When health insurers and insurance agents think of the target customer for employer-sponsored health plans, they usually think of the person assigned to be the Group Health Benefits Administrator of a company. This makes sense as these are the people who evaluate options and make purchase decisions on behalf of their workforce.
But a consequence of this focus is that more market information is generated about what benefits administrators think, and less information is generated about what employees want.
Staying true to its mission of creating information that supports better health consumer experiences, Deft Research has conducted a new, large scale study. The new study is unique in that it asks employees, not benefits administrators, how they value health benefits. It then determines whether or not they are willing to pay for them.
The Employee Choice and Preference Study asked over 2,000 employees to consider various health benefits and give us their choices. It focused especially on ancillary benefits, supplemental coverage, and wellness programs.
Employee Willingness to Pay for Additional Benefits
The conclusion of the study suggests a substantial percentage of employees who are willing to pay more for additional health benefits. The study provides several indications that benefits such as catastrophic illness coverage, wellness programs, and programs to manage particular health conditions have value that is recognized by employees. Moreover, employees are willing to have more deducted from their paychecks to obtain them.
The study has important implications for both insurers and employers.
- The study highlights the demand and market size for additional insurance and programs.
- It helps to quantify the opportunity for insurers wishing to increase the revenue of existing accounts and to be more appealing to prospective accounts.
- It suggests to employers what they can do to increase employee satisfaction through additions to health benefits.
- It suggests to insurance sales people how to frame the value proposition of adding benefits to employee menus.
Insurance and wellness services can be obtained less expensively through employer-group purchasing than through the individual market. This study shows that many employees want the additional benefits and understand the economic value of getting them through employers. Check out the preview slides: Employee Choice and Preference Study for more key findings.