Workplace Benefits Resource Guide - C2 Solutions · 6 Workplace Benefits Resource Guide costs to employees through strategies such as cost shifting, cost sharing, and limits on eligibility

Workplace Benefits Resource Guide: A Holistic Overview of the Changing Benefits Landscape

2 Workplace Benefits Resource Guide

Anita PotterAssistant Vice President

LIMRA Workplace Benefits Research860-285-7847

[email protected]

Acknowledgments

Special thanks to contributing subject matter experts:

Yuliya BabushkinaAssistant Research Director

LIMRA Workplace Benefits Research

InAh ChambersMember Relations & Sales Director

LIMRA Workplace Benefits

Deb DupontAssociate Managing Director

LIMRA Secure Retirement Institute

Kimberly LandryAssistant Research Director

LIMRA Workplace Benefits Research

Workplace Benefits Resource Guide: A Holistic Overview of the

Changing Benefits Landscape

Contents

Introduction .................................................................................................... 5

Business Landscape Overview ...................................................................... 9

The Current Benefits Landscape................................................................. 29

Attitudes and Behaviors of Employers and Employees ........................... 49

Products ......................................................................................................... 71

The Future ..................................................................................................... 95

Bibliography ................................................................................................ 105



As LIMRA’s Workplace Benefits Resource Guide shows, many trends are contributing to the tremendous changes occurring in the workplace benefits landscape today, including:

• The labor force is increasingly diverse• Generational differences are widening, as younger employees express different

expectations• Employer-employee relationships are evolving• The number and variety of benefits available to employees are growing• The costs of benefits continue to escalate• More Americans are discovering they are not financially prepared for retirement• Technology’s role in benefits administration is increasing• Fraud and the threats to privacy and cybersecurity are growing

The significance of these factors for all stakeholders is undeniable, although challenging to define precisely. The immediate question is how the industry will handle the challenges it faces today and tomorrow.Employers offer benefits to attract and retain high-quality employees. With the unemployment rate under 4 percent,1 identifying, training, and retaining employees become even more challenging. Employers persistently struggle with defining and providing the right mix of employee benefits that will help reduce turnover and increase loyalty. Yet, few are meeting their expectations.

Managing Benefits

With benefit costs accounting for over 30 percent of employee compensation, are employers getting the right return on their investments? Given the consequences, employers can ill afford to make mistakes, but many are doing just that. The majority of employers do not have a formal employee benefits strategy in place, nor do they have a plan to engage employees in the benefits process. What’s more, employers tend to overrate the success of their benefits communication strategies, which may help explain why only 53 percent of employees with benefits are satisfied with the benefits offered to them.2 Even with unemployment at historically low levels, inflation-adjusted earnings have stagnated — the median weekly earnings for full-time workers in 2017 was $860, a scant rise from $847 in 2009.3 Moreover, median earnings have barely registered an increase since 1979, on an inflation-adjusted basis. Additionally, 78 percent of employees admit that at some point, they are living paycheck to paycheck.4 Benefit costs, particularly medical insurance premiums, continue to rise, and, as a result, employers are passing on an increasingly larger portion of

1 U.S. Department of Labor, Bureau of Labor Statistics. https://data.bls.gov/timeseries/LNS14000000. Accessed November 26, 2018.

2 Mind the Gap: Do Employers Understand Employees’ Benefit Priorities? LIMRA, 2018. 3 U.S. Department of Labor, Bureau of Labor Statistics, Highlights of Women’s Earnings in 2017, 2018, https://

www.bls.gov/opub/reports/womens-earnings/2017/home.htm. 4 Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers, According to New CareerBuilder

Survey, http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-According-to-New-CareerBuilder-Survey, accessed April 10, 2018.

Introduction

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costs to employees through strategies such as cost shifting, cost sharing, and limits on eligibility rules. While there may be a considerable number of benefits available for employers to offer their employees, important questions remain. For example, when the cost of living exceeds average wage increases, how will employees afford the financial-protection products made available to them? Further, on what basis will employees make their benefits decisions?We all know that employees are much more familiar with products such as medical and dental insurance and 401(k) plans, as most have visited a doctor, seen a dentist, or contributed to their retirement savings plans. Why, then, does the industry still struggle with getting the message about financial security and protection across to employees? Many industry growth rates are stagnant as much of the business is take-over business. Moreover, despite improving trends in the overall economy, the percentage of employers offering insurance and retirement benefits has dropped from pre-recession levels.

Investment in Technology

Technology continues to have a powerful impact on how employers manage benefits. Traditionally, they have utilized technology for payroll-deduction services. Today, however, nearly half of employers utilize technology to support Human Resources management functions, such as benefits administration and enrollment. Who ultimately pays for the technology is an issue confronting employers, brokers, and carriers alike. Carriers are struggling with justifying the expense of paying for enrollment or benefits administration technology costs when most have not seen any reduction in expenses or resources. In fact, many carriers have invested significantly more resources to support the involvement of technology companies in their day-to-day operations. While the anticipated return on investment has not yet materialized, many remain hopeful that they will eventually see greater efficiencies, better data, and improved customer service.Similarly, many carriers are not currently experiencing the increase in participation rates anticipated from enrollment technology. Nevertheless, there is potential in exploring the use of technology for more effective ways to educate and engage employees. Despite technological advances, however, employers continue to rely heavily on printed materials to educate their employees about the benefits offered to them. In fact, more than 8 in 10 employees currently receive printed materials at work or home. Slightly less than half receive information online.5

Distribution Channels

We also cannot discount the fact that 1 in 4 employers would consider working directly with carriers, given the opportunity. Is this an indication that employers are dissatisfied with the brokers they work with, or is it a recognition of the fact that they would likely receive a reduction in premium if working directly with a carrier? Will the utilization of technology make it easier for more employers to make this direct connection? It’s worth noting that, of those employers currently not offering certain benefits, many have not been approached in the past 12 months. Is there an opportunity for carriers to market directly to them?

5 Employee Understanding of Benefits and Risk Study, unpublished data, LIMRA, 2018.

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Given that only 20 percent–50 percent of private sector firms currently offer various insurance benefits and less than 60 percent of employers offer a retirement or pension plan to their employees, significant opportunities for growth exist. The question for carriers will be how best to capitalize on these opportunities — be it through increasing the number of employers offering benefits, increasing the number of benefits offered by employers, offering additional services to employers, and/or by increasing employee participation rates.

Looking Ahead

The Resource Guide gives you a starting point to help you think through these challenges and to develop and deliver promising solutions. If the industry has learned anything over the past 10 years, it is that the speed of change will only accelerate, and it is never too early to gather information and develop forward-looking strategies.


Chapter 1Business Landscape Overview


Number of Private-Sector Firms in the United StatesPrivate Firms by Size

3,665,182

1,013,878

626,900 538,283

90,742 9,757 7,840 2,102500,000

0

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

Size of Firm (number of employees)

Fewer than 5 5-9 10-19 20-99 100-499 500-999 1000-4999 5,000+

Num

ber o

f Firm

s

Source: 2016 County Business Patterns, Statistics of U.S. Businesses, U.S. Census Bureau.

Note: Excludes most government entities, businesses without paid employees, public schools and colleges, private households, and certain North American Industry Classification System (NAICS) industries.

Key Takeaways:

• As of 2016, there were 5,954,684 private-sector firms in the United States.• Eighty-nine percent of the firms have fewer than 20 employees.• Private-sector firms employ 86 percent of all workers. 6

While the mid-to-large employer market is attractive to carriers, growth will depend on penetrating the small case size market.

6 Bureau of Labor Statistics, 2017 Labor Force Statistics, 2018.

C H A P T E R O N E : Business Landscape Overview

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Growth/Decline In Number of Private-Sector FirmsAnnual Growth Rate (percent) (2007–2016)

-0.6% -0.4% -0.2% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0%

Fewer than 5

10-19

5-9

20-99

100-499

500+

Size

of F

irm (n

umbe

r of

em

ploy

ees)

Average -0.2%

Source: 2016 County Business Patterns, Statistics of U.S. Businesses, U.S. Census Bureau.

Note: Excludes most government entities, businesses without paid employees, public schools and colleges, private households, and certain NAICS industries.

Key Takeaways:

• Compared with pre-recessions levels, the total number of private-sector firms has declined 1.6 percent since 2007. This compares with a 7 percent increase in the number of firms from 2000–2007.

• Based on recent firm births, closings, and consolidations, it will be several more years before the number of firms surpasses pre-recession levels.

Mergers and acquisitions of smaller firms by larger businesses help explain the slower than expected growth in the fewer-than-100-employees market.



Private-Sector Employment by Firm SizeEmployment Distribution by Firm Size

5% 5% 7%

17%14%

5%

13%

35%

0

5%

10%

15%

20%

25%

30%

35%

40%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

Fewer than5

5-9 10-19 20-99 100-499 500-999 1000-4999 5,000+

Num

ber o

f Em

ploy

ees

(in 0

00s)

Employer Size (number of employees)

Number of employees Percent of employees

Sources: 2000 and 2016 County Business Patterns Statistics of U.S. Businesses, U.S. Census Bureau.


Key Takeaways:

• While the smallest firms account for 89 percent of all private-sector employers, they only account for 17 percent of employment.

• Nearly 3 in 10 employees work in private-sector firms with 10,000 or more employees.• The share of employment in firms with 500 or more employees (52.7 percent) has increased nearly

three percentage points since 2000.

Since 1990, firms with fewer than 250 employees have seen their shares of private-sector employment decrease. There is no reason to believe this trend will not continue for the foreseeable future.



Private-Sector Firm Growth by State/District 2007–2016 Annual Growth Rate (percent) (2007–2016) (by employer size)

Less than 100 100-499 500 or more Total

North Dakota 1.1 3.0 3.3 1.2

Texas 1.0 1.6 1.2 1.0

District of Columbia 0.6 1.1 1.8 0.7

Utah 0.6 1.0 1.6 0.6

New York 0.5 0.6 1.1 0.5

Colorado 0.3 0.9 1.2 0.4

Florida 0.3 0.4 0.8 0.3

California 0.3 0.1 0.7 0.3

Missouri 0.3 -0.2 1.0 0.3

Alaska 0.1 0.8 2.3 0.2

Nebraska 0.1 0.9 1.4 0.2

South Dakota 0.0 0.8 2.3 0.1

Nevada 0.1 -1.1 0.8 0.1

Oregon -0.1 0.5 1.3 -0.1

Washington -0.1 0.4 1.3 -0.1

Wyoming -0.2 0.9 2.7 -0.1

Massachusetts -0.2 0.2 1.2 -0.1

Oklahoma -0.2 1.3 1.6 -0.1

Delaware -0.1 -2.2 -0.6 -0.2

Montana -0.3 1.1 1.9 -0.2

Louisiana -0.4 0.7 1.1 -0.3

Illinois -0.4 0.0 0.8 -0.3

North Carolina -0.4 0.0 1.0 -0.3

Virginia -0.4 0.0 0.9 -0.4

Minnesota -0.5 0.6 1.3 -0.4

Georgia -0.5 0.2 0.8 -0.4

Sources: 2007 and 2016 County Business Patterns, Statistics of U.S. Businesses, U.S. Census Bureau.





Private-Sector Firm Growth by State/District 2007–2016 (cont.)Annual Growth Rate (percent) (2007–2016) (by employer size)

Less than 100 100-499 500 or more Total

Pennsylvania -0.5 0.0 0.9 -0.5

South Carolina -0.6 0.7 1.5 -0.6

Iowa -0.6 0.2 1.3 -0.6

Maryland -0.6 0.0 1.1 -0.6

Maine -0.7 -0.4 2.1 -0.6

Arizona -0.7 -1.0 1.1 -0.6

Kentucky -0.7 -0.4 1.1 -0.6

Idaho -0.8 0.8 2.4 -0.6

Hawaii -0.8 0.1 1.7 -0.7

Arkansas -0.8 0.5 1.3 -0.7

Kansas -0.8 0.2 1.4 -0.7

Tennessee -0.8 0.7 1.2 -0.7

New Jersey -0.8 0.0 0.6 -0.8

Vermont -0.9 -0.2 1.8 -0.8

New Hampshire -1.0 -0.2 2.1 -0.8

Connecticut -0.9 -0.4 1.2 -0.8

Wisconsin -0.9 0.2 1.4 -0.8

Michigan -1.0 0.0 0.8 -0.9

Indiana -1.0 0.0 1.1 -0.9

Rhode Island -1.1 -0.5 1.8 -0.9

Mississippi -1.1 0.0 1.6 -1.0

Alabama -1.2 0.2 1.1 -1.1

Ohio -1.3 0.1 0.9 -1.2

New Mexico -1.3 0.1 0.9 -1.2

West Virginia -2.0 -0.2 1.3 -1.8

Key Takeaways:

• Thirty-five percent of private-sector firms are located in the South; 19 percent are located in the South Atlantic states.

• Only 5 percent of private firms are located in New England.• Over half of private-sector firms are located in nine states.

Four states account for approximately one third of private-sector firms: California, New York, Florida, and Texas.


Number of Public Entities

501 90,056

LocalStateFederal

14% of U.S. workers are employed by public entities.

Sources: U.S. Census Bureau, 2012 Census of Governments: Organization Component and Bureau of Labor Statistics, and 2017 Labor Force Statistics from the Current Population Survey, 2018.

Key Takeaways:

• Local governments account for 65 percent of total government employees, while state and federal governments account for 23 percent and 13 percent of employees, respectively. 7

• Over half of all state and local government employees work in education. 8

• Over the past 10 years, the overall number of government workers has increased slightly.9 Most of this increase occurred at the federal government level.

• Thirty-four percent of public sector workers belong to a union. Union membership is highest in local governments at 40.1 percent and lowest at the federal level, 26.6 percent.

While the Midwest has the highest average number of local governments per state (3,332), the region has only 21 percent of the U.S. population. Conversely, the South has 38 percent of the population and the fewest average number of local governments per state (1,181).10

7 Bureau of Labor Statistics, from the Current Employment Statistics Survey, Series CES9092000001, 2018. 8 Bureau of Labor Statistics, from the Current Employment Statistics Survey, Series CES9092161101, 2018. 9 Bureau of Labor Statistics, from the Current Employment Statistics Survey, Series CES9000000001, 2018. 10 U.S. Census Bureau, Government Organization Summary Report, 2012, and U.S. Census Bureau.



Industry Categorization of WorkersPercent of Total U.S. Workforce Distribution by Industry Employment*

0 20% 40% 60% 80% 100%

Agriculture

Information

Wholesale trade

Other services, except public administration

Transportation,warehousing, utilities

Financial activities

Construction

Leisure and hospitality

Manufacturing

Retail trade

Professional and business services

Educational, health care,social assistance

Private not-for-pro�tSelf-employedPrivate for pro�t Government

Perc

ent o

f wor

kfor

ce

23%

12%

11%

10%

10%

7%

7%

5%

5%

3%

2%

2%

Source: U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates.Note: Agriculture includes forestry, fishing, hunting, and mining industries. Financial activities include finance, insurance, real estate, and rental and leasing industries. Leisure and hospitality include art, entertainment, recreation, accommodation, and food service industries. Professional and business services include professional, scientific, management, administrative, and waste management industries.

*Excludes Public Administration, which accounts for 5 percent of workers.

Self-employed includes workers in own incorporated businesses, in unincorporated businesses, and unpaid family workers.

Key Takeaways:

• Nearly 7 in 10 employees (68.7 percent) work for private-for-profit businesses.• Overall, 1 in 10 employees are self-employed; the majority of whom either work in their own

unincorporated businesses or are unpaid family workers.• Nearly 1 in 4 employees work in the educational, health care, and social assistance industries,

industries that have the highest proportion of women.

Employment in the goods-producing sector has declined 7 percent from 2007 to 2017.11 On the other hand, employment in the private service-producing sector increased 12 percent.12

11 Bureau of Labor Statistics, from the Current Employment Statistics Survey, Series CES0600000001, 2018. 12 Bureau of Labor Statistics, from the Current Employment Statistics Survey, Series CES0800000001, 2018.



Median Earnings for Full-Time Workers Earnings by Class of Worker

$45,049

$50,977 $51,113 $51,133

$66,363

$36,340

Private for-profitworkers*

Private not-for-profit workers

Local governmentworkers

State government

workers

Federalgovernment

workers

Self-employed**

Med

ian

Earn

ings

for F

ull-t

ime

Wor

kers

Source: U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates.Note: Earnings based on 2017 inflation-adjusted dollars for full-time, year-round, civilian-employed population 16 years and over.*Excludes self-employed workers in incorporated businesses.**Self-employed workers in own not incorporated businesses and unpaid family workers.

Key Takeaways:

• In 2017, the median earnings for all full-time employees was $47,016.• The median earnings for men was $51,421 and $41,512 for women.• While the median earnings for the unincorporated self-employed was $36,340,

the median earnings for the incorporated self-employed was $61,470.

Earnings for men and women vary significantly by educational attainment. Additionally, in 2016, the ratio of weekly earnings for workers with only a high school diploma was 55 percent of those with a bachelor’s degree or higher. For those with some college or an associate’s degree, the ratio was 62 percent.13

13 U.S. Department of Labor, Bureau of Labor Statistics, Highlights of Women’s Earnings in 2016, https://www.bls.gov/opub/reports/womens-earnings/2016/home.htm, 2017.



Median Earnings by Industry

Industry Classification Median Earnings for Full-time Workers (2017)

Utilities $71,458

Mining, quarrying, and oil and gas extraction $69,223

Information $62,126

Professional and business services $60,271

Public administration $58,712

Financial activities $58,107

Wholesale trade $50,850

Educational services $50,554

Manufacturing $50,379

Transportation and warehousing $47,341

Median $47,016

Construction $45,150

Health care and social assistance $43,657

Other services $36,354

Retail trade $35,003

Agriculture, forestry, fishing, and hunting $32,506

Leisure and hospitality $29,400

Source: U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates.Note: Earnings based on 2017 inflation-adjusted dollars for full-time, year-round civilian-employed population 16 years and over.

Key Takeaways:

• The industries with the highest pay — mining, utilities, and information — accounted for only 3 percent of total employment in 2017.14

• Conversely, the industries with the lowest pay — retail trade, agriculture, and leisure and hospitality — accounted for 22 percent of total employment in the United States.15

Women’s earnings as a percent of men’s vary by occupation and industry.16

14 U.S. Department of Labor, Bureau of Labor, 2017 Labor Force Statistics from the Current Population Survey, 2018. 15 Ibid. 16 U.S. Census Bureau, 2017 American Community Survey 1-Year Estimates.



Growth in Civilian Labor ForceGrowth in Employed Labor Force

66

89105

118131

139 139153

50

55

60

65

70

0

20

40

60

80

100

120

140

160

180

1960 1976 1984 1992 1998 2004 2010 2017

Ratio

Num

ber o

f Em

ploy

ed in

Mill

ions

Year

Civilian Labor Force Employment Employment-Population Ratio

Source: U.S. Department of Labor, Bureau of Labor Statistics, Statistics from the Current Population Survey, 2018.

Note: The civilian labor force employed population includes individuals age 16 and older. The employment-population ratio is the ratio of employed persons to the civilian noninstitutional population. Data based on annual averages.

Key Takeaways:

• Since the 1970s, changes in the labor force reflect general changes in the growth and composition of the U.S. population.

• The U.S. labor force participation rate, the percentage of the civilian population classified as employed or unemployed (actively seeking work), currently equals 62.9 percent, a decline of 4.2 percentage points from its peak in 2000.

The annual growth rate of the labor force has been declining over the past 40 years, due to a number of factors, including lower population growth and the aging of American society.



Changing Employment StatusAge Breakdown of 2017 Civilian Noninstitutional Population (in 000s)

16 to 19

20 to 24

25 to 34

35 to 44

45 to 54

55 to 64

65 and over

Age

Employed Unemployed Not in Labor Force

49,542

41,691

41,787

39,952

43,958

21,396

16,754

Source: U.S. Department of Labor, Bureau of Labor Statistics, Statistics from the Current Population Survey, 2018.

Key Takeaways:

• Men currently make up 53 percent of the workforce, but their participation rate has been declining for decades.

• The prime-age (25 to 54) labor force participation rate for men has been declining since the mid-1950s and currently equals 89 percent.

• Conversely, the prime-age labor force participation rate for women has been increasing, from 41 percent in the mid-‘50s to 75 percent in 2017.

• The participation rates for young adults (age 16 to 24 years) have declined over the past several decades due to increased school enrollments.

According to Congressional Budget Office projections, the labor force participation rate for men will continue to decline. This is due in part to a decline in male-dominated jobs, such as manufacturing.



Changing Employer – Employee Relationships

82% 5%18%Full-time

EmployeesPart-time

EmployeesPrime-age WorkersWith Multiple Jobs

Source: U.S. Department of Labor, Bureau of Labor Statistics, and Bureau of Labor, Statistics from the Current Population Survey, 2018.

Note: People are classified as full- or part-time based on the number of hours they usually work in a week, including people who were absent from their jobs for the entire week. Full time is defined as 35 hours or more a week; part time is fewer than 35 hours per week. Prime-age workers are people age 25-54.

Key Takeaways:

• Part-time employment varies with age, with the youngest and oldest workers more likely to work fewer than 35 hours a week. Only 12 percent of prime-age employees work part-time.

• Sixteen percent of workers have irregular work schedules that vary by employers’ needs.17 • In 2017, 7.5 million workers in the United States held more than one job. The majority of multiple

jobholders have a full-time job in addition to secondary part-time work.

The majority of employees who work fewer than 35 hours per week do so for noneconomic reasons.

17 Report on the Economic Well-Being of the U.S. Households in 2017, Board of Governors of the Federal Reserve System, May 2018.



Alternative Work Arrangements

7% 2% 1% 1%IndependentContractors*

On-CallWorkers

Temporary Help Agency

Workers

Workers Provided by

Contract Firms

Source: U.S. Department of Labor, Bureau of Labor Statistics, “Contingent and Alternative Employment Arrangements — May 2017,” News Release, https://www.bls.gov/news.release/conemp.nr0.htm, accessed June 10, 2018.*Note: Independent contractors include self-employed and wage-and-salary workers.

Key Takeaways:

• Independent contractors tend to be older than workers in other alternative or traditional work arrangements. They are also more likely to be men.

• The median earnings for workers in alternative work arrangements vary widely.• In addition, nearly 4 percent of workers held some type of contingent job (a job that is not

expected to last or is temporary) in 2017.18 The proportion of workers employed in alternative work arrangements who were also classified as contingent workers ranged from 3 percent of independent contractors to 42 percent of temporary help agency workers.

• Contingent workers are more than twice as likely as noncontingent workers to be under age 25 and work part time. On average, contingent workers earn less than their non-contingent peers.

Contingent workers and those in alternative work arrangements are less likely to be offered benefits than traditional workers.

18 Contingent workers exclude individuals who do not expect to continue in their jobs for personal reasons.



Understanding the Gig Economy

of adults earned money through online activities.

of adults earned money through of�ine service activities.

of adults earned money through of�ine sales.

16%

14%

9%

Source: Report on the Economic Well-Being of U.S. Households in 2017, Board of Governors of the Federal Reserve System, 2018.Note: Offline services are defined as activities such as childcare or house cleaning; offline sales include selling items at flea markets or thrift stores; online activities include selling items online as well as providing services that are computer or internet-based.

Key Takeaways:

• Overall, 3 in 10 adults (31 percent) engaged in some type of gig work in 2017, a slight increase from 2016.

• Typically, adults working in the gig economy spend fewer than six hours per month on their respective gig activities.

• The most common reason individuals take on gig work is to earn extra money. In fact, for the vast majority of gig workers, their activities account for 10 percent or less of their family income.

Gig work is the primary source of income for only 16 percent of all gig workers.



Changing Employee TenureMedian Years for Prime-Age Wage-and-Salary Workers by Gender*

5.0

4.7 4.7 4.7

4.94.9

5.15.2

5.45.5

5.15.0

5.3

4.9 4.9 4.95.1 5.0

5.25.3

5.55.5

5.25.1

4.7

4.4 4.4 4.4 4.74.8

4.9

5.1

5.4 5.4

5.0 4.9

1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Med

ian

Year

s W

ith C

urre

nt E

mpl

oyer

Wage and Salary Workers (25 years and older) Men Women

Source: U.S. Department of Labor, Bureau of Labor Statistics, "Employee Tenure In 2018,” News Release,https://www.bls.gov/news.release/pdf/tenure.pdf, accessed September 25, 2018, and “Employee Tenure in 2000,” News Release, https://www.bls.gov/news.release/history/tenure_08292000.txt, accessed June 20, 2018.*Note: Based on workers 25 years and older. Based on median years of tenure of current employer.

Key Takeaways:• In 2018, the median employee tenure for all workers (16 years and older) was 4.2 years, unchanged

from the tenure reported in 2016. The first decline in overall tenure reported since 2000 occurred in 2016.

• The median tenure for male wage and salary workers 25 years or older was 5.1 years in 2018, while the median tenure for women was 4.9 years. In 2000, the median tenure for men and women were 4.9 years and 4.4 years, respectively.

• Public-sector workers reported higher median tenure than private-sector employees: 6.8 years compared with 3.8 years. Federal government employees recorded the longest tenure, 8.3 years.

In 2009, the unemployment rate reached 10 percent. Nine years later that rate is less than 4 percent. As the economy has improved, workers are leaving their jobs faster. Not surprisingly, employee retention and turnover rank as one of the top challenges for employers today.



Projected Annual Growth in Labor ForceEmployment Projections

1.9%

1.3%

0.6% 0.7%

1.3% 1.2%

0.5% 0.6%

1.1%1.3%

1.0% 0.9%

1986-1996 1996-2006 2006-2016 Projected 2016-2026

Employment Labor Force Civilian Non-institutional Population*

Source: Employment Projections program, U.S. Bureau of Labor Statistics.*Note: Civilian noninstitutional population age 16 years and older.

Key Takeaways:

• By 2026, the civilian noninstitutional population is expected to increase by 24.6 million individuals, while the labor force is expected to increase by 10.5 million people.19

• Because of the aging workforce, the U.S. labor force participation rate is projected to decline even further over the next eight years to 61.0 percent.

• Over this time period, the labor force is expected to become more diverse, with the share of minorities and women continuing to increase.

The growth in the labor force will depend in large part on the economy, the aging population, and immigration.

19 T. Allan Lacey, Mitra Toossi, and Kevin Dubina, “Projections Overview and Highlights, 2016-2026,” Monthly Labor Review, October 2017.



Labor Force of the Future

Labor force 2006 (in 000s)



Annual growth rate 2016-2026

By Age

16–24 years 22,394 21,202 19,868 -0.6

25–54 years 103,566 102,248 107,634 0.5

55 years or older 25,468 35,737 42,148 1.7

Source: Employment Projections program, U.S. Bureau of Labor Statistics, 2017.

Key Takeaways:

• By 2026, workers in the 16 to 24-year age group will account for 11.7 percent of the labor force, a decline from 14.8 percent in 2006. Similarly, workers in the prime-age group will also experience a decline, from 68.4 percent of the labor force in 2006 to 63.5 percent in 2026.

• In contrast, older workers are expected to see their share of the labor force increase to 24.8 percent by 2026.

• By 2026, the median age of the labor force will increase slightly to 42.3 years old.

By 2026, workers 65 years and older will account for nearly nine percent of the overall labor force.



Projected Employment by Industry Sector

Industry Classification

Annual Rate of Change

(2016-2026))

Goods-producing (excluding agriculture) 0.1%

Services-providing 0.8%

Health Care and Social Assistance 1.9%

Mining 1.4%

Educational Services, private 1.3%

Construction 1.2%

Professional and Business Services 1.0%

Leisure and Hospitality 0.8%

Transportation and Warehousing 0.7%

Financial Activities 0.6%

Other Services 0.5%

State and Local Government 0.4%

Retail Trade 0.3%

Wholesale Trade 0.2%

Information 0.2%

Utilities 0.2%

Federal Government -0.2%

Manufacturing -0.6%

Source: Employment Projections program, U.S. Bureau of Labor Statistics.Note: Employment data for wage and salary workers are from the BLS Current Employment Statistics survey, which counts jobs, whereas self-employed, unpaid family workers, and agriculture, forestry, fishing, and hunting are from the Current Population Survey (household survey), which counts workers.

Key Takeaways:

• From 2016 to 2026, the total annual employment growth in nonagricultural wage and salary industries is projected to be 0.7 percent, while agricultural employment is expected to be flat.

• The annual employment growth for nonagricultural self-employed is projected to be 0.9 percent.

By 2026, approximately one third of all new jobs will be in the health care and social assistance sectors.



Chapter 2The Current Benefits Landscape



C H A P T E R T W O : The Current Benefits Landscape

What Constitutes a Traditional Benefit?

Key Takeaways:

• Employee benefits have not always been an attraction and retention tool; their usefulness in appealing to employees has ebbed and flowed along with that of the economy.

• One thing is certain; the number of benefits offered to employees and their families has expanded over the past 60 years as a way to keep up with changing worker demographics, attitudes, and behaviors.

In fact, most of this expansion has occurred within just the past 20 years. According to a recent Society for Human Resource Management survey, today’s employers have a choice of more than 350 benefits, a nearly six-fold increase over the past 20 years. This expansion of benefits also helps explain the growth in 100 percent employee-pay-all-options.



Benefits OfferedPercent of Employers Offering Benefits Now and Then

4%

2017 2009

Insurance and Pension/Retirement Bene�tsInsurance Bene�ts Only

Pension/Retirement Bene�ts OnlyNone

56%25%

15%

59%29%

11%1%

Sources: Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market, LIMRA, 2018, and A Subtle Shift: Examining Employee Benefits in the Midst of Economic Uncertainty, LIMRA, 2009.

Note: Pension/Retirement benefits include traditional pension (DB), 401(k), 403(b), and other defined contribution plans. Data are based on private employers with 10 or more employees.

Key Takeaways:

• Despite improving trends in the overall economy, the percentage of employers offering benefits has dropped from pre-recession levels.

• This drop is accompanied by a notable decline in the number of insurance benefits offered by employers and is found across all employer segments. The average number of insurance benefits offered in 2017 was seven, compared with eight in 2014.

• In 2017, an average of one pension/retirement plan was offered.

Since the Great Recession, the economy has been in an extended period of growth. Unemployment is near record lows, confidence in the economy is growing, and one of the top-two challenges employers face is recruiting and retaining employees. Under these circumstances, we would expect to see more employers offering benefits, as they have money to invest in their businesses and have to compete for talent. Instead, the opposite is occurring.



Benefit Penetration TrendsPercent of Employers Offering Benefits Over Time

87%

+

60% 62%

49%44% 42%

30%

19%30%

79%

58% 58%

48%55%

46%41%

29%24% 21% 21%

+

2006 2017

Pension/R

etirement

Dental

Vision

Hospita

l Indemnity

Cancer

Critica

l illness

Accident

Long-term

disabilit

y

Short-term

disabilit

yLife

Medical


+Note: Not asked in 2006. Pension/Retirement benefits include traditional pension (DB), 401(k), 403(b), and other defined contribution plans. Data are based on private employers with 10 or more employees.

Key Takeaways:

• Medical insurance continues to be the most widely offered benefit.• Employers with fewer than 50 employees were primarily responsible for the overall decline

in the percentage of private employers that offer medical benefits.• Penetration rates vary greatly depending on the product and employer size.

Employers’ overall benefit portfolios are driven by the challenges the Affordable Care Act (ACA) legislation poses and the continued increases in the average annual premium for employer-sponsored health insurance.



Main Reasons Employers Do Not Offer BenefitsPercent of Employers That Cited Reason

14%

14%

19%

19%

25%

28%

44%

Administration would be too complex or expensive

Business cannot qualify for a group policy

Business does not have enough employees

Business has other priorities

Employees have bene�ts through other sources

Employees prefer higher take home pay

Business cannot afford bene�ts at this time

Source: Understanding Current Trends in Employee Benefits: Benefit Penetration Rates, Technical Report, LIMRA, 2017.

Note: Based on private employers with 10 or more employees currently not offering insurance benefits.

Key Takeaways:

• Employers indicate affordability is less of an issue today than it was in 2013. In 2013, 62 percent of employers cited affordability as a main factor in their decision not to offer benefits.20

• A large percentage of these employers represent a lost opportunity for carriers, as only 50 percent indicated they had been approached about offering benefits to their employees within the prior 12 months.

Over the years, affordability has solidly remained the No. 1 reason employers cite for not offering benefits, especially among the smallest firms.

20 Employee Benefits at a Crossroads: Employer Perspective, LIMRA, 2014.



Who Pays the Premium?Percent of Premium Paid by Employer*

100% 10% – 90% 0%

2009 2017 2009 2017 2009 2017

Medical 25% 18% 74% 80% 1% 2%

Dental 20% 22% 68% 63% 12% 15%

Vision 22% 22% 66% 61% 11% 17%

Life 45% 46% 43% 41% 12% 13%

Short-term disability 30% 30% 45% 49% 25% 21%

Long-term disability 32% 40% 46% 34% 22% 26%

Critical illness 9% 8% 61% 55% 30% 37%

Accident 13% 19% 47% 46% 40% 35%

Cancer 5% 11% 44% 43% 51% 46%


*Note: Respondents provided percent of premium in 10 percent increments, based on employee-only coverage. Data are based on private employers with 10 or more employees.

Key Takeaways:

• Overall, 3 in 10 employers that offer benefits provide at least one benefit on a 100 percent employee-paid basis, a finding relatively unchanged since 2009.

• As with benefit penetration rates, cost-shifting approaches vary by employer size.• Employers with fewer than 50 employees are not only less likely to offer employee benefits,

they are also less likely to pay for them, with a higher percentage of these companies offering purely voluntary options where the employee pays 100 percent of the benefits.

• While many employers continue to offer benefits on a contributory basis, a growing percentage of firms are decreasing the share of premiums they pay.

As long as benefit costs rise faster than inflation, employees will continue to pick-up a growing share of their premiums.



Employee Participation RatesAverage Participation Rates* (Based on percent of premiums employer pays)

80% 78% 85% 82% 61% 63% 76% 66%

55% 55% 51% 48% 39% 29% 41% 47%

49% 40% 26% 30% 17% 17% 21% 20%

Dental

Vision

care

Critica

l illne

ss

Cance

r

Accide

nt

Accide

ntal d

eath

and d

ismem

berm

ent

Hospita

l indemnity

Shor

t-term

disa

bility

68% 65% 65% 60% 38% 36% 50% 47%Average

Pays 50% or more Pays between 1% - 49% Pays 0%

Source: Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market, LIMRA, 2018.

*Note: Participation rates are based on eligible employees only and for employee-only coverage in private employers with 10 or more employees.

Key Takeaways:

• Employees’ access to benefits affect overall participation rates. Part-time employees are significantly less likely than full-time employees to be eligible for benefits.

• Participation rates vary by employee demographics and occupational groups.• Overall, 68 percent of private industry workers have access to defined benefit (DB) or defined

contribution (DC) retirement benefits, and 51 percent participate in the plans. Not surprisingly, the percentage of employees who have access to and participate in DC plans, which are often voluntary, is lower than in DB plans.21

Despite increased efforts to create effective benefit communications, employees are not getting the message. Overall enrollment rates are a byproduct of the amount of premiums employers pay, rather than the value these benefits provide.

21 U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey, March 2018.

cpetrakis

Highlight



Main Reasons Employees Do Not Participate in Benefits

NONEED

NOT ABLETO AFFORD

COVERAGETHROUGH

OTHER SOURCES

NOT WORTHTHE COST

Source: Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018 and 2015 LIMRA Secure Retirement Institute Consumer Survey.

Note: Based on employees who have access to benefits but choose not to participate in the plans.

Key Takeaways:

• The reasons workers choose not to participate in a particular plan vary by benefit and demographic characteristics. For medical and dental insurance, obtaining coverage somewhere else, such as through a spouse/partner, is the primary reason, followed by affordability. For other insurance benefits, the most common reasons are not believing they need the benefits or thinking they are not worth the cost.

• For employees who chose not to participate in their employers’ DC retirement savings plans, the main reasons cited are not being able to afford to contribute to the plan and saving for retirement in other ways. A plan not offering a matching contribution is also an often-cited reason.

• A large and significant number of employees and their families have yet to recover from the effects of the Great Recession. In fact, the median earnings of young adults, ages 25 to 34 years old, who were employed full-time were lower in 2016 than in 2000.22 Moreover, 78 percent of full-time workers state that they are, at some point, living paycheck to paycheck.23

In an era where employers continue to shift more of the benefit costs onto employees and where real (inflation-adjusted) wage growth has been low or nonexistent for many Americans, the share of workers indicating they are unable to afford benefits is expected to increase.

22 The Condition of Education 2018, "Annual Earnings of Young Adults," National Center for Educational Statistics, April 2018.

23 Living Paycheck to Paycheck is a Way of Life for Majority of U.S. Workers, According to New CareerBuilder Survey, http://press.careerbuilder.com/2017-08-24-Living-Paycheck-to-Paycheck-is-a-Way-of-Life-for-Majority-of-U-S-Workers-Accord-ing-to-New-CareerBuilder-Survey, accessed April 10, 2018.



Increasing Availability of Non-insurance BenefitsPercent of Employers Offering*

3%Elder care assistance

4%Student loan assistance/repayment4%Identity theft protection

6%Legal services plan8%Commuter expenses/Subsidized parking

8%Financial wellness11%Work-life bene�ts

17%Health wellness programs

19%Tuition assistance

26%Career advancement opportunities26%Paid family leave26%Learning and development opportunities

50%Paid time off66%Paid sick days

73%Paid vacation


Note: * Based on private employers with 10 or more employees that currently offer insurance benefits.

Key Takeaways:

• Not surprisingly, 9 in 10 employers that currently offer insurance benefits offer at least one non-insurance benefit as well.

• Similar to traditional insurance plans, benefit penetration rates for non-insurance offerings vary by employer size.

• Many of these more recent offerings, such as financial wellness, student loan repayment, and paid family leave programs, were added to help employees handle their increasingly growing financial concerns and stress — concerns that can negatively affect employee productivity and retention.

To a certain degree, non-insurance benefits are starting to compete with the more traditional core benefits for employers’ mindshare as well as wallet share.

cpetrakis

Highlight



Spotlighting Micro BusinessesPercent of Micro Employers Offering Benefits*

Medica

l

Pens

ion/R

etirem

ent

LifeDen

talVisio

n

Long

-term

disa

bility

Short

-term

disa

bility

Critica

l illne

ss

Accide

nt

Cance

r

40%

36%

18%17% 15%

13% 12% 12%

8%3%

Source: LIMRA Small Employer Survey, 2018.

*Note: Micro firms are defined as those with two to nine employees.

Key Takeaways:

• Micro firms account for 80 percent of employers and provide 30 percent of private sector jobs.24 Nearly half of all firms with fewer than 10 employees have been in business for 20 years or more.25

• Overall 4 in 10 micro businesses are home-based, and 3 in 4 are family-owned; businesses that are less likely than other types of small businesses to offer benefits.26

• The most common retirement/pension plans offered by micro businesses are 401(k) plans (18 percent), followed by SEP or SIMPLE IRAs (16 percent).27

• The majority of micro employers without benefits (85 percent) are never approached about offering benefits to their employees in a given year.

The number one reason why micro firms do not offer benefits is the belief that they are unaffordable. Moreover, relatively few of these business owners are familiar with voluntary benefits.28

24 2015 County Business Patterns Statistics of U.S. Businesses, U.S. Census Bureau.25 LIMRA Small Employer Survey, 2018.26 Ibid.27 Ibid.28 Small World: Trends in U.S. Small Business Market, LIMRA, 2013.



Public-Sector Benefit OfferingsPercent of Employers Offering Benefits

99%95% 95%

86% 84%

74%

43% 42% 40%

26%

Hospit

al Ind

emnit

y

Medica

lLife

Dental

Vision

Long

-term

disa

bility

Short

-term

disa

bility

Critica

l illne

ss

Accide

nt

Cance

r

Source: Protecting Their Greatest Resource: Workplace Insurance Benefits in the Public Sector, LIMRA, 2015.

Note: Data are based on 146 public organizations and are not weighted to be representative of all public-sector entities.

Key Takeaways:

• Among state and local government employees, 91 percent have access to a retirement plan, 89 percent have access to a medical plan, and 81 percent have access to life insurance. Overall, 99 percent of full-time workers have access to both retirement and medical benefits.29

• One hundred percent employee-paid benefits are more commonplace in the public sector than in the private-industry sector.30

Compared to private employers, public-sector entities often offer more robust benefit portfolios to their employees. Several factors contribute to this difference, including the tendencies for public entities to have larger workforces, offer pension plans, and have a higher rate of union membership.

29 U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey, March 2017.30 Protecting Their Greatest Resource: Workplace Insurance Benefits in the Public Sector, LIMRA, 2015.


Continuous Medical Costs IncreasesAverage Annual Premiums for Single Coverage (2002-2018)

15%

10%9% 9%

5%

6%

5%

3%

5%

8%

3%4%

3%4%

3%4%

3%

0

2%

4%

6%

8%

10%

12%

14%

16%

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500$5,000$5,500$6,000$6,500$7,000$7,500

Perc

ent C

hang

e

Ave

rage

Ann

ual P

rem

ium

s

Average premiums Percent change

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Source: Employer Health Benefits 2018 Annual Survey, Kaiser Family Foundation.

Note: Data are based on 2,160 private and public (non-federal) employers with three or more employees.

Key Takeaways:

• In 2018, the average annual premium for single coverage was $6,896, up 3 percent from 2017; family coverage increased 5 percent.31

• The average premiums for covered employees varies by size of firm, industry, and type of medical plan offered. Additionally, employees in public and private not-for-profit firms have higher average annual premiums than those in private-for-profit businesses.32

• On average, employers paid 82 percent of the cost for single coverage and 71 percent for family coverage in 2018, down from 86 percent and 74 percent, respectively, in 2000.33 State and local governments pay a larger share of the premiums for single and family coverage than do private industry employers.

Although the rate of annual increases in health insurance has moderated over the past 15 years, the absolute dollar amounts employers and employees pay grows and continues to stretch the limits of what many businesses and their workers can afford.

31 Employer Health Benefits 2018 Annual Survey, Kaiser Family Foundation.32 Ibid.33 Ibid.




Approaches Used to Mitigate Medical Costs IncreasesPercent of Employers Considering Plan Changes*

3%

3%

4%

5%

6%

7%

8%

15%

25%

26%

29%

Limit the number of bene�t-eligible employees

Shift to a de�ned contribution funding model

Reduce the overall bene�t levels

Reduce number of medical plans offered

Reduce subsidies for spouses and dependents

Not sure

Increase deductibles or copayments

Increase employee contributions

Switch to a different carrier or administrator

Eliminate eligibility for spouses with access toother coverage

Switch to a consumer-directed or high-deductiblehealth plan

Source: How Well Do Benefits Strategies Align with Employer Challenges? unpublished data, LIMRA, 2018.

*Note: Based on private employers with 10 or more employees that currently offer a medical plan. Employers were asked which changes they were considering implementing within the next 18 months.

Key Takeaways:

• Over half of employers plan to make at least one change to their health care programs. A significant minority are considering implementing multiple changes.

• Cost-shifting strategies and switching carriers or administrators are the most common changes employers plan to implement. The percentages of employers that plan to implement these changes do not vary significantly by case size.

• In 2013, only 13 percent of employers indicated they were considering switching carriers or administrators.

• Eight percent of the largest employers plan to switch to a consumer-directed or high-deductible health plan exclusively.

Due to the disruption changing healthcare carriers can cause employers and employees, plan design changes are often the first step employers use to rein in medical cost increases.


Unrelenting Pension Plan Cost IncreasesFlat Rate PBGC Premium Per Participant 1974 - 2017

$1.00 $2.60$8.50

$16 $19 $19 $19

$30 $31 $33 $34 $35$42

$49$57

$64$69

160%

227%

88%

19%0% 0%

58%

3% 6% 3% 3%20% 17% 16% 12% 8%

0

50%

100%

150%

200%

250%

$0.00$10.00$20.00$30.00$40.00$50.00$60.00$70.00$80.00

Flat Rate per Participant % increase

Septe

mber 2

, 197

4 -

Decem

ber 3

1, 1

977

1978

-198

5

1986

-198

7

1988

-199

0

1991

-199

3

1994

-199

6

1997

- 200

520

0620

0720

0820

09

2010

-201

220

1320

1420

1520

1620

17

Source: LIMRA Secure Retirement Institute Analysis, PBGC's Single-Employer and Multiemployer Programs, 2015 Data Table Listing.

Key Takeaways:

• Since the 1970s, the percentage of employers offering DB plans has plummeted due to the escalating costs associated with these plans and the rise in life expectancy.

• One such expense — the required Pension Benefit Guaranty Corporation (PBGC) premiums — rose most dramatically on a percentage basis. Between 1974 and 1987 premiums rose roughly 32 percent per year during this period.

• On a dollar-by-dollar basis, between 1987 and 2017 premiums rose by $60.50 per participant. In 2018, the rate per participant rose again.

• During this period, the per-participant premium (flat rate) steadily increased, from $2.60 in 1980 to $74 in 2018 — a 28-fold increase.

While increasing PBGC premiums (flat rate for single plans) have levelled off — and even decreased on a percentage basis — the premium rise has been substantial and dramatic over the past 30 years, representing an additional challenge for sponsors and employers that maintain DB programs.




Economic Factors Affecting the Benefits Landscape

Rise of different “classes” of workers (e.g., contract, gig, etc.)

Globalization

Wage stagnation

Unemployment rates

Low interest rates

Stock market volatility

Federal government regulations (e.g., ACA, etc.)

State and local government regulations (e.g., paid leave, minimum wage, etc.)

Marketplace consolidation

Changing distribution models, such as online marketplaces

Broker consolidation

Technology’s impact on marketing,

sales, communication, and education

Growth in bene�ts and services

Rise of different “classes” of workers (e.g., contract, gig, etc.)

Globalization

Wage stagnation

Unemployment rates

Low interest rates

Stock market volatility

Federal government regulations (e.g., ACA, etc.)

State and local government regulations (e.g., paid leave, minimum wage, etc.)

Marketplace consolidation

Changing distribution models, such as online marketplaces

Broker consolidation

Technology’s impact on marketing, sales, communication, and education

Growth in bene�ts and services

Key Takeaways:• Have you considered all these factors, and how they may influence the benefits marketplace?• Have you considered how these factors affect employers and employees, and how they can

ultimately influence the benefits purchase?• Have you considered how changing cyber security and privacy laws will affect the marketplace?

The affect on each stakeholder will vary, in both positive and negative ways.


The Changing Face of the WorkforcePercent of the U.S. Labor Force

29%

50%

21%

1994

5%

35%

33%

25%

2%

2017

Silent

Baby Boomers

Gen X

Millennials

Gen Z

Source: Millennials are the largest generation in the U.S. labor force, Pew Research Center, Washington, D.C., April 2018. http://www.pewresearch.org/fact-tank/2018/04/11/millennials-largest-generation-us-labor-force/.

Note: Generations are defined as Silent and Greatest: born 1945 or earlier; Baby Boomer: born 1946 to 1964; Gen X: born 1965 to 1980; Millennial: born 1981 to 1996; Gen Z: born 1997 and later.

Key Takeaways:

• There are currently five different generations in the workforce today.• Unlike in the latter part of the 20th century, no one generation is currently dominating the labor

force or is expected to, as the Baby Boomer generation did at its peak in 1997.• As a result, different generations will affect employers differently.

Each generation grows up with different experiences and expectations from prior generations. As a result, employers continually adjust their benefit strategies and portfolios to respond to the changing attitudes and demographic and economic experiences of each new generation of workers.




Employers Managing an Aging Workforce

10,000 per day

An estimated 10,000 Baby Boomers reach retirement age each day.

Employers also realize older workers result in higher healthcare benefits costs.

Approaches employees have taken

Absorb costs into business 49%

Pass costs on to employees 41%

Reduce health care benefits 33%

Reduce workforce costs 30%

Reduce retirement contribution 28%

Reduce other insurance benefits 24%

Source: Age-Related: Potential, Possibilities, and Problems as Workers Delay Retirement, LIMRA Secure Retirement Institute, 2015.

Note: Data based on for-profit employers with 10 or more employees that offer a 401(k) plan.

Key Takeaways:

• While a large majority of employers currently expect their employees will retire at or by age 65, they also expect that their employees will retire at older ages within the next five to 10 years.

• This is consistent with employees’ views. Many employees plan to work past “traditional” retirement ages; nearly 1 in 6 workers expect to retire at age 70 or later.34

• Seventy percent of employers have implemented programs designed to retain and/or recruit older workers, including offering phased retirement, flexible hours, and job retraining.

Phased retirement and other programs employers use to retain or attract older workers can have significant benefit cost implications for both employers and employees. A worker’s decision to retire is often a combination of financial, health related, and psychological factors.

34 The Inner Workings of Retirement Timing: Consumer Behavior and Attitudes, LIMRA Secure Retirement Institute, 2018.

Most employers worry that losing older workers can be bad for business



Digital Technology is Reshaping the Benefits LandscapeSources of Technology for Enrollment and Benefit Administration

32%

26% 26% 25%

20%

10%

31%

26%

23%

31%

16%14%

Bene�t Enrollment Bene�t Administration

Bene�t administ

ration

vendor

Payroll v

endor

Insurance

carri

er

Developed in-h

ouse

HRIS vendor

Broker, a

gent, or c

onsulta

nt

Source: Convenient and Connected: How are Employers Using Technology Today, LIMRA, 2017.

Key Takeaways:

• Only 3 percent of midsize-to-large employers were using digital technology to enroll employees in 2001, compared with 64 percent today.35

• After cost, three of the most important features employers want from their benefits administration platform are satisfying employee experience, consolidation of benefits on one platform, and integration of benefits technology with HRIS systems.

• When it comes to who should pay for the technology, the answer varies depending on whom you ask. Over three quarters of brokers believe carriers should absorb the majority of expenses related to employee benefits technology. Brokers’ views, however, differ from those of employers. Nearly two thirds of employers believe their companies should be at least partially responsible for paying for benefits technology, while 32 percent expect insurance carriers to contribute to this cost; 20 percent expect their brokers to pay.36

• Employers that are looking specifically for an enrollment system are the most likely to expect their insurance carrier to pay for the system.37

As employers continue to expand their use of technology, carriers are grappling with issues such as the economics surrounding who pays for the benefit administration systems, how carriers pay for the systems, and which entity (the benefit administration vendor, carrier, or employer) owns the data.

35 Marketing Group and Insurance and Health Care Benefits: Trends and Insights, LIMRA, 2001, and Convenient and Connected: How are Employers Using Technology Today, LIMRA, 2017.

36 Partnering With Carriers to Connect With Clients: Employee Benefit Brokers’ Perspectives on Technology, LIMRA, 2017.37 Convenient and Connected: What are Employers Looking for in Benefits Technology, LIMRA, 2017.


Chapter 3Attitudes and Behaviors of Employers and Employees



C H A P T E R T H R E E : Attitudes and Behaviors of Employers and Employees

Top Reasons Why Employers Offer Benefits*

73% 56%51%STAY COMPETITIVE

WITHIN THE INDUSTRYRETAIN

EMPLOYEESATTRACT

EMPLOYEES

Source: How Well Do Benefits Strategies Align With Employer Challenges? LIMRA, 2018.

* Note: Based on private employers with 10 or more employees that offer insurance benefits and insurance and retirement benefits.

Key Takeaways:

• Given the current low unemployment rate, it is unsurprising that one of the biggest challenges employers face is recruiting and retaining employees.

• There are a number of reasons why employers offer employee benefits beyond addressing the challenge of finding the right employees. Some companies offer benefits to comply with state regulations or because employees ask for them, others to improve job performance or boost employee morale. Whatever the reason, employers realize the advantages of providing benefits.

• When employers were asked whether they offer benefits primarily for business reasons, or for the health and financial wellbeing of employees, nearly 6 in 10 (57 percent) stated it is ultimately for the benefit of employees.

In an era of declining employee tenure, it becomes even more imperative for employers to undertake actions to help retain skilled employees. Despite the cost, employers realize employee benefits help their bottom lines.



Main Objectives for Offering Employee Benefits*

Objective Percent of Employers**

Create employee loyalty 68%

Improve employee satisfaction ratings 50%

Provide access to benefits 50%

Enable employees to stay financially stable 44%

Foster the company’s culture 39%

Stay compliant with laws and regulations 38%

Create and foster employees’ sense of ownership in the company 33%

Design and implement a total rewards program 29%

Contain benefit costs 29%

Support the company’s strategic business goals 27%

Enable the business to stay financially sustainable 27%

Meet the company’s recruitment objectives 24%

Incent and reward employees’ specific behaviors, such as enhanced consumerism or

healthier behavior

22%

Increase benefit participation rates 12%

** Percent of employers that cited the objective as among their top-five priorities.



Key Takeaways:

• More than 2 in 3 employers cite talent retention as their main objective for offering benefits, which is consistent with the reasons why they provide benefits. In one way or another, the top-three objectives relate to employee attraction and retention.

• More than 8 in 10 employers believe that their current benefits programs are meeting their companies’ needs.

• Overall, 1 in 2 employees say that their benefits package makes them more likely to stay with their current employers. Younger workers and those employed in smaller firms are less likely to say that their benefits would motivate them to stay.38

LIMRA research shows that benefits do increase employees’ satisfaction with employers.39

38 Employee Understanding of Benefits and Risk Study, unpublished data, LIMRA, 2018. 39 Ibid.



Challenges to Offering Employee BenefitsCritical Issues Facing Employers

22%

32%

43%

43%

46%

56%

58%

59%

69%

75%

Addressing needs of the "gig" economy workforce

Finding the best technology solution for bene�ts

Meeting the needs of a diverse workforce

Bene�t communication & education

Managing bene�t enrollment process

Legal and compliance requirements

Managing bene�t plans

Matching employee bene�ts to company needs

Recruiting and retaining employees

Controlling employee bene�t costs

Challenge rated 4 or 5 on a 5-point scale.



Key Takeaways:

• Unsurprisingly, controlling benefits costs is the No. 1 benefits challenge employers face, with the cost of health insurance the top concern. The costs associated with defined benefit (DB) pension plans are also an issue for a large segment of employers, especially at the state and local government levels.

• Employers find themselves in a delicate balancing act. They realize employees are finding it difficult to afford their benefits; but, at the same time, employers are unable to absorb all the cost increases themselves.

• Since 1996, the share of total compensation costs devoted to wages and salaries has declined from 71.5 percent to 68.3 percent.40 The cause of this decline has been the rise in benefit costs.

• Compared with private industry employers, state and local governments devote a larger share of employee compensation to healthcare and pension plans.

Some experts have contended that workers’ wages have been kept low in recent years due to the rising cost of benefits. Healthcare costs currently account for over 8 percent of total compensation costs, while retirement and savings plans account for over 5 percent of costs.41

40 U.S. Department of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation, 1986-99, March 2000, and Employer Costs for Employee Compensation, December 2017.

41 U.S. Department of Labor, Bureau of Labor Statistics, Employer Costs for Employee Compensation, December 2017.



Impediments to Developing a Strong Employee Benefits Plan: Lack of a Comprehensive Strategic Approach to BenefitsMissing Parts*

The majority of employers do NOT:• Have formal strategic plans in place.• Have planning cycles that extend beyond one year.• Communicate bene�t objectives to employees.• Regularly receive employee feedback on their bene�t programs.• Benchmark their bene�ts programs against their peers’ programs.



Key Takeaways:

• Only 1 in 4 employers have developed a comprehensive strategic approach to benefits planning. Larger employers and companies with diverse workforce demographics are more likely to have structured/comprehensive benefit strategies.

• Overall, fewer than 4 in 10 employers have a formal strategic plan in place; 3 in 4 of the smallest employers lack a formal plan, as do 4 in 10 employers with 500 or more employees.

• When it comes to considering changes to their benefits programs, 3 in 4 employers use a planning cycle of 12 months or less. Only 5 percent of employers use a three-year planning cycle.

• Only 1 in 4 employers manage their insurance and retirement benefits as part of a broader total rewards compensation package.

When planning cycles are a year or less, employers are hard pressed to holistically view all the components of their benefits programs.



Impediments to Developing a Strong Employee Benefits Plan: Differing PerspectivesBenefit Availability Versus Importance*

79%

60% 58% 55%

48%46%

41%

29%24%

21% 21% 21%

86%

81%

62%

53%60%

50% 54%

44% 44%

31% 35%

46%

Medica

l

Retire

ment p

lan

Denta

l

Vision Life

Short

-term

disa

bility

Long

-term

disa

bility

Accide

nt

Critica

l illne

ss

Cance

r

Hospit

al

inde

mnity

Long

term

care

insura

nce

Offered by Employers Important to Employees

Source: Mind the Gap: Do Employers Understand Employee’s Benefit Priorities? LIMRA, 2018.

* Note: Importance rated 4 or 5 on a 5-point scale. Employer data are based on private firms with 10 or more employees. Employee data are based on full or part-time employees ages 18 to 64 who work for private firms with 10 or more employees.

Key Takeaways:

• While 7 in 10 employers believe their current benefit offerings are meeting employees’ needs, only 53 percent of workers with benefits are satisfied with the benefits they receive. Employees with more benefits report a higher level of satisfaction.

• This disconnect may be partially explained by the fact that employers are not asking employees directly which benefits they want. Only 18 percent of employers survey their employees on a regular basis to find out which benefits they are interested in, while 34 percent admit to never doing so.

• As a result, there are a number of gaps between the benefits employers offer and the benefits employees desire. These gaps are particularly large when it comes to retirement plans, life insurance, long-term disability insurance, and supplemental health products. For retirement, life, and long-term disability coverages, small employers primarily drive the gaps. For supplemental health products, small to midsize firms drive the gaps.

Nearly 1 in 2 employees desire at least one benefit that is not available to them.



Employers’ Perceptions of Generational Differences

Importance of Benefits to Employees*Older Employees Younger Employees

Employers’ Perceived Importance

Employees’ Actual Importance

Employers’ Perceived Importance

Employees’ Actual Importance

Medical 95% 89% 86% 79%

Retirement savings plan 87% 82% 61% 73%

Dental 83% 60% 69% 62%

Vision 80% 51% 56% 56%

Life 76% 59% 44% 60%

Long-term disability 72% 55% 39% 49%

Short-term disability 68% 50% 43% 47%

Critical illness 63% 42% 30% 46%

Cancer 57% 31% 22% 34%

Hospital indemnity 56% 35% 27% 37%

Accident 55% 42% 35% 49%

Health wellness programs 51% 28% 35% 39%

Work-life benefits 49% 53% 46% 61%

Tuition assistance 13% 18% 37% 35%

Source: Mind the Gap: Do Employers Understand Employee’s Benefit Priorities? LIMRA, 2018.

*Note: Importance rated 4 or 5 on a 5-point scale. “Younger” is defined as under age 40; “Older” is defined as age 40+.

Key Takeaways:

• Employers tend to assume that almost all insurance and retirement benefits are more important to their older employees than to their younger workers.

• These views, however, have changed over time, especially when it comes younger workers. The gap in perceived importance has narrowed over the past decade. Employers are far more likely to predict that their younger employees value benefits more now than they did in 2010, but the gap still exists.

• Employees, regardless of age, actually prioritize benefits in roughly the same order. The three most valued benefits are medical insurance, retirement savings plans, and paid time off.

• Gen Xers place more interest in dental, disability, and life benefits than do their older and younger peers. Millennials tend to place more emphasis on health wellness programs, work-life benefits, and tuition assistance.

The only benefits employers expect young workers to value more than older workers are career advancement and development opportunities, tuition assistance, and student loan repayment programs.



Goal of Benefits Communication

employers believe their top bene�tscommunication objective is to make sure employees

understand their bene�ts.

Source: 2016 Employer Study: Benefit Communication and Enrollment Technical Report, LIMRA, 2016.

Key Takeaways:

• In addition to helping employees understand their benefits, other top objectives include conveying the value of their benefits package to employees, controlling costs, increasing employee satisfaction, and talent acquisition.

• Ensuring employees understand their benefits is more important to small and midsize employers than to larger firms.

• While employees overall express confidence in their benefits decisions, they express higher levels of confidence with decisions regarding insurance products than they do with retirement savings benefits.42

Expressed confidence, however, does not necessarily correlate with benefit knowledge. Employees' confidence appears to have more to do with familiarity and length enrolled in benefits than with a deep understanding of the benefits offered to them.

42 Can You Hear Me Now? Employee View on Benefits Communication and Enrollment, LIMRA 2015, and 2017 LIMRA Secure Retirement Institute Consumer Survey.



How Successful Are Benefits Communications? The answer depends on whom you ask.

Employer Views of Communication SuccessHow successful is your current bene�ts communication approach?

Employee Views of Communication SuccessDo employers do a good job of explaining how bene�ts meet employees’ needs?

50% 41% 9%

38% 32% 30%

Successful Somewhat Successful Not Successful

Agree Neutral Disagree

Source: Crossed Signals, The Benefits Communication Disconnect, LIMRA, 2016.

Key Takeaways:

• Overall, employers have a very positive view of their benefits communication strategies.• The employees’ perspective, however, is less favorable to the approaches employers are taking.• Only 1 in 5 employees feel that they completely understand the insurance benefits that are offered

to them.43 In addition, only 1 in 8 workers consider themselves very knowledgeable about investments or financial products.44

If employers believe that their current approaches are working well, they will not be motivated to make changes to improve their communication strategies, such as bringing in new tools, using different communication platforms, or educational materials.

43 Employee Understanding of Benefits and Risk Study, unpublished data, LIMRA, 2018. 44 2018 Secure Retirement Institute Consumer Survey, LIMRA.



Are Employers Meeting Their No. 1 Communication Goal?Employer and Employee Perceptions of Employees’ Benefit Knowledge*

58%56%

53%

40%

28% 27%23%

19% 19%

+

70%

61% 59%56%

42% 41% 42%

33% 36%

66%

Medical Dental Vision Life Long-termdisability

Short-termdisability

Accident Criticalillness

Cancer Retirement

Employer Perception Employee Perception

Sources: 2016 Employer Study: Benefit Communication and Enrollment Technical Report, LIMRA, and Employee Understanding of Benefits and Risk Study, LIMRA, 2018.

* Note: Four or 5 on a 5-point scale. Employers rated the knowledgeability of their companies’ employees, and employees who are offered the benefit rated their own level of knowledge.

+ Not tracked in 2016 survey.

Key Takeaways:

• When asked how knowledgeable their employees are, employers admit that their employees struggle to understand nonmedical benefits. In fact, employers have less confidence in employees’ understanding then employees themselves do.

• Additionally, nearly 2 in 5 employers believe less than half of their employees will be financially well prepared for retirement.45

• Unfortunately, employee confidence is not supported by actual knowledge. Employees demonstrated very poor understanding of life, disability, and critical illness products in recent product knowledge studies. These results suggest that many employees who are offered these benefits lack a basic understanding of the products and significantly underestimate the likelihood of needing them.46 Prior LIMRA research also demonstrated a similarly poor understanding of health products.

Because employees have a generally poor understanding of their benefits, it makes them less likely to understand the value they are being offered.

45 401(k) Plan Sponsor Perspectives: Employee Retirement Readiness, Secure Retirement Institute, LIMRA, 2015. 46 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.



Employer Communication Methods*

Communication Materials UsedPre-enrollment Enrollment Post-enrollment

Printed materials 65% 69% 46%

Onsite meetings 51% 62% 21%

Emails 55% 56% 43%

Call centers 16% 23% 21%

PowerPoints 14% 17% 6%

Poster, table tents 13% 11% 5%

Webinars 11% 10% 6%

Text messages 7% 7% 5%

Non-interactive videos 6% 6% 4%

Avatars 4% 5% 3%

Interactive videos 5% 5% 2%

Source: 2016 Employer Study: Benefit Communication and Enrollment Technical Report, LIMRA, 2016.

* Note: Data based on private employers with 10 or more employees that offer insurance benefits on a contributory or voluntary basis.

Key Takeaways:

• On average, employers use two or three different benefit communication methods.• Additionally, employers prefer simplicity in their approaches to communicating with employees,

often sacrificing communications that are engaging to ones that are easy to provide.• Only 2 in 10 employers tailor communications to their workforces. Moreover, 1 in 2 employers

limit benefit communications to enrollment periods only.• Generally speaking, employers offer what they think their employees want.

Nine in 10 employers direct their communications to employees only. However, almost half of employees report their family members are involved in the benefit decision-making process. This disconnect can hinder employees’ decision-making and result in their overspending on certain benefits, underspending on others, and ultimately becoming dissatisfied with their benefits plan overall.47

47 Help Employers Connect the Dots: Benefits Communications, LIMRA, 2016.



Employees’ Preferred Communication FormatsAvailable Versus Preferred Formats*

4%

4%

18%

26%

35%

45%

6%

7%

29%

33%

39%

43%

Videos

Webinars

Emailedinformation

Printed materialsat home

Online

Printed materialsat work

Preferred Available

Source: Can You Hear Me Now? Employees Views of Benefits Communization and Enrollment, LIMRA, 2015.

*Note: Data based on full-time employees with access to benefits.

Key Takeaways:

• Employees’ preferred formats tend to mirror the ways they recall receiving information. In addition, they find the different formats to be similar in terms of usefulness. These findings suggest that the contents of benefit communications matters more to employees than the formats.

• The approaches employers use vary somewhat by size of firm.• The vast majority (73 percent) of employees believe they receive the right amount of benefits

communication. However, a significant minority (21 percent) do not think they receive enough information from their employers.48

• The majority of workers rate the quality of information they receive on their insurance benefits as good or very good; older workers are more likely to rate the information higher than younger employees.49

When it comes to specific content about their benefits, employees are more likely to recall information they receive about their medical benefits than they are about their nonmedical benefits.

48 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.49 Ibid.



Effects of Employees’ OverconfidenceTime Spent Reviewing Benefits Information*

Fewer than30 minutes

Less than1 hour

Fewer than2 hours

2-3 hours 4+ hours

22% 31% 26% 16% 6%

Source: Can You Hear Me Now? Employee Views of Benefits Communication and Enrollment, LIMRA, 2015.

*Note: Data based on full-time employees enrolled in benefits.

Key Takeaways:

• A majority of employees have two to four weeks each year for open enrollment, and most are satisfied with the length of their enrollment periods, but some feel it is too short, particularly those with fewer than three weeks.

• However, more than half of employees spend under one hour reviewing their benefits information each year; three quarters spend under two hours.

• When asked, slightly more than one third of employees made a change to any of their benefit selections within the prior 12-month period. Moreover, a significant proportion of employees have never made a change to their benefit selections, particularly when it comes to nonmedical products. Of those employees who did not change any of their benefit selections, most claim that they reviewed their options and determined that no changes were needed.

One of the most common complaints employees have with the content of the benefits material they receive is that they are too long. Many employees freely admit they do not read everything they receive. Additionally, employees want benefit communication to be more readable.50

50 Employees Open Up About Open Enrollment, LIMRA, 2015.



Employer Enrollment Strategies*

use passive enrollments.

offer only one type of enrollment method.

enroll company-paid and voluntary bene�ts simultaneously.

27%

56%

80%

Source: Clinging to Old Habits: Employer Strategies for Enrolling Workplace Insurance Benefits, LIMRA, 2016.

*Note: Data based on private employers with 10 or more employees that offer benefits.

Key Takeaways:

• Passive enrollments are most often used for employer-funded disability and life coverages and are less popular for plans that require employee funding. The use of this particular enrollment method varies little by employer size.

• More than 1 in 3 employers use mandatory enrollments for at least some of their benefits. Unlike the passive approach, the use of mandatory enrollments increases with firm size.

• Off-cycle enrollments have become less popular over time. Only 1 in 5 employers hold distinct open enrollment periods for voluntary and company-paid benefits, compared to 29 percent in 2010. Small employers are four times more likely to hold separate open enrollment periods for voluntary benefits than large employers.

Employers rely mostly on one type of enrollment method for all available insurance benefits. They also place significant importance on consistency in enrollment methods. This preference grows as employer size increases.



Types of Enrollment Methods Employers UseCurrent Enrollment Methods*

68%

37%

27% 27%

11%6%

2%

Pape

r enro

llmen

t

form

Using a

compu

ter

In a o

ne-on

-one

meetin

g

Automati

cally

rolle

d ove

r

from la

st ye

ar

By ph

one

Other

Mobile

devic

e

Source: Clinging to Old Habits: Employer Strategies for Enrolling Workplace Insurance Benefits, LIMRA, 2016.

*Note: Data based on private employers with 10 or more employees that offer benefits.

Key Takeaways:

• The enrollment method or methods used by employers vary considerably based on employer size. Paper is the only option offered at roughly 1 in 3 small employers compared to 1 in 8 large employers.

• The main reasons employers cite for not using enrollment technology varies by company size. While small employers point to logistical reasons, such as not being large enough and cost, the reasons cited by midsize and larger employers are mostly related to preferences. They perceive that the organization, broker, administrator, or employees prefer not to use technology.51

• Of the employers not currently using enrollment technology, 35 percent are at least casually in the market for a solution.52

While few employers currently use mobile technology for enrollments, the vast majority of brokers agree that employers’ desire for this method will increase over the next several years.53

51 Convenient and Connected: What Are Employers Looking for in Benefits Technology, LIMRA, 2017.52 Ibid.53 Partnering with Carriers to Connect With Clients: Employee Benefit Brokers’ Perspective on Technology, LIMRA, 2017.



Types of Enrollment Methods Employees PreferMethods of Enrolling*

62%

29%

9%5% 5%

1%

68%

16%

8% 6%2% 1%

Method Used This Year Preferred Method

Online

or

electr

onica

lly

Pape

r enro

llmen

t

form

Automati

cally

rolle

d ove

r

from la

st ye

ar

In a o

ne-on

-one

meetng

Mobile

app

By ph

one

Source: Can You Hear Me Now: Employee Views of Benefits Communication and Enrollment, LIMRA, 2015.

*Note: Data based on full-time employees enrolled in benefits.

Key Takeaways:

• Despite the prevalence of paper, employees show a strong preference for electronic enrollments, while paper enrollments are a distant second.

• Of the employees who enroll on paper, 40 percent would prefer online enrollment, while another 13 percent would prefer a different option.

• Employees’ preferences for electronic enrollments vary greatly by employer size.

The youngest employees are far more likely than their older peers to enroll using a tablet or smart phone. Few employees, however, indicate they would prefer to enroll in benefits via a mobile app in the future.



What Do Employers Look for in a Technology Platform?*

said low cost87%

said data security86%

said user friendly, easy to use85%

said integrating all insurance bene�ts on same platform77%

$

Source: Convenient and Connected: Employers and Benefits Technology Technical Report, LIMRA, 2017.

*Note: Based on employers without technology for insurance enrollment, benefit administration or both. Importance rated as 4 or 5 on a 5-point scale.

Key Takeaways:

• The overall importance placed on specific platform features varies somewhat based on what the technology is used for — benefit administration, enrollment, or both.

• Fewer than half of employers think it is important to be able to access a benefits platform on a tablet or smartphone. However, mobile capabilities are more important to companies looking specifically for an enrollment platform. While this functionality is not a high priority of most employers, more than half would prefer that their platforms be accessible on a tablet or smartphone.

• For those employers that use an electronic platform to enroll employees, 64 percent use the same platform to enroll all their benefits, while 27 percent use multiple platforms.

• Unsurprisingly, those that have all of their products on one platform are more likely to be satisfied with their current technology. As are those employers that built their platforms in-house or obtained it from a payroll vendor or broker.

Employers overall are most likely to obtain their benefit enrollment platforms from a benefits administration vendor, followed by payroll vendors, brokers, and insurance companies. However, preferences vary by size of employer. Human Resource information system (HRIS) vendors are more prevalent among large employers, while broker and insurance carrier platforms are more likely to be used in the small employer marketplace.


How are Employers Using HR Technology?Top Uses of Technology

29%

30%

36%

42%

42%

47%

70%

Retirement bene�t enrollment

Retirement bene�t admin

Insurance bene�t admin

Insurance enrollment for new hires

Employee time tracking

Insurance annual open enrollment

Payroll

Source: Convenient and Connected: How Are Employers Using Technology Today, LIMRA, 2017.

Note: Based on private employers with 10 or more employees offering insurance benefits.

Key Takeaways:

• Payroll is the most common HR function for which employers use technology. It is also the only type of technology that is prevalent among all size employers. Overall, 9 in 10 employers use a technology solution for at least one HR task.

• With the exception of payroll, the use of most kinds of technology increases dramatically with employer size.

• In addition to the size factor, newer businesses, firms with younger workforces, firms with more educated workforces, and employers with higher average salaries are more likely to use technology solutions.

• Among those employers that have technology platforms for both enrollment and administration, most use the same platform for both.

Fewer than 1 in 4 employers use technology solutions for employee data management, benefit education or communication, absence management tracking, Affordable Care Act (ACA) compliance or other compliance issues, or for employee performance management.



Benefit Administrative PreferencesCurrent and Preferred Uses*

82%79% 78%

66%

53%48%

42% 41%34% 33%

77%71% 75%

69%66%

58% 57% 59%

50%47%

Current Uses Preferred Uses

Enrol

ling n

ew hi

res

Updati

ng em

ploye

e info

Acces

sing f

orms

Genera

ting r

epor

ts

Revie

wing cl

aims i

nfo

Produ

ct fea

tures

& de

tails

Commun

icatio

n mate

rials

ACA compli

ance

Billin

g/Pa

ymen

ts

Life e

vent/

status

chan

ges

Source: Convenient and Connected: How Are Employers Using Technology Today, LIMRA, 2017.

*Note: Based on firms that currently have technology for benefits administration.

Key Takeaways:

• Employers that have benefit administration (ben admin) technology are most likely to use it for routine tasks.

• In general, employers want more ben admin capabilities than their systems currently provide. Fourteen percent of employers indicate they would switch platforms if a new one offered better administrative and service capabilities.

• Insurance carriers and ben admin vendors are the most frequent providers of ben admin technology. Small employers are most likely to obtain their technology from an insurance carrier, while large employers are more likely to receive it from a ben admin vendor or HRIS vendor.

Although employers have a number of features to consider when selecting a platform, price is often the deciding factor. Whether their platform handles enrollment, benefit administration, or both, employers are most likely to say that cost played the largest role in their decisions.




What Is Driving the Need for Technology?Most Important Reasons Employers Are Looking for Technology*

15%

16%

18%

27%

29%

32%

35%

36%

Broker/administrator preferenceor recommendation

Employee preference

Ability to customize the bene�texperience to employees

Provide a better experienceto employees

Improve bene�tcommunications

Reduce staff time/resourcesto administer bene�ts

Better control/managementof bene�t data

Reduce costs

Source: Convenient and Connected: What Are Employers Looking for in Benefits Technology, LIMRA, 2017.

* Note: Based on private employers with 10 or more employees offering insurance benefits that are looking for benefits technology.

Key Takeaways:

• Overall, employers are more motivated by the desire to meet their own HR needs than those of their employees.

• Employers’ reasons for wanting technology vary little by employer size. However, they do vary depending on the type of technology sought.

• Employers looking specifically for an enrollment platform place more importance on employee preference, while firms looking for only a ben admin platform are most interested in better data management and reducing costs.

• Employers seeking technology for both enrollment and administration are most interested in reducing the staff time required to administer benefits and reducing costs.

When it comes to preferred sources of technology, 1 in 2 employers would specifically prefer to obtain benefits technology from a vendor or firm with which they currently do business.



What is Preventing Employers from Using Technology?Main Reasons For Not Using Ben Admin Technology*

11%

16%

16%

18%

20%

30%

39%

Have not found a system to meet employer's needs

Never been approached

Prefer to keep paper records

Company culture

Simplicity/ease of use

Cost, it would be too expensive

Company is not large enough

Source: Convenient and Connected: What Are Employers Looking for in Benefits Technology, LIMRA, 2017.

* Note: Based on private employers with 10 or more employees that offer insurance benefit and do not use benefit administration technology.

Key Takeaways:

• Not having enough employees, perceived cost and believing it is easier to administer benefits without a platform are the main reasons cited by small employers for not using a technology platform.

• While midsize and large employers are also concerned about the potential cost of technology, they also cite company culture and not having found a system that meets their needs as top reasons.

• Additionally, 1 in 5 large employers claim they already have too many HR technology systems.

Despite these objections, 11 percent of firms are actively looking to bring in a ben admin technology solution, while 29 percent are casually looking.

Chapter 4Products


C H A P T E R F O U R : Products

Employment-based Health InsuranceNumber of Individuals With Health Insurance Coverage

0

50,000

100,000

150,000

200,000

Num

ber o

f Ins

ured

s (in

000

s)

Employment-based Government

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Sources: Health Insurance Coverage in the United States: 2017, United States Census Bureau, 2018, and Historical Health Insurance Tables, United States Census Bureau.

Note: Individuals may be covered under more than one type of insurance during the year, and, so, may be counted more than once.

Key Takeaways:

• Employment-based health insurance remains the most prevalent type of coverage in the United States.

• In 2017, 56.0 percent of the U.S. population had employment-based health insurance for all or part of the year, followed by Medicaid (19.3 percent), Medicare (17.2 percent), direct-purchase (16.0 percent), and military coverage (4.8 percent).

• Approximately 14 percent of individuals who worked in 2017 had government health insurance coverage —10.9 percent of individuals who worked full-time, year round, and 22.4 percent who worked less than full-time, year round.

• There are substantial variations among the states in the percentage of workers with and without employment-based coverage.54

Cost/affordability issues was the main reason cited by 9 out of 10 uninsured workers who declined employer-sponsored coverage.55

54 U.S. Census Bureau, 2017 1-year American Community Survey, 2018.55 Key Facts About the Uninsured Population, Kaiser Family Foundation, 2017.



Medical Insurance OverviewPercent of Private-Sector Firms Offering Medical Benefits

84%72%

90% 85%96% 93% 98% 97% 97% 97% 96% 92%

10 to 19 employees

20 to 99employees

100 to 499employees

500 to 999employees

1,000 to 4,999employees

5,000+ employees

2006 2017

Sources: Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market, LIMRA, 2018, and Employee Benefits at a Crossroads: Today’s Marketplace, LIMRA, 2014.

Note: Data based on private-sector firms with 10+ employees.

Key Takeaways:

• The number of medical plans offered by private-sector firms varies by employer size.• Fifty-five percent of employers offer just one medical plan; 66 percent of the smallest firms offer

just one plan, compared with 11 percent of the largest employers.• Preferred provider organization (PPO) plans are the most prevalent plan offered by employers

(60 percent), followed by health maintenance organizations (HMOs) (47 percent).• Health plan enrollment varies greatly by the type of plan.• According to estimates from PwC’s Health Research Institute, the average employer medical cost

trend in 2019 will be 6 percent, similar to the amount reported in 2018. Actual cost trends, however, will vary by employer size.

According to the Centers for Medicare and Medicaid Services, the growth in private health insuarance spending is projected to decrease from 4.8 percent in 2018 to 4.1 percent for 2019–2020, due in part to the repeal of the individual mandate.



Enrollment in High-Deductible Health PlansPercent of Adults (Aged 18–64) With Employment-based Coverage by Type of Coverage

18.9%

24.5%

56.6%

4.2%

10.6%

85.1%

HDHP with an HSA

HDHP without an HSA

Traditional*

2007 2017

Source: Cohen, R.A., and E.P. Zammitti "High-deductible health plan enrollment among adults aged 18-64 with employment-based insurance coverage." NCHS Data Brief, no 317. National Center for Health Statistics. 2018.

*Note: In 2017, high-deductible health plans (HDHPs) were defined as private health plans with a deductible of at least $1,300 for single coverage and $2,600 for family coverage. In 2007, annual deductibles for HDHPs were $1,100 for single coverage and $2,200 for family coverage. A traditional plan is defined as any plan with an annual deductible less than the HDHP threshold for that year. Not all HDHPs qualify for use with a health savings account (HSA). Not all plans have an annual deductible. Annual deductibles are the amount that must be paid before most services are covered by the health plan.

Key Takeaways:

• Among adults aged 18–64 with employment-based coverage, the percentage enrolled in a traditional health plan decreased 33 percent from 2007 to 2017, while the percentage enrolled in a HDHP with an HSA increased 350 percent.

• In 2017, adults aged 30–44 were the most likely to be enrolled in a HDHP with an HSA (21 percent), as were more highly educated and affluent adults.

• Over 8 in 10 (85 percent) covered workers are enrolled in health plans with an annual deductible for single coverage. In 2007, that percentage was 59 percent. On average, workers in smaller firms have larger deductibles compared with employees in larger firms.56

Over the past 10 years, the growth in supplemental health plans parallels the increase in HDHPs.

56 Employer Health Benefits 2018 Annual Survey, Kaiser Family Foundation, 2018.



Trends in Pension Plans Number of Private-Sector Plans Over Time

0100,000200,000300,000400,000500,000600,000700,000800,000

De�ned Bene�t De�ned Contribution

20132011200920072005200320011999199719951993199119891987198519831981197919771975 2015

648,252

45,672

Source: Private Pension Plan Bulletin, Employee Benefits Security Administration, Department of Labor, February 2018.

Key Takeaways:

• From 1975 to 2015, the number of defined contribution (DC) plans has increased over 200 percent, while the number of defined benefit (DB) plans has decreased 56 percent.

• 401(k) type plans account for the vast majority of DC plans (84 percent), while 403(b) plans account for 3 percent of the DC market.

• Cash balance plans account for one third of DB plans.• Additionally, in the fiscal year between July 1, 2015, and June 30, 2016, there were 299 state-

administered funds and 5,977 locally-administered defined benefit public pension systems.57

Between 2014 and 2015, the total number of pension plans increased 1.3 percent; the number of DC plans increased 1.2 percent, and the number of DB plans grew 1.8 percent.

57 U.S. Census Bureau, Annual Survey of Public Pensions: State- and Locally-Administered Defined Benefit Data Summary Brief: 2016, July 2017.



Trends in Pension Plan ParticipationNumber of Participants in Private-Sector Plans Over Time

010,00020,00030,00040,00050,00060,00070,00080,00090,000

100,000

De�ned Bene�t De�ned Contribution

20132011200920072005200320011999199719951993199119891987198519831981197919771975 2015

Parti

cipa

nts

(in 0

00s)

97,572

37,286

Source: Private Pension Plan Bulletin, Employee Benefits Security Administration, Department of Labor, February 2018.

Key Takeaways:

• In 1975, 33 million workers in the private sector were covered by DB plans versus 11.5 million in DC plans. Forty years later 37.3 million workers were covered by DB plans compared with 97.6 million in DC plans.

• Within the private sector, there were 14.4 million active participants in DB plans and 78.1 million active participants in DC plans in 2015.

• Additionally, in the fiscal year that ended June 30, 2016, the total number of members in public pension DB plans was 20.9 million.58

Nearly half of all workers participating in a DB plan are in plans that are frozen (either partially or fully) — 39 percent of private industry workers and 57 percent of state and government workers.59

58 U.S. Census Bureau, Annual Survey of Public Pensions: State- and Locally-Administered Defined Benefit Data Summary Brief: 2016, July 2017.

59 U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey, March 2018.



Pension Plan Penetration RatesPercent of Private-Sector Employers Offering Pension Plans

5% 7% 9%

21%

9%

20%

6% 8% 5% 9%5%

12%8%

16%21%

35%30%

38%40%

57%

72%67%

77% 80%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+ employees

403(b) Other DB 401(k)

Source: Hidden Currents: Under-the-Surface Changes in the Employee Benefits Market, unpublished data. LIMRA, 2018.


Key Takeaways:

• Overall, 6 in 10 private-sector firms offer some type of pension or retirement savings plan. Generally speaking, penetration rates for pension/retirement savings plans display a similar pattern to those of insurance benefits.

• Of the firms offering 401(k) plans, 85 percent offer matching contributions to employees who participate in the plan.

• Forty-six percent of employers offering 401(k) plans automatically enroll new eligible employees into their plans.60

Median DC account balances vary by employee age and gender. Millennials have the lowest median account balance ($12,000), followed by Gen Xers ($56,500) and Baby Boomers ($125,000). The median account balance for men is $50,000, compared with $20,000 or women.61

60 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018. 61 LIMRA Secure Retirement Institute 2018 Consumer Survey. Based on 2,679 workers participating in their current

employers' DC plans.



Overview of Dental PlansPercent of Private-Sector Firms Offering Dental Plans

45%

71%

93% 97% 97% 96%

46%

67%82% 82%

90%84%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+employees

2006 2017



Key Takeaways:

• Overall, 58 percent of private-sector firms currently offer dental benefits.• Of these firms, approximately 1 in 4 (24 percent) offer dental benefits to part-time employees.

The largest firms are twice as likely as firms with fewer than 1,000 employees to offer dental benefits to part-timers.62

• The percent of premiums employers pay for employee-only coverage varies significantly by employer size. Two thirds of employers indicate they have no short-term plans to change the percent of premiums they pay; 19 percent are undecided.

• Of the firms currently offering dental benefits, only 4 percent state they plan to drop the coverage within the ensuing 18 months. Conversely, 11 percent of employers currently not offering the benefit plan to add it.

According to estimates from Segal Consulting, the average employer dental cost trends in 2019 will be lower than they were in 2017 and 2018. The company projects trend costs to be 3.6 percent for dental maintenance organizations (DMOs), 3.7 percent for dental provider organizations (DPOs), and 4.0 percent for indemnity plans in 2019.

62 How Well Do Benefits Strategies Align With Employer Challenges?, unpublished data, LIMRA, 2018.



Life Insurance Ownership TrendsLife Insurance Ownership Trends — All Ages

29

55 71

84 92 108

99 108 101

111 113 97 97

108 99 102

116

146 149 153 143

182

164 172

1960 1976 1984 1992 1998 2004 2010 2016

Mill

ions

Owns Employment-based Life Owns Individual Life Owns Any Life*

Source: Life Insurance Ownership in Focus: U.S. Person Level Trends, LIMRA, 2016.

*Note: Any life insurance includes individual, employment-based, and service members’ coverage (SGLI/VGLI).

Key Takeaways:

• The number of Americans owning life insurance obtained through their place of work equals 108 million, a 9 percent increase from 2010. This translates to over 57 million households with employment-based life insurance coverage.63

• More Americans are covered by employment-based life insurance than by individual life insurance.• Of the households owning life insurance, 37 percent have only employment-based coverage,

34 percent only have individual coverage, and 29 percent have both individual and employment-based coverages.64

The proportion of Americans who are eligibile for employment-based coverage is expected to decline in the future. As a result, carriers need to become more flexible in terms of employment definitions and who is covered or eligible for coverage. Products should be developed, filed, and priced to cover changing workforce demographics.

63 Employment-Based Life Insurance Ownership Trends, LIMRA, 2017.64 Life Insurance Ownership in Focus: U.S. Household Trends – 2016, LIMRA.



Overview of Life Insurance BenefitsPercent of Private-Sector Firms Offering Life Insurance

45%

75%

92%98% 97% 96%

36%

57%

74% 78%88% 87%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+employees

2006 2017


Note: Data based on private-sector firms with 10+ employees. Includes supplemental plans.

Key Takeaways:

• Overall, 48 percent of private-sector firms currently offer life insurance benefits to their employees. Of these firms, approximately 1 in 5 (19 percent) offer life insurance benefits to part-time employees.65

• When asked about their short-term plans, few employers, 3 percent, indicated they plan to drop their life insurance benefits. Additionally, of those not currently offering the benefit, only 4 percent have plans to add it.

• Of the employers currently offering life insurance benefits, 25 percent offer plans that allow employees to purchase supplemental or optional coverage in addition to the basic coverage offered by their employers.

• One third of employees who choose not to participate in their employers’ life benefit do so because they have coverage through other sources or purchased the insurance on their own.66

For private-industry workers with basic life insurance coverage, 35 percent receive a flat dollar amount, while over 6 in 10 receive a fixed multiple of earnings. State and local government workers, however, are far more likely to receive a flat dollar amount (53 percent).67 The maximum benefit amounts for basic and supplemental insurance vary by case size, as do the guaranteed issue amounts.

65 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.66 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018. 67 U.S. Department of Labor, Bureau of Labor Statistics, National Compensation Survey, March 2018.



Overview of Short-Term Disability BenefitsPercent of Private-Sector Firms Offering Short-Term Disability

30%

53%

74%80%

75%

91%

36%

53%

69%77% 82% 83%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+employees

2006 2017



Key Takeaways:

• Overall, 46 percent of private-sector employers offer short-term disability (STD) insurance benefits to their employees.

• Of these firms, slightly more than 2 in 10 offer STD benefits to part-time employees.68 • Larger firms are more likely to self-insure their STD benefits than are smaller employers.

Of the private-sector firms that offer disability benefits, the vast majority offer both STD and LTD products to their employees, while 2 in 10 offer only a STD plan.

68 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.



Overview of Long-Term Disability BenefitsPercent of Private-Sector Firms Offering Long-Term Disability

27%

54%

73%

88% 87% 91%

31%

48%

60%

73%79% 80%

10 to 19 employees

20 to 99 employees

100 to 499employees

500 to 999employees


5,000+ employees

2006 2017



Key Takeaways:

• Overall, 41 percent of private-sector employers offer long-term disability (LTD) insurance benefits to their employees.

• Of these firms, slightly more than 2 in 10 (21 percent) offer LTD benefits to part-time employees.69 • Of the employers currently offering LTD benefits, 26 percent offer it on a voluntary, 100 percent

employee-paid basis, and an additional 14 percent offer it as a buy-up option. The employee participation rate for voluntary LTD is 30 percent, on average, and for buy-up plans, the average is 69 percent.

• Only 2 percent of employers have plans to add LTD coverage within in the next 18 months.

Since 2006, a larger percentage of employers are sponsoring plans in which they pay all or a portion of the benefit.

69 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.



Overview of Accident Insurance BenefitsPercent of Private-Sector Firms Offering Accident Insurance

23%

38%

29% 30%25% 26%24%

31%39%

46% 49%

66%

10 to 19 employees

20 to 99 employees

100 to 499employees

500 to 999employees


5,000+ employees

2006 2017


Note: Data based on private-sector firms with 10+ employees. Accident insurance excludes accidental death and dismemberment insurance.

Key Takeaways:

• Overall, 28 percent of private-sector employers offer accident insurance (AI) benefits to their employees.

• While the overall percentage of employers offering AI to their employees has not significantly changed since 2006, there are noticeable differences by size of firm.

• Of those employers offering AI, 1 in 4 offer the benefit to part-time employees.70 • Only 1 percent of employers that currently do not offer AI intend to add the benefit within the next

18 months.

The most common reasons why employees decide not to enroll in accident insurance benefits are that they do not believe AI is worth the cost (33 percent), followed by believing they do not need the benefit (20 percent).71

70 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.71 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.



Overview of Critical Illness Insurance BenefitsPercent of Private-Sector Firms Offering Critical Illness

12%

26% 25% 27%

18% 20%20%

27%

37%

45% 47%

54%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+employees

2006 2017



Key Takeaways:

• Overall, 24 percent of private-sector employers offer critical illness (CI) benefits to their employees. • Of those firms, 27 percent offer the benefit to part-time employees.72 • Only 3 percent of employers that currently do not offer CI intend to add the benefit within the next

18 months.• The No. 1 reason why employees decide not to enroll in the benefit when offered is that they do not

believe CI is worth the cost (39 percent).73

The growth in high-deductible health plans has been a major factor in the overall growth of CI products.

72 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.73 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.



Overview of Cancer Insurance BenefitsPercent of Private-Sector Firms Offering Cancer Insurance

21%

41%

34% 35%

20%18%18%

23% 25%

30%27%

33%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+ employees

2006 2017



Key Takeaways:

• Overall, 21 percent of private-sector employers offer cancer insurance to their employees. • Of those firms, more than 1 in 4 (27 percent) offer the benefit to part-time employees.74 • Only 4 percent of employers that currently do not offer cancer insurance intend to add the benefit

within the next 18 months.• Lack of awareness is one reason why overall employee participation rates are low for cancer

insurance. Nearly 1 in 3 employees do not know if they have access to the benefit through their employers.75

Largely, the growth in CI benefits has come at the expense of cancer products. Since 2006, the percentage of employers offering cancer insurance has declined 9 percentage points. While CI products include some form of cancer coverage, most offer the option to purchase CI excluding the cancer coverage.76

74 How Well Do Benefits Strategies Align With Employer Challenges? unpublished data, LIMRA, 2018.75 Mind the Gap: Do Employers Understand Employees’ Benefit Priorities? LIMRA, 2018.76 U.S. Critical Illness Insurance Product Profiles, LIMRA, 2015.



Overview of Hospital Indemnity BenefitsPercent of Private-Sector Firms Offering Hospital Indemnity

17%

24% 24%

34%38% 40%

10 to 19employees

20 to 99employees

100 to 499employees

500 to 999employees


5,000+ employees

2017



Key Takeaways:

• Overall, 21 percent of private-sector employers offer hospital indemnity benefits to their employees.

• Of those firms, 25 percent offer the benefit to part-time employees.77 • Only 2 percent of employers that currently do not offer hospital indemnity intend to add

the benefit within the next 18 months.

One fourth of employees that opt not to enroll in their employers’ hospital indemnity benefit claim they do not need the coverage.78

77 How Well Do Benefits Strategies Align With Employer Challenges? Unpublished data, LIMRA, 2018.78 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.



Employers’ Plans to Offer Non-insurance BenefitsPercent of Employers Planning to Add Benefit in Next 18 Months*

18%

20%

21%

22%

23%

23%

23%

26%

26%

27%

32%

32%

33%

35%

38%

Elder care assistance

Legal services plan

Tuition assistance

Commuter expenses/Subsidized parking

Student loan assistance/repayment

Identity theft protection

Paid vacation

Financial wellness

Paid sick days

Work-life bene�ts

Learning and developmentopportunities

Paid time off

Career advancementopportunities

Health wellness programs

Paid family leave


*Note: Based on private employers with 10 or more employees who currently do not offer the benefit.

Key Takeaways:

• Overall, 25 percent of private-sector employers intend to add a new non-insurance benefit. In contrast, only 1 in 10 employers intend to add a traditional insurance benefit that they currently do not offer.

• Generally speaking, interest in these products varies by employer size.• The need to retain, rather than attract, employees appears to be the impetus behind adding many

of these non-insurance benefits.

While wellness programs, both health and financial, are designed to improve the health and productivity of employees, employers often discover that employees who can benefit the most from these programs do not utilize them.



Spotlight on Sales and In Force — Dental, Life, and Disability

Dental, Life, and Disability Products

2017 Sales

2017 In Force

Sales Average Premium

In Force Average Premium

Average Employee

Workplace Products1 (000,000s) (000,000s) per Employee/Policy per Employee/Policy Participation Rate2

Dental - Total $5,122 $45,673 $647 $668 68%

Employer-paid $3,585 $31,971 $653 $667 71%

Employee-paid $1,537 $13,702 $631 $682 49%

Life - Total3 $3,346 $26,118 $171 $204 77%

Employer-paid $1,328 $12,394 $116 $149 84%

Employee-paid $2,018 $13,724 $254 $298 64%

STD - Total4 $2,069 $10,518 $272 $283 65%

Employer-paid $1,088 $6,751 $186 $223 74%

Employee-paid $981 $3,767 $467 $505 26%

LTD - Total4 $1,724 $12,476 $226 $262 67%

Employer-paid $1,294 $9,461 $213 $241 79%

Employee-paid $430 $3,015 $265 $373 30%

Retail Products

Dental5 $204 $428 $524 $567

Life $10,823 Not available $2,007 Not available

Disability6 $455 $5,085 $1,532 $1,618

Sources: LIMRA’s Sales and In Force Surveys, 2018.

Note: 1 Includes estimated data. Data exclude association business.2 Based on eligible employees.3 Workplace life products exclude mortgage, credit, specialty, and standalone AD&D insurance. Employee-paid data include

supplemental/optional products.4 Employer-paid data include ASO business. LTD buy-up plans are included in employer-paid products.5 Retail dental includes private exchanges and excludes government business.6 Retail disability includes multilife products.

Since the end of the Great Recession, overall growth in in-force business for these workplace products has been modest, while sales have been more volatile. Employment gains, wage and salary increases, and an aging work force account for much of the overall increases in in-force business.



Spotlight on Sales and In Force — Dental, Life, and Disability (continued)

Key Takeaways:

Dental• The year-over-year growth rate for dental sales in 2017 was 4.1 percent, based on new premiums,

while the growth rate for in-force premiums was 1.5 percent.• Similar to medical plans, employers have turned away from indemnity dental plans to more

cost-effective plans as a way to rein in costs. In 2000, indemnity plans captured 33 percent of the in-force market, based on subscribers, dental preferred provider organization (DPPO) plans captured 43 percent, and DHMO plans had 24 percent. By 2017, indemnity plans captured only 2 percent of in-force subscribers, while DPPO and DHMO plans captured 89 percent and 9 percent of in-force subscribers, respectively.

• A sizable proportion of dental plans are self-insured. Overall, more than 2 in 10 private-sector employers self-insure their dental plans. Compared with the smallest employers, large employers are nearly twice as likely to self-fund their dental plans.79 In 2017, administrative services only (ASO) plans covered 42 percent of in-force subscribers.

• While non-government, retail dental products currently only capture 5 percent of the market, based on LIMRA estimates, these products are expected to grow in the future.

Life• The year-over-year growth rate for new annualized premium life sales in 2017 was 1.0 percent,

while the growth rate for in-force premiums was 3.4 percent.• The median amount of employment-based life insurance coverage held by households in the

United States is $100,000. Unfortunately, a large proportion of Americans lack a general understanding of the coverage provided by employers.80

• Over the years, voluntary life products have accounted for a growing share of the market. In 2017, voluntary life products accounted for 60 percent of total new annualized premium sales and 53 percent of total in-force premiums.

• Additionally, group platform products account for the vast majority of business sold. In 2017, group platform products accounted for 88 percent of total new annualized premiums and 93 percent of total in-force premiums.

• Term products accounted for 87 percent of total employment-based new annualized premium sales in 2017, but only 20 percent of total retail sales.81

79 Employee Benefits at a Crossroads: Employer Perspectives Technical Report, LIMRA, 2014.80 Employment-Based Life Insurance Ownership Trends, LIMRA, 2017.81 2017 U.S. Individual Life Insurance Yearbook, LIMRA, 2018.



Spotlight on Sales and In Force — Dental, Life, and Disability (continued)

Key Takeaways:

Short-Term Disability (STD)• The year-over-year growth rate for new annualized premium STD sales in 2017 was 6.9 percent,

while the growth rate for in-force premiums was 6.4 percent.• Similar to dental, a sizable proportion of STD plans are self-insured. Approximately 1 in 4 private-

sector firms self-insure their STD benefits. The type of method used to fund these benefits varies by employer size.82 In 2017, ASO plans accounted for nearly one third of in-force premiums.

• Group platform products accounted for 73 percent of total new annualized premiums sold in 2017 and 82 percent of total in-force premiums.

• Employees most commonly decide not to enroll in STD benefits because they do not see the need for it (33 percent) and do not believe that STD is worth the cost (28 percent). Affordability is an issue for less than 2 in 10 employees.83

Long-Term Disability (LTD)• The year-over-year growth rate for new annualized premium LTD sales in 2017 was 6.0 percent,

while the growth rate for in-force premiums was 3.8 percent.• Due to the inherent risks associated with long-term disability claims, few employers choose to

self-fund LTD benefits. ASO plans accounted for only 3 percent of in-force premiums in 2017.• The LTD market has become even more concentrated over the past several years due to mergers

and acquisitions. The top-five carriers account for nearly 60 percent of in-force premiums, while the top 10 account for 85 percent of premiums.

• Employees display a strong tendency to underestimate the risk of becoming disabled, which contributes to the perception that they do not need the benefit. In fact, the No. 1 reason why employees forego enrolling in LTD is the belief that they do not need the benefit. One reason workers may underestimate their risk is that most expect serious accidents or illnesses to be the leading cause of a disability, potentially causing them to misjudge their own risk factors.84

82 Employee Benefits at a Crossroads: Employer Perspectives Technical Report, LIMRA, 2014. 83 Don’t Look Down: Employees’ Understanding of Benefits and Risk, LIMRA, 2018.84 Impractical Strategies to Address Realistic Challenges: Disability Insurance in the Eyes of Employees, LIMRA, 2018.


Spotlight on Sales and In Force — Supplemental Health

Supplemental Health Products

2017 Sales

2017 In Force

Sales Average Premium

In Force Average Premium

Average Employee

Workplace Products1 (000,000s) (000,000s) per Employee/Policy per Employee/Policy Participation Rate2

Accident — Total3 $1,019 $2,979 $274 $319 50%

Employer-paid $1 $5 $77 $73 64%

Employee-paid $1,018 $2,974 $275 $321 21%

Critical illness — Total $630 $1,598 $278 $300 38%

Employer-paid $3 $9 $46 $59 50%

Employee-paid $627 $1,589 $287 $304 17%

Cancer — Total $327 $2,455 $500 $495 36%

Employer-paid + ++ $385 $280 49%

Employee-paid $327 $2,455 $500 $495 17%

Hospital indemnity — Total $512 $1,404 $388 $457 47%

Employer-paid $2 $23 $301 $315 58%

Employee-paid $510 $1,381 $389 $460 20%

Retail Products

Accident3 $113 $428 $435 $243

Critical illness $26 $109 $566 $516

Cancer $54 $240 $547 $284

Hospital indemnity $29 $142 $237 $274

Sources: LIMRA’s Sales and In Force Surveys, 2018.

Note: 1 Includes estimated data and excludes association business.2 Based on eligible employees.3 Data exclude accidental death and dismemberment products.+ Less than $10,000++ Less than $500,000

These supplemental health products are especially popular when offered in conjunction with high-deductible health plans (HDHPs). Though HDHPs have become prevalent in recent years, the popularity of these plans has recently cooled and may have an impact on the future growth potential of accident, critical illness, and hospital indemnity benefits.



Spotlight on Sales and In Force — Supplemental Health (continued)

Key Takeaways:

Accident• The year-over-year growth rate for accident insurance sales in 2017 was 8.7 percent, based on new

premiums, while the growth rate for in-force premiums was 6.7 percent.• Since 2015, group platform products have gradually captured a larger share of the market. In 2017,

the percent of employees covered under group platform products was 47 percent, while these products accounted for one third of in-force premiums.

• New entrants, new and updated products, and market expansion have all contributed to the growth in accident insurance over the past five years.

• To keep up with changes in the marketplace and to provide a competitive advantage, accident insurance (AI) products offer a wider range of benefits than ever before. Typically, policies covered hospital confinement, emergency benefits, orthopedic injuries, and burns, but many new products offer additional features such as family transportation and lodging, rehabilitation services, follow-up care, and wellness benefits.

Critical Illness (CI)• The year-over-year growth rate for new annualized premium CI sales in 2017 was 17.8 percent,

while the growth rate for in-force premiums was 17.2 percent.• Similar to accident insurance, new entrants, new and updated products, and market expansion

have all contributed to the growth in CI over the past five years.• However, unlike accident insurance, group platform products dominate the market. In 2017, the

percent of employees covered under group platform products was 75 percent and accounted for just over 74 percent of in-force premiums.

• The vast majority of CI products sold at the workplace are HSA compatible. The median benefit amount offered on products that are guaranteed issue is $30,000 and $50,000 for those offered on a simplified issue basis. Similar to accident insurance, carriers are expanding the list of conditions they cover, with many covering 20 or more conditions.85

85 U.S. Critical Illness Insurance Product Profiles, LIMRA, 2015.




Spotlight on Sales and In Force — Supplemental Health (continued)

Key Takeaways:

Cancer

• The year-over-year growth rate for new annualized premium cancer sales in 2017 was less than one-half of negative one percent, while the growth rate for in-force premiums was 1.3 percent.

• Retail products account for a sizable portion of yearly sales. In 2017, retail products accounted for 14 percent of total new annualized premium sales. In addition, they accounted for 9 percent of in-force premiums.

• Unlike CI products, individual platform products dominate the cancer insurance marketplace. The percent of employees/policies covered under individual platform products was 89 percent and accounted for 91 percent of in-force premiums in 2017.

• The cancer insurance marketplace is a highly concentrated one; the top-five carriers accounted for 94 percent of new annualized premium sales in 2017. This percentage is unchanged from the share held by the top companies in 2015.

• Interestingly, 80 percent of employees who think cancer insurance is important are not offered the benefit at work.86

Hospital Indemnity

• The year-over-year growth rate for new annualized premium hospital indemnity sales in 2017 was less than 1 percent, while the growth rate for in-force premiums was 14.0 percent.

• Similar to accident insurance, group platform products are starting to capture a larger share of the market. Based on 2017 sales, the percent of employees covered under group platform products was 72 percent and accounted for 58 percent of new annualized premium.

• Like cancer insurance, the hospital indemnity marketplace is highly concentrated; the top-five carriers accounted for 86 percent of new premium in 2017. This percentage is down from the share held by the top companies in 2015.

86 Mind the Gap: Do Employers Understand Employees’ Benefit Priorities? LIMRA, 2018.


Chapter 5The Future


C H A P T E R F I V E : The Future

Healthcare Expenditures

Background

Employers’ healthcare expenses are rising more slowly than in previous years, but they still outpace overall inflation. Additionally, overall healthcare expenditures as a share of the U.S. gross domestic product (GDP) and employee wages have doubled over the past 38 years.87 Moreover, total U.S. health spending is anticipated to continue to increase faster than GDP in the coming years and will account for nearly 20 percent of the economy in 2026.88

Overall Societal Implications/Considerations

• If current projections hold, the government is expected to account for a larger proportion of total national health expenditures by 2026, while the proportion of spending by private businesses and households is expected to decline. Factors such as the aging population account for much of this shift in financing.89

• Recently released data from the Social Security and Medicare Boards of Trustees indicate that Medicare Part A, also known as the Hospital Insurance Trust Fund, will run out of money by 2026, and will only be able to cover 91 percent of the costs. Because of this financing shortfall, public-sector budgets and ultimately taxpayers will feel increasing pressure to help make up the shortage.

Employer Implications/Considerations

• While employers’ overall healthcare costs are expected to slow due to the elimination of the individual mandate and the continuing shift of Baby Boomers from their employers’ health insurance plans to Medicare, employers will continue to face unsustainable costs in the long run.

• Employers, no doubt, will continue to offer medical insurance to their employees, but they will continue to adjust the strategies they use to control these costs. Changes in legislation, regulations, employee wages, and the economy will all impact the strategies employers implement in the future.

87 PWC Health Institute, Medical Cost Trends: Behind the numbers 2019, June 2018. 88 Centers for Medicare and Medicaid Services, National Health Expenditure Projections 2017-2026 —

Forecast Summary, 2018. 89 Ibid.



• Cost-sharing strategies have been, and will continue to be, one of the more popular ways employers use to rein in healthcare costs. However, with stagnant wage and salary increases, employers are starting to reach the limit on the amount of cost they can ask employees to pick up, forcing them to look for other possible long-term strategies.

• Over the past 15 years, high-deductible and consumer-driven health plans have been a popular strategy. However, recent evidence suggests that the enthusiasm for these plans may be waning, as employers feel a greater need to compete for employees in today’s strong economy. If high-deductible health plans do trend lower, supplemental health products may follow suit.

• Cost-shifting rather than cost-sharing strategies have been used successfully by employers to help lower the cost of benefits overall, and this strategy is not expected to abate any time soon. As employers continue to offer a greater array of benefits as an attraction and retention tool, carriers can expect employers will shift more of the cost of non-medical benefits onto employees.

Employee Implications/Considerations

• Not only are workers and their families paying more for their employer-sponsored health insurance, they are also paying more out-of-pocket costs. These costs end up as a growing burden for many American families. Despite having coverage, significant proportions of workers and their families forgo some form of medical treatment each year due to an inability to pay.

• Recent data from the Kaiser Family Foundation’s 2018 Employer Health Benefits Survey reveal that the average annual deductible among all covered workers increased 53 percent over the past five years, and 212 percent over the past decade. What’s more, these amounts exclude any copayments or co-insurance for office visits and hospitalizations.

• While the economy is in a period of sustained growth, the same cannot be said of workers’ earnings. After adjusting for inflation, the wage growth of many workers has been falling recently, putting additional pressure on employees to cover a growing share of their benefits costs.

Other Questions to Contemplate

• How will regulations reshape how and where Americans obtain health coverage?• Given the amount of time employees spend on benefit decisions during open enrollment, while

also being asked to take on greater responsibilities in the decision-making process, is the industry making products too complex? Is it adding and focusing too much on the value-added benefits? In order to cut down on customer confusion, and ultimately increase customer engagement, are simpler products the solution?



The Retirement Dilemma

Background

Despite Americans’ growing concerns about not having enough money to retire, many adults are not saving enough or are finding themselves struggling to save at all. One solution to this problem has been the establishment of state-run retirement plans. However, due to various legal and cost concerns, these plans are currently in limbo. This retirement-savings dilemma, unfortunately, is not strictly limited to consumers. Many private, and, in particular, public pension plans are underfunded. In fact, according to recent estimates by Moody’s Investors Service, public pensions are underfunded by $4.4 trillion.


• According to the Report on Economic Well-Being of U.S. Households in 2017, one-quarter of non-retired Americans have no retirement savings or pensions. Of those who have retirement savings, over half of non-retirees have money in a defined contribution (DC) plans, and 26 percent participate in a defined benefit (DB) pension plan. While Social Security accounts for a significant source of income for current retirees, future retirees may have to depend more on retirement savings and employment.

• The Social Security Boards of Trustees has recently projected that the trust funds (OASI and DI) will run out of money in 2034. At that time, Social Security is expected to pay 77 percent of scheduled benefits. To keep the trust funds viable, the government could reduce benefits and/or increase the payroll-tax rate employers and employees pay.

• If, as some experts predict, the United States will soon enter an era of lower investment returns compared to the past, the impact on retirement savings, pension plans, retirees, and non-retirees will be felt broadly. In a recent report, McKinsey projected total real returns on U.S. equities may be between 4.0 and 6.5 percent over the next 20 years. In addition, U.S. bonds could fall to between 0 and 2 percent. 90

90 McKinsey Global Institute, Diminishing Returns: Why Investors May Need to Lower Their Expectations, May 2016.




• Due to the rising premiums imposed by the Pension Benefit Guaranty Corporation, a volatile stock market, low interest rates, and changing mortality assumptions, companies continue to struggle to offer DB pension plans. If these companies find themselves in an era of lower investment returns, they will find it even more difficult to provide DB plans to their employees and may look for ways to transfer the risk.

• Implementing a hard or soft freeze is another option to meet these challenges, but one that could negatively impact current and future recruiting efforts, especially in a tight labor market.

• When offering a DC plan, employers face myriad challenges, especially those relating to cost, fiduciary liability, administration, and employee education needs. In addition, despite the popularity of these plans, plan sponsors express interest in state government managed retirement programs. Interestingly, when asked, more than half of DC sponsors indicated they were “somewhat” or “very” likely to consider transitioning their current plans to a hypothetical state-managed solution.91


• While a growing number of employees plan to work past age 65, the reality is many will retire earlier than planned. Economic and financial circumstances and health considerations are the main reasons why employees retire early. Not surprisingly, unplanned retirements can have negative consequences on the financial well-being of retirees.

• While LIMRA Secure Retirement Institute research found that 4 in 10 workers expect to work in retirement, the reality may be very different, as employers may not be willing to support workers at or near retirement age. However, if employee expectations come to fruition, it will mean a restructuring of not only retirement and workforce compositions, but employer expectations as well.92

• Recent research suggests that in an era of lower investment returns, workers build up less wealth in their retirement accounts, claim Social Security benefits later, and work more.93


• If employers transition their DC plans to state-managed programs, how will that affect other benefits employers offer? Will these employers use any savings toward other benefits?

• Benefit providers and employers are starting to take a more holistic approach to employee benefits — understanding how medical, non-medical, and retirement benefits can be better integrated with one another. Will providers that offer this approach have a competitive advantage? What does it mean for the industry for those carriers that do not have medical or retirement products?

• If employees begin to save more for retirement, does this necessarily mean employees will have less money available for voluntary benefits?

91 An Ongoing Story: Plan Sponsors, Defined Contribution Plans, and State Retirement Programs, LIMRA Secure Retirement Institute, 2018.

92 The Inner Workings of Retirement Timing: Consumer Behavior and Attitudes, LIMRA Secure Retirement Institute, 2018.

93 Horneff, Vanya, Raimond Maurer, and Olivia S. Mitchell, How Will Persistent Low Expected Returns Shape Household Economic Behavior? Pension Research Council Working Paper, Pension Research Council, The Wharton School, University of Pennsylvania, October 2018.



Changing Demographics

2020

Background

The United States is a nation of change, and, while the population is growing, that rate of growth is slowing. It is also a population that is aging, even though Millennials are projected to outnumber Baby Boomers by 2020. By 2030, 1 in 5 individuals will be 65 years and older, and, by 2035, older adults are projected to outnumber children for the first time.94 Just as the general population is changing, so too is the U.S. workforce. Currently, the workforce comprises five different and diverse generations. Compared with their peers in prior generations, the youngest workers are more likely to be single, more racially and ethnically diverse, and better educated.


• Even though Millennials and leading-edge Gen Zers are better educated than their older peers, they are also saddled with record levels of student debt. These young adults are also more likely to delay many life events, such as buying a home, getting married, and having children. They are also more likely to remain financially dependent on family for longer periods of time.95

• Despite being better educated, college graduates face stagnant real wages. According to the Condition of Education 2018 report by the National Center for Education Statistics, the median earnings of college graduates age 25–34 who work full-time are lower today than they were in 2000, after adjusting for inflation.

• What’s more, recent data from the Federal Reserve Bank of New York reveal that approximately 42 percent of recent college graduates are underemployed. Unfortunately, many of those graduates will remain underemployed for years to come.

94 Vespa, Jonathan, David M. Armstrong, and Lauren Median, Demographic Turning Points for the United States: Population Projections for 2020 to 2060, Current Population Reports, P25-1144, U.S. Census Bureau, March 2018.

95 Vespa, Jonathan, “The Changing Economics and Demographics of Young Adulthood: 1975–2016,” Current Population

Reports, P20-579, U.S. Census Bureau, April 2017.



• Another ongoing change noted by the Census Bureau is the decline in the rate of marriages. Offsetting this decline are increases in living arrangements including single-parent families, single-person households, and people living together outside of marriage.

• Over the past 10 years, the number of births in the United States has been declining, and, what’s more, the nation’s fertility rate is expected to remain below pre-recession levels in the future, according to a new report by the Center for Retirement Research. If accuate, government programs that support seniors will become more expensive.


• Employers are adjusting their benefit strategies and portfolios to respond to the changing attitudes and demographic and economic experiences of Millennials and Gen Zers. Because the youngest workers express relatively less interest in traditional core benefits, employers are placing a greater emphasis on non-insurance/non-traditional benefits.

• Despite the different needs and wants of the various generations within the workforce, along with the fact that younger workers are relatively less knowledgeable about benefits generally, the vast majority of employers still view communications as a one-size-fits-all exercise.

• Few employers are taking the time to understand how to communicate effectively with different employee populations.

• In their quest for skilled workers, will employers embrace non-traditional employees? Will they see the need to offer traditional benefits to these employees? Will they offer the same benefits to all employees, or will employers customize benefits based on criteria such as employment relationships or demographics?

• Will employers embrace older workers?


• Unlike prior generations, the youngest workers are not seeing the benefits of higher education in either their jobs or wages. Many are saddled with student loan debt, which limits their choices and leaves them less financially secure than their earlier peers.

• The youngest workers are not the only ones feeling squeezed. The earnings of full-time, year-round workers fell 1.1 percent between 2016 and 2017.96

• Since many young workers witnessed the impact of the Great Recession personally or on family members and friends, it is not surprising that job stability is a top employment priority, benefits less so.

• While Millennials and leading-edge Gen Zers are unique, they are not completely different from previous generations. The best way to engage and communicate with them, however, varies.

96 Fontenot, Kayla, Jessica Semega, and Melissa Kollar, “Income and Poverty in the United States,” Current Population Reports P60-263, U.S. Census Bureau, 2018.




• Is this lack of interest in traditional core benefits by the youngest workers just a life stage-related phase, or does it represent a more fundamental change?

• Who will educate and engage the newest members of the workforce? Current employer-communication practices are not working, so where does that leave the industry? If the industry does not find a compelling way to educate and engage employees, will they lose out on providing financial protection products due to competing priorities, such as loans, cars, new phones, and entertainment?

• Are employers offering too many different benefits to employees, resulting in choice overload and growing decision paralysis?

• Given the demographic changes occurring in the United States, as well as the decline in real wage growth, will a new “sandwich generation” arise? Will they face even greater caretaking and financial pressures than prior generations? How will employers respond? Will we see an increase in paid family leaves?

• How will employer-employee relationships change in the future? If the gig economy continues to grow and employees seek less job security, what impact will that have on the benefits employers offer?

• If traditional working arrangements decline, what does that mean for future product-plan designs?• Since immigration is a significant factor in population growth, how will future labor-force trends

be affected if current immigration policies change?• How will benefit providers replace aging sales representatives and brokers?



Technology

Background

In many ways, the availability of technology has transformed Human Resource (HR) departments, freeing them from mundane, time-consuming administrative tasks. Advances in technology have also changed the way companies manage their HR processes, including talent acquisition, payroll, benefits, performance appraisals, and enterprise training and learning. Just as important, if not more so, is the way digital technology has transformed customer experiences and expectations. Unfortunately, HR technology has historically been developed with the organization in mind, not its employees. Despite advances in data analytics, artificial intelligence, automation, machine learning, and the ”internet of things,” there are still a number of limitations as to what these tools have to offer.


• According to a National Center for Education Statistics report, 84 percent of Americans aged 16 to 65 are digitally literate, meaning they are able to use computers to purchase goods and services, find health information, and manage personal information and business finances. Compared to digitally literate adults, adults who are not digitally literate tend to work in unskilled or semi-skilled blue-collar jobs. The survey also found that 74 percent of U.S. workers use computers at work.97

• The share of Americans using digital technologies has recently plateaued, according to a recent Pew Research Center report. The study has tracked Americans use of various technologies over time and noted that the share of people who go online or own key devices has remained stable over the past two years. Currently, 77 percent of Americans own a smartphone, 73 percent own a desktop or laptop computer, 53 percent own a tablet, and 20 percent are smartphone-only internet users.98

97 Mamedova, Saida, Emily Pawlowski, and Lisa Hudson, Statistics In Brief: A Description of U.S. Adults Who Are Not Digitially Literate, U.S. Department of Education, May 2018.

98 Hitlin, Paul, Internet, social media use and device ownership in U.S. have plateaued after years of growth, Pew Research Center, September 2018, http://www.pewresearch.org/fact-tank/2018/09/28/internet-social-media-use-and-device-ownership-in-u-s-have-plateaued-after-years-of-growth/.




• Employers spend millions of dollars annually on HR tools and technology. The larger question is what proportion of those dollars will be allocated to benefits technology.

• While benefits technology is becoming increasingly important, who should pay for the technology remains an open question, with costs variously being shouldered by employers, brokers, and insurance carriers. The industry will eventually need to move to a stable model for how and by whom these platforms are funded. If much of the cost is borne by benefit carriers, what impact will this have on premiums?

• For many companies, complexity in technology will be a limiting factor in the tools and systems they use.

• For companies that lack large or sophisticated HR departments, the amount of data collected may become a downside to all these technology advances. Companies may soon discover they have more data than they can manage.

• More and more technology decisions will be based on meeting the expectations of Millennials and Gen Zers.


• While most employees prefer to enroll in benefits electronically, this format often makes it more difficult to educate them about benefits. By relying on technology, is the industry hurting or helping the effectiveness of employee communications?

• Many employees desire the ability to talk to someone about benefits. While technology is freeing employers from many administrative tasks, it also allows companies to disengage from employer-employee interactions — just the opposite of what so many employees want. How will benefit providers fill this gap? Will improving chat features and the ability to connect to a live person be enough?

• Will employers take into account how technology will influence their benefit communication plans and the affect that it will have on employee behaviors?

• Employees have grown accustomed to the “Amazon” experience of online shopping and expect an intuitive, seamless, and instantaneous transaction. How will carriers meet these rising expectations?


• Who will succeed in using technology to grow and maintain business?• How will technology be used for sales/distribution and benefits administration?• How will automation and artificial intelligence affect HR technology?• How much of a role with benefit administration technology companies play as a distribution

partner for carriers? How much authority and control will these technology companies have? Will carriers just manufacture products and manage claims? Which will be more important to employers, the technology platform or the benefits?

• Who owns the data?• How can carriers make decision-support tools more effective?


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