Michael Sean Grant, Vice President and Employee Benefits Leader offers his perspective on the challenges employers in the New York metro region face today. Michael oversees the team of employee benefits professionals and business development executives for Risk Strategies in the New York metro.
In 2022, employers are navigating an unusual employment landscape. Talent scarcity is forcing a reevaluation of how employee benefit programs can drive greater value and support employee retention strategies. Employers need to identify and implement new ideas and options that are both attractive to employees, and cost-effective.
Voluntary benefits like pet insurance, supplemental life insurance, or access to legal and financial counseling services were popular for attracting and retaining employees prior to the pandemic. These continue to offer employers a way to fill the void of coverage not encompassed by traditional benefits, with little to no effect on the bottom line.
A well-managed health and productivity program that offers monthly activities like fitness challenges or classes that support positive mental health and resiliency are a win for everyone. Additionally, employee recognition platforms which offer tangible rewards and immediate positive feedback have become regular components of corporate culture. From organized “special events” like food truck days or scavenger hunts, to structured award programs, these are affordable morale-boosters that spotlight employee appreciation.
With retention being a critical issue for employers, adding benefits and perks like these and others such as lifestyle and fringe benefits helps to retain employees. They can also differentiate your organization developing its reputation as a desired workplace and attract needed talent. However, it’s important to revisit your organization’s benefits program and ensure it addresses your post-pandemic workforce model, particularly if your workforce has moved to a remote or hybrid working model.
Recent trends have shown a major surge in uncontrollable expenses like catastrophic claims (those exceeding $750,000) and specialty drugs for employers. As highlighted in the Risk Strategies State of the Market Report: 2022 Outlook, a 2021 IQVIA study determined that specialty drugs now account for 53% of pharmacy plan spend, and that an additional 10-15% of pharmacy spend results from high-cost drugs like injectables requiring physician administration.
To offset these costs, many employers are moving away from offering traditional coverage with a provider network and toward network models like Reference Based Pricing (RBP). In this model, the employer pays a set price for health care services rather than funding catastrophic cases. While employees see an increase in out-of-pocket costs, they are not limited to using traditional “in network” providers.
Although this cost-shifting can reduce health care costs for employers by as much as 50%, it’s important to keep in mind shifting costs to your employees can backfire and be perceived in a negative light, risking retention and your ability to attract talent. It’s a delicate balance and why it’s important to work more closely than ever with your benefits broker and consultant on the right approach for your organization.
For Risk Strategies New York region, our team succeeds in this mission guided by the principles of RISC—meaning a focus on retention, investment, stewardship, and compliance—to assist our clients in developing leading-edge benefit strategies and investing in the people, processes, and technology needed to implement them.
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Find Michael Sean Grant on LinkedIn or contact us at benefits@risk-strategies.com.