Benefits Complexity Overwhelming Employers

A new survey finds that most employers are feeling overwhelmed with the increasing complexity of managing their benefits programs – and the bigger they are, the more they are struggling.

Six in 10 employers feel overwhelmed with the increased complexity of managing their benefits programs, and larger firms (100 or more employees) are struggling the most (69%), especially with installing new coverages, changing carriers, and employee communication and enrollment, according to Guardian’s fourth annual Workplace Benefits Study.

Employer priorities appear to be shifting to other strategic areas, such as maintaining benefit plan compliance in the face of an evolving legal and regulatory landscape. The report notes that the top employee benefits challenge mentioned by more than one in four employers (28%) is ensuring that their programs are in compliance with legal requirements.

That said, roughly 7 in 10 employers believe their company currently is not well prepared to address a series of important federal, state and local laws. Only about half (49%) of those with more than 1,000 employees report success in complying with ERISA requirements, compared with a third (34%) of those with 100-1,000 and 28% of those with fewer than 100 workers.

Roughly one in four companies cite employee communication/education and installing new benefits or changing carriers/TPAs as the most difficult aspects to manage. Establishing electronic data interchange with carriers/TPAs and vendor account management/service are additional “pain points” for employers. Nearly half of mid-size employers (with 100-999 employees) cite “employee communication” as a challenge, while one-third indicate that new benefits plan implementation is difficult.

Misaligned Priorities

Aligning on benefits priorities within an organization can be challenging as the number of decision-makers expands – and with varying priorities. For example, the report found that:

  • CFOs and legal/procurement teams are increasingly contributing to benefits decisions, and their priorities and perceptions of successful strategies may vary from other senior executives and HR.
  • CFOs place greater importance on implementing CDHPs and taking a more integrated approach to managing benefits.
  • HR is more partial to improving employee leave tracking/reporting.
  • Corporate legal teams focus on helping employees with their benefits decisions.

The top benefits cost control strategies include:

67% – make plan design changes
57% – use fewer benefit providers
56% – expand use of wellness/prevention programs
54% – implement consumer driven health plans (CDHPs)
50% – coordinate/integrate benefits plans
50% – expand use of benefits web technology

What’s (not) working? Well, larger employers – specifically those with fewer than 100 workers – are having less success than larger businesses. The latter report the following as most successful:

45% – cost-sharing with employees (only 26% of smaller employers report success)
42% – make plan design changes (versus 31% of smaller employers)
41% – coordinate/integrate benefits plans (31% of smaller businesses)
39% – implement consumer-driven health plans (CDHPs), versus 28% of smaller plans

More information is available at

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