Benefit cost is the biggest barrier to employers finalizing the benefit plan design. Finding the right balance between benefit cost and value can delay or slow down the open enrollment process.
NEW YORK (PRWEB) August 14, 2019
The U.S. student loan debt crisis has persuaded many employers that loan assistance programs are a valuable benefit for their employees, and employers now rank student loan assistance as the top new benefit they plan to offer during open enrollment this year, according to Employee Benefit Adviser’s newly released Open Enrollment Readiness Benchmark (OERB) survey.
Health, fitness and wellness incentive programs and financial credit management came second to student loan assistance in the list of new employer benefits for open enrollment, followed closely by identity theft protection.
According to the Federal Reserve Bank of New York, U.S. student loan debt reached a high of $1.4 trillion as of June 2018. “The increasing level of student loan debt has persuaded many employers that loan assistance programs are a valuable benefit for their employees. Employers are offering loan assistance benefits to improve employee financial well-being, as well as employee recruitment and retention,” said Walden Siew, editor in chief of Employee Benefit Adviser.
OERB scores (as of Q1 2019) for employers with a Q1 2020 benefits start indicate that overall employers are in a reasonable state of readiness, with a composite score of 44 out of 100 across the four phases of preparedness measured by the benchmark. In particular, the composite score of 65 for the first phase of “benefit plan design” reveals that employers are mostly on track for this time of the year. A complete analysis of the most recent OERB data is available here.
Employers, however, are falling behind in some benefit plan design activities, such as health, voluntary and wellness plan selections. “Benefit cost is the biggest barrier to employers finalizing the benefit plan design,” said Linda Cheung, director of research for SourceMedia. “Finding the right balance between benefit cost and value can delay or slow down the open enrollment process.”
Employers engage in a number of strategies to manage their benefit costs, including flexible spending accounts, telemedicine benefits and high deductible health plans. Offering flexible spending accounts is the most popular among these strategies, with 75% of employers having implemented this option. This is followed by telemedicine benefits and high deductible health plans at 69% of employers.
The OERB is a performance benchmark that quantifies companies’ preparedness for annual employee benefits enrollment. Each month SourceMedia Research and Employee Benefit Adviser survey more than 400 HR and benefits executives at organizations of various sizes and across multiple industries. These professionals are asked to rate their completion levels for 20 activities — from selecting health plans to reviewing enrollment metrics — that take place during the four critical phases of open enrollment: benefit plan design, enrollment preparation, enrollment management and post-enrollment analysis. Scores range from zero to 100 and reflect the degree to which an employer considers itself prepared for each activity. These scores are then averaged to determine scores for each of the four phases and for overall readiness.
About Employee Benefit Adviser
Employee Benefit Adviser is the information resource for employee benefit advisers, brokers, agents and consultants, providing the current awareness and perspective they need to anticipate changes in the marketplace and optimally serve their clients. EBA delivers a broad range of critical content, including comparative market data, legal and regulatory updates, the latest products and services, and best practices in benefits delivery — including health insurance, vision and dental insurance, and voluntary and retirement benefits. The benefits broker community relies on EBA to stay connected through its website comment forums, its social media communities and live events.
About SourceMedia Research
SourceMedia Research, a division of SourceMedia, is a full-service B2B market research service that draws upon SourceMedia’s market expertise and proprietary database of engaged executives to develop information and insights for clients. SourceMedia Research provides research solutions for marketers, agencies, and others targeting sectors such as banking, payments, mortgage, accounting, employee benefits and wealth management.
SourceMedia is a business information, media, and events company serving the financial, technology and healthcare industries. We advance communities of professionals and marketers, by uncovering powerful business ideas, connecting industry leaders around them, and tracking progress through research and benchmarks. Brands include Digital Insurance, American Banker, The Bond Buyer, PaymentsSource, Financial Planning, Accounting Today, and National Mortgage News. SourceMedia also hosts over 30 events per year that guide industry professionals through leadership, technology and policy disruption.
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