How does each generation view employee benefits?
Employees see health coverage as a vital benefit, and employers have a key role to play. Seventy-three percent of employees believe that “employers have a responsibility for the health and wellbeing of their employees,” according to a recent MetLife report. But what benefits do today’s workers want? Ask five workers and you might get five different answers, depending on age and stage of life. In fact, juggling the wishes of multiple generations is a key challenge in building your benefits mix. Five generations are in the workplace today:
- Traditionalists, born before 1946
- Boomers, born 1946–1964
- Generation X, born 1965–1980
- Millennials, born 1981–1995
- And just entering the workforce, Generation Z, born 1996–2010
Great employee benefits are key to remain competitive
All of these generations have distinctive, and sometimes contradictory, needs and wants for work perks and benefits. As a benefits manager, how you manage these divergent desires can be the difference between winning or losing top talent. Potential employees will compare your overall package of pay and perks against the competition. Getting benefits right also has other advantages for employers, from increased productivity and loyalty to reduced employee stress levels. An employee who stays awake at night with anxiety about their medical concerns is less likely to be effective the next day.
Medical insurance is a top request, but not for everyone
Everyone wants health insurance, right? Yes and no. While MetLife’s Annual Benefits Trends Report found medical insurance remains the top requested benefit, there are marked differences between generations. The desire for health coverage tops out at over ninety percent for Boomers aged 51–64, but drops off slightly for those older than 65 when Medicare coverage begins. The youngest Millennials regard medical insurance as less desirable than other generations, but seventy percent still want the coverage to be available. A percentage of these employees may still be covered by their parents’ life insurance due to requirements in the Affordable Care Act. Overall, health insurance is desired by eighty-eight percent of the workforce today.
Younger workers want more insurance choices
When they do choose an employer-provided insurance plan, Millennials are opting for the lowest-cost options. Adoption of high-deductible health plans (HDHPs) are highest amongst this age group, according to BenefitFocus. Forty-four percent of Millennials opted for an HDHP over a traditional plan with higher premiums. Older workers were less likely to select an HDHP over a traditional, more robust, higher premium plan. And when it comes to contributing to their healthcare costs, this group again chooses the less expensive option. Health Savings Accounts, which anyone enrolled in an HDHP is eligible to use, receive the least amount of employee contributions from Millennials and the most from those over 50.
Several factors may be at play here. Younger workers are just getting their footing in the corporate world and are more likely to have entry-level jobs with lower pay, for example. Paying off debt such as school loans may be a higher priority. They may also be “playing the odds” and figuring that at their age they are unlikely to have high annual medical expenses. Older workers, by contrast, are more likely to have ongoing health concerns. Public policy also plays a role, as the gap between contribution limits for younger or single workers and older and married employees is notable. Single employees can contribute $3,400 to an HSA in 2017, while married workers can deposit $6,570. Those over 55 can add another $1,000 to their annual contribution, which makes an HSA attractive for an additional source of retirement savings in addition to paying near-term medical expenses.
Dental, prescription and vision coverage are not as popular as medical
Medical insurance is more wanted than all other types of health benefits. According to MetLife, prescription coverage, surprisingly, is only desired by 72 percent of workers when considered separately from health insurance. Probably because the other twenty-eight percent are the least likely to need prescriptions for chronic conditions. Barely 40 percent of younger workers consider prescription coverage essential. Dental coverage is slightly less wanted by all employees, at 68 percent. Less than 50 percent of Boomers desire vision coverage: this is the one benefit that is more preferred by younger workers.
Workers want customized benefits
MetLife found that 72 percent of employees “agree that the ability to customize benefits increases loyalty.” These same employees would be likely to consider an offer from a new employer if they were able to customize their benefits.
Our website’s sponsor, Security Health Plan, provides standard options for workplace health benefits. A system like Security Health Plan’s MyChoice can help employees select the best plan for their life stage, whether they are starting out in the workplace or building their nest egg for retirement. Contact Security Health Plan to find out more about employer coverage in Central Wisconsin, Northern Wisconsin and now with plans designed for the Fox Valley region in Northeastern Wisconsin.