When going up against larger competitors for a limited pool of highly qualified employees, small to midsized companies often find themselves at a disadvantage, particularly when it comes to benefits. Big businesses typically have access to a wider range of benefits and can offer better choices. And, larger companies usually have a deeper bench of in-house experts to handle their benefits strategy.
The playing field has been tilted in favor of larger companies for decades, but the disadvantage for smaller companies is even more acute in an era where the healthcare landscape is changing rapidly. Today, payment models are more complex, and technology plays a significant role in gaining access to coverage.
To find out how smaller companies are dealing with these challenges, hCentive conducted a pulse survey to explore what small to midsized companies need and what factors they consider when administering benefits. The survey focused on employer groups in the Mid-Atlantic and Northeast across a range of industries and roles.
Here are seven insights hCentive gathered from survey participants, which included people from HR/benefits, finance and legal as well as executive officers:
- Employers still value the ability to offer great benefits. While conventional wisdom says the employer-sponsored health benefits model is declining in popularity, particularly with smaller employers, the survey indicates that employers still value benefits. Smaller company leaders see benefits as a primary way to attract and retain the best employees in a tight job market.
- Employers need support from brokers they trust.Most employers work with an agency or individual broker to build their benefits package, but they report a variety of experiences. In some cases, the broker helps employers select and renew plans only.
Other brokers play a key role in ensuring compliance, assisting with enrollment and providing ongoing support to the company and its employees. Most employers seek a more proactive, supportive broker relationship.
- Employers require assistance in controlling costs.Spiraling costs are the #1 concern for smaller companies. Employers report that brokers are helping them tackle costs by offering alternatives such as different carriers and plan designs. But they express discomfort with the lack of transparency that exists today around options that could truly control costs and still offer better choices.
Also, among medium-sized companies, there is a lack of interest in becoming self-insured, which signals an opportunity for brokers to educate clients on the risks and benefits associated with self-funding.
- Employers need help managing choices.Employers indicated that they want access to more carrier and plan design choices, but they also said they need help putting together a benefits package that meet their business and budgetary requirements and fit with their employee demographics.
For example, they’d like more broker help to make choices related to carrier changes or implementing a money-saving high deductible plan. Smaller companies usually don’t have the expertise, resources or technology platforms their competitors have, so they count on brokers for support.
- Employers need support with benefits changes. Companies want more choices, but they prefer to offer fewer benefits options for employees that minimize disruption, focusing on strategies like offering multiple plans from a single carrier, including high-deductible plans. Employers say that employees are overwhelmed when they have many options.
Employers also report that they understand the value of communicating the features of new plans, such as the tax advantages of health savings accounts. However, they often lack the resources to communicate change effectively, so they need support.
- Employers want assistance with employee engagement. The companies surveyed indicate that employees are disengaged on benefits. Employers understand that effective methods of engagement depend on demographics, and they report that while outreach and guidance is key when employees are choosing benefits, support is even more important when employees use their plans.
But it’s a challenge for smaller companies to engage employees and educate them on coverage, out-of-pocket expenses and other critical features, so they need assistance.
- Employers are willing to consider technology solutions. Most smaller companies don’t yet have online systems or benefits platforms (or have limited capability), but survey participants report they would consider it if the system can help them address costs, choices, communication and education challenges. An easy-to-use system with decision tools and data can also help employers as well as employees make smarter decisions, and that prospect is attractive to smaller companies, as it ultimately lowers benefits costs.
The key takeaway from the hCentive survey is that small to midsized companies need help but are underserved. Since they are competing with much larger companies for the best and brightest employees, they understand that benefits can make an enormous difference. But to compete effectively, they need assistance, particularly when an owner or general manager also handles HR.
A relationship with a broker who offers robust support enabled by the right technology can be a critical advantage for smaller businesses.
Date: June 6th 2016.