By Patricia Clabeaux, Executive Vice President & Chief Human Resources Officer, Independent Health
As the economy continues to improve and the job market evolves from an employer-driven market to a candidate-driven one, it’s essential that companies and businesses leverage their benefits to recruit and retain top talent.
According to a 2017 Strategic Benefits Survey conducted by the Society for Human Resource Management (SHRM), organizations that use benefits as a strategic tool for recruiting and retaining talent reported better overall company performance compared with organizations that did not (58% vs. 34%). These organizations also experienced above-average effectiveness in recruitment and retention as compared to their counterparts:
- 19% vs. 8% when it comes to effectiveness in recruitment: Benefit plan design is an integral to recruiting. Data shows that 79% of employees cited “competitive benefits plan as an influencer” when evaluating job opportunities. In terms of recruiting new talent, the right benefits can be an important factor for potential employees. The question for employers is how to design a benefits structure, within budgetary constraints and position it appropriately.
- 28% vs. 11% when it comes to effectiveness in retention: To retain top talent, it is essential to understand what your employees want and what keeps them happy at work. If you don’t know this about your employees then you’re probably missing the mark in terms of communication, incentives and satisfaction levels. SHRM found that 61% of employees stated benefits like “compensation and overall pay” was “very important” to their job satisfaction, but only 26% were satisfied with it.
Consumer-driven health care as a solution
Faced with the reality of rising health care costs, many employers are finding they can still provide highly valued benefits within their budget by offering consumer directed health care plans (CDHPs). The goal of these plans is to reduce costs for employers, while prompting employees to make more educated decisions about the care they seek. That seems to be working. A recent study found that CDHP enrollees are more “engaged” health care consumers.
Although they come in various forms, a CDHP most commonly means offering a high-deductible health plan paired with a spending account for out-of-pocket costs such as a Health Savings Account (HSA). According to the SHRM’s “2018 Employee Benefits: The Evolution of Benefits” report, enrollment in CDHPs rose from 23% in 2017 to 40% in 2018. Of the employers who offered CDHPs last year, 56% of them offered an HSA.
Health Savings Accounts benefit both employers and employees
An HSA is a tax-advantaged account that can be offered to those enrolled in qualified CDHPs. Funds in an HSA can be used to pay for qualified medical expenses. Any unused dollars carry over year-to-year and account owners can invest their HSA dollars in mutual funds for enhanced retirement savings and future health care expenses.
An employee’s HSA may be funded by contributions from the employer, from the employee or both. Employers may choose to contribute a set amount or make “matching” contributions.
This is a great way to incentivize employees to contribute more to their HSA. Plus, HSA contributions deducted from payroll are done on a pre-tax basis, saving both the employee and the employer FICA taxes (7.65%).
How we did it
At Independent Health, we currently include two CDHPs and an HSA among our employee benefit offerings. Not only do both plans have lower premium costs, but we also fund 50 percent of each eligible employee’s deductible through the HSA. As a result, nearly 700 of our 1,100 employees are enrolled in an HSA-qualified plan for 2019.
By offering CDHPs paired with an HSA, we’ve empowered our employees to spend their health care dollars how and when they want, while showing them that we trust them to make good decisions. In turn, we believe we are well positioned to increase recruiting efforts and maintain high retention rates within our organization.
Independent Health recently announced a new partnership with HealthEquity, one of the leading administrators of Health Savings Accounts (HSAs) in the nation. Through this collaboration, Independent Health is the only health plan in Western New York that offers an HSA product with complete integrated enrollment and claims payment solutions that makes it easier for employers and members to manage, use and maximize an HSA. To learn more, visit Independent Health.