Open Enrollment Digital Listening Bulletin #3

Welcome to the third installment of our Fall 2019 Group Benefits Open Enrollment Digital Listening Bulletin. In this periodic e-mail, we take a look at the trends, conversations, and themes that we are seeing dominate the group benefits digital discussion over the last several weeks as many carriers, brokers, heads of HR, and employees enter the home stretch of the open enrollment season.

The last few weeks we have picked up a lot more discussion around emerging categories of enhanced benefits as new products are “digested” by the market throughout this open enrollment; a continued focus on cost control and driving employee engagement; and ultimately,  discussions about the future of employer-based benefits in today’s high-cost environment.

Here we go.

Emerging Voluntary Worksite Supplemental Lifestyle Enhanced Hidden Benefits

The industry does itself few favors by changing the vocabulary around its products constantly.  Little wonder that many employers and employees are confused.  CNBC talked about the “hidden” benefits of open enrollment in a recent segment.  Perhaps that is a more apt descriptor for this category of benefits.

Recent research by Unum found that three-quarters of working adults will spend 45 minutes or less reviewing their benefits before enrolling.  Despite that, Prudential found that 65% of employees actually chose new benefits, and most of them credited their employer for employing a variety of communication methods to keep them informed.

The challenge for carriers, brokers and employers is how to present and communicate an increasingly large and confusing array of benefits in a simple, coordinated and personalized way.  When Aflac completed its acquisition of dental and vision provider Argus in early November, it highlighted that the acquisition “moves us to the front page of the benefit enrollment process for employees”.

Here are some of the other “hidden” benefits that appear to be moving toward the front page this year.

Student loan assistance.  A recent SHRM study indicates that nearly 8% of employers will be offering some sort of student loan assistance benefit in 2019, up from 4% last year.  Lots of room for growth but doubling year-over-year is a good sign that the trend is here to stay.

Unum is putting their money where their hidden benefits are, offering an innovative program managed by Fidelity which allows Unum employees to trade up to five days of unused PTO a year for a payment against their student loan tab.  Still, with $1.5 trillion in outstanding student loan debt, that’s a lot of PTO!  Expect to see more focus on student loan debt specifically, and financial wellness more broadly.

Unum is also taking benefit innovation to a new level,  launching the 2019 Historically Black Colleges and Universities (HBCU) Innovation Challenge in cooperation with the Company Lab this Fall.  Thirty-two HBCU juniors and seniors from ten states traveled to Chattanooga to participate in a 24-hour innovation session to ideate new benefit solutions—and to help develop new benefit leaders.   Divorce insurance apparently made the list. ( We found this Divorce Probability Calculator in the event your actuaries need a starting point.)

With a name like Smuckers—the benefits have to be good.   Paid parental leave remains one of the top, most-requested benefits. The JM Smucker Co added 12 weeks of paid leave for all employees following the birth, adoption or foster placement of a child, and joins other venerable brands like Hilton and the Washington Post in adding or expanding this benefit. Paid family leave is the third most requested benefit beyond health insurance.

Indiana University went further, adding lactation supplies to more than 60 wellness rooms to support breast-feeding mothers who are returning from parental leave.  And Lawline, the nation’s leading online Continuing Legal Education (CLE) provider, was selected as one of the top 10 companies for women by DataBird Business Journal, in part as a result of its generous parental leave policies.

One is the loneliest number. Cigna is focused on raising awareness of the loneliness epidemic through research and encouraging its employer health plan clients to promote good relationships among workers by leveraging resources they may already have, like affinity groups, volunteer activities or sports leagues.  Their research found that that 18- to 22-year-olds reported feeling the loneliest and also reported feeling worse in health than older adults reported, making this an important behavioral health consideration for employers as Gen Z begins to enter the workforce in greater numbers.

“Back to Ugly”

So far this OE period, national cost surveys peg 2020 average increases in the mid-single digits for large employers.  Many brokers report renewals generally in the range of 6-percent increases for self-funded employers, and 4-percent to 9-percent increases for small employers, but others are seeing increases that range from 7-percent to 18-percent for small employers.   “Back to ugly” as one said.

Employers are becoming even more engaged in helping to control insurance costs.  In the age of high—cost, high-deductible health plans, employers are demanding greater access to health care cost calculators, increased pricing transparency and quality information on providers.  In a recent survey of best practices, Willis Towers Watson PLC showed that 26% of respondents have a tool in their health benefits platform for employees to look up price and quality data on care providers currently. That’s expected to grow to 31 percent for 2020 and to 48 percent by 2021.
Still, employee usage of these cost and quality tools has remained in the single digits and employers and brokers are looking for ways to incentivize their usage, even including gift cards in some cases.

In fact, Premier, a NC-based group purchasing and consulting firm that is partially owned by hospitals, health systems and other healthcare organizations, launched Contigo Health in mid-November to do just that—to put more control in the employers hands to help control costs by creating closer relationships with healthcare providers and leveraging data, analytics and technology across the network to drive costs down and quality delivery up.

Other carriers are launching expanded HSA and FSA offerings to provide employees with tax-advantaged benefit account solutions that will help to offset costs and maximize existing healthcare and voluntary benefits offerings.  MetLife announced their program in late November, designed to support multiple providers and benefit administration platforms, thereby offering “… a smoother and more seamless experience, eliminating some of the complexities of using multiple providers.”

With the Trump Administration’s announcement in November that they intend to extend pricing transparency requirements to include Insurance companies and group health plans that cover employees—in file formats that are computer-searchable—the industry should expect even more scrutiny of both costs and outcomes.

• “An excellent initiative that MUST be pushed through. True open market competition.” @TimothyShrout1
• “If this holds up in court it will profoundly disrupt American healthcare.” @kevin_p_shah

While the outcome is far from decided, and there is a long fight ahead, the end result will likely be greater transparency and cost comparison, and carriers need to be evaluating new strategies to compete in that environment, including value-based analytics and plan performance assessment.

“If you like your employer-based plan, you can keep it”

The M4A debate rages on and will continue for a while.  Meanwhile, the HRA changes announced in June go into effect on 1/1/20.  While, there is no consensus yet on how this will impact employer-based coverage,  HHS estimates that as many as 800,000 employers are expected to choose this option to provide coverage to more than 11 million employees in the next five years.

Expect the landscape to get even more confusing next year as acronyms like ICHRA, EBHRA, and QSEHRA get added into the lexicon and employers are faced with even more benefit choices in 2020.

Brokers and carriers will need to develop strategies for engaging with this new model of benefits delivery and partnering with multiple new entrants in the field.

And employees will need lots of support:

• “Do people realize that next year their company may opt out of even providing private insurance?” @TheLiberalVol
• “You want to see a really good way to make our healthcare system even worse that it is now? Here you go! New federal rules will allow employers to ‘401(k)-ize’ health benefits. What could go wrong? Yes, everything.” @NVUnionLawyer

New startups, like Take Command Health have been launched to capitalize on this new model.  In October, they announced a partnership with Oscar Health to bring ICHRA solutions to several markets in 2020 that leverage Oscar Health individual plans.  Expect to see many more announcements over the coming months, and whole new benefit administration platforms emerge to support HRA plan administration.

And you thought this year was fun…