Retirement plan sponsors are the first, and most important, line of defense in providing employees with well-managed retirement savings plans.
With the first half of 2016 under our belt, more and more employers are looking ahead to the beginning of 2017 and the possible changes they will have to make to their group employee benefits plan. Likewise, since it is an election year, the uncertainty (and dare I say it, anxiety) is great.
The four trends I'll discuss today are areas that are driven largely by changes related to employee's response to social demands in the workforce and the ever-increasing cost of health care delivery. Being aware of and prepared to address these industry trends can help your organization plan for a successful second half of 2016, as well as a productive 2017.
1. Telemedicine
Telemedicine is a top trend of 2016. It uses technology to help physicians and patients communicate with each other, even if they are not in the same physical location. This communication can be either in real-time or delayed, via phone, webcam, or email. Telemedicine can be used for evaluation, diagnosis, and treatment of patients.
According to The American Telemedicine Association, the number of large employers offering telemedicine visits increased from 48% in 2015 to 74% in 2016.
There are many advantages to telemedicine—to both employers and their employees, including:
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More convenient care
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Increased access to doctors, especially in rural areas
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Greater access to specialists, especially for things like mental health services
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Higher cost savings for patients and plan sponsors
However, while telemedicine is a practical option, it is not intended to completely replace face-to-face health care visits with local physicians. As we move forward through 2016 and into 2017, employers and employees alike should remain aware and informed on the telemedicine trend.
2. The Rise of Health Care Costs
It's no surprise that we can expect health care costs to continue to rise throughout the duration of 2016. In fact, health-related spending is expected to exceed $10,000 per person this year, rising to $16,000 per person by 2025. Meanwhile, employers can expect their costs to continue to increase as well, although it's expected that most of that burden will be passed along to employees to help contain costs. Some of the cost-saving measures employers will be taking include:
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Moving to high-deductible plans
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Increasing premiums
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Narrowing network restrictions
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Implementing a defined contribution strategy
There are several culprits for these continued increases in health care costs, including:
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Increasing consumer demand and utilization
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Increasing medical prices
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An aging workforce population
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Increasing prescription drug costs
Moving through the end of the year and into 2017, employers and employees should remain cognizant of their options and opportunities to contain costs.
3. Voluntary Benefits
As employers continue to strive to set themselves apart from the competition and recruit and retain high-quality employees, we expect to see voluntary benefits become increasingly important. Millennials, in particular, have high expectations of their employers when it comes to comprehensive benefits packages. One voluntary benefit in particular, Student Loan Repayment, has really piqued the interest of Millennials and recent college graduates. In fact, an overwhelming 89% of job seekers surveyed by Beyond said that they believe a company's benefits package should include student loan repayment benefits.
Other voluntary benefits that are becoming increasingly popular and commonplace include:
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Financial counseling services
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Identity theft protection
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Pet insurance
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Long-term care coverage
Voluntary benefits will continue to grow in popularity, both with employers and employees, as employees "shop" for the best companies in which to grow their careers, and employers strive to recruit and retain top talent.
Staying aware of benefits trends can help your organization find creative ways to contain costs, while also setting yourself apart from your competitors.
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