June Edition
Many of the challenges faced by employers in today's employee benefits market are not new. Companies are still hyper-focused on controlling costs of benefit programs by shifting much of the financial responsibility to employees. At the same time, the number of employers that offer insurance benefits has not changed significantly since 2013, but employers have started to provide fewer benefits.
These are just a few of the conclusions noted in a research report from the Life Insurance and Market Research Association (LIMRA). We want to share the top takeaways from LIMRA's latest assessment of the employer benefits market — "Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market."
Every three years, LIMRA takes an in-depth look into the state of the employee benefits market across a range of company sizes from 10-49 employees to companies over 500 employees. The survey included 1,497 private employers with 10 or more employees that had been in business for at least three years. Here are five top takeaways from the latest report:
1. 96 percent of large employers offer benefits
Employers with 500 employees or more showed positive trends for core benefits such as dental, life, vision, long-term disability (LTD) and critical illness (CI). The research found that 96 percent of companies with 500+ employees offer benefits, whereas only 75 percent of companies with 10-49 employees provide benefits. Recent Affordable Care Act legislation has led to lower participation rates by smaller companies.
2. Benefit costs continue the shift toward employees
Most employers are still contributing toward employee benefits packages, but more of those costs have shifted to workers, continuing a trend LIMRA has tracked for many years. Today, three in 10 employers offer at least one benefit on a 100 percent employee-paid basis.
3. Benefits that attract candidates
Employers continue to perceive benefits as a tool for attracting top talent, but in the past four years, there have been shifts in which benefits employers see to be most important. For instance, between 2014 and 2017, the importance of vision care has risen 14 percent, dental and paid sick days, 9 and 11 percent, respectively.
4. Communications campaigns can help boost participation
Employers are more focused on addressing employee engagement and less concerned with specifically improving benefit participation rates. As a result, the benefits industry has been slow to establish measurable goals in benefit participation, and enrollment rates haven't changed since 2014.
5. The rise of non-traditional benefits
Full-time employees, as well as employees in the emerging contingent workforce (the gig economy), are asking for non-traditional benefits like never before. Employers that expand benefit portfolios to mollify these growing voices with innovative and non-conventional benefits can create an engaging work environment. The result is that nine out of 10 employers offer at least one non-insurance benefit, such as health wellness programs, financial wellness programs, tuition assistance, paid family leave and more.
It pays to be competitive
Benefits research can help employers understand the landscape when it comes to knowing what benefits peer companies are offering. It’s much less expensive to keep existing employees with compelling benefits, and it also helps when recruiting new ones.
At Securian Financial we are always working to bring you the latest industry insights and research. Because your success is at the heart of what we do.
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