One-size-fits-many coverage may no longer cut it for Americans with heightened expectations and diverse health concerns. Going forward, we may see employer-sponsored health insurance going the way of pension plans. Consumers are showing they’re ready for the change, with data revealing that 41% of consumers say they think health insurance should be decoupled from employment. As business leaders look ahead to the next couple of years, we have an opportunity to meet the moment and reimagine what health insurance looks like, and what incentives companies should offer to attract the best talent.
- Today’s workforce is highly mobile
Employees often move from job to job, changing employers after only a couple of years, rather than staying at the same company for decades. Younger workers are statistically twice as likely to leave their jobs in search of better offers, according to data from Visier.
- Consumer expectations have evolved
Younger generations have only lived a digital age — and therefore have high expectations for flexibility, convenience, and personalization. They are generally in good health, so they are far less likely to be dealing with chronic conditions, specialized physicians and treatments, or high-cost prescriptions. Many are single and have not yet started families, which simplifies their considerations when choosing coverage. Younger generations are great adopters and proficient users of technology, and are therefore likely to be more receptive to change, and are at the forefront of adopting new technologies and experiences.
It’s inevitable that demands for more personalization in healthcare will reach a tipping point— and employer plans will either have to evolve to deliver these experiences, or consumers may take matters into their own hands, re-evaluating where they get their healthcare coverage.
- Technology advancements make it easier to customize plans to an individual’s unique needs
- Employers, particularly those with younger leaders, don’t see the logic in providing healthcare
When employers make decisions about health insurance plan designs, they are balancing the needs and wants of a diverse employee population — with a few, limited, one-size-fits-all options.
- Regulatory changes have opened up new possibilities
By making a defined contribution toward coverage, employers can control rising healthcare costs and get out from under the administrative burden of administering health benefit programs — while still giving employees greater flexibility, by allowing them to choose their coverage from a much wider array of options. This is very similar to the shift we saw in retirement benefits, from pension funds to 401ks.
Click HERE to read full article by Leif O’Leary, Harvard Business Review, May 19, 2021.