Growing number of millennials in U.S. workforce an

ARLINGTON, Va., Dec. 08, 2016 (GLOBE NEWSWIRE) -- Even as U.S. election results set the stage for potentially major changes in health care, U.S. employers are likely to continue efforts to modernize benefits in 2017. The mission: attract and retain young talent by offering more choice in benefit programs and improving the employee experience through technology. These are among the top trends in employer-sponsored health care in 2017, released today by Willis Towers Watson (NASDAQ:WLTW) and based on an analysis of proprietary survey data and insights gleaned from Fortune 1000 clients. The shift in focus to younger workers, especially millennials, will lead to significant changes in benefit strategies, design and delivery in 2017 and beyond.

According to the Bureau of Labor Statistics, in 2015, millennials (ages 18 to 34) surpassed Generation X (ages 35 to 50) to become the largest segment of the U.S. workforce, at 36% and 31%, respectively. By 2020, millennials will account for 43% of the workforce, compared to Gen Xers at 30% and baby boomers at 23%.

“While health care cost management will remain a top priority for employers in 2017, employers also want to offer benefits that attract and retain top performers, meet employees’ day-to-day health and well-being needs, and enhance employee effectiveness and on-the-job productivity,” said Julie Stone, a national health care practice leader for Willis Towers Watson. “Yet, it’s difficult to achieve these goals with a one-size-fits-all approach now that the workforce includes three generations and a fourth coming soon. In response, a growing number of employers are using consumer-style workforce segmentation to decide how to expand or modify benefit offerings to meet a broader range of needs.”

“Another factor driving employers’ efforts to modernize benefits is the availability of a broad range of innovative technologies and tools to help employees select benefits, and build and manage personalized benefit portfolios, which gives employees more control over their benefits and improves the overall experience,” said Frank Giampietro, managing director of group exchanges for Willis Towers Watson. “We expect these efforts to dramatically reshape how benefit programs are designed and delivered in the coming years.”

Here are Willis Towers Watson’s top five trends in employer-sponsored health and well-being benefits in 2017:

1. Employers are moving away from one-size-fits-all health benefits to providing employees with more options to choose from so their individual needs can be met.

Because younger employees seek more flexibility and control over their benefits, employers are providing employees with more choice. For example, a growing number of employers now offer employees the option of a high-deductible health plan for their core medical benefits. These plans are often associated with tax-advantaged health savings accounts to help employees set aside pretax dollars for medical expenses. These accounts are popular with millennials and also appeal to older employees who see them as long-term investment vehicles that can play a role in saving for retirement.

The new benefit options also reflect changes in the health care needs of the U.S. population generally. One benefit that will become more prevalent in 2017 is expanded coverage for autism spectrum disorders; another is transgender-inclusive medical and short-term disability benefits that cover medically necessary treatments and procedures for the treatment of gender identity disorder.

2. Most employers are adding or expanding voluntary benefits to appeal to younger generations.

Traditionally, employers have geared voluntary benefits to the needs of baby boomers, offering benefits such as dental, vision, life and disability insurance. Now, however, they are adding benefits such as identity theft protection, critical illness insurance, student loan repayment programs and pet insurance that appeal to millennials. For Gen Xers facing the financial and emotional challenges of taking care of aging parents and dependent children at the same time, employers are adding voluntary benefits that help allay their financial anxieties. These include critical illness and hospital indemnity, accident or injury coverage, legal assistance and financial counseling.

Voluntary benefits are appealing to employers for another important reason: They add little or no cost to employers because they are often employee-paid. Because of group purchasing, employers can offer these benefits at a potentially more attractive cost than if employees purchased the benefits individually. 

3. More employers are introducing innovative technologies and tools into the benefit experience.

When it comes to benefit technology, millennials and Gen Xers especially expect up-to-date data and easy-to-use tools for evaluating, selecting, enrolling in and managing benefits. To meet these expectations, employers are deploying myriad technologies, including private benefit exchanges with decision support tools such as out-of-pocket cost calculators and recommendation engines that offer a consumer-like shopping experience, web-based enrollment portals and mobile apps.

Some employers are also adding consumer technologies to wellness programs such as tech-enabled lifestyle coaching and fitness wearables available at low or no cost for tracking exercise activities or nutritional intake. Plus, there are now mobile apps for smartphones and tablets that can be connected to back-end systems that automatically send employees recommendations or reminders in the context of preventing or managing existing health conditions, compliance with recommended treatment and more.

In addition, employer use of social media to encourage employees to manage their health is on the rise, with more employers using or planning to use digital health profiles, social networking, discussion forums, affinity groups and blogs to promote engagement.

4. More employers are expanding the definition of well-being to include mental, emotional, social and financial health in addition to physical health.

Many employees today have a complex set of interconnected issues to deal with that can prevent them from bringing their best selves to work each day. Employers are increasingly understanding that to make a measurable difference in employees’ overall health and productivity, they must adopt a more holistic approach that recognizes these connections as well as those between employees and the workplace. As a result, more employers are driving well-being initiatives deeper into the organization and embedding them in employees’ day-to-day work experience and company culture.

In addition, with anxiety, depression and substance abuse on the rise in the general population, employers are also rethinking behavioral health benefit strategy, use and delivery. Significant new benefit designs in this area will emerge in 2017 and 2018.

5. A growing number of employers are using or considering private benefit exchanges to address the complexity of delivering personalized benefits to a multigenerational workforce.

Meeting the diverse needs of a multigenerational workforce requires employers to design new benefit programs, identify and select qualified vendors, and develop new and expanded administration and compliance capabilities. They must also educate employees about their new choices and the technologies and tools that will help them make good decisions.

To address these challenges, a growing number of employers are turning to private benefit exchange models to simplify and accelerate the delivery of more benefit options, streamline day-to-day management and provide employees with a more satisfying benefit experience. For employers that found first-generation private exchanges too rigid, second-generation private exchanges are providing employers with greater flexibility to design and configure their benefit programs to meet more varied organizational goals. 

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Media contact Rob Wyse: +1 212 920 1470 rob@capital-content.com