The evolving landscape of employer-sponsored health care with regards to the Patient Protection and Affordable Care Act (PPACA) and the implications that the law will have on voluntary benefits was discussed at a Prudential briefing in New York yesterday.
“The rising cost of health care is leading companies to shift more cost to employees, as well as to offer employees a robust menu of voluntary benefits to address key financial risks,” said Stephen Pelletier, president of Prudential Group Insurance.
However, although employers feel that offering a wide array of voluntary benefits to employees helps retain and attract talent, we have yet to see whether employees attach the same value to something that for the most part they don’t understand and, more importantly, don’t understand they need.
The panel of benefits experts at the event included Dallas Salisbury, president of the Employee Benefit Research Institute (EBRI); James Klein, president of the American Benefits Council; and James Gemus, senior vice president of Group Life and Voluntary Benefits, Prudential Group Insurance.
The discussion revolved around two recent Prudential white papers, “Optimizing Employee Benefits in the Post-Health Care Reform Environment,” and “Voluntary Benefits: A Critical Tool for Improving Employees’ Financial Wellness."
Mr. Klein purported that as PPACA is implemented, health care benefits will become more commoditized and that the voluntary benefits that employers offer to their employees will be the “differentiator.”
Traditionally, access to health care and retirement planning benefits are the two most important benefits to employees that their employers offer. As PPACA is rolled-out and deficit reduction talks and tax reform will undoubtedly have an impact on retirement planning products, rendering them less attractive, Klein feels that voluntary benefits will increasingly become a way to attract talent.
In the “Optimizing Employee Benefits” white paper, Gemus highlighted the shift in the benefits realm that is taking place: As cost and decision making responsibilities are now placed upon the individual employee, they need to have the proper tools to help them make educated decisions.
Prudential has come out with a benefits needs estimator that works to help employees understand what they need and what that will cost. The digital tool can be utilized on both tablets and smart phones, giving the employee the opportunity to figure out their needs while in line at the grocery store, Gemus said.
Panelists admitted that it is easy for voluntary benefits to be deemed unimportant by employees during the typical benefits enrollment season due to the deluge of decisions that employees have to make. There has been some talk of having a separate enrollment season for voluntary benefits so that they get the focus they deserve.
Still, the biggest challenge remains educating workers about the importance of voluntary benefits and getting them to understand how that importance can affect them financially.