ACA Spurs Benefits Rethink among Employers

Expected cost increases stemming from the Affordable Care Act are spurring employers to consider new approaches to benefits funding and administration.
The increasingly complex benefits environment is also making employers rethink their benefits strategies, which may allow them to take advantage of new opportunities for benefits communication, funding and administration, according to the “Guardian Workplace Benefits Study,” released in August.
Although many employers in the study emphasized the need for cost control, they also expressed a growing interest in raising their employees’ financial security and satisfaction with provided benefits.
Only three in 10 workers surveyed said they felt financially secure. What little security they feel hinges, says Guardian, on their workplace insurance benefits. In fact, 42% of employees surveyed indicated that they rely on their benefits for all or most of their financial preparedness.

Whose responsibility is it?
Only 16% of employers in the insurer’s study strongly believed that they have a responsibility to ensure their employees’ financial preparedness.
Large employers (those with at least 100 benefits-eligible employees) were more inclined to express some belief that they had this responsibility (46%) than were smaller firms (29%). In contrast, nearly two in three employees believed that employers have a responsibility to offer them insurance and retirement benefits.

Cost-sharing as a strategy
Most employers surveyed predicted substantial increases in the cost of health insurance that are tied to the ACA.
That said, fewer employers compared to last year said they were shifting more of the premium cost burden to their employees as part of their effort to reduce their own costs. More employers said they instead were seeking out increased efficiencies and reductions in administrative burdens.

Workers sound off
While many workers who were surveyed said they felt their benefits met their personal needs and positively impacted their financial health, those with lower incomes ($25,000 to $49,000) were less likely to think that their benefits met their needs, were affordable, or improved their health or financial security.
One area where workers expressed much greater satisfaction was with the effectiveness of their benefits communication. In addition, workers who had more assistance and communication from their employers appeared to place more value on their benefits.

Other ACA concerns
Employers in the survey seemed uncertain about how to manage the administrative and compliance requirements of the ACA.
Only 60% of large employers felt well prepared for the post-health care reform area, and 40% of smaller companies felt well prepared.
Those companies that said they are more likely to increase the level of outsourcing for their benefits programs were also more likely to state that they were unprepared for the ACA.

Other coverage
Although most employees have access to some kind of health insurance for themselves and their families, one in three has no disability insurance, one in four has no life insurance, and one in five has no retirement savings plan.
Furthermore, even when employees are offered these benefits, they often do not take advantage of them due to either poor decision-making or ineffective communication, according to the survey.