Rising Above Rising Costs Of Health Care And Employee Benefits

It gets harder and harder to find the end. The prices of everyday goods and services continue to rise, and a new study by Aon predicts that healthcare costs will increase by 8.5% in 2024. Employees already facing financial pressures may feel tighter on their portfolios in the new year. For employers, too, and for their financial security, it's more important than ever to stand by their employees when it comes to benefits. This brings me to the troubling findings of the latest Aflac WorkForces report , which shows that employee understanding of their health insurance has dropped from 43% last year to 37% this year. Additionally, most employers (79%) believe their employees have a good understanding of health care costs, while less than half (48%) do. And 78% of employers believe their employees are very satisfied with their benefits, compared to 59% who say so. What can employers do to close this growing gap? Open conversations that help bridge the gap.

Benefits information is not limited to open enrollment periods. Once the conversation starts, it should continue. Providing benefits training throughout the year helps employees better understand and benefit from the inner workings of their policies. This knowledge empowers employees and helps them manage the complexity of healthcare costs and better prepare for the unexpected medical event. An ongoing conversation about benefits is beneficial to both parties because it allows employers to discover what employees are looking for in a total benefits package. It can also help bridge the gap between what employees understand and what employers think they know. A third positive outcome is that it can lead to increased acceptance of benefits. If employees understand what they are getting, they will be more likely to take advantage of the offer. Meet employees where they are.

Providing employees with professional tools and resources tailored to their situation in the digital space is essential. In fact, a significant number of workers (82%) and 87% of millennials say managing their benefits online is very or very important; However, according to the Aflac WorkForces report, only 64% of organizations and providers offer online benefits administration, compared to 67% in 2022 and 79% in 2021. Employers and providers using digital technologies will make it easier for employees to access and navigate their preferences at any time. Companies with a generationally diverse workforce would do well to think more about what younger employees want and need compared to their slightly older counterparts. The report shows a significant division here as well. Enjoy the benefits while balancing your budget.

For many employers, the cost of health benefits is accompanied by organizational changes. Employers are under greater pressure to invest in key growth areas and face certain personnel costs, such as higher payrolls and sharing employee health insurance premiums. In fact, according to our research, nearly half of employers say rising benefits costs have impacted their ability to offer bonuses (49%), offer more diverse benefits (48%) and better quality of coverage (44%). Despite rising claims and benefits administration costs, very few workers (10%) believe their employers will make their offers less generous next year.

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Employers have the opportunity to turn these challenges into opportunities. Additional insurance can be a good solution. It remains a key part of a comprehensive benefits package because it can help protect employees in the event of an unexpected medical diagnosis and provide additional financial security that can help fill gaps in health insurance. Many supplemental insurance plans are sponsored by employees. This approach can therefore help employers effectively manage costs, stay within budget and remain competitive.

Jerry Hawthorne, Director of Human Resources, Aflac Incorporated

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