How are plan sponsors upgrading benefits in this period of polycrisis?
Employer-provided healthcare plans have evolved during and after the pandemic to continue to attract and retain talent as well as support the evolving healthcare needs of employees. Plan sponsors have also made changes to reduce risk and costs.
The ‘MMB health trends 2023’ survey shares five top trends benefit plans and their providers will likely experience this year:
Per-person medical cost – Per-person medical cost increases are back to pre-pandemic levels. Sixty-eight percent of insurers expect plan sponsors to prioritize design improvements despite forecasted double-digit medical trend rates in some markets.
Claims experience – COVID-19 continues to impact claims experience. Fifty-five percent of insurers report an increase in later-stage diagnosis of illness due to deferred care.
Plan modernization – Plan modernization has begun. One in two insurers has changed or expects to change eligibility requirements and eligible expenses to make coverage more inclusive for those who identify as LGBTQ+.
Mental health gaps – Mental health gaps persist. Sixteen percent of insurers report not providing plans that cover mental health services (versus 26% in 2022).
Plan management – Plan management requires greater rigour. More than one in five insurers in Asia are adjusting medical plan premiums based on COVID-19 vaccination status. These trends are important for employers to consider as while many firms have latitude in designing their benefit plan to meet their needs, insurers play a key role in shaping the benefits landscape. They do this through their standard practices and policy language, their willingness to adopt new provisions, and their access to large pools of claims data. A significant number of insurers are adding innovative features to medical products, such as digital health and self-care tools to ways of connecting individuals with better quality care.
Value of employer-provided benefits
Benefit plans are the secret to thriving employees and thriving businesses, says the ‘Canada Health on Demand 2023’ report by MMB. It offers insight into the value employees place on employer-provided benefits and demonstrates the power of a care-first approach.
This report identified three trends in the way plan sponsors should approach benefit plans:
Benefits for all – Building benefit strategies that work for everyone requires insight into the broad range of needs and preferences of different employee groups in your workforce.
Benefits for a fast-changing world – Using benefits as an expression of company values and to mitigate people risk is going to be more important as life becomes more complex, chaotic, and digital.
Benefits for healthier societies – Advancing employee health is a critical component of “the S in ESG”. For employers to be part of the solution, they need to address the physical, financial, and emotional needs of their workforce.
Plan sponsors will also need to be committed in what they offer and creative in how they offer benefits to stay aligned with employee needs and technological advancements. For example, some companies now offer telemedicine services which adds extra value for people who are struggling to access a primary care physician.
New opportunities and services
“Looking to the future, this may evolve into insurers having to start thinking about creating concierge or navigation services to support employees accessing their benefits and health care,” says Mark Sylvia, president and CEO of The Empire Life Insurance Company. He says demand for access to diagnostic services is growing but they need to be delivered within the parameters of the Canada Health Act. “A new path has opened up in this space. The crisis in healthcare is an opportunity for us to do better for Canadians, to do better for patients.”
Sylvia emphasized the increasing importance of the role of the insurer to best tailor benefits plans to employer and employee needs. “As an industry, we need to do more to create different options for advisors and their clients. We still have a lot of complexity in our business, so we have to simplify that initial decision-making process for clients and provide more flexible package solutions.”
Employees’ lives have become more complex. The physical, social and emotional, and financial challenges of the past few years have been exacerbated by a period of polycrisis that has encompassed war, environmental disasters, political upheaval, and a level of inflation that has affected access to basic necessities, says MMB in its report.
Employers have had to reassess the relevance and value of their benefits and are looking for creative and new ways to grow their business and their talent.
