According to the Bureau of Labor Statistics, Millennials (ages 18 to 34) have now surpassed Generation X (ages 35 to 50) to become the largest segment of the U.S. workforce – and they are already having an impact on benefit program designs, according to a new report.
Here are what consultant Willis Towers Watson sees as the top five trends in employer-sponsored health and well-being benefits in 2017:
1. Employers are moving away from one-size-fits-all health benefits to providing employees with more options to choose from so their individual needs can be met.
Younger employees seek more flexibility and control over their benefits, so employers are providing employees with more choice. Willis Towers Watson says that a growing number of employers now offer employees the option of a high-deductible health plan for their core medical benefits, plans that are often associated with tax-advantaged health savings accounts. “These accounts are popular with Millennials and also appeal to older employees who see them as long-term investment vehicles that can play a role in saving for retirement,” according to the report.
2. Most employers are adding or expanding voluntary benefits to appeal to younger generations.
Traditionally, employers have geared voluntary benefits to the needs of Baby Boomers, offering benefits such as dental, vision, life and disability insurance. Now, Willis Towers Watson says, they are adding benefits that appeal to Millennials, such as:
- identity theft protection
- critical illness insurance
- student loan repayment programs
- pet insurance
For Gen Xers facing the financial and emotional challenges of taking care of aging parents and dependent children at the same time, employers are adding voluntary benefits that help allay their financial anxieties, including critical illness and hospital indemnity, accident or injury coverage, legal assistance and financial counseling.
Voluntary benefits are appealing to employers for another important reason, according to the report: They add little or no cost to employers because they are often employee-paid. Moreover, because of group purchasing, employers can offer these benefits at a potentially more attractive cost than if employees purchased the benefits individually.
3. More employers are introducing innovative technologies and tools into the benefit experience.
When it comes to benefit technology, Millennials and Gen Xers especially expect up-to-date data and easy-to-use tools for evaluating, selecting, enrolling in and managing benefits, according to the report. To meet these expectations, employers are deploying technologies, including private benefit exchanges with decision support tools such as out-of-pocket cost calculators and recommendation engines that offer a consumer-like shopping experience, web-based enrollment portals and mobile apps.
Some employers are also adding consumer technologies to wellness programs such as tech-enabled lifestyle coaching and fitness wearables available at low or no cost for tracking exercise activities or nutritional intake.
Additionally employer use of social media to encourage employees to manage their health is on the rise, with more employers using or planning to use digital health profiles, social networking, discussion forums, affinity groups and blogs to promote engagement.
4. More employers are expanding the definition of well-being to include financial health.
The report notes that employers are increasingly understanding that to make a measurable difference in employees’ overall health and productivity, they must adopt a more holistic approach that recognizes these connections as well as those between employees and the workplace. As a result, more employers are driving well-being initiatives deeper into the organization and embedding them in employees’ day-to-day work experience and company culture.
5. A growing number of employers are using or considering private benefit exchanges to address the complexity of delivering personalized benefits to a multigenerational workforce.
Meeting the diverse needs of a multigenerational workforce requires employers to design new benefit programs, identify and select qualified vendors, and develop new and expanded administration and compliance capabilities. They must also educate employees about their new choices and the technologies and tools that will help them make good decisions, according to the report. Willis Towers Watson says that second-generation private exchanges are providing employers with greater flexibility to design and configure their benefit programs to meet more varied organizational goals.
