Transforming benefits – Benefit financing

Employers indicate that benefit financing is the area where they are most effective. They are focused on ensuring their benefit packages deliver value for money. Additionally, cost control remains a major issue, with four in 10 reporting they actively manage costs and risks (Figure 1).

Figure 1. Effectiveness of benefit financing

Concerns about increases in costs or premiums

The cost of healthcare benefits is top of mind. Six in 10 employers globally are concerned about increases in healthcare costs or premiums, a figure that rises to 69% in North America and 77% in Latin America. The percentage of employers concerned about healthcare costs is significantly higher than that in the other benefit categories (Figure 2).

Figure 2. Top areas of concern regarding increases in benefit costs and premiums

Taking action

Employers globally are planning or considering taking the following measures to manage healthcare costs in the next two years: use care navigation support (32%), use condition specific care (30%) and manage fees/premiums paid to insurance providers/vendors (29%).

The key actions employers are looking to take to control retirement costs include: management of third-party costs (26%), plan design (24%) and ensuring tax efficiency (23%). The percentage of employers looking to adopt arrangements that optimize tax efficiency drops to 14% in North America, while 23% of employers in EMEA, 26% in Asia Pacific and 30% in Latin America are planning or considering such arrangements.

To better manage the cost of risk benefits, employers are planning or considering taking the following actions: manage fees/premiums paid to insurers (27%), change plan design (25%) and optimize insurance arrangements (24%).

Next section: Transforming benefits – Administration and operations