I just spent most of the week in Las Vegas at the inaugural Health and Benefits Leadership Conference sponsored by Human Resource Executive magazine, and after having benefits information pounded into my head for three days, I return from Sin City with two distinct thoughts:
- This new conference seems well on its way to becoming THE go-to annual event for benefits professionals. With a reported 500 attendees and 700 people attending, the new Health and Benefits Leadership Conference not only seems popular but is also scheduled at a better time than the longstanding EBN Benefits Forum & Expo (spring vs. fall, and BEFORE benefits pros make decisions on changes for the coming year). Plus, it seems to have a lot more energy and pizazz than the EBN event. I should know; I’ve attended a number of Benefits Forums and they don’t have half the zing I found at this one.
- Geez, are HR and benefits pros focused on health care reform, or what? Even the speakers at this event joked about how much information was being presented about coping with Obamacare, but that’s probably because no one is certain if all the regulations and health exchanges will be clear and operational by the time things really kick in on Jan. 1, 2014. Yes, people seem to be worried — and for good reason.
A formula for the value of benefits
To that last point, the conference kicked off with a provocative presentation titled Are Employee Benefits Forever? by Dr. Ron Leopold, senior vice president and national practice leader in health and productivity at Wells Fargo Insurance Services.
As Dr. Ron noted, employers don’t just offer benefits because they think it is good to do so. No, they offer benefits to employees because there is a value in doing so for both employers and employees. He even offered an equation that showed the business value of employee benefits:
[Value] = [Attraction] + [Retention] + [Productivity]
[Cost]
But, he also presented these sobering numbers. According to a survey by the Kaiser Family Foundation, in the period between 1999-2012:
- Overall inflation rose 38 percent;
- Workers earnings rose by 47 percent;
- Health insurance premiums increased by 172 percent; and,
- Workers contributions to their premiums jumped by 180 percent.
Why health premiums keep going up
Dr. Leopold noted that we probably aren’t surprised by the jump in these numbers but that we don’t really know WHY health insurance premiums have skyrocketed. He offered seven (7) factors that are driving the increase:
- We pay providers in ways that reward doing more, rather than being efficient.
- We’re growing older, sicker and more obese.
- We want new drugs, technologies, services and procedures.
- We get tax breaks on buying health insurance, and the cost to patients of seeking care is often low.
- We don’t have enough information regarding which medical care is best for us.
- Our hospitals and other providers are increasingly gaining market share and are better able to demand higher prices.
- We have supply and demand problems, and legal issues that complicate efforts to slow spending.
He also made the point (and he said this true for everything in life) that you can have any two of these three things when it comes to health reform or anything else — Good, Cheap, or Fast. Most people want all three but they can’t get them all — and that in a nutshell is the problem as the government tries to push through health care reform.
Trends that will impact employee benefits
Employee benefits, Dr. Leopold said, drive employee loyalty, so they’re really important — but here are some of the trends he listed that will impact employee benefits moving ahead:
- It’s a mad, mad defined contribution world. The shift from defined benefit plans to defined contribution plans (like 401k’s) is accelerating. Better tools to select and administer benefits are becoming more widespread — and employees seem to prefer dealing with it this way.
- Because it’s often better and smarter. Things are moving crazy fast. This isn’t a fad. How we select benefits, submit a claim, check a balance, change coverage and interact with benefits service is becoming increasingly device-centric.
- Employers will never be out of the productivity business. The new focus will be on resiliency, mental wellness, and fulfillment.
- Welcome, insourcing — finally. There is a pendulum phenomenon to outsourcing occurring. Eventually (as we’re seeing in India right now) the cost-benefit shrinks to a point where we keep jobs here. And Bangalore workers start to come here.
- Is Indianapolis the new Bangalore? The U.S. gets into this globalization thing in a big way as the war for skilled talent becomes more of a global phenomenon for more and more industries. And, American competitiveness will depend on U.S. benefits values being in step with other nations.
Are employee benefits forever?
You may not agree with all that Ron Leopold said about benefits and where things are going, but he did get everyone’s thinking revved up, and that’s not an easy thing to do at a benefits conference.
Plus, he answered the provocative question that he used to title his presentation — “Are employee benefits forever?”
Yes, he said — as long as people depend on businesses, and business depend on people.
And yes, as long as business compete for talent, and as long as companies can move the needle on worker productivity with programs, service and coverages.
And finally, yes, even if we were to move to a nationalized single payer health care system.
This is interesting, provocative stuff, and was head and shoulders above anything I’ve heard at other benefits conferences the last few years. It’s a reason to check out the Health and Benefits Leadership Conference when it comes around to Las Vegas again next March.
Can employees be rehabilitated?
Of course, there’s a lot more than a new benefits conference in the news this week. Here are some HR and workplace-related items you may have missed. This is TLNT’s weekly round-up of news, trends, and insights from the world of talent management. I do it so you don’t have to.
- More Americans confident about their job. Here’s one way to measure that the economic recovery is slowly taking hold: according to the Los Angeles Times, “Americans are more upbeat about their job prospects and fears of being laid off are subsiding, a new survey shows. … The percentage of Americans who said it would be somewhat or very easy to get a job if they lost their current position increased to 54% last year from 46% in 2010, according to the survey.
- Can employees be rehabilitated? The New York Times’ You’re the Boss small business blog has a lot of intriguing content, and this discussion about whether long-time employees who are not a good fit for their current jobs anymore can be changed, is one of those issues that lots of people talk about but never have a good answer for. This discussion may help.
- Canada pardoning job seekers with criminal records. It’s getting to be damn near impossible to get hired, it seems, if a criminal record pops up on a background search, but Canada is doing something about that. According to EmployeeScreen IQ’s IQ blog, “In Canada, they recently implemented legislation (in March of 2012) for … record suspension, allowing ex-offenders a pardon for past crimes. According to Chris Heringer, a senior executive with Pardon Applications of Canada, a nationwide application firm, this is a great opportunity, particularly for those seeking employment.”
- Pushing for paid sick leave. The Los Angeles Times reports that labor groups in California are “expected to mount campaigns in Los Angeles, San Jose and Oakland” for paid sick leave for workers, “but the timing is unclear, and labor groups say they are still deciding whether to pursue ballot initiatives or push ordinances through city councils.” Some 40 percent of California’s workforce, the newspaper reports, have no sick leave to draw on at all.
