For many, daily life now involves hopping in a taxi, Uber, or Lyft as a means of travel. But ridesharing is just another step in the evolution of transportation. If you had looked around the recently concluded Consumer Electronics Show in Las Vegas, it would be clear that the transportation system is already moving to the next step — autonomous vehicles. Automakers were everywhere to be seen at CES, and technology companies are all over the automotive sector. Examples of this crossover include GM investing in Lyft and Google's self-driving cars. Simply put, these worlds are converging.
So why is this story relevant to the benefits world? Because the same thing is happening with health and retirement benefits.
Why? There are many reasons:
- Corporate budgets may treat benefits as one bucket with human resources departments left to allocate between health and retirement benefits.
- Health and retirement benefits both come in defined benefit (via a pension or a “traditional” insurance plan) and defined contribution (via a 401(k), IRA, HSA or an allowance on an exchange) models. With the creation of the Affordable Care Act, health plans are increasingly looking like retirement plans. At the same time, retirement plans are adopting collective structures that have features that aggregate risk in a manner similar to health insurance plans.
- A focus of progressive planning in both the health and retirement areas is wellness and readiness for one’s retirement years.
So with these reasons, where are employers and service providers heading?
Employers are constantly considering new ways to control HR costs while also preparing employees for a time when they can retire and allow a next generation to move up the corporate ladder.
Retirement advisors are focusing on how they can, and should, shift their business model in light of the Department of Labor’s proposed “conflict of interest” fiduciary regulation. Welfare benefits brokers are living in a world of public and private exchanges that can significantly alter their interaction with their clients.
Other service providers, even if they stick to their strengths, are actively looking for creative value add solutions that often cross the lines between health and retirement.
So what's the takeaway here?
From an employer perspective, health and retirement benefits will likely continue to move toward a more of a seamless, integrated benefits solution. One can imagine the concept of a “total rewards” statement on steroids.
From a benefits service provider perspective, there are many opportunities as they move toward this world of integrated health and retirement benefits. While service providers face challenges, they also can reap great opportunities in this evolving world.
David N. Levine is a Principal at Groom Law Group, Chartered, in Washington, DC. He writes the “Inside the Law” column for NAPA Net the Magazine.
