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Finding the right balance: benefit plan costs and employee health

January 19, 2015

Source – INSIGHTS, Volume 9, Issue 2 by TELUS Health Analytics
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Any organization that offers benefits to employees needs to know how the design of their health plan affects costs and employee productivity. A thoughtfully designed healthcare benefit plan is not only a key competitive differentiator for plan sponsors, it also plays a critical role in ensuring the sustainability of human-resource offerings. The aim of TELUS Health’s annual plan sponsor survey is to measure industry-wide trends and identify influencers that will help key decision makers ascertain the right choice for benefit plans.

The 2013 TELUS Health Plan Sponsor Survey1 (conducted by Research House, an Environics Company) polled 105 senior employee benefit personnel2 in medium-to-large-size plan sponsors during October and November 2013. The plan sponsors who participated worked for public and private sector enterprises with distribution as shown in Table 1.

Table 1: Breakdown of plan sponsor sample1


What benefits do plan sponsors offer?

Long-term disability, employee assistance and wellness programs are the more common benefit offerings. (Figure 1)

Figure 1: Types of benefits offered by plan sponsors


Of the plan sponsors that offer a wellness program, we asked for specific information regarding the various initiatives, with results shown in Figure 2. The survey reveals disability management, lunch n’ learns and stress management as the top three programs offered.

Figure 2: Wellness programs offered by frequency of mention


What influences decision-making for benefits?

Most plan sponsors are trying to achieve a balance between cost saving and encouraging and promoting employee health. (Figure 3) The survey asked respondents to rank whether the programs focused more on cost containment (1), disease management and health promotion (5) or a combination of both.

Most of the responses were in the middle range, with approximately equal numbers at the extreme ends of cost containment and health promotion.

Figure 3: HR focus in providing benefits


While three-quarters of respondents felt that benefit plans are important in attracting and retaining talent (Figure 4), decisions about benefit coverage take factors like productivity, adherence to industry standards and the firm’s overall compensation strategy into account. (Figure 5)

Figure 4: Importance of the benefit plan in attracting and retaining employees


Figure 5: Determinants for benefit design


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