Yesterday, we wrote about ways small businesses can build their company brand to become a coveted 'Employer of Choice'.
A cornerstone of being an Employer of Choice is having great benefits - a combination of attractive health benefits, unique perks, and a great company culture. But with the landscape of employee health benefits changing, new roles for Employers of Choice are emerging.
How Small Business Health Insurance is Changing
In the past, most businesses offered health insurance through group health insurance (a "defined benefit"). With this model, HR's role is to select and/or administer plans that best fit employees' needs, making it easy for employees to understand options and enroll.
But small business health insurance models are changing, especially for businesses with less than 50 employees. Health insurance is quickly shifting away from a one-size fits all company plan and toward toward consumer-driven and defined contribution health benefits models. These new models, along with new changes under the ACA, place more decisions regarding health care directly in employees’ hands.
New Roles for Employers of Choice
With these changes in small business health insurance, the role of HR changes from health care decision maker to health care navigator.
Studies show that employees want this choice and control of their own health care. But they also want to feel taken care of, and need guidance. A recent survey by Metlife found that 61% of employees say that being able to customize health benefits would increase their loyalty to their employer. Employees say they no longer want a one-size fits all health insurance plan. However, they still want help navigating choices (source).
This shift in roles around small business health insurance is relatively new, but it is very similar to the shift from retirement pensions (a defined benefit) to retirement 401(k)s (a defined contribution).
Under these new types of health benefits models, Employers of Choice will be those that offer choice to employees, help employees find the insurance coverage they need, clearly explain and educate employees on the health benefits plan, and communicate with employees regularly on how to take advantage of the health benefits.
Prepare, Educate, and Engage with Employees
Practically speaking, how can HR staff or small business owners manage this shift to defined contribution health plan models? Here are four quick tips on how to best facilitate this change to a defined contribution health plan -- and remain an Employer of Choice.
1. Understand and Prepare for Health Care Reform: Understand your organization's obligations, and opportunities, with health care reform. This will help you position your defined contribution health benefits approach and put it in context for employees with other changes that are occuring.
2. Educate Employees on the Benefits of Defined Contribution: Take the time to educate employees on how defined contribution health plans work, and how they will benefit personally. This will contribute to their understanding and happiness with the defined contribution health plan.
3. Communicate with Employees Early-On & Frequently: Keep the communication open between leadership and employees, and check in frequently.
4. Provide a Health Insurance Broker or Consultant to Help Employees: With pure defined contribution, employees purchase their own individual health insurance. This is a new experience for many employees. Make a health insurance broker available to employees to help them select and purchase plans. This will help them choose plans that best fit their individual needs, help them see the value in the change to a defined contribution plan, and reinforce that you care about them.
How are you seeing the roles change for HR and Employers of Choice? Join the discussion in the comments section below.