Insights from the 2017 Vermont Benefits Survey Results
One thing has remained constant since our firm began conducting the Vermont Employee Benefits Survey in 2001 – change. This year is no different as employers continue to struggle with high health care cost increases and look for new ways to contain costs and still offer a health insurance package that is valued. Employers are also looking at wellness offerings through a different lens, while HR technology is creating a shift in thought and operational processes. Paid time off is becoming ever more important as millennials and digital natives enter the workforce and demand different thinking.
On the health care front, one finding from our survey is that the average premium increase was 7.5% in Vermont, which is also the average in the State over the last eight years. What is interesting in this regard is that the average national premium increase, per Kaiser Family Foundation, was 3%, the lowest in a number of years. National premiums have been trending downward for the last 5 years and Vermont just isn’t seeing that downward trend. Vermont employers continue to struggle with these increases and are increasingly trying to come up with new ways of managing their health plans.
On the funding front, more and more employers are self-funding, including using captive insurance – a trend that we’ve seen tick up over the last five years. Part of this strategy for employers is not just to change funding methodologies, but to actively manage the plan with more claims data. Data from our survey is showing an increase in implementation of innovative strategies for self-funding including consumer pricing transparency tools, on-site primary care clinics, telemedicine, claims analytic tools and health advocacy.
Another health care trend identified in the survey is the strategy of using a defined contribution/exchange approach to offering a health plan. Employers employing this approach are providing a number of plan choices to their employees and a set dollar contribution so that employees may buy up or down depending on their individual need. Our survey is showing that smaller employers are leading the charge in this regard as Vermont Health Connect allows for this type of offering. Nationally, larger employers are the ones implementing this approach, once again showing the uniqueness of Vermont’s health care market.
For those of us who have been working with employee benefits for a while, you might notice that defined contribution bears an eerie resemblance to old school cafeteria plans and you’d be right. Renamed, rebranded and redone, these defined contribution/exchange strategies are the old cafeteria plans, but with updated tools including benefits enrollment systems and decision-making tools. The adoption rate both nationally and in Vermont suggest that this is a trend worth considering.
On the wellness front, the survey suggests there seems to be a bit of fatigue. Where in 2008, the biggest challenges for employers was determining return on investment and money, the two biggest challenges in 2017 are a lack of staffing and resources and time. Burnout has not only hit the workforce, but wellness as well.
The data is showing that employers are not