By Tulay Turan, J.D.
Addressing needs of multi-generational workforce continues.
Enrollment in high-deductible health plans (HDHPs) as well as voluntary benefits, specifically income protection products, increased as employers continued to diversify and enhance their benefit offerings for 2021. That’s according to The State of Employee Benefits™ 2021 report by Benefitfocus. The report, which took its findings from millions of actual enrollment transactions occurring on the Benefitfocus platform, is an analysis of employee benefit plan design and participation highlighting key trends that are shaping the future of the benefits ecosystem.
"The State of Employee Benefits provides a clear picture of how employers maintained their strategic focus on employee engagement and controlling health care costs. It also highlights, in the midst of the COVID-19 pandemic, how employers are approaching benefit plan design, offering more consistency in workforce benefits planning and better addressing employees' total wellbeing," said John Thomas, Chief Data Officer of Benefitfocus. "With the long-term impacts of the pandemic still largely unknown, our unique data capabilities help us identify enrollment and engagement trends that can help guide employers to adapt their benefit strategies accordingly."
Among the report's key findings:
- Employers are expanding benefit packages to address the diverse needs of a multi-generational workforce. Nearly three quarters of large employer groups offered a mix of traditional health plans (PPOs) and high-deductible health plans (HDHPs) for 2021, moving away from single health plan strategies. Voluntary benefit offerings continued to expand, specifically income protection benefits, as a way to supplement core coverage and provide greater flexibility and choice.
- Employee health plan premiums saw moderate growth as employers took on more of the cost burden in 2021. While employee health plan premiums saw only a slight increase between 2020 and 2021, employers are paying more as a percentage of the total premium in 2021.
- HDHPs are catching up to traditional PPOs in popularity among employees. PPOs are still the health plan of choice among employees, but HDHPs have grown in popularity across the board, with participation up 30 percent since 2018.
- Consumer-directed health care accounts appeal to younger employees. Since 2018, the percentage of Gen Zers with a health savings account (HSA) has more than doubled. Gen Zers, millennials and Gen Xers increased HSA contributions by 10 percent or more in 2021.
- Supplemental benefits gained significant traction among employees. Over the last four years, employee participation in hospital indemnity plans has more than doubled and increased by 13 percent in 2021 alone. Participation in both critical illness and accident plans has grown by 65 percent or more since 2018 as well.
Based on its analysis of the compiled data, the report concludes: "There was a clear trend upward for expanding benefit offerings as a way to differentiate in a competitive job market leading up to 2020. If anything, employers took a more paternalistic approach in 2021, continuing to offer more benefits and absorbing health plan cost increases to keep things consistent for employees. At the same time, employees took more advantage of savings opportunities and income protection."
For the report, Benefitfocus aggregated, anonymized and analyzed 3.5 million actual enrollment records from nearly 350 large employer customers (1,000+ employees). That analysis is illustrated through graphs and appending tables and depicts trends for benefit plan design and participation leading up to and following the onset of COVID-19.
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