Top Benefit Trends That Will Shape Your 2022 Strategy
We’ve officially reached that time where we all start setting goals and strategizing for success in the new year. Regardless of what your planning process looks like, it’s important to reflect on last year as well as try to anticipate what’s really going to matter in 2022. What new technologies and tactics will become major players? What will employees actually want in their benefits packages? We’ve broken down all of the key trends and predictions that will change the benefits game in the new year.
Embracing the Digital Transformation
63% of employers are still using multiple HR tech systems that aren’t integrated. This leads to more manual processes, missing information and mistakes along the way. Ben admin systems have evolved from simply managing enrollment to creating a truly simplified and automated benefits shopping experience with integrated decision support and personalization.
More and more organizations will modernize their benefits technology this year so that it has best-in-class features and integrations with not only HCM and payroll platforms, but carriers as well. 50% of companies plan to spend more on HR tech in 2022 due to the challenges they’re facing now. As a result, modernized ben admin solutions are no longer a “nice to have”, but are now a “need to have” instead.
What truly sets these modernized planforms apart are APIs. Real-time integrations are the future of the benefits industry. As all these companies seek out new ben admin solutions, the ones they choose will have replaced antiquated EDI with carrier API integrations, boast EOI integrations with real-time decision notification and also have API’s that import plan data. These integrations not only reduce HR burden but create a seamless employee experience as well.
The modernization and API trends won’t only affect employers and HR leaders, but benefit technology providers as well. Significant API investments are long, multi-year endeavors and it will take several years before the majority of integrations are handled this way. However, it’s incredibly important, and if your benefits tech provider isn’t working on this by 2022, they may be left behind.
The Big Data Trend is Here to Stay
Big data has been a trend for years now, and it’s not going anywhere. With so much data and information at our fingertips, it can be overwhelming to know what metrics to look at, what they mean and how to make decisions based on those findings. We predict that this ongoing trend will lead to a new emergence of data visualization tools in 2022.
HR leaders recognize the value in the employee and benefit data available to them, but the reporting process is time consuming between organizing, analyzing and making decisions off this information. Data visualization tools, like our own InsightsIQ, automate the reporting process and present information in a more digestible way.
Outside of reporting, big data is also driving the growing trend of AI/ML innovations as well. In recent years, employees have been paying more and more attention to their benefits. This leads to an increased need for personalization and decision support. AI/ML technology can streamline both decision support and other inefficient and costly processes.
The Great Resignation Hits HR
The Great Resignation continues to affect all aspects of the workforce, especially HR. According to the U.S. Bureau of Labor Statistics, there were 5.9 million total separations (including quits, layoffs and discharges, and other separations) in the U.S. in October 2021, leaving already over-worked HR teams spread even thinner as they handle an influx of resignations and new-hire admin work. It also brings a new sense of urgency for developing talent retention strategies. But how are HR teams supposed to find the time and resources to do it all? Especially when those resignations come from within HR – an alarming trend we’re hearing more and more from customers.
To relieve the extra administrative burden The Great Resignation will continue to cause well into 2022 — as well as mitigate impacts of HR staff leaving the organization – many companies are considering outsourcing core benefits administration tasks to help pick up the slack.
Best-in-class benefits outsourcing allows HR leaders to trust the well-being of their employees is taken care of by an established partner who is focused on managing benefits and procedures. This way, HR can focus on more pressing matters such as strategy and engagement rather than tedious, manual processes.
A New Generation Entering the Workforce
With the Great Resignation shaking up the U.S. workforce, there have been significant changes to employee populations. Millennials have had the greatest increase in resignation rates, with an average increase of more than 20% between 2020 and 2021. As these population shifts continue to occur at staggering rates, the newest generation to the workforce will be filling in the gaps.
As the most recent college graduates, Generation Z is accepting more job offers as Millennials leave. According to the World Economic Forum, Gen Z will make up about 27% of the workforce by 2025. This means that benefit needs will continue to change as a reflection of the overall evolving workforce, leading to more companies expanding and diversifying their benefit programs in 2022.
Many companies are recognizing the importance of voluntary benefits as a way to meet their employee’s needs. 94% of large employers believe voluntary benefits will be more important to their total rewards strategy going forward because they create a sense of security and help decrease burnout while increasing productivity. Having a ben admin provider who invests in strong carrier partnerships is key to providing a seamless experience across your entire benefits ecosystem.
Combating Rising Benefit Costs
Benefit costs continue to rise. According to the Kaiser Family Foundation, these costs rose 4% in 2021 and we expect them to continue to do so in 2022. Consequently, 60% of employers said that rising benefit costs are a major concern of theirs. So how can companies keep costs down while still meeting the needs of their employees?
In addition to offering a High Deductible plan (HDHP) with a Health Savings Account (HSA), we expect employers to invest heavily in strategies and tools that help them proactively reduce costs in 2022. Key trends in this area include healthcare consumerism (more on that in the next section!), real-time dependent verification and tools that help employees enroll in best-fit, low-cost plans upfront.
Dependent verification audits can also reduce costs by preventing companies from covering those who are ineligible. As AI/ML technology continues to grow in popularity, so will tools that automate and simplify this auditing process, much like our own DependentIQ. Dependent verification tools not only save time and money but improve compliance and minimize risk as well.
Despite benefits being a large expense for employers and employees alike – employees spend little time in the actual enrollment process. For example, a medical enrollment decision worth roughly $13k across employer and employee happens in approximately 7 minutes. Many employees have a hard time understanding insurance and struggle selecting the right plans, thus decision support tools are necessary to help them make the right decisions. With that additional support, employees are less likely to enroll in benefits they won’t use, saving money for both parties involved.
Employees Want to Be Active Healthcare Consumers
Healthcare consumerism means employees are actively involved in their healthcare decisions. We believe this will become more important as the workforce population continues to change. When your employees truly understand their benefits and how to use them, engagement and satisfaction rating go up as well. As we enter 2022, employees will continue to seek more benefit education so they can be active participants in their healthcare experience.
This trend will also drive HR leaders to get more creative with their benefit education efforts. Choosing a ben admin provider with a robust customer experience call center can be a great way to connect employees with the information they need without burdening HR with more work. Additionally, decision support within the benefits shopping experience will better engage employees in enrollment through personalized recommendations. This way, employees can become healthcare consumers without HR taking on more work.
The Broker Role Is Changing with The Industry
In response to these industry changes and trends, the broker role is evolving as well. Brokers will likely spend more time advising their clients in 2022 and take on a more strategic services role. Employers need help navigating the changing regulations and the increasingly digital and complex benefits landscape. According to a recent LIMRA study, majority of employers report their “broker/benefits advisor provides valuable support and advice beyond simply presenting our benefit options,” so it’s likely that this trend will continue.
Want to Learn More?
For a more in-depth breakdown of the top benefit trends we predict for 2022, register for our upcoming webinar on Thursday, Jan. 13 at 1 p.m. ET/10 a.m. PT.
Interested in learning how the right benefits technology partner can help you pivot with these trends? Schedule a product demo with our team today!
ROI measured through investing in voluntary benefits. Especially as it pertains to employees through the lens of personal & professional development.
PlanSource’s Top 10 Highlights of 2021 [rt_reading_time label="Read...
5 Surprising Stats That Support Total Compensation...