America's Benefit Specialist November 2022

NOTEWORTHY

erage and benefits that American families depend on for their health. The report from Avalere looks across in dustries at trends that drive ROI higher and lower. Avalere highlights the manufacturing industry as an example, finding American manufacturers see an ROI of 42% on their ESI programs. “Employee-sponsored health insurance is a win-win for employers and employees,” said Katie Mahoney, vice president of health policy at the U.S. Chamber of Commerce. “We know employees place a high value on quality health insurance in the work place, and now we have more evidence that employers benefit significantly from investing in these programs as well. Em ployer-provided coverage is the backbone of the American healthcare system, and this report reinforces that any reforms should build off this model that is good for workers and companies alike.” “Improving productivity and wellness make America more competitive and prosperous,” said Joel White, president of the Council for Affordable Health Cover age. “While employers offer health coverage to improve the health and welfare of their employees, employees and their families benefit significantly. This study shows that Congress and the Administration must work to expand job-based coverage, not weaken it. The study, which examined employers with 100 or more employees, defined ROI as “the monetary value of benefit for each dollar employers invest in healthcare cover age. Investment in ESI may include health insurance premiums, wellness programs, direct medical expenses, administrative costs associated with processing medical claims, and other costs associated with providing health insurance. Avalere calculated the ROI derived from ESI by dividing the total em ployer benefits by the total costs of providing ESI.” The full report, including methodol ogy, can be found at www.uschamber. com/assets/documents/20220622_

introducing at least one new non-insurance option to address a wider array of their workers’ needs. While salary and bonuses remain a primary way to attract and retain workers, LIMRA’s study shows many employers are placing heightened emphasis on other com ponents of total compensation. Providing enhanced benefit options and greater job flexibility appeals to job seekers while also helping to retain key employees. EMPLOYER-SPONSORED HEALTH INSURANCE PRODUCES A 47% RETURN ON INVESTMENT FOR AMERICAN BUSINESSES Employers in the United States this year will earn an average return on investment of 47% from their employer-sponsored health insurance (ESI) programs, according to a new study from Avalere Health. This means for every dollar spent on ESI, employers get back $1.47 in financial benefits. The analysis from the health data firm finds that the aver age ROI is projected to grow to 52% in 2026, and that businesses that invest more in their ESI programs tend have a higher ROI. While providing employees high-quality health insurance is the right thing to do for workers, the report shows how it makes business sense. Avalere attributes the direct financial return for employers to lower direct medical costs, increased productivity, lower recruitment costs, stronger reten tion, lower short- and long-term disability costs, as well as tax benefits. More than 155 million Americans currently get their health insurance through ESI. The study was commissioned by the U.S. Chamber of Commerce on behalf of the Protecting Americans’ Coverage Together (PACT) campaign. PACT members, includ ing the U.S. Chamber of Commerce, Busi ness Roundtable, The National Association of Manufacturers, Council for Affordable Health Coverage and Vermeer Corporation, represent leading employer voices focused on strengthening the employer-sponsored insurance system and protecting the cov

adding a new insurance benefit within the next two years—roughly double the interest employers expressed five years ago. More than one in four businesses express strong interest in introducing at least one new type of insurance option to their workforces. Four in 10 midsize and large companies are very interested in offering new insurance benefits within the next two years. If all of these organizations follow through, approximately 784,000 employers will introduce a new insurance benefit over the next two years, reaching more than 86 million employees. Today, more than 80% of private employ ers with 10 or more workers offer at least one insurance benefit, with major medical plans most commonly available to employ ees. Dental (55%), life insurance (48%), vision care (47%) and short-term disability (47%) round out the top five benefits offered by employers currently. When it comes to new benefits employers are considering, disability (both short- and long-term) and vision care benefits were mentioned most often. Businesses that do not currently offer insurance benefits are most often considering adding major med ical coverage. Employers with no existing insurance benefits are also looking to add dental insurance, life insurance, short-term disability and vision care coverage. This aligns with what workers value, according to recent LIMRA research. In the 2022 BEAT Study: Benefits and Employee Attitude Tracker, more than half of workers cite medical benefits as one of the top five factors they look for in an employer, and more than a quarter prioritize other insurance benefits, such as life, disability or dental insurance. Beyond insurance benefits, employees are interested in adding non-traditional benefits, such as work flexibility, caregiving benefits and wellness programs. Given the current competition for talent, coupled with the increased emphasis on job flexibility among workers, the study finds more than half of employers (53%) are interested in

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