Hub International Limited (HUB), a leading global insurance brokerage, recently undertook an in-depth small-middle market employee benefits study: Employee Benefits Barometer: SMB Perspectives and Priorities in an Era of Disruption. More than 400 senior-level human resource and finance executives at U.S. companies with 50-1,000 employees were surveyed. The goal is to understand the priorities and challenges facing today’s employee benefits decision-makers.
- Only 58% of respondents ranked ACA compliance as a top priority, despite 2016 being the first year of ACA reporting and IRS audits. It ranked third, behind employee wellness and productivity improvements (83%) as well as cost management (76%).
- While ACA compliance was not the top priority, 64% of respondents said they would struggle to stay in business as a result of ACA compliance, with 57% concerned about the burden of calculating affordability and 45% concerned about calculating full-time employees and equivalents – key red flags for IRS audits.
- 66% are experiencing ROI on their health and performance initiatives, with 35% reporting improved productivity and 34% citing improved morale, but key benchmarks for these initiatives which include employee turnover (21%), absenteeism (18%) and chronic disease management (16%) are lagging.
- 65% believe they are doing all they can to rein in rising benefits costs, but many are missing opportunities to leverage other proven cost management strategies – with only 51% using voluntary benefits, 31% pharmacy carve out, 18% self-funding and 16% narrow network strategies to manage costs.
- Collaboration between HR and finance is critical. 78% of Finance considers HR a strategic partner, but Finance has significant concerns with benefits costs (97%), HR missteps with executive liability (93%) and ACA audits (88%). Even more indicative of the relationship is that a third of Finance expects HR to go over budget (32%), mismanage ACA reporting (34%), and pay IRS audit penalties (35%).
“Given its impact on organizational performance and employee satisfaction, employee benefits must be viewed as a strategic imperative with clear alignment between HR and Finance,” said Linda Keller, National Chief Operating Officer of Employee Benefits, Hub International.
Mike Barone, President of Hub International’s Employee Benefits agreed, “HR and finance leaders are operating in an era of unprecedented disruption -- brought on by ACA compliance, rising health care costs and the increasing demands of a multi-generational workforce. Taking a long-term, strategic approach to employee benefits is key to achieving cost management, compliance and employee productivity goals.”
Download the HUB Benefits Barometer to learn more.
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Source: HUB International Limited