Alleviating Health Insurance Burden on Employees a Top Priority: Poll

As the 2023 group health open enrollment season nears, more employers have heard concerns among their staff and are focusing on affordability and easier access to health care services, according to a new study.

Mercer's "Health & Benefit Strategies for 2023" study, which surveyed more than 700 employers, found that more than two-thirds of businesses are planning to improve their health benefit options to better compete for talent.

The survey found that 70% of all large employers were planning benefit enhancements for 2023. While small employers are somewhat less likely to be planning enhancements, still more than half (53%) say that they are.

One in five employers said they would put a special emphasis on improving benefits for low-wage and unskilled workers, while two-thirds said they planned to focus on all employees. The biggest concern among employers is the increasing costs that employees have to shoulder for their health benefits.

Employers are starting to realize that a high-deductible health plan with an attached health savings account is not a good fit for all of their employees. In fact, the high-deductibles have been blamed for saddling an increasing amount of U.S. workers with more medical debt.

Tackling affordability issue

Businesses are taking different approaches to tackling the affordability issue, both on the front end in terms of premiums or the back end in the form of out-of-pocket expenses. Mercer found that:

• 41% of employers said they've already introduced a low- or no-deductible plan option, while 11% said they are considering adding one.
• 11% said they offer at least one plan with no employee premium-sharing (meaning the employees pay nothing for their coverage and the employer covers the entire monthly premium). Mercer found that these kinds of arrangements are more common among small employers, although more large employers are starting to offer them as well. Another 11% said they are planning on adding a free option.
• 16% said they offer a narrow/high-performance network plan with low cost-sharing, and another 24% said they are planning on offering one for 2023.
• 17% said they offer salary-banded health plan contributions (with lower-wage workers required to pay less for their share of premium than higher-wage colleagues). Another 15% said they plan to offer this type of arrangement for 2023. But employers need to be careful.
  Writes Mercer: "It's important to be thoughtful about the possible consequences of implementing salary banding for the first time now. While charging lower-paid employees less is the goal, charging some employees more could have a negative impact on hiring at those levels."

Find out what they want

But just improving benefits or adding benefits without consulting staff can backfire. It's important employers understand their employees' needs before embarking on changes to their benefits.

"When it comes to retaining talent, taking a standard approach to benefit design is almost guaranteed to come up short," Mercer writes.

Mercer also notes that employees are more concerned these days about having the right lifestyle fit at their employer, so employers should take into account differences in their employees' lifestyles.

Here's what employers are doing to get the answers they need:

• Employee surveys: 61%
• Analysis of needs based on employee demographics and personas: 46%
• Input from employee resource groups: 35%
• Focus groups: 26%
• Other sources of information: 46%
• Nothing: 6%

If you are pinched for resources, Mercer notes that offering your staff greater flexibility in their benefits and better targeting communications about their benefits can be the way to go.

Flexibility can be as simple as supporting a work-life balance and giving them the option for flexible hours so they can run errands or tend to family issues like dentist or pediatric care appointments.
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Flexibility can encompass a wide range of benefits. Here's what Mercer found that employers offer or plan to offer in 2023:

• 66%: Flexible work schedules, such as flex time during the day or a four-day work week.
• 78%: Option to work from home regularly, but not every day.
• 9%: Option to work from home every day.
• 12%: Lifestyle accounts — employer-funded accounts that employees can use for a variety of purposes.
• 45%: Paid time off to volunteer.
• 50%: Other benefits/policies to support work-life balance.