Dive Brief:
- The rising cost of benefits — and the insufficiency of their support in covering employee costs — are straining both employers and workers, a report from Aflac has shown. Three in 4 employers responding to a survey said their benefits costs went up in the last year, naming prescription drug costs and an increased need for mental healthcare and medical appointments as factors.
- Of all challenges when it comes to employee engagement and satisfaction, employers named providing a competitive total compensation package as their No. 1 struggle, with 47% picking this option — topping training and development (40%), implementing tech solutions (38%) and offering optimal flexible work arrangements (37%).
- Despite employers’ desire to offer competitive benefits, they remain overconfident in employees’ satisfaction with and understanding of their benefits packages, the Aflac report showed, with a 22% gap between employer assessment of employee satisfaction and employees’ own reporting. Employees said they had to make difficult financial decisions about healthcare, with 21% saying they had to decide between healthcare or paying a bill, 17% reporting difficulty affording a prescription and 15% reporting difficulty affording healthcare recommended by a doctor or specialist. Just under half expressed skepticism they would be well-covered in the event of an extreme illness, and only 1 in 5 thought they would be covered “extremely well.
Dive Insight:
Deferred care has been a worrying trend since the beginning of the pandemic, when employees put off preventive care or chronic health management in droves due to fears of contracting COVID-19 or difficulty accessing an overloaded medical system. Aflac’s report suggests employers and workers are still dealing with the downstream effects, as employees begin to address medical issues that may have cropped up over the past few years.
That trend is coalescing with a greater need for mental healthcare, as workers simultaneously manage anxiety and depression — along with other conditions — that also worsened during the pandemic. Adding in the effects of inflation, it may not be surprising that workers expressed less satisfaction with employers’ benefits plans than those employers may expect, despite businesses seeing their costs tick up.
Education may play a role. Most workers responding to Aflac’s survey said they spent under half an hour researching their benefits, close to half said they didn’t understand some aspects of them and nearly 90% said they chose the same benefits year after year. Younger workers — namely, millennials and Generation Z — tend to be less engaged and educated on benefits. Employees have previously expressed an interest in learning more about certain benefits, especially those dealing in financial planning and budgeting. Helping workers better understand and select health plans may boost their satisfaction.
Employees have also reiterated that the type of wellness benefit matters as much as the provision of such a benefit, with those emphasizing physical fitness winning out; 65% of workers responding to a recent Opinium survey said they would use an employer-sponsored gym membership, for example, while nearly half said they would participate in mindfulness sessions and 36% said they would consider using a yoga membership.
