3 minutes
Improving employee wellness and productivity and managing benefits costs are among the top priorities of human resources departments, according to a recent survey of more than 400 HR and finance executives with U.S. companies employing 50 to 1,000 workers.
Return on Wellness Program Investments
According to the survey, which Hub International calls its “Employee Benefits Barometer,” 83 percent of respondents cited employee wellness and productivity as a high priority, and two-thirds reported a measurable return on their investment in programs to improve productivity and morale.
Among the companies that have implemented wellness or related programs, more than a third of HR executives reported gains in productivity (35 percent) and higher morale (34 percent). Other benefits reported include reduced medical and prescription claims (29 percent), workers’ compensation costs (28 percent), stress (26 percent), disability claims (22 percent), and employee turnover (21 percent), as well as increases in employee retention (29 percent) and improvements in chronic disease management (16 percent).
“Middle market employers are starting to put more effort into longer-term benefits initiatives that support the connection between healthy employees and business performance,” the report notes. “These programs are the cornerstone of a long-term benefit strategy that supports a healthier and more engaged workforce.”
Key Strategies to Manage Benefits Costs
The second most common HR priority was managing benefits costs, cited by 76 percent of respondents, who reported success with a variety of strategies designed to hold the line on benefits costs. The most common cost-containment strategies include:
- Reference-based pricing, cited by 20 percent of respondents, which refers to health plans that set a cap, or “reference price,” on benefits for a given medical service. If the cost of the medical service exceeds the reference price, employees must pay the difference out of pocket.
- Renegotiating the costs of prescription coverage with providers (20 percent).
- Enrolling in narrow networks (17 percent), or programs that place limits on the doctors and hospitals available to employees enrolled for health care coverage, often excluding high-cost providers.
- Self-funding health care coverage (9 percent).
- Offering high-deductible coverage (8 percent).
Among the cost management strategies respondents reported that they plan to implement over the next year to 18 months are voluntary benefits, such as separate coverage for critical illness, hospitalization, confinement or accident (51 percent); multiple plan options along the “metal spectrum,” adding more bronze, silver or gold options (39 percent); high-deductible health plans (39 percent); a defined medical contribution plan (36 percent); reference-based pricing (23 percent); self-funding (18 percent); telehealth benefits (17 percent); and narrow network coverage (16 percent).
Almost two-thirds (65 percent) of respondents agreed with the statement, “We have done all that we can reasonably do to control rising medical costs.” And 80 percent gave their organizations high marks for deploying technology systems to help management employee benefits and payroll.
ACA Compliance
The third most commonly cited priority among survey respondents was ensuring compliance with the Affordable Care Act, especially among smaller companies, those with 50 to 99 employees. The top three concerns regarding ACA compliance were:
- accurately calculating and reporting affordability of benefits (57 percent);
- tracking and reporting employee subsidy eligibility and employer liability (53 percent); and
- accurately calculating and reporting full-time employees vs. full-time equivalents (45 percent).
Another topic covered in the survey was the working relationship between the HR and finance departments. More than three-quarters of finance executives said they consider HR a strategic partner, and 70 percent agree that HR comes in on budget as a cost center. Still, 97 percent of finance execs said they are concerned about the escalating costs of providing employee benefits, and nine in 10 said they worry about the HR department increasing the risks of executive liability and cyber-liability and the potential for ACA reporting fines and penalties.
“Middle market HR managers have made significant strides advancing their organizations on a more strategic benefits continuum that supports the well-being of employees as well as the business,” the report concludes. “That’s not to say that there are no roadblocks. ACA compliance may be more worrisome that anyone wants to admit. Further, there’s substantial room for improvement in adopting a wider range of cost-saving tactics, many of which can be put in place without disrupting employees.”
