Wider Benefits Selection Better Engages Workforce

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The Private Exchange Research Council (PERC), a think tank comprised of private benefits exchange experts and top national insurance brokers and consultants, released a report, “Understanding Product Offerings and Choices on a Private Exchange,” examining the types of benefits products offered and employee purchasing decisions on private exchanges, also known as benefits marketplaces.

According to a press release, the report reveals that employers are offering a greater variety of benefit options on exchanges and increasing those options over time. The report also details findings from tens of thousands of purchase transactions indicating that employees are taking advantage of those increased offerings by buying more products over time and that their purchasing decisions are consistent with their personal needs and financial situations.

“Benefits are a valuable tool for recruiting and retaining top-tier employees,” says Alan Cohen, co-founder and chief strategy officer of Liazon, a member of PERC. “The exclusive data in this report point to an increased recognition among employers that, by offering a wider selection of benefits each year, including non-traditional products, they can set themselves apart and better engage their workforce.”

The analysis, based on data from companies using a Liazon-powered private exchange between 2013 and 2015, showed:

  • Employers are offering an average of 14 different benefit types (medical, dental, vision, life, disability, etc.) and a median of six medical plan choices;
  • Overall, smaller-sized companies are offering more non-traditional voluntary products (legal plans, pet insurance, identity theft protection, and more) compared to larger companies;
  • Employees who purchased on the exchange bought an average of 4.4 products in 2015 compared to 3.6 products in 2013 — an increase of more than 20%;
  • Gen Xers tend to purchase the most products compared to other generations: approximately 44% purchased four or more products, compared with 42% of Boomers and only 30% of Millennials;
  • There is a steady increase in employees enrolling in HSA-qualified health plans — rising from 38% in 2013 to 42% in 2015 — consistently ahead of general industry averages;
  • Those selecting HSA-qualified plans are more likely to be younger, male, healthier, higher-paid, and have fewer financial issues; and
  • 38% of employees bought the exact medical plan that was recommended to them via the system’s decision support tool in 2015, up from 32% in 2013.

The research also reveals that an employee’s socioeconomic circumstance tends to align to their benefits purchases, supporting the notion that people make choices based on what’s best for their individual situations. For example, those who purchase more products tend to have greater financial means, have a greater need to address health issues or financial challenges, or are at a point in their lives where greater financial security is attractive.

“We founded PERC last year because we felt that there was a lack of data on, and insight into, consumer behavior in benefits selection,” says Christopher Condeluci, principal of CC Law & Policy and a member of PERC. “Knowing what plans people want and how they choose them will go a long way in helping the benefits industry better meet employers’ and employees’ needs.”

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