Benefitfocus State of Employee Benefits™ 2021 Midsize Employer Report Shows Increase in Benefits Participation and Cost-Sharing
The report explores how an evolving multi-generational workforce and the impact of COVID-19 affected health care costs and health plan design for midsize employers. It compares their response to large employers (1,000+ employees) and the potential impact on employees. The first report of the State of Employee Benefits 2021 series analyzed employee benefit plan design and participation for large employers.
According to the latest report, midsize employers appear to have kept health insurance offerings and premium cost-sharing trends consistent since 2018, similar to the findings in the large employer market. However, as large employers remained consistent in their effort to increase voluntary benefit offerings in 2021, midsize employers reduced these offerings. Employees, on the other hand, are showing greater demand for voluntary benefit products – even those that are not employer funded.
Based on analysis of the compiled data, the report concludes with opportunities for health plans to offer midsize employers enrollment solutions that will enable seamless administration of medical coverage alongside more robust voluntary benefit packages.
"The data we've collected over recent years provides specific insight on the benefit plan designs by midsize employers and participation trends among their employees," said
"These two editions of the State of Employee Benefits demonstrate how we leverage data to create insights and guidance for our customers," said
Among the report's key findings:
- Health Insurance Offerings: Since 2018, there is little variance in the percentage of midsize employers only offering traditional health insurance options and those offering a combination of traditional and high-deductible health plans (HDHPs), while the percentage of employers offering only HDHP has dropped by half. Midsize employers are offering fewer choices when it comes to health insurance than large employers.
- Health Care Spending Accounts: Since 2018, the percentage of midsize employers offering at least one health care spending account option has increased by nearly 40 percent. More than half now offer both a health savings account (HSA) and flexible spending account (FSA). Midsize employers offer either an HSA only or an FSA only option at a higher rate than large employers.
- Employee Health Insurance Participation: Traditional plans remained the most popular choice across generations compared to HDHPs for employees of midsize employers. However, enrollment overall is increasing for all generations except for traditionalists as they're likely enrolled in Medicare or other coverage. Generation Z had the highest growth in participation across all plan types since 2018, while Gen Xers account for the most participation overall in employer-sponsored health insurance in 2021.
- Health Insurance Premiums: On average, health insurance premiums increased in 2021 for both midsize employers and employees across most plan types. However, employee premiums are considerably less than they were in 2018. This is likely because employers are taking on a higher percentage of the total premium from 2019 through 2021 for most plan types. This differs from large employers, who increased their share of the total premium only in 2021.
- Voluntary Benefit Offerings & Participation: Voluntary benefit offerings for midsize employers have steadily increased since 2018, with hospital indemnity offerings nearly doubling from 15 percent to 28 percent. However, voluntary accident, critical illness, hospital indemnity and legal insurance offerings dropped slightly in 2021, while pet insurance and identity theft protection experienced growth during the same timeframe – 27 percent and 12 percent increases respectively. Even with that growth, midsize employer voluntary benefit offering rates are significantly lower than those of the large employer groups, except for pet insurance.
For this report,
Click here to download the full report.
Benefitfocus (NASDAQ: BNFT) unifies the entire benefits industry through innovative technology solutions that bring efficiency, cost savings and simplicity to employee benefits administration. Our powerful cloud-based software, data-driven insights and thoughtfully designed services help employers, insurance brokers, health plans and suppliers address the complexity of benefits enrollment and engagement, while bringing easier access to health, wealth and lifestyle products through a world-class benefits experience. Our mission is simple: to improve lives with benefits. Learn more at www.benefitfocus.com, LinkedIn and Twitter.
DISCLAIMER REGARDING FORWARD LOOKING STATEMENTS
Except for historical information, all of the statements, expectations, and assumptions contained in this press release are forward-looking statements. Actual results might differ materially from those explicit or implicit in the forward-looking statements. Important factors that could cause actual results to differ materially include: volatility and uncertainty in the global economy and financial markets in light of the evolving COVID-19 pandemic and uncertainties arising from the recent
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