In this report, ICONIQ Growth dives into our research and explores how and why tech companies are looking to restructure benefits programs going into 2023.

Research

ICONIQ Growth- Future of Work: Employer Benefits Series

Nayya Marketing 

_The status quo will continue to challenge the American worker unless we harness the latest technologies to change the industry._

New York, New York, April 16, 2024 – Nayya, the data-driven adviser and leading provider of personalized employee benefits guidance, has published a report challenging the humdrum assertions made by many ecosystem players. The company, founded in 2019, already serves millions of employees, as well as many of the leading employers, consultants, PEOs, payroll companies, carriers, benefit administrators, and retirement providers across the United States. 

Nayya’s research showcases how offering more benefits is not solving the problem. Confusion and dissatisfaction with benefits are rising while the cost of living, healthcare costs, and inadequate retirement savings exert ever more pressure on employees. Traditional benefits education practices to drive benefits engagement continue to fall short of their promise, with point solution engagement in the single digits and as many as 60% of individuals selecting a more expensive health plan than they need.* Constant benefit administrator reports tout personalization and simplification. Why have these entities not solved the core challenges facing employees over the last 20 years?

Nayya’s report, titled "_Time to Build: How Employee Benefits Infrastructure Can Rise to Meet New Challenges_," comes at a time when nearly 50% of all Americans are concerned that a major health event would drive them into bankruptcy. Simultaneously, many of these same people are struggling with underutilizing their benefits. 

The standard industry approach is to throw more and more information at employees attempting to drive higher benefits engagement. And yet employee satisfaction with benefits reached an all-time low in 2023. Benefits education is often communicated in generic, long-form, and jargon-filled language. The entire employee benefits ecosystem has been constructed without a “last mile” adviser for the employee.

Nayya’s latest report offers a guide to understanding how the twin challenges of rising costs and low benefits engagement are causing employee benefits to fall short of expectations. In addition, it provides a first step for employers and consultants to take in delivering real value to employees. 

A new approach to employee benefits starts with holistic benefits guidance. In this new world, benefits pathways are tailored to the individual. These are based on health data, wealth insights, and tuned to personal preferences. The result is an employee benefits system that proactively delivers value in the moments that matter.

**Key highlights of the report include:**
- **Double Clicking into the Rising Costs and Impact to the Individual:** An overview of the current state of the economy and associated challenges facing employees, including why employers are in such a crucial position to help their teams navigate these times
- **The Role of Benefits in Financial Preparedness:** The significance of a cohesive benefits strategy in helping employees understand how to maximize the value of the resources available to them and bolster confidence in their protection
- **Driving Impact Through Digital-First Experiences:** Strategies for providing intuitive and effective benefits guidance that improve employee satisfaction and financial outcomes
- **Harnessing Technology for Holistic Guidance:** The importance of leveraging data-driven solutions to enable a scaled approach to optimizing benefits delivery 

Commenting on the release of the report, Catherine Spence, VP of Marketing & Member Impact at Nayya, said, "There comes a point where you have to cast aside systems that aren’t serving consumers. We realize that incumbent players delivering benefits guidance have proven unsuccessful. As an industry, we have the opportunity to make holistic, data-driven, benefits guidance the new standard of excellence.

Nayya is committed to continually providing research-based insights alongside our partners, so that we can collectively shift our focus to benefits that proactively, programmatically, and prescriptively deliver impact to employees. People deserve better support."

Time to Build: How Employee Benefits Infrastructure Can Rise to Meet New Challenges is now available for download on [Nayya.com](http://Nayya.com/time-to-build-report).

**About Nayya:**
Nayya is the leading provider of personalized employee benefits guidance. Leveraging data and technology to reduce user friction, increases benefits understanding, and drives benefits impact from enrollment to usage to re-enrollment. Nayya unites the employee benefits experience across health, wealth, and wellness to deliver clarity and efficiency across the entire benefits landscape. Nayya is proud to be trusted by the biggest name in benefits including MetLife, ADP, Prudential, and Guardian. Headquartered in New York City, Nayya is a privately held company backed by Iconiq, Felicis, and Viewpoint Investment Partners. For more information visit [www.nayya.com](http://www.nayya.com).


**Sources:**
* [_The Quarterly Journal of Economics, Volume 132, Issue 3, August 2017_](https://academic.oup.com/qje/article-abstract/132/3/1319/3769420?redirectedFrom=fulltext&login=false)


The traditional approach to employee benefits in the United States is failing to meet the needs of workers, with nearly 60% of individuals selecting more expensive health plans than they need. It's time for a new approach that focuses on personalized, holistic benefits guidance to improve the employee benefits experience.

News

We Need a New Deal for Employee Benefits

## Healthcare Benefit Costs to Increase

If there's anything that the last few years have taught us, it's that having a competitive benefits package is critical to a company's success. Attracting and retaining top talent has become increasingly difficult, and one of the key ways to stay ahead of the curve is by offering a benefits package that meets or exceeds the needs of employees and their families, giving them peace of mind. However, with healthcare costs rising faster than the rate of inflation, it's becoming more and more difficult for companies to offer comprehensive benefits packages without breaking the bank.

A recent study by Willis Towers Watson looks at the projected costs of healthcare benefits for 2023 and how they will impact employers.

## The 2023 Global Medical Trends Survey

For the 2023 Global Medical Trends Survey, Willis Towers Watson interviewed 257 leading health insurers in 55 countries over the summer of 2022. The survey projects that global healthcare benefits costs will increase to the highest level we've seen in over ten years. 

On average, global healthcare benefit costs are projected to increase by 10% in 2023, according to the report. This is a significant increase from the 8.8% rise we see in 2022 and the 8.2% in 2021.

## What's driving these increases?

There are a number of factors that are contributing to the rising cost of healthcare benefits. Here are some of the key drivers:

- **Global inflation**: Between the current international conflicts and supply chain issues, inflation has rapidly risen. This has directly impacted the cost of healthcare benefits as providers pass along inflation increases to employers.
- **The pandemic**: The ongoing COVID-19 pandemic has resulted in both a higher utilization of healthcare services and an increase in the cost of treatments. Many countries are still dealing with this pandemic, and the costs associated with the long-term effects are still being felt and difficult to predict.
- **Overuse of services**: The number one driver behind the rising cost of healthcare benefits is thought to be the overuse of services, ranked first by 74% of insurers. This means medical professionals are ordering more tests and procedures than necessary and overprescribing medications. This, in turn, drives the cost of healthcare up without necessarily improving the quality of care.
- **An increase in chronic conditions**: Along with an aging population, we're also seeing a rise in the number of people living with chronic conditions such as diabetes and heart disease. These conditions require more frequent and more expensive treatments, which drives up the cost of healthcare benefits.
- **Increase in mental health services**: For a long time, it felt like mental health was not acceptable to discuss in the workplace — but it's becoming more and more common to talk about these issues and seek treatment for them. The pandemic has also taken a toll on mental health, with anxiety and depression rates skyrocketing. The increased demand for mental health services has driven up the cost of overall healthcare benefits.
- **Poor lifestyle habits**: Despite all of the available information about the importance of maintaining a healthy lifestyle, unhealthy habits like smoking, drinking, poor posture habits, and a sedentary lifestyle are still quite common. These poor health habits can result in more serious or chronic health problems down the road, which drives up the cost of healthcare benefits.
- **Lack of preventive care**: Many people still don't see the importance of preventative care, such as routine physicals, screenings, and dental cleanings. The lack of preventive care often leads to more severe problems, which are more expensive to treat. The years of the pandemic lockdowns have also led to a decrease in preventive care. Many people have been afraid to go to the doctor or dentist, and access has often been limited due to physical distancing restrictions. Healthcare providers are still playing catch up to provide the necessary preventive care that's been missed over the past few years, and many patients are now dealing with the consequences.

## Healthcare cost increases across the globe

Although all countries are projecting an increase in healthcare costs for 2023, there are significant variations by region. In North America, for example, healthcare benefit costs are projected to increase by only 6.5%, lower than the 9.4% increase in 2022. 

In contrast, most regions will still see an acceleration in the growth rates of their cost of benefits.

Experts project that average healthcare benefit costs will increase in the Middle East and Africa by 11.5% in 2023, versus 10.5% in 2022, in Asia Pacific by 10.2% versus 6.9% in 2022, and in Latin America by 18.9% from 18.2% in 2022. Even in Europe, where healthcare costs have traditionally seen lower increases, they predict a rise of 8.6% in 2023 versus 8% in 2022.

Experts have warned that healthcare costs will carry on increasing unless we make fundamental changes to the way care is delivered.

## How to keep healthcare costs down

If employers want to keep their healthcare costs down, they need to make some changes to the way they're approaching benefits. Some of the ways they can do this include:
- **Offering incentives that encourage employees to live healthier lifestyles**. These incentives can include discounted gym memberships, on-site wellness programs, health coaching, healthy food options in the workplace, and health risk assessments.
- **Encouraging employees to use preventive care services**. This can be done by offering free or discounted screenings and physicals. Education is also key, and employers can provide educational materials on the importance of preventive care and how it can save money and improve quality of life in the long run.
- **Ask employees what they want from their healthcare benefits**. By understanding what your employees value, you can design a benefits package that meets your employees' needs and helps keep costs down. Using decision support software like Nayya can also support employees to make better choices about their benefits and find the providers that offer the best value for their specific needs, optimizing healthcare costs without sacrificing the quality of care.

A competitive benefits package is still a crucial element in attracting and retaining top talent. With healthcare costs still projected to increase, employers need to be strategic about how they design and manage their benefits as a recruiting tool.

With the right approach, taking proactive steps to support employees in maintaining good health and a balanced lifestyle and using decision support technology to make benefits more cost-effective, it is possible to keep healthcare costs down while still providing a comprehensive benefits package that meets the needs of your employees or potential candidates.

According to research from Willis Towers Watson, healthcare benefit costs will increase in 2023.

Benefits

Global Healthcare Benefit Costs to Increase in 2023 

## Healthcare Costs Expected to Skyrocket Next Year
If it feels like you haven’t been able to catch a financial break lately—you’re not alone. It seems inflation has now taken over as the number one concern across many households.

We’ve seen prices skyrocket across countless industries: food, gas prices, real estate, transportation, and other everyday expenses. And now, because inflation really likes to pull the old “kick ya while you’re down,” healthcare costs are predicted to skyrocket next year—for employees and employers alike. 

Mercer's recently published **National Survey of Employer-Sponsored Health Plans** seeks to provide insight into what we can expect to see across healthcare costs in the coming year. Let’s take a look at some of the key findings, how the newly signed Inflation Reduction Act comes into play, new benefits and healthcare trends, and how employers and employees can drive cost savings.

## Growing healthcare costs

TL/DR? Healthcare costs are rising.

In 2023, employers expect an average increase of 5.6% in healthcare costs. This is a significant jump from this year's projection of a 4.4% increase. The main drivers of rising healthcare costs are growing labor costs and supply chain-driven price increases.

When it comes to the cost of prescription drugs, how they will evolve remains to be seen. The [Inflation Reduction Act](https://www.nayya.com/blog/inflation-reduction-act) promises to cut drug costs for people covered by federal medical health insurance by allowing direct negotiation between Medicare and pharmaceutical companies. What effect this will have on the prices of drugs covered by private insurance plans has yet to be seen. 

## Current healthcare trends

As well as facing rising costs, employers must adapt to changing trends in the healthcare industry and new employee concerns.

Here are some of the current areas of focus for employers:

- **Behavioral health**: as the world starts to get back to some levels of normalcy, employees are struggling with anxiety, stress, and depression at unprecedented levels. The flip-flop-flip of going back and forth between remote work, in person work, and hybrid work in such a short time has taken a toll on employee’s mental health, and employers are beginning to take action. Because of this, we’re starting to see employers focus on promoting mental health in the workplace and offering programs and benefits to support employees' well-being.In the coming years, we can expect to see a rise in the use of behavioral health services as a critical part of employee benefits.
- **Reproductive care**: in the wake of the Supreme Court's decision to overturn Roe v Wade, many states have been quick to pass laws restricting access to abortion. This has led to a rise in the number of women seeking out reproductive care services, such as abortions and contraception, outside of their home state. Employers have started to take note, and many have committed to ensuring that employees have access to these services regardless of state legislation.
- **Digital health**: the last few years have forced us to rely on technology more than ever, and that's not likely to change anytime soon. Employers are investing in digital health solutions to help employees manage their health and well-being and provide easier access to care. We can expect to see a rise in the use of telehealth services and preventative care and wellness programs.
- **Health equity**: nearly half of the employers that Mercer surveyed in companies with 500 or more employees stated that they're very concerned about health equity, and it's easy to see why. The pandemic has disproportionately affected marginalized communities, and employers are beginning to take note of existing healthcare and economic disparities. In the coming years, employers have stated that addressing health equity will be a priority for them.


## Healthcare's impact on employee retention

Despite the projection that healthcare costs will continue to escalate, employers are reluctant to reduce employee healthcare benefits. 

With all the labor shortages coming from what has been dubbed the Great Resignation, employers are more aware than ever that solid employee benefits are crucial in attracting and retaining talent. This is why they are reluctant to either decrease healthcare benefits coverage or pass part of the costs back onto employees through higher deductibles or copays.

Instead, employers are looking for ways to control costs without reducing benefits—to do more with less, if you will. This includes looking for ways to optimize their investment in employee benefits by enriching their offering to meet the specific needs of their workforce.

## Making the right healthcare choices

One of the best ways to control the costs of employee healthcare benefits is to make sure that employers offer the right mix of plans that genuinely meet their employees' needs, and that employers are **thoroughly educating and communicating the value of these plans to their employees.**

With the myriad of different plans and providers out there, and the complexity of the healthcare system, this can be a daunting task. But there are ways to simplify the process and **ensure that employees know their options and feel confident when selecting them.**

A benefits decision support tool like Nayya can cross-reference data with an employee’s physical, mental, and financial needs to provide personalized benefits recommendations to each unique employee. With a tool like this, employees receive comprehensive benefits education and support throughout the entire enrollment process.

## Cutting costs for employees and employers

One of the biggest benefits (no pun intended) of a benefits decision support tool is the ability to help drive cost savings for employees and also employers.

By choosing the right plans for their family, health, and financial background, employees can feel confident that they are not overpaying for benefits, and that their plans have their back when they need them most. Throughout the process, employees also receive education around pre-tax savings accounts like HSAs, FSAs, and 401K accounts, which gives them the confidence to increase pretax contributions which can help drive healthcare and retirement savings over time.

For employers, Nayya drives cost savings by:

- Making sure employees are on the right plans (whether that be PPOs, HDHPs, or otherwise)
- Driving increased contributions to aforementioned pre-tax savings accounts which can help employers save on Payroll taxes
- Giving time back to HR teams to so that they can do more with less

And so much more.

Benefits are the single most important financial decision employees make for themselves and their families each year—they have a direct impact on health and financial wellness for everyone. With healthcare costs expected to skyrocket next year, and record high inflation rates, a benefits decision support tool can alleviate the pain associated with increased costs for employees and employers alike. 


[Ready to learn more about Nayya?](https://www.nayya.com/get-demo)

A new study from Mercer predicts skyrocketing healthcare costs for employers and employees in 2023.

ICONIQ Growth- Future of Work: Employer Benefits Series

Future of Work Series: Employer Benefits

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