Benchmarking Your Benefits
Benchmarking compares how employers are responding to continually rising health care costs. Offering a competitive and cost-effective benefits plan is a serious business challenge. It is important that organizations monitor and tend to their benefits to recruit and retain talent with the job market evolving from employer-driven to candidate-driven.
How do your benefits measure up to that of other businesses? How is your current broker assisting you with this and keeping up with where you stand against others in your industry? At Healthcare Consultants, Inc. understands how important it is to make educated plan design decisions and to help balance cost control and value.
Ensuring your employee package is competitive and valuable is vital for your recruiting and retention needs. Not only do you know how your offerings stack up to other employers in your industry, benchmarking your benefits can provide insight on whether it is economical or not. You will be able to study best practices, innovative ideas and effective operating procedures that lead to superior performance.
The Importance of Benchmarking
SHRM survey on job satisfaction and engagement said 92% of employees look for benefits as a requirement for overall job satisfaction. 29% of employees stated that seeking benefits was a top reason for leaving a current position. 32% of employees who stay with their current employer cited that their benefits package was their main reason.
With health care benefit costs rising, employers are strategically analyzing how other companies have their plans structured, in order to improve and cut costs. Benchmarking will show you what your weaknesses are, where and how to maintain your strengths, where you can improve, along with strategies, and perspective. Doing so can help arm you with information when making important benefit plan decisions.
What can be Benchmarked?
What can be benchmarked? What aspects of your benefits are important to your business’s success? Anything can be benchmarked, but common factors to consider would be total costs, cost-sharing measures, plan design, voluntary offerings, and workers’ compensation, paid leave. With employee benefits being the second largest expense, after compensation, employers are doing what they can to stay above the cost increases in healthcare.
It all boils down to what is important to the needs of your business and your employees. Looking at your own health claims from previous years will help get a better understanding of where your employees are spending their money and how they are utilizing their benefits. Once the area of spending is identified, employers can make changes to accommodate needs.
Projected 2019 trends for improving healthcare benefit costs, according to the National Business Group on Health, are consumer-directed health plans, offering virtual care services, management of specialty drug spending, improvement of drug rebates with PBMs, co-pay assistance programs, among other trends that may help in improving health care utilization and cost.
The Kaiser Family Foundation and the Health Research & Educational Trust conducted a survey to examine employer-sponsored health benefit trends. Their survey found that premiums have risen 55% since 2008 with the average family premium of $19,616 and the single coverage premium of $6,896.
In 2018, 49% of covered workers were enrolled in a preferred provider organization (PPO). and 21% of workers were enrolled in a high-deductible plan with a savings option (HDHP/SO). 61% of covered workers are enrolled in a self-funded plan.
Healthcare Consultants, Inc’s insurance software provider indicated that industries demographics of insurance benefits were offered by 19% Manufacturing. 14% Construction. 10% Healthcare. 10% Nonprofit. 6% Retail/Wholesale Trade. 6% Finance, Insurance, Real Estate. 4% Transportation, Communications, Utilities. 4% Public Administration. 3% Education. 1% EACH Agriculture/Forestry/Fishing, Hotels.Hospitality, Legal, Social Services. 20% were other services not listed.
Only 1% of polled employers admitted to not offering any sort of health care benefit. 62% of employers offer a PPO plan (7% decrease from 2017), 44% HDHP with an HSA, 17% HMO, 13% HDHP with an HRA, 8% POS plan.
93% of organizations offer dental benefits, a 10% increase from 2017. And 88% of employers offer life insurance for the employee, up from 76% in 2017.
The key to staying ahead of the job market and leading the competition against other employers in the battle to find and keep talent is keeping up with benefit trends. Contact a Healthcare Consultants, Inc agent, today, to learn more about what businesses in your industry are doing and how you can improve your compensation strategy.