As businesses plan for next year’s open enrollment period, decision
makers for employee benefit plans may be surprised to learn that
involvement from company leadership plays more of a key role in driving
employee medical plan participation than do financial incentives. That
according to the 2016 Benefit Analytics and Benchmarking Study (BABS),
conducted by Wells
Fargo Insurance, part of Wells
Fargo & Company (NYSE: WFC). Whether establishing a culture of
health, demonstrating support of wellness, or narrowing their network of
healthcare providers – which can save up to 10% of costs for businesses
– employers who take an active role in plan management can favorably
impact the total spend on benefit plans.
The Benefit Analytics and Benchmarking study analyzed more than 1,000
employers nationwide to better understand trends and costs related to
employee benefits. It represents current data from 2016 and well over
one million employee lives.
Key among the findings was that an employer’s cash contribution to
Health Savings Accounts (HSAs) does not impact employee participation in
plans with HSAs, an attractive lever for employers looking to reduce
benefit costs. In addition, financial incentives did not motivate
employees to opt out, or waive, medical plan coverage.
“Many of the findings shatter traditional industry narratives that we
have been following for the last 10 years, about cash and
cash-equivalent incentives with employee benefit plans,” said Nick
Allen, national practice leader for customer analytics with Wells Fargo
Insurance’s Employee
Benefits National Practice. “As it turns out, many employees do not
view HSA contributions from their employers as an incentive when
choosing plans.”
Involvement from company leadership plays a key role in driving medical
plan participation. Whether establishing a culture of health,
demonstrating support of wellness, or narrowing their network of
healthcare providers – which can save up to 10% of costs for businesses
– employers who take an active role in plan management can favorably
impact the total spend on benefit plans.
“We’ve seen senior leaders encourage their employees to leave work early
to exercise or to attend their annual physical appointment. That type of
encouragement from management sends a strong message, not only boosting
employee morale, but having a positive financial impact,” added Dan
Gowen, national practice leader with Wells Fargo Insurance’s Employee
Benefits National Practice.
With healthcare costs expected to continue to rise in 2017, employers
are looking for more ways to manage benefit expenses. The study found
companies that offer more wellness initiatives, such as walking or
biking trails, smoke-free environments and lactation rooms, reported
lower medical premiums. However, less than one in five employers has a
documented strategic plan in place to address wellness and disease
management.
While support from senior leadership is important to increase
engagement, only 45 percent of respondents indicated seeing support from
their executives. Demonstrations of support include active participation
in benefits programs (21 percent), endorsement of benefits plans to
their board of directors (16 percent), involvement in employee benefits
communications (25 percent) and inclusion of employee health and
well-being in organizational goals and value statements (17 percent).
Wells Fargo’s Employee
Benefits National Practice helps customers with financial
underwriting and insurance, health and productivity risk management,
benefits communication and administration, and compliance with health
care reform.
About the 2016 Benefit Analytics and Benchmarking Study
The 2016 Wells Fargo Insurance Benefit Analytics and Benchmarking Study
(BABS) is a national study of employee benefits. More than 1,000
employers participated in the study, nationwide. The responses
represented well over one million employee lives, across three group
size market segments (fewer than 200, 199 – 999, and over 1,000) and
dozens of industry classifications.
About Wells Fargo Insurance
Named one of the top 10 insurance brokers in the U.S. by Business
Insurance [1], Wells
Fargo Insurance provides solutions for a wide range of customers,
including retail consumers, high net worth individuals, small
businesses, as well as middle market and large corporate customers.
Wells Fargo Insurance writes or places $11 billion of risk premiums
annually in property, casualty, benefits, international and personal
lines.
[1] 2016 Ranking includes Wells Fargo Insurance Services USA, Inc.,
Wells Fargo Insurance, Inc., and Rural Community Insurance Company
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based
financial services company with $1.9 trillion in assets. Founded in 1852
and headquartered in San Francisco, Wells Fargo provides banking,
insurance, investments, mortgage, and consumer and commercial finance
through more than 8,600 locations, 13,000 ATMs, the internet (wellsfargo.com)
and mobile banking, and has offices in 36 countries and territories to
support customers who conduct business in the global economy. With
approximately 268,000 team members, Wells Fargo serves one in three
households in the United States. Wells Fargo & Company was ranked No. 27
on Fortune’s 2016 rankings of America’s largest corporations. Wells
Fargo’s vision is to satisfy our customers’ financial needs and help
them succeed financially. Wells Fargo perspectives are also available at Wells
Fargo Blogs and Wells
Fargo Stories.