Measuring the state of the benefits market to see what trends are at work is a necessary but imprecise exercise during a time when change is rampant. Some insurers with big stakes in the business look past their own company's market data. They sponsor independent research, polling employers and employees, to determine what trends are at work throughout the market, hoping for insights that eventually will lead to better business decisions and market penetration.

Among those that have recently shared their independently conducted research on the state of the market are MetLife, Aflac, Colonial Life and Lincoln Financial Group.

The caveat about all such studies is that access to research data in a fast-moving market doesn't guarantee easy decisions for those sponsoring the research. Just ask Janet Yellen, chair of the Federal Reserve Board, who is awash in data about the economy. Perhaps the Fed will have acted to raise interest rates by the time this column appears. Or maybe not. Whatever it decides, the Fed has spent years agonizing over complex data about the economy, especially the employment market, as it struggles to make a decision with vast implications.

In the benefits market, today's rapid pace of change starts with the Affordable Care Act. Employers continue to adjust to ACA regulations, but how will those regulations change in the years ahead? The ACA is driving some of the largest health carriers to consolidate-big bets by big players on where they think the market is headed. These decisions can only be based on data at hand, and change can be swift.

Brokers are surrounded by change outside of the ACA's influence too. In the recent past they have had to help their clients adjust to high-deductible health plans and expanded voluntary benefits menus. They continue to engage in the delicate process of communicating these wider options to increasingly diverse workforces.

As difficult as it may be to assess the market against a backdrop of rapid change, the studies go on, and they do provide insights, and perhaps some guarded guidance for the future. What does today's research tell us about the market?

According to the current MetLife's U.S. Employee Benefit Trends Study, employers' "most important objective" for their benefits program has shifted since the company conducted the study a year earlier. Previously the top objective for employers was cost control. Now their highest priority is retaining employees.

"Controlling health and welfare benefits costs" still ranks high as an employer objective (the second most important, less than four percentage points behind "retaining employees") in the MetLife study. What are some of the healthcare cost control strategies being tried today? Another study, Aflac's 2015 WorkForces Report, asked employers that question. Here in descending order of utilization are those that were being employed during 2014:

Increased employees' share of premiums, 31%; increased employees' copayments, 30%; implemented high-deductible health plans with health savings accounts, 21%; reduced employee health plan options, 17%; introduced health care incentives, 16%; reduced employees' hours, 12%; used public and/or private exchanges, 11%; eliminated spouse/partner coverage, 9%; offered employees stipends in lieu of health insurance, 7%.

MetLife also asked employers about their plans for healthcare cost control. Specifically, it asked how likely they were to implement four possible strategies over the next three years. Here is how employers' answers changed from the study a year earlier: switch coverage to an Employer-Driven Accountable Care Organization (ACO), from 17% to 19%; switch coverage to a Private Health Insurance Exchange, from 23% to 20%; offer Consumer Driven Health Plans (CDHP), from 30% to 23%; and offer Defined Contribution Health Plans, from 31% to 24%.

Employee concerns

Most of the remaining data from the four insurance carriers focus on the state of the market through the eyes of employees. MetLife's study indicates a positive correlation between the number of benefits an employer offers and the employees' overall satisfaction with that employer. It also shows that the way benefits are communicated is an important driver of employee satisfaction.

Benefits communications efforts are falling short of employee expectations, according to the MetLife study. Only 45% of employees strongly agree that their company's benefit communication helped them understand how they would pay for specific services and effectively educated them on their benefits options.

"Communicating during open enrollment season may not be enough," says Todd Katz, executive vice president, Group, Voluntary & Worksite Benefits at MetLife. He advises sending employees "personalized benefit messages throughout the year reflecting employees' life stages and events, and using the communication channels preferred by employees."

Almost half (47%) of employees surveyed for the study said their employers had communicated to them about healthcare reform. How effective that communication was depends on whom you ask. Sixty-three percent of employers said their communication to employees on healthcare reform was effective; only 37% of employees agreed.

When asked whether health insurance exchanges (private or state/federal) offer lower-cost options for employees compared to what employers currently provide, approximately one-third of mid-sized and large companies said yes. In contrast, only 17% of small companies believe these exchanges offer lower-cost options. Commentary in the MetLife study report speculated that this may indicate that small employers have a lower level of awareness about exchange options.

The studies by Colonial Life (its 2014 U.S. Worker Survey) and Aflac (the 2015 Aflac WorkForces Report) focus on how effective employee benefits programs are for different segments of the population. Colonial probes the differences in benefits provided by the smallest employers (fewer than 10 employees) compared to larger ones; Aflac contrasts the utilization of benefits by lower-income employees versus higher-income employees.

Colonial's survey finds that only 44% of employees at the very small companies have benefits at work, compared with 82% of all employees. Only 25% of all employees at the smallest companies rate their benefits as excellent or very good. For firms with 10-99 employees, 75% of the workers are offered benefits; 96% of those with 1,000 or more employees provide benefits.

Employees at the smallest firms also have the least understanding of their benefits-62% report a good understanding, versus 80% at large firms. Likewise, only 55% of the workers at very small businesses who are offered benefits say they highly value those benefits, compared to 70% at large firms.

Income-based analysis

Aflac's study of employee benefits utilization, like Colonial's, highlights a contrast between "haves" and "have nots." Aflac concludes that lower-income employees (under $50,000 income) face significantly higher risks than higher-income employees (more than $100,000).

According to Aflac's study, only 65% of employees in lower-income households who are offered benefits are enrolled in major medical insurance, compared with 81% of employees in higher-income households. Enrollment in disability plans is 25% in lower-income households, versus 56% in higher-income households. Enrollment figures for life insurance indicate 39% of lower-income workers participating, versus 67% of higher-income workers.

"Year after year, the Aflac WorkForces Report consistently shows that low-income households remain on the brink of financial chaos in the event of an unforeseen injury or illness," states Matthew Owenby, senior vice president and chief human resources officer at Aflac.

The company's analysis indicates that lower-income employees have a general awareness of their risk problem-41% of them agree that they would be unable to adjust to the large financial cost associated with a serious injury or illness, compared to 21% of higher-income households who say they couldn't adjust-but the lower-income workers are not taking advantage of the products that could mitigate that risk.

The Aflac study also reported that the higher-income group expressed greater confidence than the lower-income group that they had enough information to feel adequately prepared to select their benefits (59% to 49%). When the two groups were asked about their understanding of high-deductible plans, 37% of the higher-income workers said they were extremely or very knowledgeable, compared to only 19% of those in the lower-income households.
Online enrollment was the preferred means of receiving enrollment for both the higher- and lower-income groups, but more dominantly so for the higher-income workers (74% versus 54%) in the Aflac study. Face-to-face enrollment was favored by 13% of higher-income workers, versus 25% for the lower-income group.

Lincoln Financial's study, titled The M.O.O.D. (Measuring Optimism, Outlook and Direction) of America on employee benefits, finds that employees enrolled in supplemental products beyond major medical coverage are more confident about their financial future and feel more optimistic and in control of their lives than those without these products. Specifically, 27% of enrollees in critical illness coverage express a sense of security about their financial future, compared to 17% of those without the coverage; 87% of critical illness enrollees also are optimistic about their financial future, compared to 73% without it.

Among employees with accident insurance, 25% say they feel secure about their financial future, compared to 16% without the coverage. Overall optimism and a sense of control of their lives is at 82% for the accident insurance enrollees, versus 73% for non-enrollees.

The author
Thomas A. McCoy, CLU, retired in 2013 as editor-in-chief of Rough Notes magazine.