Health plan puts pressure on companies’ benefits package – 08/30/2023 – Market

The costs of the benefit packages offered by companies to their employees once again occupy a prominent place in companies’ strategies, according to a trend survey carried out by the consultancy WTW.

The previous edition of the same survey, carried out in 2021 amid the Covid-19 pandemic, showed companies’ greater concern with other issues, such as inclusion and diversity, use of new technologies and more flexible work arrangements.

René Ballo, director of health and benefits consulting at WTW, says that, before the pandemic, costs were always among the main issues in the design of packages offered by companies. There was a lull during the health crisis.

“In 2021, practically in the middle of the pandemic, there was a certain suspension of use [dos planos de saúde]giving some financial relief to companies”, he says. Now, the issue returns to the top of concerns, driven mainly by health plans.

The companies negotiate directly with the plans the annual readjustment percentages of the agreements and this account considers the medical inflation and the average use, the so-called loss ratio.

In Ballo’s assessment, companies need to reinforce communication about the use of benefits to improve understanding of how these rights, products and services work. The highlight, he recalls, must come from health.

WTW’s benefits trend survey polled representatives from 5,233 companies that employ 22.9 million employees worldwide. In Brazil, 326 companies were heard, with a total of 900 thousand employees.

Faced with rising costs to maintain benefit packages, companies indicate greater interest in improving the effectiveness of their programs. This involves, according to the survey, improving contracts with suppliers, grouping services in the same package (also in dealings with suppliers) and increasing employee participation in the cost.

Among the companies interviewed by WTW in Brazil, 16% stated that they had already taken measures to increase employee participation in the cost and 18% said that they plan actions. Another 22% stated that they have done nothing but plan to.

Ballo, from WTW, says that it is common for companies to be more concerned with designing their benefit plans, when they should also listen more to the demands of employees.

These expectations, he says, change according to the generation, age group and other types of diversity (LGBTQIA+ employees, black men and women, for example).

WTW’s research shows that while employees would like more family support policies, for example, this is on the toe of what companies consider relevant.

Top of the list of what is considered very important by employers are health benefits, followed by mental health support. These two points were cited by employees as relevant, but in a smaller percentage.

WTW defined a differential between the expectations of each one. When positive, it indicates the margin of agreement. When negative, the difference between what employees expect and how much companies consider relevant.

The most positive gap (as the consultancy called it) is 33, for health benefits. In the assessment of WTW’s director of health and benefits consulting, the difference can be taken as a given. “The employee understands that the health plan already serves him well.”

The two biggest gaps were family and caregiver support and retirement plan or long-term finance. The former was cited as one of the top three most important benefits by 22% of employees but only 3% of companies.

Retirement plans were at the top for 31% of workers. For employers, only 12% placed the topic among the top three.

According to the WTW survey, a trend whose adoption is overdue —as it had been pointed out by companies in previous editions— is flexibility in choosing the basket of benefits for each employee.

“There are very few companies that offer this in Brazil”, says Ballo. One of the impediments to the model is that it can make the package more expensive for companies, in addition to being more difficult to administer.

What is on the market today are some flexible benefit cards, from which the employee can choose how he wants to use them.