ACA and Millennials Are Influencing Trends in Employee Benefits

Posted by on Feb 17, 2016 in Health Insurance | 0 comments

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The Affordable Care Act and the millennial generation are having a big impact on the way human resource departments and C-level executives view and provide benefits to employees.  Businesses are providing employees with a wider range of retirement financial services beyond pension and 401(k) plans.  Millennials expect to have options when it comes to health insurance and retirement planning which includes being able to opt out of any plan their employer provides.  As a result, HR and C-level executives are expecting to see certain employee benefit trends in 2016 that will have an impact on the workplace environment.

Generational differences

Baby boomers, Gen Xers and millennials have different expectations when it comes to employer benefits.  Baby boomers view employee benefits as being old-fashioned and not worth paying much attention to while Gen Xers view benefits as savings accounts they can cash out.  Millennials view employee benefits as being an important part of their employment package and will often choose to work for and stay with an employer based on the benefits they offer.  Millennial’s views on employee benefits has encouraged employers to use benefits as a way to recruit and retain employees.

Trends in employee health insurance

More employers are offering a variety of health insurance options for their employees to choose from that allow both parties to save money while complying with the ACA.  One of these options is offering high-deductible health plans combined health savings accounts and reimbursement plans.  These consumer-directed health plans use traditional health insurance plans in addition to the tax-advantageous health savings or reimbursement accounts allowing enrollees to pay for their own medical costs that traditional health plans may not cover.

Other trends among employer health plans include telemedicine where enrollees can use a smartphone app to contact physicians who make house-calls.  Employers are also offering wearable devices that will allow enrollees to track their fitness goals and inspire them to stay healthy.  All of these benefit trends are allowing enrollees to customize their own health benefit plans.

Trends in employee retirement planning

With today’s volatile stock market, more people are concerned about the security of their retirement savings.  Some employees are even willing to have smaller paychecks in order to have a guaranteed retirement benefit.  An increasing number of employees are making contributions to a 401(k) plans, and they are making conservative investments within these plans.

Employers are also offering financial education to their employees.  These benefits include online retirement planning resources, one-on-one financial advising, financial planning seminars on saving money to buy a house or going to college, and advice on other financial wellness issues.  Helping employees to better manage their money helps them reduce stress and increase performance.

Human capital

Employers are looking to provide the best benefits to their employees for several reasons:

  1. Reduce turnover
  2. Increase employee morale, productivity and happiness
  3. Lower medical costs for employees
  4. Reduce absenteeism
  5. Improve employee loyalty and engagement

These reasons make it important for employers to understand what is happening in society so that they can offer benefits that reflect needs of what employees are seeking.