Employee benefits trends in the workplace and marketplace: Perspectives from the C-suite and HR/Benefits Managers

Transcription

1 White paper: Employee Benefits Trends Survey Employee benefits trends in the workplace and marketplace: Perspectives from the and HR/Benefits Managers Employee Benefits National Practice January 2016 As you will see in the results, the employee benefits market is continually evolving. Employers remain in a juggling act of adhering to regulations, improving health, and controlling costs. Dan Gowen, National Practice Leader for Employee Benefits, Wells Fargo Insurance

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3 An era of concern, caution, and corresponding change As 2016 begins, benefit changes are occurring for companies across all industries. Employers are not standing idle when it comes to their existing employee benefits offerings in light of the Affordable Care Act (ACA). They continue to make significant changes to their benefits in order to manage costs, increase participation and engagement, implement cost-sharing strategies, and improve health. And, after all these modifications, most employers are still seeing rising costs for 2016 and are concerned they will be penalized with the excise or Cadillac tax originally set for 2018, now delayed until Additionally, human capital and health and productivity remain key issues with employers. In fact, implementing the changes mandated by healthcare reform legislation has caused executives to be increasingly concerned about attracting and retaining employees, improving their health, and measuring the return on investment (ROI) associated with improving health. All of this is according to our Employee Benefits Trends Survey, which surveyed employers with 50 or more employees, as well as some employers with 49 or less employees. This white paper reveals key findings for these employers as the ACA continues into its next phase. About the survey We commissioned the second annual Employee Benefits Trends Survey of executives and human resources or employee benefits () managers across the United States. Our survey was designed to better understand how organizations are responding to healthcare reform requirements while providing a competitive benefits strategy for employees and to compare the results to our survey. More than 700 respondents answered a series of questions that covered current marketplace trends and concerns related to employee benefits, employee attraction and retention strategies, health and productivity, private exchanges, and how the ACA is impacting employers benefits strategies. Key findings Costs, productivity, and maintaining current benefits are top goals Results from the survey show that in the near term, managing the costs of benefit programs remains the top goal. Other critical goals include maintaining the current level of benefits and employee productivity. In the next five years, managing employee benefits costs remains the top priority of employers, driven in part by their concern about paying the excise tax, which many employers are concerned about and almost all admit they don t want to pay. Maintaining employee productivity remains their second most important goal. And rounding out their top three, employers continue to value a healthy and a fully productive workforce, which is encouraging to see. Without it, chances of success in any organization can be greatly reduced. Top three goals for executives and managers Short-term (next months) Maintaining productivity of employees 20% Managing the overall cost of healthcare benefits 18% Maintaining current level of benefits offered 1 Managing the overall cost of healthcare benefits 21% Attracting high quality new talent 16% Maintaining current level of benefits offered 15% Long-term (next five years) Managing the overall cost of healthcare benefits 26% Maintaining productivity of employees 18% Maintaining current level of benefits offered 15% Managing the overall cost of healthcare benefits 20% Maintaining productivity of employees 1 Maintaining current level of benefits 15% Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

4 An increasing focus on voluntary benefits From to, our survey showed an interesting shift of focus in the C suite, however. In, the top short-term goal in the was maintaining employee productivity, while in, focus shifted to expanding the offering of voluntary benefits. In, the top long-term goal in the C suite was managing the overall cost of healthcare benefits, while in, priorities also shifted to expanding the offering of voluntary benefits. On the contrary, managers did not shift their focus. The top short- and long-term goals for managers in remained the same as in : managing the overall costs of healthcare benefits. managers ranked expanding voluntary benefits as seventh out of eight top short-term and long-term goals. As more employers offer high deductible health plans, the C suite is mindful of the financial exposure that employees face with these plans and are trying to mitigate it by offering voluntary benefits solutions (e.g. critical illness and accident insurance) to help fill that gap. Voluntary benefits also allow employers to better address the needs that a growing and diverse workforce has come to expect. Employers are more concerned about attracting and retaining employees In our survey, 45% of C suite executives said they were concerned about attracting and retaining employees in light of the ACA; in, that number jumped to 62%. The percentage of managers citing concern remained unchanged from at 4. Overall response to change in employee benefits offering These findings correlate with another Wells Fargo Insurance study conducted in late that cited retention and attraction of top talent as the fifth top business risk overall, trailing only economic conditions, regulatory change/scrutiny, increasing competition, and failure to innovate. If the economy continues to improve, demand for talent will grow and having a benefits program that fits the company culture is crucial to securing key talent. Clearly, a well-designed competitive employee benefits package is critical to attracting and retaining a highly productive workforce. Employers should consider the following questions: Is our benefits package appropriate for the majority of our workforce as well as prospective employees? Do we consider the ages and salaries of our entire workforce when developing our benefits design? Do we provide multiple plan choices? Have our employees asked for enhancements that we have not been able to provide? Are there gaps that leave some or all of our employees exposed? Do our benefits align with our company strategy and culture? As more employers expand their talent searches beyond their local regions to manage the impact of some baby boomers exiting the labor market, it is important to note that a multi-generational workforce will have different needs. It is essential that the benefits plan provides options and flexibility for those employees, as well as sufficient education to allow the employees to make the best selections. "We take polls during the year to see where the employees heads are as far as the benefits they already have, what they need, and how we can make their burden a little bit easier. survey respondent 3 28% % 2 28% 2 11% 16% 31% 26% 26% Very concerned Somewhat concerned 29% 2 Neutral Not very concerned/ not at all concerned Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

5 Importance and effectiveness of human capital strategies is slightly waning The survey showed human capital strategy issues are still important, but some concerning trends have arisen. Decreased importance of various areas to the success of human capital strategy In, executives ranked four areas lower in importance for the success of their human capital strategy than they did in. These areas are improving employee productivity, improving employee morale, providing a competitive benefits program, and retaining current employees. Importance of areas of success in human capital strategy (Top two box importance) Improving employee 91% productivity 95% 91% Improving the health of employee Improving employee morale Providing a competitive employee benefits program Retaining current employees *** 90% 96% 89% 95% 89% 95% 95% Employee Benefits Attracting new 88% 85% employees 90% Trends Survey: Early Insights to rise. Among 55 to 64-year-olds, the participation rate was 61.9 percent in 2002 and increased to 64.5 percent in BLS projects their participation rate to increase further, to 67.5 percent in The Centers for Disease Control notes, A competitive labor market will exist in the future due to fewer younger workers entering the workforce to replace retirees as well as a growing number of older workers who will want to remain in the workforce due to personal or financial reasons. Each group will seek employers who offer an attractive benefits package, development opportunities, and a high-quality environment in which to work, posing challenges for employers to effectively recruit and retain employees. 2 Employers expect to make changes to future employee benefits offerings Survey results show that companies appear to have already made significant changes to their core benefit offerings compared to. In 2016 or 2017, most are planning to make additional changes to their benefits offerings in a variety of areas. Wellness offerings will continue to increase Consistent with our survey findings, companies continue to expect a very strong focus on wellness for the future. In 2016 or later, 73% of companies intend to make health and wellness changes. About half (51%) also expect to increase their budget for health and wellness in 2016 or 2017, when they plan to make these changes. 8 8 regulations 89% Employers expect to make changes to future employee benefits offerings Satisfying federal and state *** Not asked About in 2 14 half of companies expect to make changes to some element of their plan offerings in 2016 or 2017 Decrease in perceived effectiveness of human capital Changes to plan offerings strategies The perceived effectiveness of the human capital strategy for these mid- to larger-sized companies generally declined from to. Both and managers felt the effectiveness of company support declined 52% in adding improving a high employee 56% increase productivity, in satisfying deductible plan employee federal offering and state regulations, contribution and retaining current percentage employees. The importance of effective human capital strategies will increase More than as the half U.S. of workforce companies ages. expect According to increase to the the Bureau budget of Labor for Statistics benefits (BLS), labor force participation rates of people age 55 and over have risen in recent Increase budget for employee benefits at some point* decades, and it is projected that the rates will continue *** 70% 88% 85% 91% 89% 90% 55% increase in co-insurance feature More than half of companies expect to make changes related to health and wellness in 2016 or 2017 Increase in wellness offerings and/or add wellness incentives 21% 6% 21% 39% 73% Chart figures are rounded Chart figures are rounded. No change Will change in 2016 Will change in 2017 Will change sometime after 2017 Don t know or N/A intend to make health and wellness changes in the future The majority of executives and Wells Fargo Insurance white managers paper: expect Employee healthcare Benefits costs Trends to increase Survey January

6 However, executives and managers are not necessarily in accord on their future plans for wellness offerings: For 2016, 45% of executives said they plan to increase wellness offerings, compared with only of managers. 4 of executives plan to add wellness incentives or penalties, compared with only 30% of managers. In 2016, 39% of executives expect to increase the health and wellness budget compared with only 28% of managers. Changes to strategic management initiatives Changes to strategic management initiatives No change Future change Funding from fully insured to % 11% self-funded 4 18% 1 9% Defined benefit plan to defined contribution plan Offer coverage through private exchanges Increase the budget for health and wellness Increase employee headcount Technology investments dedicated to employee benefits Increase budget for employee benefits No change 31% 2 35% 22% 33% 2 29% 21% 31% 19% 26% 2 21% 22% 16% 33% 23% 1 21% 9% 39% 2 28% 15% 35% 23% 16% 33% 1 11% 32% 26% 1 25% 15% 15% 39% 2 11% 30% 19% 1 Don t know N/A 8% 12% 1 2% 12% 2% Will change in 2016 Will change in 2017 Will change after 2017 A successful wellness strategy manages the total health of the population. In this fully-integrated approach, the goal is to manage healthcare s total financial impact on an employer, including direct (medical and benefit plan) and indirect (absenteeism and presenteeism) costs. We expect that even more employers will make use of data analytics to evaluate benefits performance to manage the quality and cost for their employees in the next five years. Companies can use leading-edge data integration platforms to analyze these costs. A robust platform integrates all of the information previously only available to carriers and providers, but now available to employers with self-funded plans. Medical and pharmacy claims, utilization data, lab results, and workers compensation, combined with self-generated data including health risk assessments, wearable fitness activity, and consumer purchasing behavior creates a more holistic view of the employee. Evaluation of this information over time will demonstrate the impact their financial and clinical interventions have on the population. Solutions in the health, wellness, and productivity space include interventions that: Increase consumer awareness Elevate personal advocacy Improve overall health and well-being Coordinate and navigate the fragmented healthcare system Collaborate and integrate the holistic employee experience Bring innovative resources to the right employee population at the right time Health plan offerings will change Managing the overall cost of healthcare benefits remains one of the top goals for employers, and about half of companies expect to make changes to some element of their health plan offerings in 2016 or More than half expect to add a high-deductible plan offering, increase the employee contribution percentage, or increase the co-insurance feature. As with the wellness offerings, executives may be expecting these changes to happen sooner than managers are. Changes to plan offerings Eliminate coverage for spouces High deductible plan offering Value-based plan design Increase plan type options Increase co-insurance feature Increase employee % contribution No change Changes to plan offerings No change Future change 33% 2 20% 1 39% 21% 20% 28% 31% 26% 31% 20% 35% 22% 30% 20% 2 29% 28% 12% 30% 15%12% 3 28% 9% 22% 20% 38% 21% 1 26% 20% 35% 25% 31% 18% 8% 35% 25% 1 30% 21% 11% Don t know N/A 3% 12% 1 9% 5% 3% Will change in 2016 Will change in 2017 Will change after 2017 Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

7 Specifically related to the ACA, most executives and managers expect to make some changes to their benefits program over the next five years: 3 of executives and 28% of managers cite plans to move employees to the public exchange when available. executives are also more likely to put emphasis on eliminating spousal coverage (31%) than managers (20%). Strategic management initiatives, such as reducing employee headcount, moving employees from full-time to part-time, and terminating plan offerings, are least likely to be targeted for change, and are less expected by managers. Changes to strategic management initiatives Reduce employee headcount Moving full-time employees to part-time Terminate plan offerings Decrease budget for employee benefits Decrease budget for health and wellness Decrease staff resources dedicated to employees benefits Reduce workforce hours Funding from self-funded to fully insured No change No change Future change 35% 2 18% 15% 42% 19% 12%1 33% 4 33% 45% 35% 40% 32% 42% 33% 41% 32% 40% 28% 42% 25% 21% 1 16% 21% 28% 19% 15% 18% 16%11% 21% 23% 16% % 18% 11% 21% % 111% 26% 25% 12% 20% 15% 28% 23% % 11% Don t know N/A 11% 6% 8% 6% 15% 5% 11% 5% 1 6% 12% Will change in 2016 Will change in 2017 Will change after 2017 Importance of improving health and measuring ROI is increasing This year our survey asked a new question about the importance of improving the health of employees. Among respondents, 91% felt this was important, compared with 85% of managers. Likely aligned with this importance, executives are increasingly thinking about how to effectively measure the ROI of efforts to improve the health of employees more so than managers. In : 88% of executives said it was important to measure the impact of improving employee health an increase of 6% from. 7 of managers said it was important to measure the impact of improving employee health a decrease of from. Importance of measuring financial impact of improving employee health 5 49% 3 33% 4 35% 9% 15% 15% 11% 3% 9% 5% Furthermore, executives are more likely than HR/ EB managers to perceive positive impacts from their benefit programs in terms of lower medical costs, reduced absenteeism, and reduced presenteeism. Over the next five years, 48% of executives and 3 of benefit managers expect greater use of health data to evaluate benefit plan performance. In the past, presenteeism, absenteeism, short- and longterm disability, and workers compensation were rarely considered parts of the healthcare spend equation. Today, it s critical to integrate a company s entire risk profile and thoroughly examine all data to identify the most appropriate solutions. Data mining and clinical review should be used to identify any trends in the covered population, where the opportunities are for improvement, and where to make Wells Fargo Insurance white paper: Employee Benefits Trends Survey January % 48% Very important Somewhat important Neutral Not very important/ not at all important Changes to employee benefits program over the next five years Greater use of health data to evaluate benefit plan performance Greater emphasis on cost/pricing and quality transparency Growth in telehealth/telemedicine Greater focus on individual consumers and their engagement and accountability in healthcare decisions Greater shift to defined contribution plan Shift in provider reimbursement from volume to value Other Don t know 48% 3 40% 3 40% 29% 31% 28% 22% 26% 0% 1% 6% 12%

8 future investments. This will ensure that the appropriate health management programs are appropriately designed and implemented, resulting in improved health and maximizing the dollars spent. Investments in health are investments in workforce productivity and not solely a line item cost. Cadillac tax The other expected big impact and concern at the time of the survey, was the excise or Cadillac tax that was originally set to take effect in 2018 for employers whose medical plan costs exceeded certain thresholds. Employers are becoming more effective at measuring the financial impact of improving employee health Employers generally expect their medical plan costs to exceed the thresholds for the excise tax in 2018 Not sure 29% No Regional expectations of exceeding excise tax cost thresholds: 69% of employers in the South Among the industries 5 of employers in the surveyed, 83% of employers Northeast in retail trade expect they will 53% of employers in the West exceed the tax thresholds 48 % of employers in the Midwest Most employers were concerned and anticipated plan changes as a result. 52% of employers were concerned about paying the excise tax with their current plan design. executives think their companies are more effective now at measuring the financial impact of improving employee 58% expected to exceed the thresholds, 29% did not, and health than Employee last year. Benefits were not sure. From to, Trends the percentage Survey: of executives Early Insights who feel their efforts to improve employee health are Among the industries surveyed, the retail trade had the The Affordable Care Act (ACA) excise tax has most highest employers concern on with alert, 83% concerned of employers and effective jumped from 73% to 81%, while the percentage in this industry anticipating plan changes of managers who feel that way remained stable expecting to exceed the tax thresholds. at 7. Measuring the impact of improving health can range from looking solely at the medical Expect that costs will to exceed a more thresholds holistic for excise view taxof productivity, absentee rates, costs, and morale. Data mining should be leveraged to identify population trends and opportunities for improvement, and to predict future costs. Employers are expecting both cost and tax impacts Healthcare costs to increase in 2016 Despite the benefits changes already made and the others anticipated in 2016, the majority of executives and managers expect 2016 healthcare costs to increase 59% expect costs to increase while only 21% expect them to decrease. Most expecting an increase, anticipate costs rising up to 5%. Despite many new innovations, affordability remains a key issue for both the employer and 52% of employers are concerned about excise tax exposure with their current plan design Very concerned Employee Benefits Somewhat concerned Neutral Trends Survey: Early Insights Not very concerned The Affordable Care Act (ACA) Not sureexcise tax has most employers on anticipating plan changes Employers generally expect their medical plan costs to exceed the thresholds for the excise tax in 2018 Expect that costs will exceed thresholds for excise tax Most employers who expect their plan costs to exceed the thresholds for the excise tax anticipate making some changes to avoid the tax 58% Yes the consumer. As the Changes health being of the considered population to avoid the continues excise tax to deteriorate, making only changes to the plan, provider network, insurer, or contributions 51% will not 46% stem the tide. It will take a concerted effort to improve the overall health of the covered population. Increase wellness Changing employee initiatives to Health Savings 2016 healthcare costs change improve estimate health of Account (HSA) the population contributions to 18% 5% Increase by or more post-tax Increase 20% Increase Increase by 5% to 60% 58% Increase by up to 5% 30% 3 No change Decrease 25% 15% 12% 3% Decrease 18% 58% Yes 46% Reduce the value of the plan design Concern with excise tax exposure with respect to current plan design 5% 38% Not sure 29% No Not at all concerned Regional expectations of exceeding excise tax cost thresholds: Implement Eliminate Nothing we a 69% spousal of employers in the flexible South spending Among the will industries pay the tax if 5 of employers in the surveyed, 83% of employers carve-out plan account plan costs exceed the Northeast in retail trade expect they will thresholds 53% of employers in the West exceed the tax thresholds 48 % of employers in the Midwest Source: Wells Fargo Insurance Employee Benefit Trend Survey Products and services are offered through Wells Fargo Insurance Services USA, Inc., a non-bank insurance agency affiliate of Wells Fargo & Company. Decrease by 5% or less Products and 2 services are underwritten by unaffiliated insurance companies, except crop and flood insurance which may be underwritten by an affiliate, Rural Community Insurance Company. Some services may require additional Decrease fees and may by 5 be to offered directly through third-party providers. Banking and insurance decisions are made independently and do not influence each other. Wells 9% Fargo Insurance Services USA, Inc. All rights reserved. 5% Decrease by or more 29% 39% 52% of employers ar exposure with their Most employers who expect their plan costs to exceed the thresholds for the e some changes to avoid the tax Changes being considered to avoid the excise tax Concern with excise tax plan design 5% 51% 46% 46% 38% Wells Fargo Insurance white paper: Employee Benefits Trends Survey January % 29% 3

9 53% of employers in the West 48 % of employers in the Midwest exceed the tax thresholds Most employers who expect their plan costs to exceed the thresholds for the excise tax anticipate making some changes to avoid the tax Changes being considered to avoid the excise tax 51% 46% 46% 38% 2% Increase wellness initiatives to improve health of the population Changing employee Health Savings Account (HSA) contributions to post-tax Reduce the value of the plan design Implement a spousal carve-out plan Eliminate flexible spending account plan Nothing we will pay the tax if costs exceed the thresholds Source: Wells Fargo Insurance Employee Benefit Trend Survey Products and services are offered through Wells Fargo Insurance Services USA, Inc., a non-bank insurance agency affiliate of Wells Fargo & Company. Products and services are underwritten by unaffiliated insurance companies, except crop and flood insurance which may be underwritten by an affiliate, Rural Community Insurance Company. Some services may require additional fees and may be offered directly through third-party providers. Banking and insurance decisions are made independently and do not influence each other. Most employers who expected their plan costs to exceed the allowable thresholds for the excise tax anticipated making Wells some Fargo changes Insurance Services to avoid USA, Inc. the All rights tax. reserved. The top three changes included: Increasing wellness initiatives to improve health of the population (51%) Changing employee Health Savings Account (HSA) contributions to post-tax (46%) Reducing the value of the plan design (46%) Only 2% of companies said they would not make changes and simply pay the tax if costs exceed the thresholds. Note: In December, Congress passed a bill, which included a provision to delay the excise tax until Employers should closely monitor legislative developments regarding this law. Other expected impacts Private exchanges. executives increasingly expect a range of impacts from healthcare reform legislation in the next five years. One notable change is 7 of executives expect private exchanges to impact their companies in the next five years, up 15% from. One reason for the increase may be because there are numerous definitions of what a private exchange entails. Depending on how respondents view an exchange shapes their interpretation of its impact. Another reason may be that employers will be considering a defined contribution (DC) arrangement, which 6 of and 5 of managers anticipate in the next five years. While it is not necessary to have an exchange to implement DC, many feel the two go hand-in-hand. Although interest in private exchanges continues to grow, it s critical for employers to ask themselves what they are trying to accomplish by moving to an exchange, as they may not be a good fit for all employers. Private exchanges facilitate a shift from providing employees with a defined healthcare benefit to instead providing a defined contribution. An ideal private exchange offers multiple carriers and product options, and includes decision support tools, benefits administration, and a defined contribution element. It s important for employers to understand that private exchanges are a platform to deliver benefits, but are not a direct cost control mechanism. In addition, cost sharing does not change medical trends, even if it does reduce costs. Even with an exchange, employers are still at risk for excise taxes unless a more fundamental change is made. Moving to a defined contribution arrangement has piqued many employers interest, but it does not stem the growth of the total healthcare costs. Wellness program guidelines. Echoing their plans to increase wellness plan offerings and budgets, one in three executives expect wellness program guidelines to impact them in the next months. The U.S. Equal Employment Opportunity Commission (EEOC) issued proposed rules in April about wellness programs included in group health plans and the guidelines that Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

10 must be followed if the program asks employees to answer disability-related questions or take a medical examination. The proposed rules impose much greater restrictions on wellness programs than existed under the previously issued Health Insurance Portability and Accountability Act (HIPAA) rules. Employers need to stay abreast of developments in designing and operating their wellness programs as the benefit compliance issues in this area continue to evolve. Impact to company to company due to Healthcare due Reform to healthcare Legislation reform legislation *** Not asked in 2 14 Small businesses Impact in months Impact in 19 months 5 years No impact Individual mandate 3 32% 22% 30% 33% Change in definition of full-time employees 35% 33% 20% 2 40% Defined contribution 32% 33% 35% 25% 31% 31% Public exchanges 3 33% 3 22% 28% 32% Private exchanges 3 32% % 31% Excise ("Cadillac") tax 26% 29% 39% 20% 2 Employer mandate ("play or pay") 29% 28% 25% 29% 39% Expansion of Medicaid 39% 2 28% Wellness program guidelines 3 *** 32% *** 2 *** In this year s survey, we also asked several questions of employers with less than 50 employees. Here are a few highlights from their responses: Retaining current employees is even more critical for the small employer; 9 of small employers stated that it was the top area of importance to their human capital strategy. Areas of success in human capital strategy (Top two box importance and effectiveness) Importance Retaining current employees 9 Improving employee morale 90% 86% Satisfying federal and 82% state regulations Attracting new employees 68% Improving employee productivity Improving the health of employees Providing a competitive employee benefits program Effectiveness 88% 9 81% 90% 90% 73% 8 Of the approximately 50 employers surveyed, 86% said their employee benefits had a large or somewhat large impact on employee loyalty, and 78% said they improved employee engagement. Areas of success in human capital strategy (Top two box impact) Improved employee loyalty Improved employee engagement Reduced absenteeism Lower medical costs for your organization Reduced cost of temporary or fill-in workers Lower medical costs for employees Reduced presenteeism Other 86% 78% 7 76% 76% 7 63% 61% Total 2-49 employees In an age of constant change, maintaining their current level of benefits topped the list of short-term goals for small employers and ranked third for their long-term goals. Employee benefits program goals (Top ranked) Short-term (12 18 months) Maintaining the current level of employee benefits offered 28% Maintaining productivity of employees 20% Managing the overall cost of offering healthcare benefits 1 Understanding and complying with healthcare reform regulations Expanding the offering of voluntary benefits 11% Attracting high quality new talent Keeping employees informed about changes to their healthcare options Other 0% Not sure 11% Total 2 49 employees Long-term (5 years) Maintaining productivity of employees 25% Managing the overall cost of offering healthcare benefits 23% Maintaining the current level of employee benefits offered 16% Attracting high quality new talent 1 Keeping employees informed about changes to their healthcare options Expanding the offering of voluntary benefits Continue to monitor and adjust for the healthcare reform regulations Other 2% Not sure 16% Total 2 49 employees Despite this, more than half of the small businesses surveyed expect to change employee benefit programs in some way due to healthcare reform, such as: reducing health coverage to minimum essential levels (30%), moving employees to public exchanges when available (19%), or eliminating part-time employee or spousal coverage (1 each). Total 2 49 employees Total 2 49 employees Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

11 Many in the employee benefits industry thought that passage of the ACA would be the driver that would finally cause small businesses to opt out of providing employee benefits. Since the employer mandate and many other provisions do not pertain to small employers, the speculation was that employers would drop coverage and send their employees looking elsewhere. Almost six years later, this approach has not been common. Most businesses aren t planning other strategic initiatives in 2016 or Changes to strategic management initiatives Reduce workforce hours Shift funding from fully insured to self-funded Decrease staff resources dedicated to employees benefits Move full-time employees to part-time Terminate plan offerings 65% 63% 59% 55% 53% 8% 1 2% 1 8% 8% 8% 1 8% 1 6% Don t know N/A 18% 18% 20% 2 The local American Lung Association, the American Cancer Association, the Center for Disease Control (CDC), and most states have free resources available to the worksite. The information includes tobacco cessation, age appropriate cancer screenings, and corresponding workplace policies. Most states have free tobacco quit telephone lines designed to assist individuals to kick the habit. Preventive screenings are an important part of early cancer detection, and reminding employees about the importance of cancer-related detection screenings can be effectively communicated via a worksite poster campaign. Initiatives toward personal safety and work-related accident prevention may also require less strain on company resources. Seatbelt awareness, handwashing demonstrations, and onsite flu shot administration are other possibilities, to name a few. Reduce employee headcount 51% 1 8% 8% 20% Shift funding from self-funded to fully insured 49% 6% 25% Decrease the budget for health and wellness 45% 8% 20% 6% 22% No change Will change in 2016 Will change in 2017 Will change sometime after 2017 Population health for small businesses Smaller businesses may not have the same access to their data as their larger counterparts, but it is fair to say there are less resource-intensive initiatives that can be administered for these smaller groups. For instance, tobacco cessation and preventive medicine campaigns are interventions that may not require too much time and effort, but may have great long-term returns. Wells Fargo Insurance white paper: Employee Benefits Trends Survey January

12 How can we help? Regardless of an employer s size, employee benefits may be more strategically important now than at any time in the past. We can help you create a smart and strategic program that provides the most value for your business while still delivering the best benefits to your workforce by taking into consideration your corporate philosophy, financial plan, and, most importantly, your employees. Our Employee Benefits National Practice can also help you identify and assess the health and productivity issues in your employee population, employ the use of data mining and clinical analysis, develop a strategic plan aligned with your corporate culture and overarching business objectives, and implement tools to measure ROI and the financial impact of improving employee health. For more information, contact your local Wells Fargo Insurance sales representative. You can find additional content from areas of the survey in the Research section on wfis.wellsfargo.com. * All data is sourced from the Wells Fargo Insurance Employee Benefits Trends Survey 1 Bureau of Labor Statistics: Labor force participation projected to fall for people under age 55 and rise for older age groups 2 Centers for Disease Control, Workplace Health Promotion: Changing Demographics Products and services are offered through Wells Fargo Insurance Services USA, Inc., a non-bank insurance agency affiliate of Wells Fargo & Company, and are underwritten by unaffiliated insurance companies. Some services require additional fees and may be offered directly through third-party providers. Banking and insurance decisions are made independently and do not influence each other Wells Fargo Insurance Services USA, Inc. All rights reserved. WCS (1/16)