Facing A Brave New World

I highlighted Prudential’s Fifth Annual Benefits Trends Study in a 5 part series, which you can access here through the Top Benefits Trends tag.

Prudential’s new study, Prudential’s Sixth Annual Study of Employee Benefits – Today and Beyond featured on Prudential’s Benefits & Beyond micro site features a different set of key trends.

A brief outline of the differences with links:

Fifth Annual Benefits Trends Study     Sixth Annual Trends Study 

Rising employee driven benefits model          Growing Importance of the Workplace
Worker Productivity                                          Voluntary Benefits
Redefining Enrollment                                       Changing Benefits Landscape
Increasingly Diverse Workforce                       Technology Front and Center
Changing Retirement Planning Attitudes        Evolving Broker Role

Here are links to documents detailing today’s 5 key employee benefits trends:

1.The Growing Importance of the Workplace

Employees looking to the workplace more for their personal insurance and savings products. This trend brings an opportunity for employers to gain a competitive advantage with their benefits packages and to attract and retain talent. Effective communication and education is vital when speaking to both employers and employees about the value of workplace benefits.

2. Gauging the Success of Voluntary Benefits

Employers continue to offer voluntary benefits more to increase employee satisfaction than for cost control. 75% of employers are currently gauging the success of their voluntary programs. Most have added more benefits options, and a large portion of them have seen an increase in employee satisfaction. Employees are also showing increased interest in the voluntary benefits offerings.

3. Grappling with a Changing Benefits Landscape

The benefits decision-making process is shifting, with bigger companies experiencing larger changes.  Employers who say that their process has changed over the past 5 years indicate that it has become a more collaborative effort with more groups involved. Senior management is increasingly involved and influential in making benefits decisions, and there has been a substantial increase in the outsourcing of benefits administration over the past four years.

4. Putting Technology Front and Center

Plan sponsors are elevating their use of and desire for technology and greater connectivity. Yet, basic functionality of web tools still needs attention and improvement. Nearly 60% of employers say it is important for their current benefits systems to interface with carriers’ systems. More than half of plan sponsors think it is at important that the carriers have the flexibility to do “plug n play,”  – to adapt and connect to other carrier or third-party administrator (TPA) systems.

5. The Evolving Role of the Broker

Brokers/consultants are fundamentally changing the way they do business and service their clients in response to external factors, such as the 2010 health care reform legislation. Health care costs, changing regulations, and health care reform, in addition to the economy are “greatly impacting” the broker/consultant business. The majority of brokers feel that their role as an employee benefits broker/consultant has changed to some extent in the past five years. Being more consultative is the main trend.

Final Word

These trends do not mean that the trends formerly noted are not continuing; in fact, they are consistent with an intensification of those trends. However, they reveal a fundamental shift in how stakeholders are viewing employee benefits in view of the uncertainty surrounding economic and regulatory pressures that are beginning to come into focus. While we continue to debate the current health care reform provisions of the PPACA, they mark a dramatic shift in thinking, and highlight the fact that, no matter what the outcome of the PPACA is, there is no turning back from reform. It is an important force that is here to stay.

Snap principle of re-examining employee benefits:

Employees, brokers and insurers are rethinking benefit strategies as they grapple with the uncertainty created by health care reform, a prolonged economic recession, and changing workforce demographics.