America's Benefit Specialist October 2022

NOTEWORTHY

tionary pressures will increase the cost of healthcare services.” Employees are contributing about $4,412 for healthcare coverage this year, of which $2,520 is paid in the form of premiums from paychecks and $1,892 is paid through plan design features such as deductibles, co-pays and co-insurance, according to the firm’s analysis. Faced with the constant, upward pressure from healthcare trends each year, employers are exploring new solutions to trim their healthcare costs. One worthwhile approach is to address the high costs associated with patients with chronic and complex health care conditions. “A key driver of cost growth and budget volatility for employers are new treat ments and increased care costs for patients managing long-term complex conditions,” Ashford added. “It is not uncommon to see one percent of membership driving 40% of healthcare spend in any given year.” To learn more, visit www.aon.com. NEW BENEFITS FOR REMOTE WORKERS LINKED TO BETTER WORKPLACES Sure, remote work comes with many inher ent benefits—flexibility, saving money on the daily commute, travel possibilities—but are actual “benefits” relevant to the remote worker anymore? Take office snacks and cof fee, day care or even extra vacation time—do these things matter as much to someone working remotely as they would to someone on-site? Since remote work has become a new norm for many in the corporate world, employee benefits may need a tune-up. After surveying more than 1,000 employ ees across the U.S.—from executive through entry level—Paychex has uncovered new insights into the remote employee benefit conundrum. Employees and employers alike were asked how benefits programs have been adjusted to accommodate their new remote workforce and how those decisions have impacted workers and the company at large.

Respondents also shared the benefits they’d most like to see incorporated in the future. Paychex first asked respondents to divulge how their company had adapted benefits to suit their new remote work format, if at all. Employees also shared how satisfied they were with these changes and responses were further categorized by company size. It immediately became clear that updating benefits packages was associated with several advantages when employees start working remotely. While 88% of employees had been satisfied with their benefits while working on-site, the number dropped to 71% when they switched to remote work. The percent age increased to 77% for those participants whose companies had updated benefits to reflect their new needs but dropped to 65% companies that had changed their benefits policy, nearly three-quarters asked for their employees’ input to do so. This process is part of what’s known as the employee feed back loop which can help achieve everything from improving employee tenure to uplifting company culture. As indicated by the survey results, it can also help improve benefit packages. Large companies were the least likely to make these much-needed changes. The survey asked respondents to share the most common benefit changes experienced as well as the ones they wanted most. The most common benefit updates for remote workers included flexible working hours and performance bonuses. When asked which additional benefits they most wanted, how ever, employees placed a home office stipend (31%) and reimbursement for internet costs (30%) in the top two spots. Setting up a home office can create a high ly valuable ripple effect for both employees and their companies. Practical and aesthet ically pleasing home offices can improve everything from an employee’s family life to their productivity, professional appearance, and even the value of their home. This kind of stipend was the single most desirable ben- when packages remained unchanged. The survey also found that among

The analysis uses the firm’s Health Value Ini tiative database, which captures information for nearly 700 U.S. employers representing approximately 5.6 million employees. Medical claims were suppressed for most employers during the first year of the pan demic, during which time much care was postponed or skipped during quarantines. Employers have seen the medical claims experience return to more typical levels of growth and anticipate inflationary cost pressures in the coming year. “In complete contrast over the last decades, we are measuring that healthcare budgets for U.S. employers will come in nearly three times lower than the Consumer Price Index this calendar year,” said Debbie Ashford, the North America chief actuary for health solutions at Aon. “Despite this historic occurrence, employer health costs are expected to increase 6.5% in 2023 due to economic inflation pressures.” Price increases driven by economic infla tion typically are slow to appear in medical trends due to the multi-year nature of the typical provider contract, but will become apparent over the coming year, Ashford added. Other contributing factors adding pressure on healthcare trends are new technologies, severity of catastrophic claims, blockbuster drugs and increasing share of specialty drugs. In terms of 2022 health plans, employ er costs increased 3.7% while employee premiums from paychecks were slated to be a more modest 0.6% increase from 2021, according to the firm’s analysis. Plan costs represent the employer’s and employee’s combined premiums for medical and pre scription drug costs but exclude employee out-of-pocket payments such as deductibles, co-pays and co-insurance. On average, em ployers subsidize about 81% of the plan cost while employees pay the remainder. “In what remains a tight labor mar ket, employers are absorbing most of the healthcare cost increases,” Ashford said. “Employers are budgeting higher due to uncertainty and the anticipation that infla

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