It is no stretch to say that the COVID pandemic permanently altered things that previously had not seen changes in decades. Take employee benefits packages. For the longest time, most benefits packages consisted of nothing more than health insurance, a retirement plan, and a few voluntary benefits. COVID has changed that. Employees are now looking for more holistic benefits packages that include creative health plans.
Health plans are typically viewed as separate and distinct entities within the employee benefits arena. Employers have historically offered health insurance plus other benefits. But the holistic approach to benefits doesn’t see things that way. It sees the health plan as just one component of a much broader package.
A holistic approach to employee benefits looks at all the needs an employee group has. Just as with holistic healthcare, holistic benefits are designed to address all the employee’s needs as a whole rather than plugging in individual benefits to meet this need and that.
A typical employee will expect some sort of health plan, a retirement plan, and dental/vision coverage. Since the pandemic, there has been a greater demand for mental health services as well. Throw in student debt reduction, childcare benefits, and a growing demand for more schedule flexibility and remote work, and you get a pretty good idea of what today’s employees are looking for in the benefits packages.
The question then becomes how employers can create packages that meet all of those needs adequately enough to satisfy employees. More importantly, how can they do so without blowing up their budgets?
The reality of employee benefits is that health plans take up the lion’s share of the budget. They are the most expensive of all benefit options. So developing a holistic package starts with figuring out how much healthcare benefits are going to cost.
More employers are turning to self-funded health plans as a lower-cost alternative to traditional health insurance. Some administer the plans on their own while others contract with third-party plan administrators like Las Vegas-based StarMed. According to StarMed, outsourcing plan administration is a cost-effective solution to a complicated problem.
Saving money on the employee health plan leaves more room in the budget to complement with a retirement plan and a basket of voluntary benefits. It is those voluntary benefits that give an employee a good opportunity to create the most holistic package possible.
Voluntary benefits are easy enough to offer because they are affordable and can be utilized by employees as they see fit. An employer can offer a basket of 15 or 20 voluntary benefits knowing that most employees will only utilize four or five. This allows for greater customization at the employee level. Employees can almost craft their own packages.
When it comes to health plans, additional customization is possible through the self-funded model. StarMed explains that one of the big advantages of self-funded health plans is the employer’s ability to determine what is, and what is not, covered. Employers are free to design their plans as they see fit as long as the end result is ACA and ERISA compliant.
Some would argue that the holistic approach to employee benefits is a better approach. By combining customized health plans with a basket of voluntary benefits, employers can more effectively meet the needs of each member of the workforce.
What are your thoughts on the holistic approach? Is it a better way to design employee benefits packages while also controlling costs?