Involvement from company leadership plays more of a key role in driving employee medical plan participation than financial incentives, according to the 2016 Benefit Analytics and Benchmarking Study (“BABS”), conducted by Wells Fargo Insurance, part of Wells Fargo & Company. Whether establishing a culture of health, demonstrating support of wellness, or narrowing their network of healthcare providers – which can save up to 10 percent of costs for businesses – employers who take an active role in plan management can favorably impact the total spend on benefit plans, the study found.
BABS analyzed more than 1,000 employers nationwide to better understand trends and costs related to employee benefits. It represents current data from 2016 and well over one million employee lives.
Key among the findings was that an employer's cash contribution to Health Savings Accounts (“HSAs”) did not impact employee participation in plans with HSAs. In addition, financial incentives did not motivate employees to opt out, or waive, medical plan coverage.
“Many of the findings shatter traditional industry narratives that we have been following for the last 10 years, about cash and cash-equivalent incentives with employee benefit plans,” said Nick Allen, national practice leader for customer analytics with Wells Fargo Insurance's employee benefits national practice. “As it turns out, many employees do not view HSA contributions from their employers as an incentive when choosing plans.”
“We've seen senior leaders encourage their employees to leave work early to exercise or to attend their annual physical appointment. That type of encouragement from management sends a strong message, not only boosting employee morale, but having a positive financial impact,” added Dan Gowen, national practice leader with Wells Fargo Insurance's employee benefits national practice.
With healthcare costs expected to continue to rise in 2017, employers are looking for more ways to manage benefit expenses. The study found companies that offer more wellness initiatives, such as walking or biking trails, smoke-free environments, and lactation rooms, reported lower medical premiums. However, fewer than one in five employers has a documented strategic plan in place to address wellness and disease management.
Although support from senior leadership is important to increase engagement, only 45 percent of respondents indicated seeing support from their executives. Demonstrations of support include active participation in benefits programs (21 percent), endorsement of benefits plans to their board of directors (16 percent), involvement in employee benefits communications (25 percent), and inclusion of employee health and well-being in organizational goals and value statements (17 percent).
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].