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Employers facing record low unemployment and the rising cost of doing business have been implementing flexible and creative solutions to attract and hire qualified employees, improve employee engagement and productivity, manage risk and reduce costs. This year’s trend report focuses on strategies employers have been using in response to the constant changes and challenges they face today, including:

  • Exploring prescription drug and other cost-saving options to combat increasing healthcare costs.
  • Offering financial wellness and other benefits strategies to help employees address personal financial challenges and improve engagement and productivity.
  • Implementing strategies to effectively manage workplace injuries and reduce the overall cost of claims.
  • Responding to the risk of business disruption and ever-evolving cybersecurity threats.

MANAGE MEDICAL EXPENSES

What we're seeing

The average cost of employer-sponsored health insurance plans has grown by 121% since 1999 while median household income has increased by just 2% during the same period, according to 2018 Kaiser Family Foundation Employee Health Benefits Survey data. The exponential rise in the cost of healthcare compared to wages has left millions of Americans struggling to pay for medical expenses out of pocket.

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Associated Benefits and Risk Consulting - MarketPulse - Executive Compensation Strategies

EXECUTIVE BENEFITS

What we're seeing

In a tight labor market, competitive wages alone is not a guarantee employees will stay—benefits and related services need to mesh with the entire compensation structure, especially for highly compensated employees (HCEs). The Society for Human Resource Management (SHRM) report, 2019 Employee Benefits, shows 76% of employers offer supplemental life insurance, almost half offer supplemental short- or long-term disability and 7% offer a supplemental executive retirement plan. These carve-out benefit plans and other perks allow employers to compensate their executives sufficiently and avoid losing them to other organizations.

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Associated Benefits and Risk Consulting - MarketPulse - Financial Well-being

CYBER RISK

What we're seeing

Directors and officers have been sued or fined for breach of duty for failing to recognize the scope of cyber risk. Securities class action (SCA) litigation is also on the rise with a recent spike of lawsuits against the directors and officers of publicly traded companies on the grounds that adequate disclosures were not provided, or sufficient prevention controls were not put in place.

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401(K) CYBERSECURITY

What we're seeing

With an estimated $5.7 trillion in assets and 55 million plan participants, 401(k) accounts could be an enticing target for cybercriminals. What makes the prospect of a retirement plan cyber breach unique and so potentially difficult to prevent is the fact that multiple parties play a role in ensuring protection, including employer plan sponsors and certain plan sponsor employees, plan trustees and investment advisors. With so many fiduciaries involved, who is responsible for protecting plan participant assets and data?

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NON-TRADITIONAL BENEFITS

What we're seeing

The Society for Human Resource Management (SHRM) 2019 Employee Benefits report noted companies offering paid parental leave leveled off for 2019 following a four-year increase. However, employers should not write off paid parental leave as a passing fad. Employees are expecting employers to offer benefits that help ease financial burdens, including a mix of traditional and non-traditional benefits like paid parental leave.

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WORKER'S COMPENSATION

What we're seeing

According to The Council of Insurance Agents & Brokers (CIAB) report, Commercial Property/Casualty Market Index, all lines of business saw premium increases indicating a potential hardening of the market; however, workers' compensation continued to see decreasing premiums, with 52% of CIAB respondents in the Midwest reporting a premium drop between 1 and 9% between 2018 and 2019. Declining premiums may be attributed to successful prevention efforts and interventions to get employees back to work following a workplace injury.

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Associated Benefits and Risk Consulting - MarketPulse - Managing Prescription Drug Costs

PRESCRIPTION REBATES

What we're seeing

Prescription drug rebates have been identified as a major factor in the healthcare costs. As the cost of prescriptions continues to rise, there has also been an increasing trend of self-insured employers receiving a greater share of the billions of dollars in manufacturer rebates, often negotiated by the employers’ pharmacy benefit managers (PBMs).

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BUSINESS INTERRUPTIONS

What we're seeing

The 2018 Business Continuity Institute report, Supply Chain Resilience—10 Year Trend Analysis, shows that over half of employers around the world reported a business interruption over a twelve-month period. Headlines about record flooding and other increasing incidents of natural disasters—not to mention disruptive cyber events—also emphasize the critical need for organizations to prioritize disaster recovery and business interruption as a top business concern.

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Associated Benefits and Risk Consulting – MarketPulse - Emerging Trends

EMERGING TRENDS

What's coming up

We expect to hear a lot more about how direct primary care may increase as a result of rising healthcare costs, more employers investing in emotional health in the workplace, and how wearable technology may become more widely adopted to help reduce workers' compensation claims in 2020.

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