Larger employers are taking a broader view of their employee benefits. Rather than consider health benefits separate from other benefits, they now look at them together as an entire package in the total compensation they offer. That\u2019s according to Amy McCulloch, a strategic consultant for benefits and people solutions at the Grand Rapids office of Lockton Companies LLC<\/strong> who works with mid- and large-market employers that generally have self-insured health benefits. Unable to pass along more costs for health coverage to employees through higher deductibles and copays during the labor shortage, employers are now looking at how they can bring in other benefits or new tactics for controlling costs, a trend that McCulloch expects to intensify in 2023.
\n<\/p>\n As employers renew health benefits for 2023, what changes are they considering?<\/strong><\/p>\n Employers have shifted where their focus is for this year, for next year, and I believe for 2024. It\u2019s no longer manipulating plan design and contributions \u2014\u00a0or it\u2019s to a lesser degree focused on manipulating plan design and contributions \u2014\u00a0and it\u2019s shifting to a much broader strategy.
\n<\/p>\n How so? What are employers looking to do differently?<\/strong>
\n<\/p>\n To a large degree, they\u2019ve exhausted plan design and changes in contributions. The pay isn\u2019t high enough for them to take any more money in the form of a contribution, and the plan designs are already at their maximums. The deductibles are really as high as they can go, out of pockets are high, and those have been changed so much over the years there\u2019s just nowhere to go with that. So, the focus is shifting into two buckets. One is: How do they attract, retain and recruit people? How do they build a total reward package that recruits, attracts and retains people? And they\u2019re looking at more strategy-focused solutions.
\n<\/p>\n Are they bringing in new benefits on top of their health plan?<\/strong>
\n<\/p>\n Absolutely. You\u2019re seeing a focus on family-forming benefits, really being appealing to young people looking to have a family. You\u2019re seeing plan menus aligning with DEI initiatives. You\u2019re seeing help toward daycare. Basic needs: daycare, flexibility, paid time off, parental leave. You\u2019re seeing the focus on benefits that fall outside what\u2019s considered a traditional menu.\t\t<\/p>\n How much does the labor shortage play into this trend?<\/strong>
\n<\/p>\n It plays into it significantly. Employers are still timid to be making any substantial changes and they want to build menus to attract the right kind of people.
\n<\/p>\n What unique things are employers doing with their benefits for next year?<\/strong>
\n<\/p>\n One of the unique strategies we\u2019re seeing that\u2019s gaining some traction is \u2018pharmacogenomics.\u2019 That\u2019s where you\u2019re using people\u2019s genetic makeup, their DNA, to identify their most effective prescription treatment plan because there\u2019s so much waste in the pharmacy side where people are taking meds that aren\u2019t effective because of what their DNA is. That\u2019s a pretty interesting strategy that employers are adding.
\n<\/p>\n On the social side of it, this unlimited PTO hybrid, their flexibility, and just that whole concept of how does the employer adapt to the labor market and what employees want.
\n<\/p>\n For 2023, health insurers for the first time have fixed the costs of COVID-19 testing, treatments and vaccines into their rates. How has that affected costs?<\/strong>
\n<\/p>\n Medical trend is predicted to be 7 percent to 8 percent in 2023, and 8 percent to 9 percent for pharmacy. Part of that is the expenses of COVID that they\u2019ve been waiving co-shares on, and then there\u2019s this notion that people who have deferred care, and then you have inflationary (pressures). The hospital systems and the providers, they\u2019re dealing with the same types of inflation as all the other employers, whether that\u2019s labor costs, health care costs, expenses on equipment. It\u2019s certainly going to be part of the package.
\n<\/p>\n What new trends do you see emerging in 2023?\u00a0<\/strong>
\n<\/p>\n There have been these topics that have sat out there on the horizon, whether you want to talk about reference-based pricing or bundled payments or direct contracting or carving out your pharmacy. Those strategies have all sat out there on the horizon and we\u2019ve talked about them, and I think they\u2019re going to gain traction because employers have exhausted what\u2019s happening to their benefit plans and what they can manipulate. They\u2019re going to need to find strategic solutions that impact costs, particularly as you head into a downturn in the economy and you combine that with medical trends and the pharmacy trend being higher.\t\t<\/p>\n We know it\u2019s out there. We know it\u2019s on the horizon. It might be part of an employer\u2019s three- to five-year strategy, but they\u2019ve kicked the can down the road. I think you\u2019re going to start to see some of those tactics actually deployed or implemented. You\u2019re going to see employers more seriously consider implementing some of those strategies that we\u2019ve been talking about for the last decade.<\/p>\n<\/div>\n![\"\"\/](\"https:\/\/news.google.com\/media\/k2\/items\/cache\/54b2557e10de6e6ff717d84e03a7049d_XL.jpg\")
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\n \t\t Amy McCulloch<\/span>
\n \t\t COURTESY PHOTO<\/span>\n \t\t <\/div>\n