When considering health and benefits strategies for this year, cost containment will be a top priority for employers. Employers face unique challenges when it comes to addressing the health and wellness of their workforce, with employees grappling with health care costs that are rising faster than wages are increasing. It’s critical for employers to ensure they’re tuned in to the health care needs of their workforce so they can be strategic about their investment in health care benefits while maximizing the chances of employee engagement with health and wellness initiatives.
These days, employers are taking a more comprehensive approach to the development and delivery of their benefits strategy.
Specifically, employers are:
- Providing more choice so employees can tailor benefits to meet individual needs;
- Offering a variety of wellbeing programs to accommodate employees’ varied needs; and
- Providing navigation support to help employees better understand program offerings.
Willis Towers Watson’s 23rd Annual Best Practices in Health Care Study was conducted to address these key issues and explores employer actions and future plans for health benefit programs. While employers are committed to offering comprehensive health benefits, solutions must take rising health care costs into consideration while simultaneously addressing the affordability issue for employees.
Willis Towers Watson’s research found that top performing employers have a financial advantage, with cost trends significantly below the benchmark, leading to savings of $1,500 per employee per year compared to the national average. Top employers are focused on long-term cost containment strategies geared toward improving the health of employees, in turn reducing expenditures associated with absenteeism, presenteeism, and high claims costs.
These strategies are centered around:
- Improving employee wellbeing by embedding a wellness orientation into the company’s culture that integrates mental, financial, social and physical wellbeing.
- Better supporting employees by enhancing the workplace through investments in technology solutions and decision support tools.
- Proactively managing costly clinical conditions such as diabetes, mental health issues, cardiovascular diseases, and musculoskeletal disorders.
When it comes to improving the health of their workforce to help contain costs, leading employers are employing a three-pronged strategy centered on:
- Adopting a holistic approach to employee wellbeing
In a brain-based economy where employers’ competitive advantage is inextricably linked to their employees’ overall wellbeing — both mental as well as physical — a robust rewards package needs to prioritize all aspects of employees’ health and wellness. Employers who support the full spectrum of health and wellness needs through a comprehensive benefits package will maintain a competitive edge when it comes to attracting and retaining talent.
Willis Towers Watson’s Annual Best Practices in Health Care Study found that only 39% of employers say they have made progress toward enhancing employees’ total wellbeing over the last three years. In the next three years that figure will more than double with 86% of employers planning to enhance employees’ total wellbeing by better aligning a total wellbeing offering with the employee value proposition.
Companies are becoming more creative and deliberate in understanding and meeting the wide-ranging needs of a diverse workforce by offering programs such as financial counseling, stress management, and inclusion and diversity initiatives. Still, employee engagement remains a challenge with only 45% average participation in wellbeing programs. To boost engagement, companies are focusing on fostering a wellness culture and creating an enhanced experience for employees, rather than offering direct financial incentives.
Our research found a few key opportunities to help boost employee engagement:
- Align wellbeing with the employee value proposition (EVP) and broader organizational engagement and productivity efforts.
- Measure results and take an actionable approach. Only 22% of employers use data to measure the impact of their health and wellbeing initiatives.
- Helping employees navigate a complex benefit environment
Employers should ask themselves the following questions to determine the intrinsic value proposition of their benefit program:
- Is my benefit program aligned with my organization’s values and does it position my organization as a leader in the market (to internal and external stakeholders)?
- Are my programs coordinated in a way that makes employees feel they have an integrated solution?
- Can employees easily find the benefit resources they need, when they need them?
The answers to these questions will provide insight on the benefit experience for employees. Employers must recognize that to improve employee engagement with health and wellbeing initiatives — and to ensure these initiatives are aligned with their overall EVP — they must deliver an accessible, user-friendly, and seamless experience for employees.
Our Best Practices in Health Care Study found that 75% of employers maintain that enhancing the employee experience is a priority over the next three years.
Employers are focusing their efforts on the following areas:
- Providing more choice in health plan options and the types of benefits offered to better meet employees’ needs, essentially offering personalization of benefits.
- Exploring initiatives to enhance the physical environment of the workplace, its culture and technological systems to improve employees’ overall experience.
- Investing in technology solutions to help members navigate the solutions, make optimal decisions and monitor their health. Getting the right vendors in place is important.
Over the next three years, we expect employers to strengthen efforts to provide employees with an improved health care experience by delivering more options, measuring performance, and tailoring the enrollment process to better fit the needs of employees.
- Gaining a better understanding of claims costs
Consider this: approximately half of all claims costs come from less than 5% of plan members. Chronic diseases take an enormous financial toll, and afflict large swaths of employee populations: for example, an estimated one-third of employees diagnosed with metabolic syndrome will develop diabetes within three years. Factor in the exorbitant cost of treatments for chronic diseases like cancer, and it’s easy to understand why employers must help guide employees with key clinical conditions toward better health outcomes.
To reduce high-cost claims and remain competitive, employers need to take an active role in helping employees better manage chronic conditions. Our Best Practices in Health Care Study found that 74% of respondents expect to focus on improving assistance for employees suffering from clinical conditions in the next three years.
- Respondents cited diabetes, musculoskeletal, behavioral health and cardiovascular diseases as some of the main conditions that will receive additional attention over the next three years. For example, some employers plan to help employees facing a mental health issue by addressing lack of access to care in rural areas, and introducing suicide prevention initiatives.
- Respondents said they plan to establish a holistic approach to managing clinical conditions by addressing all aspects of wellbeing, including physical, emotional, financial and social.
In addition to weaving employees’ total wellbeing into their EVP, a key opportunity for employers lies in deploying new, innovative technology solutions to help improve the employee experience as well as employee health outcomes related to key clinical conditions.
There are countless opportunities for employers to make benefit program adjustments that will not only reduce costs, but will help position them as leading employers who support the health and wellbeing of their workforce. In a competitive market where attracting and retaining top talent is key, the health of employees is critical to ensuring the long-term health and success of an organization.