Employees Appreciate Voluntary Insurance Benefits

Seventy-nine percent of employees see a growing need for voluntary insurance compared to last year. And of those, 60% say the need is driven by the rising cost of medical services, according to an Aflac survey. Employees who are offered voluntary benefits report higher satisfaction with their jobs and their benefits. Employees whose work site offers voluntary benefits are more likely to say the following:

  • They are prepared to pay for out-of-pocket expenses not covered by major medical/health insurance related to an unexpected serious illness or accident (73% versus 56%).
  • They are extremely or very satisfied with their jobs (73% versus 57%).

The Benefit Gap for Small Businesses

Health insurance is offered to 96% of employees at large and small companies and 89% of employees at small-businesses, in particular. But the study by Lincoln Financial reveals a much larger gap when it comes to other benefits:

Benefits offered Small Business Employees Employees of businesses of all sizes
Dental Insurance 74% 91%
A retirement plan 72% 89%
Vision insurance 66% 84%
Life insurance 62% 81%
Disability insurance 52% 74%

Employees at small businesses say that it’s important for their employers to offer these benefits:

  • 90% a retirement plan.
  • 87% dental coverage.
  • 83% vision insurance.
  • 76% life insurance.

Almost 70% of employees at small businesses say that benefits have influenced their employment decisions. Business-continuation strategies are critical since more than 50% of small-business owners are 50 to 85. Life insurance can help ensure that the business continues in the event of the death of an owner, co-owner, or key employee.

Study Reveals Leading Healthcare Benefit Trends

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The Healthcare Treds Institute issued a massive survey of employee benefit trends. The good news is that employers are looking to insurance brokers and benefit consultants to help them evaluate health benefit designs and distribution models. Forty percent of employers say they will depend on insurance brokers to learn about new health benefit models, such as defined contribution plans and private exchanges, and 31% will depend on benefit consultants. Nearly 40% rely on insurance brokers to learn about health benefit designs and platforms.

“The ACA has created a dynamic marketplace in which brokers have a front row seat navigating in this new era,” according to the study. Human resource professionals have new responsibilities due to the ACA. Thirty percent are looking for help from benefit consultants. However, 30% are researching independently compared to 26% in the previous year. Employers gave the following answers to this question, “What partners would you depend on to help you learn about new health benefit designs and distribution models?”

  • Insurance broker 39.7%
  • Will research independently 30.8%
  • Benefit consultant 30.8%
  • Insurance carrier 24.4%
  • TPA 19.2%
  • None 15.4%
  • Trade Association 11.5%
  • Payroll company 10.3%
  • Other 5.1%

What Benefits Employers Are Offering

About 40% of employers offer three or more health plan options, which are usually a PPO, an HDHP, and an HMO. Employees are choosing HDHPs (39%) over HMOs (35%). The following is a breakdown of benefits that employers offer:

  • PPO 59.5%
  • Flexible spending account (FSA)59.5%
  • Health savings account (HSA) 52.1%
  • High deductible health plan (HDHP) 38.8%
  • HMO 34.7%
  • Self-insured plan 22.3%
  • Health-reimbursement arrangement (HRA) 15.7%
  • Catastrophic insurance 8.3%
  • Dental plan 73.6%
  • Vision plan 67.8%
  • Prescription drug coverage 67.8%
  • Mental health coverage 52.1%

How Healthcare Reform Has Affected Employee Benefit Packages

Forty-nine percent say that healthcare reform will increase employee cost-sharing; 39.6% say it will increase premium contributions, and 3.6% say it will shift their company towards a defined contribution plan. Employee cost-sharing has risen every year for 10 years. Employers and the medical industry have had to deal with other ACA implications, such as the employer mandate and new compliance, which has caused an increase in capital and human resources. Employers have done the following in response to health reform:

  • Increased employee cost sharing 49%
  • Has had no effect 30%
  • Enhanced wellness/preventive health programs 23%
  • Increased employee engagement in their health 19%
  • Increased employee engagement in reducing healthcare costs 18%
  • Adopted new wellness/preventive health programs 17%
  • Reduced covered benefits 15%
  • Added HDHPs/CDHPs 14%
  • Stopped offering healthcare benefits 9%
  • Shifted to a defined-contribution plan

The Cadillac Tax

The impending 2018 Cadillac Tax is a prevalent challenge for employers. The ACA 40% excise tax will be imposed on the portion of group health plan premiums that exceed specified thresholds. The concern may be more regional since it could be triggered in parts of the country where healthcare costs are high and less likely to be triggered in parts of the U.S. with below average healthcare costs. Thirty-five percent of employers are very concerned about the 2018 Cadillac Tax; 25% are somewhat concerned; and 30% are not concerned. Sixty-one percent are making no changes to their benefits in light of the impending Cadillac tax while 18% have changed plans to avoid the Cadillac Tax. Recent news reports along with lobbying efforts may be influencing the 61% of companies who have a wait and see approach about the Cadillac Tax.

Defined Contribution Plans

Employers continue to learn more about defined contribution plans and private exchanges with about 35% saying they are familiar with them. This is an increase of about 5% over last year. Twenty-eight percent say that exchanges help employees understand the value of their benefits. Twenty-five percent say that a defined-contribution plan would help employees understand the value of their benefits and make more cost-conscious benefit decisions.

Five percent of employers offer defined-contribution plans (not on a private exchange) while same offer defined-contribution plans on a private exchange. Also, 7% are considering offering a defined contribution plans on a private exchange while 53% have not explored defined contribution plans.

Fifty-five percent of employers who are considering a defined-contribution plan, say they would explore the option for 2017 or 2018. This suggests that near-term adoption will be gradual. But the adoption curve may steepen as the benefits of defined-contribution plans become better known.

Private Exchanges

Employers want private exchanges to provide many solutions including health spending accounts (62%), carrier integration (58%), COBRA compliance (56%), automation of premium payments (51%), and payroll integration (50%). Employers choose private exchanges to control costs and increase employee choices, which is why employers say, most often, that they are looking for health spending accounts. Incorporating consumer directed healthcare coverage, such as HDHPs, HSAs and HRAs, helps private exchanges create a competitive marketplace that promotes cost-savings for employees and employers.

To succeed a private exchange needs to provide broad choices and help participants in the selection process. Sixty-two percent of employers say that it is somewhat important to very important to have health-spending accounts in an insurance exchange. Also considered somewhat important to very important are carrier integration (59%), COBRA compliance (56.4%), and premium payment automation (53%). Employers say they would choose the following offerings in an exchange:

  • Plan and cost comparison tools 80%
  • Online capabilities 69%
  • Combined benefit enrollment 47%
  • A help line 47%
  • Transparency solutions for treatment cost comparisons 45%
  • Mobile applications 45%
  • Progressive cost tracking tools 35%
  • Consolidated employer billing 35%
  • Integrated consumer healthcare accounts 30%
  • Financial account options 28%

Employers rank several exchange features as important, such as being a private exchange instead of a public exchange (83%), having a large selection of plan choices at targeted benefit levels (58%), and being provided by their broker or benefit consultant (55%). These findings indicate that broad choice is more important than who runs the exchange (broker versus carrier).

Wellness

Wellness programs continue to gain interest as 35% of employers have initiatives in place compared to 30% last year. Another 22% are considering implementing a program. Sixty-five percent are considering adopting a wellness program in 2017, and 16% are considering adopting one by the end of 2016.

Fifty-five percent of those offering wellness programs, offer an employee-assistance program (EAP); 53% offer flu shots or vaccinations; and 37% offer a smoking cessation program. The disease management tools that most employers offer are for diabetes (30%) and depression or other mental health (30%). Fifty-four percent of employees are not offering disease management tools. But 30% are providing services for diabetes and mental health conditions. To promote positive health outcomes, 44% of employers offer at least one wellness program; 31% offer biometric screening; and 20% offer a disease management program.

Forty-four percent have at least one wellness initiative in their workplace. Employers that are interested in offering wellness plans should consider how it would affect productivity, absenteeism, turnover, retention, and recruitment, according to the survey authors. Including these factors in the ROI discussion can help demonstrate additional savings a company could achieve.

When it comes to wellness incentives, HSA and HRA contributions (18%) and premium reductions (16%) are most popular. Companies are split on whether to offer wellness incentives with 58% not providing rewards to employees and 42% offering some type of incentive in varying monetary amounts to participate. The value of the incentives remains relatively modest. Companies interested in wellness incentives can use the ACA as a guide. Eighteen percent offer $250 or more of incentives to employees for health-related tasks. Common values of incentives are $101 to 250 and $1 to $50. For more information, visit www.HealthcareTrendsInstitute.

What Employees Need to Ask During Open Enrollment

Transamerica is offering a list of questions that employees should be asking during open enrollment. Renee Preslar, communications manager at Transamerica Employee Benefits said, “It’s important to spend time reviewing your company’s voluntary benefit options. With high deductible health plans on the rise, supplemental insurance can add value to your benefit portfolio and help you save money on your annual medical expenses. Here are the questions:

  • What’s my share of medical costs? Deductibles, copays, and coinsurance amounts are on the rise, so be sure to find out what they are. An important part of financial planning is understanding what you would have to pay for a costly medical event, such as an accident or critical illness.
  • What are my out-of-pocket non-medical expenses? Your major medical insurance does not cover expenses, such as transportation, child care, and lost income due to missing work. These non-medical costs can add up quickly.
  • Do I want to use my savings for these expenses? Even if you have enough money in the bank to handle these expenses, wouldn’t you rather use your savings elsewhere? The cost of supplemental insurance can be far less than the cost of a medical emergency. For example, a critical illness policy would pay a lump-sum cash benefit after a heart attack; that money could be used for travel to see a specialist or to cover child care while you focus on recovery.
  • How would I make up for lost income if I became disabled? One of the most crucial items to protect is your income. Many employers offer some coverage for long-term disability. Consider what could happen if you couldn’t work for three to six months due to a back injury. Short-term disability insurance provides a percentage of your pay for a specified period.
  • What’s my health history? Past problems could indicate a predisposition to other problems. It’s not fun to think about risks to your health by things like smoking or watching sports on TV versus actually exercising. Whether or not you’re ready to make changes today, you may need medical treatment based on health habits, so it makes sense to get a policy like hospital indemnity insurance, which pays benefits for hospital stays.
  • What’s my family medical history? Has anyone in your family had cancer, heart disease, or high blood pressure? Consider how cancer insurance or critical illness insurance can help if you’ve inherited certain family illnesses.
  • What does my family like to do in our spare time? Are you playing sports, hiking, or spending time at the lake? Some activities carry more risk for injury. If you or your child has an accident, you’ll need to cover increased expenses. Accident insurance pays benefits you can use for medical bills and other out-of-pocket expenses.
  • Do I go in for routine eye exams and dental cleanings? Your eyes can help detect potential health issues. Plus, protecting your oral health is a crucial disease-prevention strategy. Vision and dental insurance can be a great value. Consider what you’d spend without one or both of these types of policies, and balance that against the cost of coverage.
  • How does my age affect my health risk factors? Getting older can make insurance even more important. At younger ages, the risk is lower so some types of insurance are more affordable. Take a look at your employer’s group rates—they may be lower than you think.
  • Does anyone need my income in the event of my death? Do I have life insurance? Do I have enough life insurance? Group life insurance is competitively priced and offers certain levels of coverage on a guaranteed-issue basis.

Employees Aren’t Taking Steps to Reduce Eyestrain

Employees are spending more time on electronic devices than they did five years ago – increasing their risk for digital eyestrain and other vision issues, according to a survey conducted by Wakefield Research for Transitions Optical. Forty-four percent of employees are spending more time during their work day using electronic devices  including smart phones, tablets, computers, and laptops. Fifty-four percent are extending their digital day by increasing use at home.

Extended use of electronic devices can lead to numerous vision problems including eyestrain, fatigue, and headaches. In fact, one-third say that light reflected from a computer screen and personal devices bothers their eyes at work. Taking breaks to rest the eyes can help alleviate problems. But 80% of employees spend at least part of their break time using devices.

Jonathan Ormsby, strategic account manager, Transitions Optical said, “We live in a digital world, so it makes sense that many employees are depending heavily on their devices throughout the day; that likely won’t change. The unfortunate consequence is that this increased and extended use is likely hurting their eyes and productivity.”

Very few employees take steps to reduce visual disturbances. Only one-third adjust the settings on their computer screens or personal devices; 16% adjust light in their work space; and one-third wear eyeglasses with advanced lens technology to improve their vision.

Ormsby added that employers have a tremendous opportunity to educate employees about the risks of extended digital use and to reinforce the importance of using their vision benefit to get regular eye exams and get eye wear that reduces glare and provides more comfortable vision.

Eighty percent of employees want more protection for their eyes. Seventy percent want more protection outdoors from the sun or ultraviolet light , and 50% want more protection indoors from harsh artificial light or glare from personal devices.

Less than 40% of employees say their plans cover anti-reflective coating fully or offer discounts while only one-third say their plans cover photochromic lenses. Twenty-seven percent of employees who have  visual disturbances at work, including eyestrain, have not told anyone about the issue. Indoor workers are three times less likely to discuss eye health concerns with eyecare professionals than are outdoor workers. Transitions Optical offers employee and employer focused tools and education free of charge at HealthySightWorkingforYou.org.

Busting Employee Benefit Myths

Busting Employee Benefit Myths

  • Adding non-medical benefits would break the company’s budget:Affordable group dental, disability, vision, and life insurance options are available for companies with two to 99 employees. Adding benefits doesn’t have to mean adding to the benefit budget. Fifty-six percent of employees are willing to bear the cost of ancillary benefits, according to a recent MetLife study. Sixty-five percent of employees agree that having customized benefits would increase their loyalty. Employees who are satisfied with their benefits are nearly four times as likely to be satisfied with their job. A study from the Center for American Progress estimates that replacing an employee costs an average of 20% of their annual salary. So if a worker making $50,000 a year quits, you’ll pay roughly $10,000 to cover the lost productivity and then recruit and train someone new. It’s a better strategy for employers to focus on retaining key employees and driving increased satisfaction through benefits. This is especially important for small businesses where the cost of replacing an employee may be higher because it may be less likely that other employees have been cross-trained to fill in the gap. Brokers should discuss how the cost of benefits can be shared and that employees are willing to take some of the responsibility. Also, address the financial implications early on to show small business decision makers how non-medical benefits can add to their businesses.
  • Administering Group Benefits Is Too Time-Consuming: Consolidating multiple coverages with a single carrier can reduce administration. Exploring new channels, such as private exchanges, can help identify opportunities for increasing benefit choices while reducing administrative burdens. Making carrier recommendations based on services, ease of implementation, educational resources, and customer understanding as well as price will give small business decision makers the support they need.
  • Dental Insurance Isn’t Important: Dental insurance is a benefit that is in high demand—and highly utilized—by employees. Sixty-three percent of Gen Y and Baby Boomers are interested in purchasing dental insurance at work. More than half of Gen X are interested in purchasing this coverage. According to the National Association of Dental Plans (NADP), people without dental insurance are less likely to get dental care, which means missed opportunities for prevention and early treatment. In fact, the NADP finds that those without dental benefits report higher incidences of other illnesses: sixty-seven percent are more likely to have heart disease; 50% are more likely to have osteoporosis; and 29% are more likely to have diabetes. The Centers for Disease Control and Prevention finds that more than 164 million work hours are lost each year due to dental problems. By offering dental benefits, employers can capitalize on the link between oral health and overall health and lay the foundation for a healthier, more productive workforce. Small business brokers should discuss this link with their clients.
  • Benefits Won’t Help Attract Employees: According to a 2014 study from the Employee Benefit Research Institute, 76% of employees say benefits are a very or extremely important in their consideration of a job offer. Brokers should explain how small business owners can leverage the benefits they provide.
  • Benefits Won’t Help Retain Employees: According to Glassdoor.com, 48% of employees are confident that they can find a job that matches their compensation level within six months of starting a job search. With that in mind, small business owners need to evaluate what they are offering to employees beyond salary. What added perks will make employees feel valued enough to keep them from looking around in the first place?  CareerBuilder reports that 58% of respondents identified better benefits as the best way to improve employee retention. Offering better benefits means offering a range of benefits to meet a variety of employee needs; this includes medical plus ancillary options that employees can choose from and pay for on their own. Employees who are satisfied with their benefits are nearly four times more likely to be satisfied with their jobs, according to MetLife’s study, once again reinforcing the impact benefits can have on existing talent. Not offering a range of employee benefits opens the door to competitors looking to attract high-performing employees.

Employees Need More Information About Their Benefits

EmployeeInfoThis enrollment season, employees have a message for employers about their benefits: “Tell us more, please.” Only 33% of employees rated the benefit education they received in 2013 as excellent or very good — a drop from 37% in 2012 and a reversal to the upward trend since 2009. In addition, 27% rated their benefit education as fair or poor, according to a survey conducted by the Harris Poll on behalf of Unum.

  • Employees they say they understand the following types of coverage at least somewhat:
    74% life insurance.
    71% vision insurance.
    47% critical illness insurance.
    40% medical understand coverage.
  • Forty-eight percent of those with long-term or short term disability benefits say that no one has explained disability insurance to them. Sixty-six percent say that their employers should do a better job of explaining these benefits.

Seventy-nine of those who say that get excellent or very good education about their benefits also rate their employer as excellent or very good compared to only 30% of those received fair or poor education about their benefits. Eighty-three percent of employees who did get education on their disability benefits gave that education a positive rating.

“The Affordable Care Act is raising lots of questions and leading to changes that extend beyond health coverage. Employees are making decisions about their benefits that they have never had to make before. It’s vital for employers to provide the right tools and information for employees so they can understand their benefits options and choose the coverage that is right for them,” explains Bill Dalicandro, vice president of Unum’s Consumer Solutions Group. For more information, visitwww.unum.com.

Study: Extra benefits are available in many Medicare Advantage plans

Coverage for dental, hearing or vision is available in 97% of Medicare Advantage plans, while traditional Medicare covers none of those benefits, according to a HealthPocket study. All three benefits are covered in 42% of Medicare Advantage plans, the study found. But “there was considerable variation for cost-sharing among these benefits as well as the extent of coverage” in Medicare Advantage, said Jesse Geneson of HealthPocket. “Consumers should review coverage details carefully before enrolling.” BenefitsPro.com (4/23)

Medicare Advantage Plans Offer Broader Coverage

Medicare Advantage plans contain many benefits that are not covered by original Medicare, according to a study by HealthPocket. The percentage of Medicare Advantage plans with at least one vision, dental, or hearing benefit that’s not included in original Medicare did not change between 2013 and 2014.
“While most Medicare Advantage plans included extra insurance benefits not in original Medicare Parts A & B, there is considerable variation for cost-sharing among these benefits as well as the extent of coverage. Consumers should review coverage details carefully before enrolling,” said Jesse Geneson of HealthPocket. From 2013 to 2014, the government reduced its benchmark payments to Medicare Advantage plans by 4%.
When reviewing data on 2014 Medicare Advantage plans, HealthPocket found the following:
• 94% of Medicare Advantage plans provide  vision coverage.
• 71% of Medicare Advantage plans provide dental coverage.
• 59% of Medicare Advantage plans provide hearing coverage.
• 97% of Medicare Advantage plans provide at least one extra insurance benefit (vision, dental, or hearing) that is not covered by original Medicare insurance.
42% of Medicare Advantage plans offer extra insurance coverage for vision, dental, and hearing together in the same plan.

For more information, visit www.HealthPocket.com. healthpocket,

Domestic Violence Victims Face Grim Health Outcomes

domesticvA survey by the National Family Justice Center Alliance finds that domestic violence victims and their children are often uninsured or underinsured; they rarely receive needed medical, dental, and vision services; and they often fail to understand the profound short and long-term effects of the violence and abuse. Major findings include the following:
• Abused women are 70% more likely to have heart disease, 80% more likely to experience a stroke, and 60% more likely to develop asthma.
• Abused women are three times more likely to have reproductive health complications.
• The trauma of growing up in an abusive home has a dramatic effect on a child’s life expectancy. The life expectancy of a child with a score of six (multiple adverse childhood experiences) in the Adverse Childhood Experiences study is reduced by 19 years compared to a child with no adverse childhood experiences.
• Less than one in four victims attributes their health problems to abuse. Many survivors of domestic violence do not realize the possible health effects from near-fatal strangulation assaults.
• The primary barriers to care are lack of insurance and the cost of insurance. Forty-four percent have no insurance. Sixty-five percent of  those with insurance have public insurance, such as Medicaid or Medicare.
• 70% of survivors reported at least one physical health need, but only 49% had a primary care provider, and only 30% saw a doctor in 2013.
• Victims are more likely to use emergency rooms for regular health care. Half went to an emergency room to meet their medical needs while only 30% saw their primary care provider in 2013.
• Forty percent would like to have dental services, and 43% would like to have vision services available in Family Justice Centers or domestic violence agencies rather than going to hospitals or doctor’s offices.
• Twenty-four percent of women will experience intimate partner violence in the United States. It is the most common cause of injury for women ages 18 to 44.
• The economic impact of violence is estimated at $5.8 – $8.3 billion each year; the vast majority attributed to healthcare costs and lost productivity (CDC, 2013).

Alliance CEO Gael Strack said, “Most community-based domestic violence agencies do not have the capacity to meet these needs. Criminal justice interventions, social services, civil legal services, mental health counseling, and other assistance is available in many communities, and multi-agency and multi-disciplinary approaches, such as Family Justice Centers, are bringing together more accessible services under one roof. But health related services are not generally included even in the most dynamic multi-agency, multi-disciplinary service approaches.”

The National Family Justice Center Alliance is working with the Verizon Foundation, Blue Shield of California Foundation, and other allied national organizations to address health needs of survivors of domestic violence and their children, particularly in Family Justice Centers or other types of multi-agency, multi-disciplinary service approaches that serve victims of domestic violence. The Alliance is calling for all domestic violence agencies, Family Justice Centers, and other community-based service providers to do the following:
• Screen survivors for pressing health needs in their intake and case management services.
• Build partnerships with community-based health clinics, hospitals, and health service providers to make sure that victims get the medical services they need.
• Help get survivors signed up for health insurance immediately pursuant to the Affordable Care Act.
For more information, visit www.familyjusticecenter.org.

Last Updated 01/13/2021

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