The Institute for Healthcare Consumerism published an article by PlanSource Senior Marketing Director Ryan Glushkoff.
Three Employee Benefits Industry Trends To Watch
August 3, 2016
Copyright © 2016 The Institute for HealthCare Consumerism
To understand the trends in employee benefits, let’s first look at the current state of the U.S. employee benefits market as a whole. First, some background on why the market exists in the first place: private sector employers are incented to buy health insurance pre-tax, and then include these benefits as part of an employee’s total compensation and incentive plan. In order to help them acquire and retain the best people they can, many employers spend generously. With 155 million Americans receiving benefits through their workplace – or just under half the total U.S. population – employer-sponsored coverage is the cornerstone of the U.S. health care system.
As a whole, the employee benefits market is strong and forecasted to remain that way. The Congressional Budget Office (CBO) predicts the number of participants in the employee benefits market to remain constant at approximately 155 million people through 2026. Even though the growth potential of this number is weak, its persistence is strong. Recent government data suggests that the labor participation rate has been and will continue to shrink as fewer, younger people enter the workforce and more, older people stay in it, which makes for a smaller and more competitive talent pool. In fact, the talent pool may be getting even more competitive as the number of job openings has recently eclipsed hiring, and the rate of new job openings has dropped precipitously. Taken together, this suggests that the U.S. economy is seeing an imbalance in the labor force that will only intensify the war for talent and galvanize the need for employer-provided benefits. Even though the market looks calm on the surface, there are three trends currently creating some big currents under the surface.