Companies should start preparing employee benefits packages for 2016 beginning now. However, human resources departments will have their work cut out for them as they develop plans to entice new talent without going over budget. A business’ finance and HR wings should start examining the new trends in benefits packages and what other companies are offering in order to stay competitive and hold on to top employees.
The new year also means more laws for employers to comply with. Here are a few trends and rules human resources should keep an eye on in 2016:
Consumer-driven health care plans
As health care costs continue to rise, companies wanting to cap or minimize expenses should see if consumer-driven medical insurance plans are right for them, the Society of Human Resource Management reported.
According to Forbes, health care costs under the Affordable Care Act are projected to rise by 6.4 percent in 2016 if employers decide to keep their staff on the same plan as 2015. While the projection isn’t as bad as first thought, employers could move toward offering new plans with higher deductibles to save themselves from large excise taxes. These higher deductible health care plans (HDHP) puts the onus on the employee.
“The push to consumerism means more employees now have more incentives to spend more carefully – to find a less expensive MRI using a transparency tool, to choose generic drugs, to have elective surgery on an outpatient basis, to have a phone consultation with a provider,” Beth Umland, director of research for Mercer’s health and benefits, told Forbes.
The HDHPs give employees the responsibility to shop around for more inexpensive care instead of going out of network and having their employers pick up the bill. This benefit trend, though, requires transparency from providers along with online tools so staff members may compare and contrast prices so they can make educated decisions about their health, SHRM noted.
Telemedicine or visiting a doctor using a video teleconferencing service could also become more prevalent under HDHPs since they’re shown to be a cheaper alternative.
More tailored benefits
Another benefit trend that’s already making news is unlimited parental and maternity leave for parents of newborn babies. Netflix announced earlier this year on its blog that it would offer the benefit to its employees. Meanwhile, other tech businesses such as Microsoft, Google, Twitter and Facebook give new mothers generous paid maternity leave as a way to keep top talent at their companies, according to Business Insider.
“Younger job seekers want employers to match their college loan payments.”
However, it’s not just Silicon Valley offering longer paid parental leave. Hilton Hotels announced it’ll also extend the benefit to its employees, according to SHRM.
“We are now in a candidate-driven environment, and employers need to focus on retaining the talent they have before their employees decide to go elsewhere in search of more attractive benefits,” Jodi Chavez, senior vice president at Accounting Principals, told SHRM. “Parental leave benefits are one perk that we find really resonates” with job seekers.
Some companies are coming around to tailoring benefits packages for the range of employees they want. While some firms offer matching retirement plans, millennial employees burdened by college loan debt want a different kind of matching benefit.
According to SHRM, younger job candidates would rather employers match their college loan payments first than a matching 401(k).
New compliance issues
Employers will also need to comply with new regulations when it comes to benefits for the new year. Smaller employers – those with 50 to 99 full-time employees must report their staff members’ coverage under the ACA to the IRS no later than Feb. 28, 2016, according to SHRM. Failure to file on time could get a business slapped with a fine of up to $3 million depending on how many employees it has.
Companies operating in Colorado should also review their paid vacation policies as the state recently reinterpreted a statute affecting vacation plans. The statute bans businesses from implementing “use it or lose it” vacation policies. Under these kinds of plans, an employee must take all of his or her paid vacation time within the year. If staff members don’t use all of the days, they cannot accrue them and roll them over into the next year.