Function Will Drive Form In The 2017 Benefits Industry

InsuranceNewsNet

By Stephanie Shields

Most of us remember bell-bottoms of the 1960s as a fashion statement that was popularized among the masses. In reality, the U.S. Navy uniform from which they were derived served more for functionality than appearance. The wide-legged bottoms could be rolled up on the legs to keep sailors dry while wading in the water or repurposed if swept overboard by using the slacks for flotation when filling the legs with air.

But what does that have to do with benefits? Just as functionality drove form that made its way into the fashion mainstream, consumer needs and demands are altering benefits functionality and traditional employer benefits packages are taking on entirely new forms both to keep up and get ahead.

Let’s take a look at five examples where function is driving form in the benefits industry.

Tailoring benefits to attract and retain millennials.

Millennials now represent the largest segment of the U.S. labor force, according to Pew Research Center. Members of this generation are gaining a greater voice in making decisions that directly affect them and their futures. In the past, companies were more likely to cater their benefits to best suit their own business needs, but there is now a growing trend to tailor benefits to attract and retain millennials.

With a reputation for job-hopping, 66 percent of millennials are at least somewhat likely to look for new jobs in the next 12 months, according to the 2016 Aflac WorkForces Report. Most workers, including two-thirds (67 percent) of millennials, say that increasing their salaries is one thing that will keep them in their jobs. However, the 2016 Aflac Open Enrollment survey revealed that 72 percent of millennials are at least somewhat likely to take a job with lower pay but better benefits – more than any other age group.

2. Improving work-life balance and flexibility.

Today’s workers desire a work-life balance that offers flexibility. Workers increasingly are pursuing careers that compliment their lifestyles and give them the opportunity to improve and expand their life experiences.

According to the annual Aflac Open Enrollment study, 46 percent of employees expect a flexible work schedule and 27 percent expect the option to work from home. As a result, employers are offering innovative ways to provide workplace flexibility and policies that foster greater work-life balance.

3. Shifting the benefits enrollment process to online tools.

There is a growing trend of Americans using online marketplaces to make purchases. According to a WWD survey, 96 percent of Americans are doing their shopping online, spending an average of five hours per week making online purchases and allocating an average of 36 percent of their shopping budgets to e-commerce.

We’re seeing this shift not only in retail, but in traditional benefits enrollment processes, as well. The 2016 Aflac Open Enrollment survey found that half of workers now prefer their benefits enrollment process to be more like Amazon.com, with easy-to-compare options online. In addition, in 2016, 16 percent of employers projected they would move employee health insurance benefits to exchanges, up from 6 percent in 2014 and 2015, according to a Henry J. Kaiser Family Foundation survey.

4. Reducing overall employee health costs with the help of wellness programs.

It is widely known that healthy employees contribute to a business’ overall performance. In fact, the 2016 Aflac WorkForces Report revealed that employees who participate in wellness programs have higher levels of job satisfaction.

Medical technology advancements could be the next thing to help make employer wellness programs more effective and help to cut inefficiencies. The 2016 Aflac WorkForces Report revealed that 54 percent of employers have company-sponsored wellness programs, up considerably from 30 percent in 2012. Of those offering new or emerging wellness options - such as telemedicine, on-site medical clinics, wearable devices or on-site pharmacies - more than half said the service had reduced overall employee health costs.

5. Rising demand for voluntary insurance.

Voluntary insurance is increasingly becoming more critical to employee benefits packages. Health care costs can impact not only financial health, but can take away money that was set aside for personal or family activities and savings. As such, workers are seeking additional coverage to help supplement these costs should an unexpected accident or injury occur.

Although major medical insurance pays the doctor or hospital, voluntary insurance pays cash benefits directly to insureds, unless otherwise assigned, when they are sick or injured. These benefits usually are purchased through an employee’s workplace. The insured decides how and when to use the money for expenses that major medical insurance may not cover. Voluntary insurance plans include life, disability, critical illness, hospital, accident, cancer insurance and many other types of coverage.

With the cost of health insurance and out-of-pocket costs rising, it’s not surprising that nearly 79 percent of employees told the Aflac WorkForces survey that they see a growing need for voluntary insurance today compared with last year. And 51 percent of employees who are enrolled in workplace voluntary insurance said they are extremely or very well prepared to pay out-of-pocket expenses not covered by major medical/health insurance, compared with 21 percent of those who aren’t offered voluntary insurance by their employers.

We will continue to see consumer needs and demands influence the way benefits are designed and delivered. Functionality most definitely will be a key driver of the form we see benefits packages taking on in 2017 and well into the future.

Stephanie Shields is vice president of product innovation and marketing at Aflac. Stephanie may be contacted at [email protected].