2016 Employee Benefits Predictions Webinar

2016 Employee Benefits Predictions

Webinar Transcript:

Jen: Hello everyone. Thank you for joining us today. This is the 2016 Benefits Predictions Webinar. I'm Jennifer Benz and I'm thrilled that you've joined us today. We are going to have a great Q & A session at the end of the webinar and slides will be available to download after our webinar today. I'm very excited to be joined by two awesome experts in employee benefits, two good friends of mine as well.

Mark Stelzner is the Founder and Managing Principal IA HR. He has been working as a leader in the HR field for over 20 years and focuses on the implementation of internal and external HR transformation initiatives for public and private sector clients worldwide. He's a highly sought after voice in the industry. He's been featured in The Wall Street Journal, The New York Times, Forbes, CNN, NPR, and many others and Mark is really going to be able to share with us today his experience and perspective working with a breadth of large employers on the full aspect of implementing technology and benefit strategies that are driving those organizations forward. So Mark, I'm super excited to have you today.

Mark: Thanks so much, Jen. I'm excited for the conversation.

Jen: We also have Bob Merberg, who is the Manager of Wellness, Safety, and Food Services at Paychex. Bob has also been a leader in employee benefits and wellness space for about 20 years and he's been really focused on helping people get healthier, primarily promoting innovation and rigor in employee wellness programs. As the employee wellness manager at Paychex, the program he oversees is a six-time winner of the National Business Group on Health's Best Employer for Healthy Lifestyles Award, and his approach and his perspectives can be seen at his blog healthshifting.com. Everyone who knows Bob knows he has tremendous perspective to provide on wellness and all aspects of engaging employees, so super excited to have you as well today, Bob.

Bob: Thanks, Jen. It's a pleasure to be here with you and Mark.

Jen: Fantastic. Well, a little bit about us at Benz Communications before we get started. We have the honor of working with amazing employers and providers to get employees better engaged in all aspects of benefits. We work with a fantastic group of Fortune 500 and 100 Best Companies to Work For organizations. For those companies, for our clients, we are helping manage all aspects of their employee communication and get employees engaged in the full spectrum of benefits, from health to financial, to work life and everything in between. So with that, we have a really unique perspective on how to make the whole benefits ecosystem work.

I'm particularly excited about what's happening in the benefits space right now. I've spent my whole career coming up on 18 years or so, focused on employee benefits communication, and this is just a time of tremendous energy and excitement and innovation. And, that's really what inspired us to write our article about 6 Employee Benefits Predictions for 2016. That's an article that we published in January and it got tremendous traction on our blog, shared a ton on LinkedIn and Twitter, and that was the inspiration for getting Bob and Mark on the line to talk about these predictions and everything that's going on in this space.

What we're going to do today on the webinar is go through each of these predictions at a high level and have a bit of dialog with Bob and Mark about them, get their perspectives and then toward the end have time to have lots of Q & A with you, the audience. So please, send in your questions in the questions module on the GoToWebinar panel and we'll get to all of those at the end. I might even throw a few of them in along the way. Again, the webinar slides, all the materials, as well as the original article can be accessed online; so, you don't have to take copious notes as we're going through all of this.

The first prediction that we're going to talk about is just that there's a lot more focus on benefits right now and this is one of the reasons that the benefits space is so exciting at this moment. The changing health care landscape certainly has put benefits under the magnifying glass, particularly the last five years or so since the passage of the Affordable Care Act, but there are a lot of other factors that are going to keep benefits in the spotlight even as things with ACA settle down. And, one of the big ones is the changing dynamic of the workplace. We have millennials, the strange beings that they are, our younger members in the workforce, and they make up about a third of US workers, and that number is growing and growing and growing. This is a group that cares deeply about working for a company that cares about them. That is something that is true across all demographics; but millennials in particular have really raised this up.

About 25% of them say that benefits options might convince them to remain at an employer, which of course is a huge talent management objective. Over 60% say that overall benefits are extremely or very important to that employer loyalty. Really interesting with that, the focus of millennials and kind of their demands for benefits. But, that is also connected to just all of the ways that the employer value proposition is changing and the ways that employers really see the opportunity to be much more holistic and high-touch with their benefit programs and with the whole employee experience.

I think this quote from our client, Sarah Lecuna at Intuit, really sums this up. This was featured in The Leadership Lessons of 2015 on Forbes and this is something she said when she and I presented at HR Technology Conference in the fall. She said, "We think about: How do we make our employees' lives easier, or better, or both? That means we offer programs that enable them to be present while they're at work. We want them to bring their whole selves to work, and to not have to worry about things we can solve for them." I think that's such a great sentiment about the power and the focus of benefits right now, really helping people bring their best selves to work, and that combined with the way the employer-employee relationship is changing puts benefits in the spotlight in such a positive way.

The plus side with this is, with low wage growth expected and the economy kind of not able to keep up with wage growth, we're going to see that emphasizing the value of benefits is a smart move to keep top talent. The downside, of course is that we already know that benefits teams are absolutely stretched for resources, and they're going to be asked to do so much more with those same resources, or the same lack of resources. An interesting balance there for sure.

Mark, you're working with large employers on all aspects of benefits, strategy, and technology. What are you seeing in terms of the emphasis that organizations are putting on their benefits?

Mark: A great question, Jen. From my perspective, for good or for bad, depending on your politics perhaps, the ACA has served as a tremendous catalyst to really fundamentally change both the visibility and criticality of benefits within this broader context of economic value, impact to employees, and really as you stated, the changing nature of the employee-employer relationship. So as a result, attendees on this webinar, benefits, total rewards leaders have been presented with the opportunity to materially modify the context in which benefits is viewed as a differentiator relative to their peers. Honestly, it's an exciting time and probably for many of you, a terrifying moment in the evolution of our industry.

Jen: Absolutely. Bob, tell us a little bit more about your role at Paychex, and what you're seeing and hearing from employees about the overall value of benefits and what they are caring about right now.

Bob: Sure. In my role at Paychex I manage employee wellness, that's the wellness of Paychex employees, safety and food service. The food service has been added in there with the idea of accelerating our support for employees who are seeking healthy eating options in cafeterias, catering and so forth. Paychex, for anyone who doesn't know, is a payroll processing, HR and benefits company. We've got about 13,000 employees across approximately 100 locations around the country. With a quarter of them—about 4,000—based in Rochester, New York, which is where I am. We, at Paychex, certainly see the importance of benefits to the employee value proposition, and Jen, I'd say that our own findings are really in alignment with the data that you just cited.

Our surveys showed that benefits are really one of the key drivers of sustainable engagement on the part of Paychex employees. Benefits are rated consistently as one of the things that lead so many employees to love working at Paychex. I know I'm sounding like I'm doing a recruiting ad but it's true and it's what the data shows us. So, that commitment of employees to benefits really says—it influences our decision-making processes a lot because I think we have a direct sense of the relationship between employees, benefits, engagements, and as a result, business results.

Jen: Fantastic. Mark, are you seeing that that connection between benefits and employer loyalty is becoming stronger across all industries, or is this just for the organizations like Paychex that can kind of afford to care more about the employees?

Mark: It's a really good question, especially the “care more” because I think the contextual relevance is really very subjective depending on the lens in which you view it. I was, obviously reading a couple of surveys in preparation for this call and what I found, which was kind of fascinating, was the survey of about 1,500 CFOs and they were asking the CFOs from your perspective, "How do you believe employees value benefits?" The results were very strong in the sense that CFOs believe that employees desire really rich benefit plan, they want lower premiums, that really is core to serve the sanctity and sustainability of the organization at large. Employees themselves within those same organizations actually indicated that they simply wanted more paid time off. I'm oversimplifying it, but of course we're Americans, right? We say we want more paid time off but we actually don't take it. But all that aside, there are certain geographies, verticals, etc., where benefits continue to either be taken for granted in some respects, where expectations in terms of the types and value is sponsored in voluntary benefits is disproportionately high, and others where employers are really struggling with the economic value proposition in return for certain population types. So, I don't think there's an easy answer, unfortunately.

Jen: Okay, let's talk about the resource challenges of the typical benefits team for a moment. Bob, how is your team keeping up with the demands of employees and having more focus on benefits? Has your team size grown? Are you able to keep up with everything you want to do?

Bob: It's a great question, Jen. At first, how are we keeping up, and I actually really appreciate the assumption that we are. No, of course I think we are. I'm going to go back for a second so I can, to something Mark just said, because Paychex just did a little pulse survey, very unscientific, of our own employees. We had a couple of thousands respondents on which benefits they value most. It was actually the health care benefits that had—let's say were—rated number one priority, basically twice as many - there were like 45% of the respondents said healthcare benefits and it's around 23% said paid time off, which was second, and then coming in third was retirement. We might be an outlier in that sense.

Regarding resources, you know I think most people in most industries, my guess, feel like they're being asked to do more with less and they're probably right. Honestly, I don't know that we're an exception. Businesses try to be as efficient as possible. So briefly, I think for our team, the keys lie in—you know this is sort of obvious—but working smarter, not just harder and not just more but working smarter, and part of that is focusing most on the things that count the most. And, the difficult part is this - it's something that we grapple with - is that sometimes this means letting go of some things that don't count as much and then the other thing is getting help when needed, and by that, Jen, I mean forging great partnerships within the organization, but also with vendors and consultants and other partners outside the organization to really sort of maximize use of all resources that we have available to us.

Jen: Great. Great. Mark, what are you seeing? What are your clients doing to keep up with the resource demands and the complexity?

Mark: I think Bob is dead on. I mean, I imagine it's increasingly difficult to keep up with this relentless pace of change in today's market because the benefits function remains severely understaffed and under-resourced relative to its peer group. Organizations are having to either get creative or as Bob suggested, whittle down their focus because it's becoming increasingly difficult to sort through the mountain of information that's certainly coming their way from all corners. As Bob suggested, many are turning to their peers, many are looking to membership-based forums, and their service providers and broker consultants for advice and guidance. But honestly, I see trust eroding in some respects among the latter two groups because the perception increasingly so is that every bit of advice comes with a surprise annuity-based license or product or service to be sold along with that advice. And so, I think it's honestly becoming increasingly difficult for a few folks to seek and maintain the pace of change in today's changing market.

Jen: Absolutely. We'll talk more about that as we move in to the other predictions. Let's move on to our second prediction, which is that that one size will fit one. This is something really interesting and particularly interesting from my perspective as a communications consultant, really driven by an incredible diversification of the workforce in age, income, family situation, and just overall needs, benefits program are becoming more niche. In the end, they should be. Meeting the needs of a recent college grad versus someone who is 65 or 70 and still going to be engaged in the workforce for many, many years, is very, very different.

There's a lot of factors going into much more niche programs right now. Particularly on the wellness side, we're seeing programs evolve from this kind of one size fits all, with a really heavy emphasis on biometric screenings and health assessments, to a much more broadened scope, kind of choose your own adventure style of wellness programs. That is exciting because we're going to be able to meet the needs of a broader group of employees and the programs are going to be more valuable to those employees, which means that you're going to get higher participation with less money spent on incentives. But of course, just to what we were speaking, the challenge of vendor coordination, ongoing communication and just making all of this work, and get employees engaged in all of these different programs, is going to be tough. It's going to be a challenge for those resource-strapped teams.

Bob, tell us how you see wellness programs evolving right now. Are they changing more to meet those individual needs? What do you like in what you're seeing?

Bob: I think that this is something where technology is making a difference and I'm coming at this most from the perspective of wellness offerings. For technology-based programs, apps ,and Web-based modules and portal—and by the way, I will say I don't think that those are the cornerstone of a program, although a lot of employers do view them that way—these types of programs can collect small business information on people and deliver more customized experiences. We're seeing that some. We've recently launched some self-directed online coaching, which delivers, I think, a very customized experience, and the financial wellness challenges that are highly customized; it asks a few questions and it delivers; it tries to meet the participant where they are.

I think that a lot of us are trying to respect this one size fits one principle, Jen, by providing a lot of choice. In one of your slides you mentioned choice and customization, and those two things can be quite a bit different. What I just described is technology is customization, and there's also of course customization and tailored segmented communication, which you know a lot more about than I do. But when it comes to choice, I think that, in my own experience, what I see from our place is that there's a constant tension between choice and simplicity, which was one of the things mentioned in the Intuit quote that you offered earlier, trying to make employees' lives or help them lead simpler, better lives.

If we recognize that a lot of employees feel overwhelmed, I think adding more choice is—I think we need to be cautious with that. I've actually seen some interesting models that are really sort of new ways of helping people make choices, like drilling down to a choice rather than giving people 15 options. I think that type of modeling will help us in wellness and in all aspects of benefits, because there is this whole thing, this concept of the paradox of choice and how a lot of choice could be overwhelming and actually be associated with unsatisfactory experiences. But, the customization, I'm certainly seeing evolve. I think that that's a great thing, but I don't know that it's a game changer.

Jen: Great. Mark, what are your thoughts about how technology is changing to keep up with this idea of offering more diverse programs?

Mark: I think I would agree with Bob. I mean, totally on what he's saying. Technology is certainly enabling that process because mobile access enablement are taking and demystifying, if you will, this managed choice into something that takes content and put it in the context of what the individual requires or desires. I think that's becoming somewhat ubiquitous across a pretty wide portion of the population. I think, however, vendor coordination is getting really complicated, given even the simple question of, "Who owns the front door to employee interaction and engagement?"

As employers are trying to rationalize their vendor ecosystem and truly innovate, as Bob is suggesting, with strategic highly focused programs from a wide look at providers, every vendor wants to own "the employer participant experience" in the context of the value they believe they offer. For employers and employees alike, it's really hard to understand the ordinal of, "Where do I begin and whom do I contact for which particular need?" Thus, employee portals and other communication technologies are having a surprising comeback.

Jen: Absolutely, and of course from my perspective, I believe the only one who can really own that employee experience is the employer themselves. They need to brand all their programs. They need to really communicate year round and make sure that employees feel that connection between benefits and the employee experience. That is challenging when you have so many different vendors that have so many different perspectives, and the employers, because of being really resource strapped have to rely on those vendors to really get folks engaged. There's an interesting balance there and absolutely the portals and custom websites and personalized tools that bring all of that together are becoming a huge part of getting folks engaged.

Let's talk for just a moment about the role of incentives. Bob, in particular, I know you've been critical of some of the ways that big dollars are thrown around with wellness programs. Is that evolving? Is this idea of having more personalized or more customized programs going to change the role of incentives?

Bob: I think that the role of incentives is changing. I don't know... I haven't really thought about whether it's the customization and personalization that's driving that. I'm sure that plays a role; but, I think that generally employers are starting to question whether incentives are delivering what they expected it to, and whether they might be seeing some downsides that they hadn't anticipated some risks. Risks for some of the incentives —like some of the outcomes-based incentives, incentives based on health measures—would be a loss of employee engagement and some of the other risks. I learned this the hard way is that the conversation, I think there's something about nature, starts becoming about the incentive. From a wellness perspective, the discussion becomes about the incentive and the focus becomes the incentive, rather than the employee's well-being. I definitely anticipate that we will start seeing this year, start hearing data fairly soon about a shift in the landscape of incentives.

Jen: Great. Mark, anything that you want to add on that topic?

Mark: Yes, certainly, I mean, and I know we're going to touch on this a little bit later in terms of employee and participant readiness "to be the consumer," but employers and many stakeholders, I think, in the industry believe that you require either a carrot or a stick, as the only means of driving meaningful participation in programs. Like Bob, I'd like to see more independent research, honestly, to demonstrate a causal relationship between these investments and truly sustain behavioral change among participants. I think more to come but, in lieu of that, I suspect incentives will continue.

Jen: Great. All right, let's move on to our next prediction. This is very much tied to the last one, which is that benefits are going to meet product marketing. This is another one that I am super excited about because of the implications for having more sophisticated communication strategies and just more sophisticated employee engagement strategies overall. But again, we have such a diverse workforce to engage and benefits are becoming so much of a bigger part of employee value proposition, so we're seeing a shift where successful organizations are really thinking about benefits as a product and their employees as the consumer of that product.

Benefits teams are putting on that product marketing lens just in the same way that their marketing colleagues are marketing their business or their external products. That is so incredible with benefits. We have an unbelievable amount of data at our fingertips that can be used to customize communications, target communications, and make things more accessible and more relevant to the very, very diverse employee population we want to engage.

I believe that we're going to see a lot more of a design focus with benefits where we're analyzing the data, we're going to design a program, evaluate it, implement it, test it, and have this real iterative process of getting employees and their family members engaged. That is going to mean taking part and using tactics that marketers use all the time, like focus groups and surveys and user testing. All these things that marketing teams and product development teams at companies are using to engage their customers are making their way into the benefits space, which is very exciting in terms of how we can create programs.

When you create a program or create the marketing strategy in a way that's really tailored to that audience, you get better engagement and better outcomes. Those better outcomes ideally are better health, better financial security. There's a really strong business case for this. But of course, just similar to the prior prediction we talked about, this is going to be a challenge when it comes to resources. We know from our own research that the majority of companies really underinvest in communications all around. Very few companies put the resources into communication to get the type of engagement that they want. Thinking more strategically about how we communicate and how we engage employees is going to take more effort on the part of those benefit teams. Again, tons of potential but a real challenge with the resources that any organization has.

Bob, how are you using that employee data? You've talked a little bit about it so far, or any of these techniques to get traction with programs. Where do you see the potential here?

Bob: Well, I think that there's a lot potential and for me it's probably something that is still an opportunity for improvement. One of the things that I've been trying to do, because I think it's a great comparison and a great way of teeing it up: benefits meets product marketing. I also think that there's a piece of product development that fits into that process flows as well. One of the things that I've been doing is talking to product marketers and product developers within our own organization, but also, we all, most of us, work with vendors and vendors all have product marketers and developers. I'm actually spending time with them in-person or on the phone, learning more about their processes because these are things that many of us just don't know and don't fully understand. I think we still have a lot of work. I still have a lot of work to do in this regard. I certainly see as you've outlined it here, Jen, the tremendous potential. We're very strong at communications, I think, but haven't fully leveraged the product marketing approach and the data available to us quite yet.

Jen: Great. Mark, what are you seeing as the opportunity is with some of these product marketing techniques? Is the industry catching up in terms of just the overall user experience and design that we see in consumer products?

Mark: I think this is spot on. The industry at large is really starting to infuse, adopt, and deploy the notion of design thinking as a concept which is really a concept that largely is stemming from development of product marketing and product enhancement. At its core, design thinking provides this really incredible means of marrying feeling and intuition and inspiration with the rational and the analytical. It's a critical process, obviously if you're attempting to address deeply human considerations of which health and well-being certainly qualifies.

When we look at what the market's doing and the opportunities at large, we're seeing a tremendous amount of investment from those who service employers and their participants and employees, to reconstruct and apply really design-thinking methodologies to everything that they do, so that every touch is meaningful, every touch is intuitive, optimally every touch is inspirational, while at the same time leveraging this deep and meaningful, sort of rational and analytical side to derive insight and to ensure that they're marrying the right programs and offering to the right individuals.

Bob: Mark, can I ask a quick question?

Mark: Please.

Bob: Design thinking is a concept that a lot of us are hearing more and more about. I remember some time ago watching a TED Talk by the Founder of IDEO and checking out his book. Do you have any recommendations for those of us who might be interested in learning more about it, sort of a starting point for how we will go about doing that?

Mark: It's a great question and you mentioned the two places I've started. I'd actually looked at the TED Talks, there had been quite a few actually on design thinking in different ways that that's been brought to market in a wide variety of industries. There is so much, great information available from TED to help those that are looking at really leveraging what their organizations already do and applying these same constructs to your own customers.

Then the second is I'd go to IDEO. I'd Google it. I would find it, and they have really found it—this notion of design thinking in everything that they do. Much of the definitional clarity comes from that source at its core and Google is your best friend when it comes to this.

Bob: Great. Thank you.

Jen: Absolutely, and I'll add to that that this is something that we've used with benefits communication for many, many years. We have a whole series of webinars on almost everything that we know about employee benefits communication, and our sixth webinar in our Master Class series is Why Design Matters: User-Centric Design Thinking Creates Results. I encourage anyone who's interested in that to go out and check out that webinar. We'd be, of course, happy to answer more questions.

Let's talk for a moment about the business case for doing this. This takes more resources, more energy, putting more resources behind communicating benefits, designing benefits, getting employees engaged in them. What's the business case for doing this, Mark? What are you seeing with your clients?

Mark: I think the audience would probably agree that an investment in...without an investment in the employee experience you can have the most thoughtful, well-designed, mind-blowing program and it may never reach its optimum destination and outcomes. But, securing this precious capital expenditure, operating expenditure, the funding's initiative is an entirely different story as people have probably experienced. One approach we advocate is to initially attach the opportunity and hard dollar costs of these programs to other adjacent value propositions.

We worked with a very large organization that started to run A/B tests and when they were in pilot they would have two different groups. Test Group A would leverage what in this case their vendor described as the very intuitive solution that requires no training, no enhanced communications, it's pretty self-explanatory, everybody will get it. Test Group B surrounded that same vendor solutions with micro sites, webinars, videos, everything you could possibly imagine for enhanced communications.

As you can probably imagine, Group B had a three-fold increase in participation and adaption, and with that pilot they can then extrapolate the justification for the overall investment and uptake and focus on the outcomes and the value of the outcomes during the enterprise-wide deployment. But they can only do so and we're permitted to do so in the context of a particular initiative that again, was not focused on communications. It was focused on a program of which communication is a component.

We've seen very good success in sort of taking a pilot approach, really starting to collect some indicative data that would suggest that core investments in these programs can lead to material return.

Jen: Great, thank you. Let's move on to our next prediction, which is that health care will continue to be sexy and messy. There is so much going on in the health care space right now and this is one of the things that I think is super, super, exciting about benefits right now. All of the user design principles that we just talked about, really figuring out all of the problems that needs to be solved and building companies and building solutions around that. The venture capitalists have definitely caught on to the potential of the employee benefits space and are putting just unbelievable amounts of money into startups that are solving very, very niche problems.

This is a graphic that we pulled off of TechCrunch from Bessemer Venture Partners that really kind of shows the ecosystem of health care startups that are focusing on bundled payments, transparency, telemedicine, consumer tools, behavioral health, disease management, referral management, care coordination. There's just this unbelievable ecosystem of startups that are coming forward, very, very well-funded and they all want employers as their customers.

This is a really interesting opportunity and there's incredible results with some of these organizations; but, it's an absolutely overwhelming number of companies vying for the benefits budget of large employers, and of course over-promising the ROI on some of these solutions and underestimating the complexity of implementation and the complexity of integration can make this very, very challenging for employers.

Bob, let's start with you. The number of companies right now calling themselves wellness providers and trying to get your attention, I'm sure the phone calls you get every week is overwhelming. What are you excited about right now with all of this new emphasis on the health care space? What are you looking for in potential partners, potential new solutions?

Bob: I appreciate that empathy with the number of calls I get from providers, because that's where most of my calls come from these days. It does get sort of crazy. I'm going to jump first to what I look for. I think that once there's an identified need for a provider, some of the characteristics that I look for include a really high degree of trust and belief that that provider shares Paychex's values around integrity and partnership. I mean that. When I think about the vendors that I've had great experiences with and those that have not worked out as planned, a lot of it has to do around trust in the relationship.

I also look for—it might depend on the provider—an active and compelling product road map. The reason for that goes back to some of the things we're talking about earlier and there are all these vendors, there are all these products but there's also, we want customized experience choice but we don't want to overwhelm people. There's also the challenge of managing multiple vendor relationships. To the extent that a partner can sort of help us work in a consultative role, which is really important to us, we want them to know more than we do and to see the future clear enough and to help lead us rather than us leading them.

Those are all things, I think generally across the board that we look for in terms of all of our vendor partners. I do think—and if there's time and maybe there are questions about it later—in wellness we might be seeing or have started seeing some consolidation of the industry, which will affect all of that. In terms of some of the providers that I'm seeing now, real quickly I will say that I have mixed feelings.

I'll ran against the hurdle a little bit when it comes to some of the technology. I mentioned apps and web modules earlier and how I don't really see them as a core part of our program in the future. I see them as a supplementary part of our program. All those calls I get from providers they usually start...they introduce me and they want to demo something, and demo usually means website or app. When I reflect on it in my nine years at Paychex, I have never, I can't think of one time when an employee has asked me personally or in a survey response for a new website or app.

One of the things I have my eye on right now, and this will just be a secret between you Jen, Mark, and the 250 or 300 people on the line, that I think is interesting, is Class Pass. They have an app that has to do with, for people who might not be familiar with it, discounts and subscriptions to fitness studios. What I like about it is that the app is really just a doorway to a real-life experience, and that's what employees want. Employees are skeptical about websites and apps too, in my experience and based on some data I've seen.

Anyone who's followed Class Pass knows that they have both their share of controversy like all the new economy companies, but all those companies—ClassPass, Uber, Airbnb, TaskRabbit— they are leveraging technology to make something happen in real life that arguably makes people's lives easier or opens opportunities in the same way, again going back to the Intuit quote that you posted earlier. That's what I'd like to see more of: leveraging technology to evoke real-life experiences that makes well-being easier or simpler and is not just another thing to do.

Jen: Absolutely. Mark, your thoughts on this, in particular the challenges of integration. How are employers able to manage all of these different providers and companies?

Mark: It's really not easy, and as Bob touched upon, the issue oftentimes is optics. I mean every vendor and service provider perceives their value propositions through a lens whereby they're the center of the ecosystem. I'd never attended a presentation where a provider puts out their value proposition to the left or to the right. You almost have to flip the conversation to recognize that the participant, as Bob just suggested, is the center of the ecosystem, with the employer really as the facilitator of that process.

I might start to derive tighter cross-functional integration and as the market continues to move sort of from B to B, or from B to B to C, we have to make it easier for participants to consume, and truly consume and activate these products and services. Honestly, it's getting more difficult and not easier and this assumption of some of these special key vendors within a broader sweet of offerings will certainly continue, and that's true across every facet of the HR marketplace today.

Jen: Absolutely. Well, let's move on to our next prediction that adds another layer of complexity to that, and this is of course that financial wellness comes to the forefront. You cannot look at a benefits publication, an HR publication right now without seeing a topic around financial wellness. There's just an incredible awareness of how much Americans are struggling with their finances.

This is data from State Street's survey of defined-contribution plan participants. About a quarter of them feel distracted at work because of their finances. A third reported missing work to deal with emotional stress caused by their finances. Almost 50% living paycheck to paycheck and you can find many surveys that says up to 75% to 80% of Americans are living paycheck to paycheck. Then, a big group lack any sort of savings cushion for any sort of emergency. A real challenge here, and this is putting tremendous emphasis on financial wellness.

It's an opportunity where employers have unbelievable influence and trust from their employees. 81% of workers trust the financial information coming from their employers. That combined with incredible need makes financial wellness just a really big opportunity right now. It's a topic that we're very, very excited about and have done some work on. I think getting into more defined areas where employers could make a big difference, like loan consolidation, credit monitoring, automated savings, debt counseling, and so forth. Employers have the potential to make a huge impact and it's an area where employers really are desperate for help. But the downside of that is, of course, just like in the health care space there's an overwhelming number of companies calling themselves financial wellness providers and vying for that employer budget and the mind share of the employee experience.

Bob and Mark, is this just a trend at the moment or do you think this has real staying power and it's going to become a big part of the benefits experience in the next 5 or 10 years? Mark, let's start with you.

Mark: Sure. I think without a question this has incredible staying power and I'll just call out one example. Mercer just recently released their 2016 report entitled "When Women Thrive." It was a study across 42 countries and included about 3.5 million employees and, among other numerous fascinating findings, and I recommend you download that study, was a core call out that quote "gender specific financial wellness programs drive better future representation of women."
If we collectively believe in driving gender paradigm, we absolutely should. Mercer cites that less than 10% of organizations today offer financial programs customized for the behaviors and the needs of different genders. We have a long way to go on a number of target groups, including this but I'm very bullish on the absolute value of financial wellness initiatives.

Jen: Great.

Bob: I would totally agree with that. People will always seek financial wellness, whether we'll always call it financial wellness remains to be seen but I think it's always been important, and the fact that it's at the forefront now is great. That will always be true in terms of the need. I think part of the question will be whether as employers, we can keep our intention on it long enough to make meaningful difference in helping our employees. Whether it's a trend or not, to a certain extent I think that the need and the demands for programs like that is not a trend. It would only be a trend if something else comes along and we as employers decide to sort of, move off to something else, which I think sometimes some of us are inclined to do.

Jen: Great point. Mark, what do you think the appeal of this is from the C-Suite? I've been very surprised but also quite delighted with the clear support of this from the C-Suite and from senior leaders. What is the business case and where do you think this is going to be connected to the overall business results that benefits create?

Mark: Great question. I personally believe that this business case is inextricably linked to the C-Suite's ability to truly deconstruct and fundamentally understand their entire population. Just yesterday I met with Tom Parry. Tom is the President of the Integrated Benefits Institute, or IBI. We were discussing some of the challenges he sees across his roughly 1,100 members. One of the items we came back to again and again is this idea that we tend to think of benefits really through the lens of eligibility versus the entire workforce. The point of this conversation really was: those most desperately needing financial wellness may be your part-time workers, they may be your contingent laborers, many of whom serving customer-facing roles, but they're actually not offered many of these programs and services by organizations. The truly defensible business case in this case is derived through a causal relationship between financial stability, productivity, and retention, and in my opinion it's certainly not to be ignored.

Jen: Great. Great. Financial wellness certainly connects to our final prediction, which is that we will slowly give up on the idea of the consumer of health care. As we all know, anyone in the benefits industry knows the move to high-deductible health plans has been fast and really, really picked up in the last five years since the passing of the Affordable Care Act. Consumer-driven plans are not necessarily a brand new thing. It's something that I have been part of since very, very early in my career. These plans have been around for almost 15 years now but the push to them and the number of employers really using this as the strategy to contain health care cost is remarkable.

86% of large employers currently offer high-deductible health plan as one of their options. For about a quarter it's their only option and those numbers are just going up. The cost implications for employees are daunting. For some of the lowest earning families in America, it could be 30% of their income needed to cover the average high-deductible health plan out of pocket maximum. That's a staggering number.

With low income workers, a majority of them experience problems paying medical bills or have medical debt; but, even when we look across the entire spectrum of workers, not just the lowest income but those on all aspects of the socio-economic scale, it is daunting to navigate the health care system. I so appreciate this quote from EBRI and all of the research they have done on this topic. They say, "There's strong evidence that workers simply lack the ability to successfully navigate the complex and technical nature of healthcare." This is something we see all of the time with it, every focus group we do, every topic is very, very tough to educate employees on.

What we're seeing as a shift and one that I think is very exciting is figuring out how to put very high touch programs in place that help employees navigate the system and help them make good decisions. We see very, very high touch concierge models coming into place, very high touch technology resources and we see employers moving to this notion of directing a consumer of health care versus having consumer directed plans or that notion that individual consumers are somehow going to change the health care system. I think this is a really, really exciting evolution, one that has the potential to really start to change the health care system and help people get better outcomes. But as we know, the industry moves very, very slowly. Until this becomes more prominent we're going to continue to see those unintended consequences of high-deductible health plans really, really taking a toll particularly on lower income workers. This is a complex topic to unpack.

Mark, of course the Affordable Care Act is a big factor in the move to high-deductible plans. Do you see that trend continuing? Is that changing with the Cadillac Tax being delayed? What are you sensing in the overall strategies right now?

Mark: Jen, I believe this trend's going to absolutely continue, almost irrespective of participant readiness to be the "smart consumer buyer." Regardless of your point of view on this challenge, I think this is another outcome of this changing role between employers and employees. As the maternalistic or paternalistic organization of old is largely an anomaly, given that most employers want more elasticity and flexibility, not less. What this has manifested is really shedding and shifting and moving more of the burden onto employees, period. What I'm fortunately seeing is less pushing, sort of the Amazon-like approach that says, "People like you choose blank." Given that people like you may be just as under-educated in making those decisions, I think this goes back to your point on the criticality of communications and high touch services because I don't see much change afoot unfortunately.

Jen: Bob, Paychex has actually not moved to high-deductible health plans yet. Can you tell us a little bit about the thinking there and what you all are doing with your health plans?

Bob: Sure, and I'll try to say it brief because I know you want to leave time for questions. As you know, Jen, I'm not personally in the role of driving those decisions but I can see all sides of it really from the perspective of an employee who just knows probably just enough to be dangerous. The position of the organization overall is—you know I mentioned earlier—that our benefits are a key driver for our employee engagement. It's one of the things that employees love about working at Paychex. You held up a slide that said that 56% of HDHP users are likely or very likely or somewhat likely to recommend it to a friend.

Now, when I think about it, Jen, if you think about your business, Mark, yours or Paychex, if we had a rating like that that promotes a score of 56%, we wouldn't be advertising it. It's really for a company like Paychex that wants to provide benefits that wow our employees and that show caring for them, that's not good enough, 56%. We do also have concerns that people with HDHPs do not get needed care. I think that there's some research that shows that it reduces unneeded care and needed care. Financially, I think that the position of the organization is that the HDHPs really lead to a one time dip in health care cost and that then continued to grow, as opposed to really being a solution for trend over time. We just had a whole discussion about financial wellness and Jen, you made that connection, and we just don't really think at this time that high-deductibles are consistent with our commitment to employees' financial wellness.

There was a study by the Health Care Cost Institute that came out just last week, that also showed that employees shopping for health care cost based on price and even quality, which we agree with the EBRI Institute, not only can employees not do but we don't really know that it's reasonable to expect them to be able to do that. It's such a complex system, a complex and flawed system, and the Health Care Cost Institute found that that type of comparison shopping and that sort of a hallmark of high-deductible health plans really doesn't have much potential to lead to health care cost decreases.

Jen: Great perspective, Bob. Thank you. We could talk about this topic for hours on its own but I want to get to some of the audience's Q & A. First, to summarize again the predictions that we just went through, Mark, anything that you would add to this list, any topics that are really top of mind for you right now that we haven't touched on today?

Mark: No, I mean I think the only topic of note that's certainly in the industry right now is one of privacy, privacy controls, opt-in, opt-out, but that's probably a webinar for another time.

Jen: That's another topic that we can spend all day talking about.

Mark: Exactly.

Jen: Bob, what about you? Anything that's top of mind that we haven't touched on?

Bob: You know, Jen, I actually think you covered it really, really well and hit really the big topics. I am sort of interested in consolidation in the wellness industry and whether we're going to be seeing more of that, and how that might affect some us. I would, like you and Mark, love to hear from some of our attendees as well.
Jen: Great. Well, we have a few more minutes for questions and we had some great ones coming in. The first one is: How do these trends and the things we've talked about connect to global benefits? We have certainly talked a lot about the challenges of the US health care market. What are you both seeing in terms of global trends? Mark, let's start with you.

Mark: I think this notion of concierge services which, Jen, you touched on briefly has started to evolve into a global conversation, whereby certain classes of individuals or employees are being presented with the opportunity to participate in programs that are not federally funded, if you will. As prioritization has become a real problem in terms of access to health care in certain countries around the world, employers certainly have an opportunity to re-prioritize by providing supplemental programs and services and helping really their employees demystify their global provider ecosystem in a way that's meaningful and impactful to their participation. But I do think in communications, there are opportunities to create one vision for your global organizations. How does one ensure that there is a persistent vision in value proposition, almost irrespective of your country of origin or work? That's where strong persistent communications will really allow for a high level of generalization as an employer and then a hyper-localization depending on where one is sitting at a given point in time.

Jen: Great. Thank you. Bob, anything that you want to add on that?

Bob: No, I think Mark said it really, really well.

Jen: We have several questions about exchanges and their role in driving forward all of these different concepts. Bob, that kind of touches to, on the topic of consolidation and the wellness base too. A lot of different providers trying to own that whole experience. How do you both see the role of exchanges going forward?

Bob: You know that's a good question. Actually I think I'll defer to Mark on that as well. Paychex is not using exchanges at this point and Mark, I'm sure you've got some good insights to share on that.

Mark: Thanks Bob, and it's an excellent question. I think the number of looks, and I'll say those that are attempting to do an initial analysis of the potential value proposition of private exchanges is incredibly high and disproportionally high relative to those that are actually activating through the constructive of a private exchange. If you talk to the major tier one providers, they're seeing a close rate of maybe 5%. That tells me there's a tremendous amount of cynicism, really relative I think to the long-term sustainable value of these programs. There is not a bad business case really "to be had" where you cannot excite your CFO about first your savings, but in effect, in many cases, you're resetting the hockey stick, where your increases may start from a different baseline but they still may occur at the same pacing that you had prior to moving to an exchange. By moving to exchange, one is moving in effect to a group purchasing organization that assumes your communications, assumes your corporate consulting relationship, often your voluntary benefits, your benefits administration structure, as well as obviously your plan design.

You certainly have choices depending on which exchange that you move to but there have not been enough demonstrable successes, I think, provided by the providers and the employers themselves to really, I think, drive the level of excitement and increase participation that I think the industry hopes for at this stage in time.

Jen: Great. Let's touch on the topic of privacy, just quickly. A question comes in: How do we answer employees' concerns about privacy and the desire that their employer is not necessarily, doesn't have access to their health data and that that shouldn't be the concern of their employer. This is a hot topic. It just got a ton of media coverage a couple of weeks ago. We wrote a long article on our blog about the challenges of privacy and employee engagement.

Bob, what do you see as the challenges and opportunities there and how do you trust in your population?

Bob: Well, I think trust is earned and when I think about Paychex when we first rolled out a ramped-up wellness program with more emphasis on biometric screening and health risk assessments, there was a lot of skepticism. For me, the focus is always transparency, to be completely honest about how data is going to be used in a really open way, not hiding that information in terms of service agreements or waivers.

Now, we don't really encounter resistance from employees regarding privacy really. I think that they understand when we've proven that what we're trying to do is respect privacy. I hold employees' health information—of course, we don't see individual health information but we have third parties who do, and we direct them to hold it—sacred. We really seek to collect it and have it transmitted as little as possible. Our employees, I think, have come to know that that's our view and respect it and we've built that trust. But, the key thing has to be a pattern of transparency over time.

There has been some celebrated cases of hacks into employers where personal health information has been found. I don't necessarily know that we have the full story on those situations or whether it's been sensationalized in the media; but, I think it's important to respect employees' concerns about privacy, because some of them may perfectly justified.

Jen: Great. Mark, if you can comment on that and then we'll wrap things up.

Mark: I think it was well described. The transparency, candor, and a clear understanding frankly of how the provider community intends to use this and for what purpose. I was recently at an event in the Midwest where a very large provider was demonstrating their big data play. Their ability to integrate data from all these different sources, and of course their ability to identify indicative use cases whereby someone was pre-diabetic, and then to invoke their nurse line to do immediate outreach to that participant. I asked the individual running the session, "Did I, as my phone rings, opt-in to that phone call?" And, it was met with silence.

I think these are reasonable questions, posed as reasonable concerns. Again, the lens with which each of the members of this community view the value of using data to impact and derive a particular outcome is perceived to either be wholeheartedly in the best interest of the individual and the participant, or perceived to be nefarious. I think it is a very difficult topic. I think it is filled with a lot of energy and emotion right now. Like Bob, I'd like to see more demonstrable examples of, in those cases where in fact it has gone awry, exactly what occurs so that employers of all kinds can ensure they don't replicate those horrific examples.

Bob: Well said.

Jen: Thank you. Well, we are over time. I wish we could keep talking all afternoon but I will let everyone get back to their days. I appreciate everyone for joining us today. We had a fantastic group. Thank you so much Bob and Mark, for sharing your time and expertise with the audience. We will send the recording out as well as the slides from this webinar to all the participants after the event. Just want to remind everyone that you can go to our website, benzcommunications.com, to look at the original article that drove this webinar. You'll be able to access the webinar recording for all of time there, as well as look at the other webinars that we offer on benefits communication. And of course, please reach out if you have any other questions. We'd be happy to answer those offline and keep the conversation going.
Thank you again everyone and thank you so much, Bob and Mark, for all of your time and expertise.

Bob: Thank you so much, it's been great.

Mark: Thank you.