Benefits in a Multi-generational Workplace

With multiple generations working side-by-side in this economy, the needs of your staff in terms of employee benefits will vary greatly depending on their age.

You may have baby boomers who are nearing retirement and have health issues, working with staff in their 30s who are newly married and have had their first kids. And those who are just entering the workforce have a different mindset about work and life than the generations before them.

Because of this, employers have to be crafty in how they set up their benefits packages so that they address these various needs.

But don’t fret, getting something that everyone likes into your package is not too expensive, particularly if you are offering voluntary benefits to which you may or may not contribute as an employer.

Think about the multi-generational workforce:

Baby boomers – These oldest workers are preparing to retire and they likely have long-standing relationships with their doctors.

Generation X – These workers, who are trailing the baby boomers into retirement, are often either raising families or on the verge of becoming empty-nesters. They may have more health care needs and different financial priorities than their older colleagues.

Millennials and Generation Z – These workers may not be so concerned about the strength of their health plans and may have other priorities, like paying off student loans and starting to make plans for retirement savings.

 

Working out a benefits strategy

If you have a multi-generational workforce, you may want to consider sitting down and talking to us about a benefits strategy that keeps costs as low as possible while being useful to employees. This is crucial for any company that is competing for talent with other employers in a tight job market.

While we will assume that you are already providing your workers with the main employee benefit – health insurance – we will look at some voluntary benefits that you should consider for your staff:

Baby boomers — Baby boomers look heavily to retirement savings plans and incentives, health savings plans, and voluntary insurance (like long-term care and critical illness coverage) to protect them in the event of a serious illness or accident. 

You may also want to consider additional paid time off for doctor’s appointments, as many of these workers may have regular checkups for medical conditions they have (64% of baby boomers have at least one chronic condition, like heart disease or diabetes).

Generation X — This is the time of life when people often get divorced and their kids start going to college. Additionally, this generation arguably suffered more than any other during the financial crisis that hit in 2008. You can offer voluntary benefits such as legal and financial planning services to help these workers.

Millennials and Generation Z — Some employee benefits specialists suggest offering these youngest workers programs to help them save for their first home or additional time off to bond with their child after birth.

Also, financially friendly benefits options, such as voluntary insurance and wellness initiatives, are two to think about including in an overall benefits package.

Voluntary insurance, which helps cover the costs that major medical policies were never intended to cover, and wellness benefits, including company-sponsored sports teams or gym membership reimbursements, are both appealing to millennials and can often be implemented with little to no cost to you.

Voluntary Benefits Improve Employee Satisfaction and Retention

Voluntary Benefits Improve Employee Satisfaction and Retention

As the economy continues roaring, the market for top talent stays exceedingly competitive. Multiple studies have consistently shown that a robust set of employee benefits is a vital component of an overall compensation package.

But it’s tough for smaller companies to compete with their large counterparts, who have the advantage of economies of scale. As a result, many employers are increasingly turning to voluntary employee benefits, which allow them to provide valued, high-demand benefits to employees at little or no cost to the company. 

How voluntary benefits work

Voluntary benefits are arranged by employers but either paid for by staff via payroll deduction or by the employers themselves. Businesses generally set up a menu of options that their workers can select from for themselves, based on their own needs.

The employer deducts any fees or premiums for these benefits from employee paychecks and forwards them in a single batch to the benefit vendors.

Once the employee enrolls in a voluntary benefit plan, payroll services companies routinely automate this process for employers, making ongoing benefits administration hassle-free for small businesses.

And best of all, because premiums and fees are often paid by the employees, even small companies can provide popular and highly valued benefits for little or no cost.

Popular voluntary benefits

There are several types of voluntary employee benefits on the market today, with more innovative new benefits and perks rolling out every year. However, the following are among the most in-demand by employees and commonly offered by their employers:

  • Dental and vision insurance coverage
  • Disability insurance coverage
  • Life insurance — can be term or cash value
  • Legal assistance/prepaid legal services
  • Identity theft insurance
  • Fitness/health club memberships
  • Long-term care insurance
  • Financial planning/counseling services
  • Accident insurance
  • Hospital indemnity plans
  • Pharmacy discount plans
  • Critical illness insurance (e.g., cancer insurance)
  • Pet insurance.

Employees can often buy these benefits and services via their employer’s group voluntary benefits plan much more cheaply than they could buy them on their own.

Voluntary benefits have been becoming more popular among employers in recent years as unemployment falls. One reason: More employers are offering high-deductible plans as health insurance costs continue to increase. 

Critical illness and hospital indemnity policies have seen big gains in enrollment as workers turn to them to help cover those deductibles and copays if they have a costly health event like cancer or another critical illness diagnosis.

According to a recent LIMRA study, seven out of 10 employers surveyed reported that they believe offering voluntary benefits improves employee morale and satisfaction.

A 2023 Harris Interactive poll found that when employers offer voluntary benefits, 55% of workers, on average, report that they are satisfied with their employer’s overall benefit mix. Where the employer did not offer voluntary benefits, the satisfaction rating fell to 32%.

Best practices

  • Don’t overwhelm employees with too many benefit choices at the same time. Roll them out a few at a time, starting with life insurance, dental/vision and/or disability insurance. These are proven high-participation programs.
  • Match benefits to your employees’ life stages. Millennials have different needs and interests than baby boomers.
  • Put effort into your benefits education and communication plan.

Protect Your Workers’ Eyesight with Proper Design, Vision Benefits

One of the by-products of the digital revolution – with most people staring many hours each day at tablets, smart phones and computers – is eye strain.

According to The Vision Council, the average U.S. adult spends more than two hours a day looking at electronic screens. Looking at such screens for too long can result in dry and irritated eyes, blurred vision and eye fatigue, as well as headaches.

Besides the trouble for eyes, using these devices can also result in back and neck pain from that hunched-over position that many people use when on these devices.

Prolonged use can cause “computer vision syndrome,” which manifests itself in a number of symptoms like eye strain, dry eyes, blurred vision, red or pink eyes, burning, light sensitivity, headaches and pain in the shoulders, neck and back.

To help prevent digital eye strain, you should ensure that:

  • Your employees sit with their eyes about 30 inches from their computer screen,
  • Your employees rest their eyes every 15 minutes, and blink frequently, which helps keep the eyes moist. It’s been found that when people work on computers they blink about one-third as much as they typically would.
  • You have proper lighting in the office. Eye strain often is caused by excessively bright light, either from outdoor sunlight coming in through a window or from harsh interior lighting. When you use a computer, ambient lighting should be about half as bright as that typically found in most offices. If possible, turn off the overhead fluorescent lights in your office and use floor lamps that provide indirect incandescent or halogen lighting instead.
  • Upgrade your displays. If you have not already done so, replace your old tube-style monitor (called a cathode ray tube, or CRT) with a flat-panel liquid crystal display (LCD), like those on laptop computers. LCD screens are easier on the eyes and usually have an anti-reflective surface.
  • Adjust computer display settings, which can help reduce eye strain and fatigue. Ask your employees to adjust the brightness of their display so it’s approximately the same as the brightness of the surrounding workstation. They can also adjust text size and contrast.

 

Consider vision benefits

If you don’t already do so, consider offering your workers vision benefits.

First off, your employees would be more apt to get a much-needed pair of glasses that have anti-glare attributes for when they work on computers.

Computer glasses are specially designed for optimizing vision when viewing content on screens, and they can be provided with or without a prescription.

Wearing computer glasses can help users experience more relaxation, sharper focus and reduced blurriness and pixilation, which can cause discomfort unless corrected. The lens designs allow the eyes to relax, adjusting to intermediate-distance objects and reducing glare during prolonged use of digital devices.

Also, workers with vision benefits tend to get regular eye exams, which can identify serious chronic conditions, including diabetes, high cholesterol, hypertension, multiple sclerosis and some tumors.

Detecting these symptoms can lead to early diagnosis and better treatment of the conditions.

Mark Cuban: CEOs Don’t Know Where Their Health Benefit Dollars Are Going

Since billionaire businessman Mark Cuban entered the health care space with Cost Plus Drug Co., which he launched in May 2020, he has gotten a new perspective on the value that most CEOs place on their group health insurance benefits.

And what he has found is a lot of waste and a lack of health care buy-in among corporate chieftains, according to one of his recent posts on X, formerly known as Twitter.

Most chief executives of self-insured companies, he wrote, “don’t know and don’t really want to know where their health care benefit dollars are going.”

In other words, employers —­ with some effort — should be invested in their health plans so they can find ways to reduce costs for themselves and their employees while improving health outcomes for their workers.

While his comments were aimed at CEOs of self-insured companies, business leaders can use them to look a little closer at the health plans they offer their employees and opt for ones that are focused on reducing costs and driving positive health outcomes.

 

Poor management buy-in

After engaging in discussions with numerous CEOs of companies that have contracted with Cost Plus, Cuban concluded that most chief executives pay little attention to how well their self-insured health plans deliver positive health care outcomes because that is not viewed as a core competency of their companies.

“As a result they waste a s**tload of money on less than quality care for their employees,” he wrote on X, “and more often than not it’s their sickest and lowest-paid employees that subsidize the rebates and deductibles. (Sicker employees have to pay up to their deductible, healthy ones don’t.)”

Cuban likened poor management buy-in to their health plan to lackluster execution of diversity, equity and inclusion (DEI) programs.

“Like health care, DEI is not seen as a core competency in most companies. It’s just a huge expense. Intellectually, [CEOs] see the benefit of DEI. But they don’t have time to focus on it,” he wrote. “So it turns into a check box that they hope they don’t have to deal with beyond having HR do a report to the board and legal tells them they are covered.

“When anything that impacts all of your employees is pretty much a check list item to the CEO, there is a good chance that it’s not going [to] work well and you are going to have employees who are not comfortable for a lot of different reasons.”

 

Taking a different approach

Taking a hands-off approach to your company’s employee benefits may be costing you and your employees. And in 2024, when group health insurance premiums have increased 8.5% on average from the year prior, it’s important that employers don’t treat their benefits as just an unavoidable expense.

As the health care and insurance industry innovates, there are growing opportunities for cost savings and better outcomes. For example, some new health plans may have narrow-provider networks with perhaps not as many physicians, however those physicians provide care at centers of excellence that have better outcomes for patients.

Additionally, there are a number of cost-containment strategies available that employers have been loath to use in order to retain and attract talent. As the labor market loosens and costs continue to rise, employers looking to arrest cost inflation may start considering their options.

New Approaches to Managing Health Care Costs, Improving Outcomes

As health insurance and health care costs continue climbing, some employers are taking new and innovative steps to tamp down costs for themselves and their covered employees while not sacrificing the quality of care they receive.

Some of the strategies require a proactive approach by engaging with their broker and insurer, and even local health care providers, efforts that may be hampered by location and how flexible insurers may be. The goal for these employers is to reduce their and their employees’ costs and improve health outcomes.

The following are some strategies that employers are pursuing.

 

Steering workers to certain providers

One way to reduce spending is to contract with insurers that guide patients to facilities and providers that are more affordable and who have good patient outcomes. This process, called steerage, if executed correctly can save the employee money on their deductibles, copays and coinsurance and help them get better overall care.

For standard services, this steerage can help your employees see immediate savings on small payments. But for services that require pre-authorization, such as an MRI or X-ray, the insurer can help steer them to the least expensive provider. The differences in cost for these pre-planned services can often be hundreds of dollars, if not more.

Even guiding workers to outpatient facilities over inpatient facilities for these services can yield even greater savings and a better patient experience.

To get the most benefit out of steerage some employers have been switching from traditional group health insurance to self-insured direct-to-employer health plans. These plans will centralize employees’ health care with an integrated provider network or hospital group that focuses on coordinated care, which can reduce overall costs and improve the quality of care.

Since the employer is self-insured, they can work with a health system to establish an integrated care strategy that puts a premium on steerage.

 

Getting a handle on drug spending

Pharmacy benefit costs are the fastest-growing part of health care costs, up an estimated 8.4% in 2023, according to the Mercer “National Survey of Employer-Sponsored Health Plans.” And as new and more expensive pharmaceuticals hit the market, the portion of overall health care costs that goes towards medications will continue to rise.

One contributor to the increasing prices that your staff pay for their medication may be the pharmacy benefit manager that your insurer uses. Many PBMs earn commissions on drugs dispensed to patients and they benefit from steering them to higher-cost drugs. As well, many PBMs steer patients to pharmacies that they own, further muddying the waters.

There is a way to cut through this mess, but it requires asking tough questions of your insurer and/or the PBM. Ask them how they earn their money, and what kind of commissions and margins they are earning on drugs dispensed to your employees. It’s best to take this approach with the assistance of us, your broker.

Having an honest discussion with your insurer and PBM can open opportunities to save on pharmaceutical outlays through various strategies, like using generic drugs instead of brand-name ones and ensuring that your workers get the full manufacturer rebates — and that they are not kept by the PBM.

Depending on the PBM, this may or may not work.

 

Helping your employees get healthier

The healthier your workers are the less they will need to access health care, meaning they will spend less for medical services.

Employers can help their employees by weaving in health and wellness education in their staff communications. As well, many wellness programs focus on improving health, including smoking cessation programs, weight loss programs and free or subsidized gym memberships.

Also, many Americans are not keeping up on preventive care visits, many of which are free under the Affordable Care Act. Keeping up on these visits can help stave off larger health problems in the future.

Sometimes what’s needed for your employees to take preventive care seriously is education. You can work with us to come up with communications strategies aimed at trumpeting the importance of these visits by focusing on improving overall health and cost savings in the long run.

 

The takeaway

The above strategies follow a trend in health care focusing on improved health outcomes for patients by better coordinating care, particularly for those with chronic conditions. For employers, the name of the game is keeping costs down for themselves and their staff while not sacrificing quality of care and while improving their workers’ health.

New Rule Aims to Expedite Prior Authorization Requests

The Centers for Medicare and Medicaid Services has published a final rule aimed at improving how prior authorizations are handled by health insurers. The measure primarily limits the time insurers have to approve or deny requests.

In addressing wait times for prior approvals, the CMS is targeting an issue that’s become a problem for some patients whose health can deteriorate while waiting for their doctor’s request for service to be approved.

Besides setting standards governing how long a health insurer has to approve or deny a request, the new rule also requires them to take steps streamline the prior approval process through technology.

The CMS said when announcing the final rule that it would improve prior authorization processes and reduce the burden on patients, providers and payers, resulting in approximately $15 billion of estimated savings over 10 years.

What the new rule does

Starting in 2026:

  • Insurers will be required to approve or deny an urgent prior authorization request for medical items and services within 72 hours of receipt.
  • Insurers will have seven calendar days to approve or deny standard requests for medical items and services. For some payers, this new time frame for standard requests cuts current decision wait times in half. 
  • Carriers must include a specific reason for denying a prior authorization request, which will help facilitate resubmission of the request or an appeal when needed.
  • To ensure that insurers will be able to handle the new time frames, the rule also requires them to implement a prior authorization application programming interface (API). The interface must facilitate a more efficient electronic prior authorization process between providers and payers by automating the end-to-end authorization process.

The takeaway

The new rule does not take effect until 2026 to give insurers and other payers more time to put in place API systems that can expedite the process.

The end result should be an improved experience for millions of insured patients nationwide, and that they get their requests handled in a timely fashion.

Workplace Age Discrimination Cases Grow Nationwide

The Equal Employment Opportunity Commission continues seeing a steady flow of complaints for one of the more common forms of workplace bias — age discrimination.

The number of court filings the EEOC made under the Age Discrimination in Employment Act (ADEA) in fiscal year 2023 was more than double that of fiscal year 2022. As the EEOC steps up its efforts under the Biden administration, it’s crucial that employers have in place policies and employment standards to avoid any appearances of discrimination against workers based on age.

The ADEA prohibits harassment and discrimination on the basis of a worker’s age for individuals over 40. This extends to any aspect of employment, including hiring, job assignments, promotions, training and benefits.  

The law even applies to employers that use third party recruiters to screen job applicants, according to EEOC guidance.

For an idea of how costly an age discrimination lawsuit can be, consider the following recent actions (keep in mind that these numbers don’t include attorneys’ fees):

  • In March 2023, Fischer Connectors settled with the EEOC for $460,000 over accusations that the manufacturer fired a human resources director and replaced her with two younger workers after she had spoken up about company plans to replace other older workers.
  • In September 2023, two former IBM human resources employees — both over 60 — sued IBM after they were terminated, alleging age discrimination.
  • Wisconsin-based Exact Sciences agreed to pay $90,000 to settle a lawsuit alleging that it had discriminated against a 49-year-old job applicant based on his age after it turned him down for a medical sales rep position in favor of a 41-year-old.
  • A 52-year-old woman sued a Palm Beach restaurant, alleging violations of the ADEA and the Florida Civil Rights Act of 1992. She claims that after working for 10 years as a seasonal server, she was terminated on the grounds that the restaurant was moving to year-round employment, yet continued to hire young seasonal workers.

What you can do

Ageism in the workplace doesn’t just negatively affect employees. It also affects your company. Over the past 15 years, age discrimination cases have accounted for 20-25% of all EEOC cases — and they typically receive the highest payouts.

Ageism is bad for business in a number of ways. Not only do you risk a large settlement, but you also miss out on a large talent pool of older workers in your hiring practices. You also miss out on the major contributions that older workers can make to your organization.

To prevent age discrimination at your firm:

  • Train your managers and supervisors on age discrimination and that it won’t be tolerated. Have in place consequences (and follow through on them) for managers that discriminate against an employee due to any protected status, including age.
  • Consider taking out any sections of your application form that disclose information about an applicant’s age. Removing the date that an applicant graduated or completed their degree is helpful. This can allow hiring managers to focus on the skills and experience an applicant brings to the table rather than their age.
  • If you have to go through a layoff, ensure you don’t make any decisions based on age. You should focus only on two things during this process: making choices solely based on performance and the necessity of the position they hold. Even a seniority-based system is acceptable.

The takeaway and insurance

Often when the EEOC settles these cases, they will require the employer to sign a consent decree requiring them to implement age-discrimination training for hiring managers. You shouldn’t wait for an order by the agency to do the same.

Finally: In the event you are sued for age discrimination, if you have in a place an employment practices liability policy, it may cover your legal costs and any potential settlements or verdicts.

Besides age discrimination, these policies will cover a host of other lawsuits by employees.

Employers Avoid Cost-Shifting, Focus on Reducing Employee Outlays: Study

Despite group health plan inflation increasing again in 2024, a new study has found that employers continue staying the course in not shifting costs to employees who may already be overstretched by inflation and medical bills.

Instead, 64% of employers say they are looking for ways to boost their health and well-being offerings to better meet employee needs, according to Mercer’s “Survey on Health & Benefit Strategies for 2024 Report.” That’s on top of the 25% who said they had already enhanced their slate of benefits in the last two years to better attract and retain staff and meet employees’ needs.

With health care costs expected to jump 7% this year from the 2023 level and insurance premiums reflecting that increase, many employers will be challenged to balance benefit options with cost-controlling measures, according to the report.

 “Employers are looking to enhance benefits, but they need to do it carefully. Not by adding bells and whistles, but by looking for opportunities to add value,” Mercer wrote in its report. “Sometimes that means filling gaps in current offerings with more inclusive benefits. It might mean revisiting time-off policies to give employees more flexibility.”

With significant cost-shifting off the table for most employers, employers will have to get creative to meet the challenge of offering benefits that workers want and need, and health care they can afford, while also managing cost growth.

Addressing employee costs

Some tactics employers are using to boost affordability for their staff include:

  • Offering at least one free employee-only coverage in at least one medical plan.
  • Making larger health savings account contributions to lower-paid employees.
  • Using salary-based contributions, with lower-wage staff paying less than those earning more.
  • Offering programs to help employees manage specific health conditions.
  • Taking action to address the cost of specialty prescription drugs.
  • Focusing on virtual care.
  • Steering members to quality care with a navigation or advocacy service (beyond the health plan’s standard service).
  • Limiting plan coverage to in-network care only (in at least one plan).

Other benefit enhancements

Employers are also looking at enhanced benefit options, such as:

Support for women’s health — According to Mercer, 46% of employers plan to offer benefits or resources to further support women’s reproductive health, up from 37% last year.

This includes:

  • Preconception planning.
  • Menopause benefits (the percentage of employers planning to offer menopause support has more than tripled since last year’s survey).
  • Lactation help resources.
  • Post-partum depression resources.

Childcare benefits and resources — Employers can help support caregivers for the long term with flexible hours and family leave and time-off policies. Some employers also provide subsidized childcare benefits.

Increasing employee flexibility — More employers are also offering paid time off for all kinds of families (like those with LGTBQ parents). Other options being offered include:

  • Hybrid work options (80% of employers offer or plan to offer these),
  • Paid time off to volunteer (49%),
  • Remote work options (47%), and
  • Four-day workweeks or consolidated schedules (22%).

The takeaways

With group health plan costs continuing to increase amid a highly competitive job market, employers need to take a balanced approach to their benefit offerings, while being mindful of the increasing out-of-pocket expenses their employees may face when accessing health care.

Your decisions in also offering enhanced benefits will obviously be based on your budget, but also on your employee population. Call us to discuss options.

More Employers Offering Wellness, Mental Health Chatbots

As a record amount of U.S. workers struggle with mental health issues and stress, more employers are offering new chatbot apps to help them.

A survey this past summer of 457 employers by Willis Towers Watson found that 24% of them offer a “digital therapeutic” for mental health support.

Some 15% of the businesses surveyed were considering adding this type of offering in 2024 or 2025, the professional services company found. Typically, these apps are provided as a voluntary or wellness benefit.

Some apps feature chatbots that can hold counseling-type conversations with users, while other wellness apps can help diagnose depression or identify people at risk of harming themselves.

At the same time, these chatbots and other mental health apps have generated controversy, with some experts warning that they are not equipped to handle serious mental health issues and that they are no replacement for human therapists.

However, as long as there are not enough therapists in the U.S. to meet demand and artificial intelligence continues to evolve, it’s likely these chatbots are here to stay.

Examples

Recently Amazon announced that as part of its employee benefits package it would offer the therapist-like app Twill. The platform says that Taylor, its clinician-trained chatbot, “learns, interprets and understands each person’s needs and goals to guide them towards personalized care.”

Another product on the market is Wysa, an AI-driven app that received a breakthrough designation by the Federal Drug Administration, putting it on track for fast-track approval. This came after an independent peer-reviewed clinical trial, published in the Journal of Medical Internet Research, which found the app to be effective in the management of chronic pain, and associated depression and anxiety.

Also on the market is Woebot, which combines exercises for mindfulness and self-care (with answers written by teams of therapists) for postpartum depression. 

Pros and cons

The apps vary in how much they incorporate AI — and in how much leeway they give AI systems. These companies say they build safeguards into their apps and that they have certified psychiatrists that oversee the applications.

Proponents of mental health apps and chatbots say they can address issues like anxiety, loneliness and depression. Also, chatbots and apps can provide 24-hour support and they can meet the demand of people who may have a hard time finding a counselor or fitting therapy into their schedule.

On the other hand, there is a paucity of data or research showing how effective, or how safe, they are — and the majority have not been approved by the FDA.

Many of these mental health apps have different specialties, for example: treating anxiety, attention-deficit/hyperactivity disorder or depression. Others can help diagnose mental health problems or predict issues that can lead to self-harm.

Often, the apps will include disclaimers that they are “not intended to be a medical, behavioral health or other health care service” or “not an FDA-cleared product.”

Also, there have been concerns raised about some of these apps. In March 2023, the Federal Trade Commission reached an $8 million settlement with BetterHelp, an app counseling service, over allegations that it shared user data with advertising partners.

Another company, Replika, updated its app last year after users complained that its chatbot engaged in overly sexual conversations, and even harassed them.

The takeaway

Mental health care is an increasingly important part of employee benefits offerings. Since the onset of the COVID-19 pandemic, 94% of employers have made investments in mental health care, according to research by Mercer.

As these apps improve and become more widespread, it’s likely your employees will encounter them when they use their group benefits, or they will be among your voluntary benefit offerings.