Spotlight on the USA – a guide to understanding the benefits landscape

Let’s start with the single biggest difference about healthcare in the U.S. – the United States is the only industrialized country in the world that does not have universal health coverage for all citizens. This means that benefits are a key driver to employee attraction and retention given that many U.S. citizens rely on employer-sponsored health and benefit plans for their financial and physical wellbeing.

Put that in the context of the great resignation in 2023 that saw a record number of working Americans – 47.4 million to be exact – quit their jobs. Research by money management platform Origin found that financially stressed employees are nearly 2.5 times more likely to look for a new job, demonstrating that better benefits and wellbeing support are among the many reasons employees sought out new positions.

In an airtight talent market – that’s forecast to continue for some years due to demographic shifts and aging populations – organizations that provide flexible, relevant benefits that give employees choice and make it easy for them to personalize their benefits package will reap the rewards in terms of employee attraction, engagement and retention.

Given the complexity of the US benefits landscape, Businessolver data shows employees need help navigating and understanding the value of their coverage options.

Understanding healthcare benefits

The dynamics of healthcare payers, providers, insurers, and government subsidies creates tremendous cost and confusion in the US, making care both expensive and difficult for the average consumer to navigate.

Healthcare is often a source of stress for Americans. The cost of care makes it difficult for most Americans to fund their own healthcare out of pocket. While 54% of Americans have insurance through their employer, the remainder are enrolled in public healthcare programs, military benefits – and 8% have no health coverage.

And even with employer-sponsored insurance, many Americans are stressed and underprepared to fund their healthcare, with 45% of employees saying they would “feel panicked” about a large, unexpected expense, like an ER bill. 37% said they would either “go into debt” or “aren’t sure how they would pay” for an unexpected healthcare expense.

This means that providing competitive healthcare coverage is a mainstay for a total rewards package, with additional benefits being added to differentiate organizations looking to attract and retain the best talent. Benefits packages are oftentimes expanded to include supplemental health insurance products, and a plethora of support programs for overall care navigation and condition-related support such as diabetes, mental health or musculoskeletal.

Balancing complexity, choice and personalization

Businessolver’s data shows that navigating this multitude of benefit choices through the overall experience of enrolling in, understanding, navigating, and using benefits is a challenge for a majority of US workers. The main factors that would improve upon American employees’ understanding their benefits include increased access to decision support at the time of enrollment, and personalized engagement during the year on how to use their benefits.

Although employers will narrow down their benefit offering from the over 900 health insurance organizations operating in the US today, they also aim to offer enough choice that will allow employees to create a personalized benefits package that takes into account their financial, health and lifestyle needs.

Alongside the medical or health plan offering, employers often offer at least one type of government-regulated spending account, similar to a bank account. This may include an account that offsets medical expenses not covered by insurance – such as an HSA (health savings account), FSA (flex spending account), or HRAs (health reimbursement arrangements). Some employers also offer an account that can fund other types of services such as an LFSA (lifestyle flex spending account to help with adoption, college tuition, etc.), DCFSA (dependent care FSA for child care) and more. The Internal Revenue Service (IRS) decides what expenses are eligible for these types of accounts.

Other benefits options

And if that’s not complicated enough, some states have different requirements regarding what employers must provide for their employees. For example, commuter benefits, to supplement the costs of public transportation, are mandatory in states like Washington and California; with this benefit, employees have the opportunity to make a monthly pre-tax payroll deduction for transport other than single occupancy vehicles. National companies, that might have employees in different states, must be mindful of benefits based on an employee’s location.

And outside of the common benefits such as medical, dental and vision, employers can choose any number of voluntary benefits to co-fund or offer as a perk, like life insurance, critical illness, hospital indemnity, accident, short- and long-term disability, wellness programs, mental health support, telemedicine, caregiving support, an employee recognition system; even pet insurance, identity theft protection, natural disaster insurance, care navigation, provider navigation, or medical condition-specific options. The list goes on.

Supporting employee benefit elections

Did you know that employees spend an average of just 15 minutes electing their benefits? This is a miniscule amount of time for a decision that will play a large role in directing their wellbeing for the next 365 days of the plan year.

Americans that are enrolling in benefits need the best option for them, and they prefer the process to be quick and convenient. Technology has to do most of the leg work. That is why it helps to have tools like decision support, an AI personal benefits assistant to ask for help if needed, and effective communication tools that empower employees to activate on their benefits once they have them.

Employees who use the MyChoice Recommendation Engine are 1.6 times more likely to elect a cost-effective plan based on how they answered a series of financial, emotional, and wellbeing questions compared to those who did not use or have access to decision support. This means that employees are using the tool to elect right-fit plans and coverage, personalized to their needs and those of their family.

Driving engagement beyond enrollment

Enrolling in the best-fit plans is only the first step. During the year, employees need help knowing when and how to interact with those benefits to optimize their value. Questions employees may have include:

• Is my doctor in the network?
• How much does that procedure cost?
• How do I file a claim?
• Who can help me understand my condition?
• What services are available to support family planning?

Meeting employees where and when they need help is critical to supporting them in their healthcare journey. Adopting an omnichannel communications strategy – text messaging, email, virtual assistant support and member services – can all help build and maintain awareness by reaching employees in their time of need.

And we see positive outcomes for engagement when using Businessolver’s communication channels:

• Nearly 70% of employees want personalization of messaging to help guide the use of their benefits using their actual medical and prescription claim data
•  39% of employees will click through to a benefits program when prompted via a personalized outbound message
• Over 30% of employees prefer text messages to receive a benefit notification
• Web traffic increases 23% within 2 days of an email nudge recommending an action be taken

So to make benefits in the US more accessible and drive greater benefits engagement, employers are increasingly offering one central location for all these benefits to be housed – a one-stop shop of total rewards – to ensure members can view, access, and activate on their benefits all in one place.

Sustainable success

For US employers to leverage benefits for sustainable success in attracting and retaining employees, it’s critical for them to offer a broad range of options enabling personalization and choice for the individual employee. But that must be coupled with the technology to support the decision-making process at time of enrollment, as well as an omni-channel personalized communications strategy to help employees use those benefits throughout the year.