American prayer for UK benefits

We have much to learn from the benefits system over the pond says Ian McKenna, director, F&TRC

Last month attend the recent Benefits Forum and Expo in Phoenix, Arizona organised by Employee Benefits Adviser and Employee Benefits News magazines, the equivalent publications to Corporate Adviser and Employee Benefits in the US.

It is not without reason that the partners in the “Special relationship” are sometimes described as two nations separated by a single language. The largest single difference between the US and UK Benefits market is of course the key role played by healthcare provision in the US which I am informed by David Albertson Editorial Director at Employee Benefit News Group results in the typical American business spending on average no less than 29per cent of salary on benefits.

With healthcare spend forming such a large part of the benefit budget President Obama’s healthcare plans dominated many conversations, but there were still many very valuable lessons to be learned from this look at the US benefits market. One worrying statistic that emerged was an estimate that potentially 30per cent of employers will stop offering health benefits after 2014. There was a recurring theme of employers looking to move to defined cost health benefits as opposed to defined benefit in future, following the trend in the retirement market.

The benefits community in both countries also share many of the same issues. The impact of technology was also a recurring theme, particularly how to use technology to achieve a better quality experience for members joining schemes, not just a quicker one.

Although the impact of the decisions they take maybe considerable, the average employee was identified as spending between seven and nine minutes deciding on which benefits to take. One US supplier, Business Solver, was able to demonstrate vastly better member engagement when users were provided with a range of interactive tools to support the on-boarding process together with a call centre that could guide them through how to use it.

Just as in the UK, the depth and quality of integrations between the benefits platform and other parts of the business, especially payroll kept coming up as a key benefit, not just in improving the time saving achieved but specifically in reducing the costs incurred through paying benefits for members who are no longer eligible or not receiving cover for those who should. I took very little comfort in hearing that we are not alone in the UK in experiencing appalling service from group risk providers.

Social media again provided a recurring conference theme although generally was less high profile than in many parallel dialogues I see in the UK. It was recognised that giving younger employees the ability to share their thoughts on benefits across services like Facebook and Twitter can drive further adoption so these represent valuable components for a strategy.

An excellent session on the best mobile apps for benefits identified massive savings that could be achieved in the cost of prescription medicine. Whilst in the UK the NBS means this is nowhere near as big an issue, it was clear there could be enormous savings for private health insurers by embracing a service like the one provided by the My Drug Costs app.  Elizabeth Galentine, editor in chief at Employee Benefit Adviser came up with the fascinating statistic that most people are never more than three feet from their mobile in any 24hour period, which reiterates how powerful mobile devices are as a platform.

Over 20years, 58per cent of the people they have tested have had some undiagnosed or unmanaged conditions. Of these, 63 per cent have not seen a doctor in last 5years. It was interesting to see how some US employers take a far more active interest in their employees’ health, both in providing screening services and offering incentives against identified health goals. 

Not only does this achieve a very significant reduction in the cost of their medical insurance, typically people managing their health pay 30per cent less for their health insurance plans, but it also ensures less absences generally and far faster return to work when they do occur. Having watched this session I could not help but ask myself how much employers are overpaying for group risk cover because wellness & biometric screening are not as prevalent in the UK market. Mobile technology is now making such services far more affordable.

Time spent comparing the UK and US markets has proved a valuable investment for me, suggesting there would be much value in a closer dialogue between the professions in both countries.