Common Employee Benefit Pain Points Faced by Today’s Businesses

Businesses offer Employee Benefits to make them more appealing than other establishments and the type of applicants they want to hire. However, the demand to adopt more flexible and more extensive health care benefits has challenged every company’s HR expertise due to the COVID-19 pandemic.

In a 2020 report by the International Foundation of Employee Benefit Plans (IFEBP), 527 companies have an extreme increase in employees’ claims to various benefits. These abrupt changes were primarily caused by the pandemic and left employers with more non-wage compensation problems.

Top 10 Employee Benefit Pain Points Today

Although traditional benefit plans remain helpful to many, other areas have increased the demand for compensation. Consequently, due to the present risks in health today, organizations have to face more problems.

Here are the ten common employee benefit pain points of businesses today:

Increased healthcare costs. Today, the importance of health care benefits like medical treatments, prescriptions, and doctor visits has been valued more than ever.

Some reasons why there is inflation to healthcare costs today are:

• An unintegrated medical system usually causes a high volume of redundant treatment.
• The population is getting sicker and unhealthier. The higher the risks, the higher the insurance premiums are.
• The utilization of more advanced technology and medical procedures for better care adds more costs.
• Prescription of unnecessary tests by doctors to avoid malpractice lawsuits.

Unaligned employee needs and offered benefits. Employers cannot provide full coverage and well-scaled expenses when employee benefits offerings are untailored and not analyzed. Moreover, suppose the plan is too costly, it can eventually turn into an unnecessary loss of resources. If there is a shortage in compensation, employee needs and morale might suffer.

Non-compliance to the Affordable Care Act (ACA). Most of the time, the lack of understanding of what the ACA requires on businesses results in unintended non-compliance. Such a mistake could also lead to expensive penalties for failure to comply.

Rise of demand for mental health support.  According to Marc Brown, Zovio’s Chief People Officer, employers now recognize the need to expand beyond traditional healthcare benefits.

Employers must consider stress management and mental health benefits to provide employees with the support they need. However, adding such perks to employee needs, once again, means additional spending.

Narrow networks misconception. An article by Wall Street Journal states that more companies target hiring young people, especially during the summer. If you are one of those companies, you have to let go of narrow networks.

Employers try to save money with narrow networks by staying local and working with more fixed healthcare partners. However, narrow networks are a disadvantage to new workers who have connections with out-of-network doctors and want to compare all options. And since narrow networks prevent patients from comparing prices, employers are forced to pay whatever the in-network providers prescribe.

Settling for High-Deductible Health Plan (HDHP). If a business has employees who do not require much coverage, an HDHP is an excellent choice. However, HDHP does not cover sudden medical needs and could put a company in debt.

Insufficient training and tools. If both employers and employees have inadequate knowledge and tools concerning benefit plans, it could lead to unutilized and unnecessary benefits. Lack of awareness is a common reason why such a thing happens.

Outdated dental and eyesight plans. New approaches on dental and eyesight plans are innovated to provide employees with better care. For example, implants and other surgical procedures must become available on dental plans. Similarly, vision plans must now include corrective laser and cataract removals. However, these improvements make dental and eyesight benefit plans more costly for employers.

No backend consolidation. Archiving and managing recruitment, payroll, compensation, and employee data using tools like Human Resource Information System (HRIS) and Human Capital Management (HCM) requires integration. If not, it can result in repeat data entry, causing costly transposition errors and wasted productivity.

Passive policy on disability and family leave.  Complex and unclear employee leave applications and approval procedures, especially on family and disability leave, can cause tense relationships and lawsuits between employees and employers.

5 Practical Solutions to Employee Benefits Challenges

With the present challenges businesses face in providing adequate employee benefits, solutions are also available to assist in establishing suitable approaches in the companies.

Check out these five practical solutions available for employers to consider.

Understand employees’ needs. Get to know more about the workers’ struggles and needs by talking to them or conducting an internal survey. After gathering valuable data about what most workers need, the HR team can study the information and possible solutions to tailor a well-scaled benefit plan.

Implement proper training and tools.  Part of an employer’s responsibility is to provide its team members and employees with the knowledge and tools they need relevant to employee benefit plans. Doing so will help the company have the right approach and scale of benefits to offer.

Offer more flexible employee leave benefits. Present a clear and definite approach to the leave application process and approval guidelines. It can also be helpful to set a re-entry system for employees who just had their leave.

Other practices like providing support, flexible schedule options, and additional leaves for workers with child care responsibilities could also help improve productivity and retention, particularly during the pandemic.

Have a Health Savings Account (HSA). HSA is a savings account that allows companies to save money pre-tax to pay for medical charges. In addition, it helps pay for copayments, coinsurance, deductibles, and some other costs, making it a convenient way to fill the gaps of HDHP and limit out-of-pocket expenses.

Explore new possibilities with employee benefits insurance. As observed in the given statements above, providing well-scaled benefit plans to your employee requires the right resources and expertise. Achieving such a goal would require partnering with a professional and established insurance company.

Employee Benefits is an excellent package to help you come up with benefits packages and meet your financial requirements simultaneously.

About Moody Insurance Worldwide

Moody Insurance Worldwide, a division of Moody & Associates founded in 1914, is a leading provider of risk management programs and insurance coverage to individuals and businesses across the East Coast. We write all companies with technical expertise in many key industry areas and provide personal insurance programs for estates and high net worth individuals. Our licensed, experienced commercial account managers can work with you to determine the coverage that you need at a competitive rate. Contact us today at (855) 868-0170 to learn more about what we can do for you.