The Right Integration of Benefits Can Boost Employee Financial Protection

Employers face a tough balancing act—they strive to offer valuable benefits that meet the goals of employees and the company, while controlling rising costs—and they can manage those priorities by building a benefit platform that considers how specific offerings work together, according to a report from Prudential Financial, Inc.

The report, “Insights for Optimizing Your Employee Benefit Program,” provides information about linkages between different benefit offerings and overall outcomes.

Prudential notes that data analytics is a powerful tool to diagnose how benefit plan designs are driving employee behaviors that in turn can support or impede business outcomes.

“Employers have more data at their fingertips than ever before, which gives us the ability to zero in on which employees are accessing benefit programs and how those programs perform,” says Christine Marcks, president of Prudential Retirement. “The right plan designs and the right mix of benefits can help drive how employees prepare for retirement, manage health care costs, or protect themselves financially in case of a disability, while helping employers maintain efficiency and productivity for their businesses—all within a given budget.”

Striking the right balance across benefits, such as retirement, disability, critical illness or accident insurance, supports financial wellness and worker productivity. “Understanding the levers for each type of benefit is the best way to develop a platform that supports productive behaviors and outcomes,” Marcks says.

As an example, disability plans with lower benefit amounts may not provide enough financial protection and could force employees to stop 401(k) contributions or take loans from retirement savings to pay for health care and living expenses. Meanwhile, disability plans offering higher benefit amounts could encourage employees to stay out of work longer than they should.

“Details matter,” says Andrew Sullivan, president of Prudential Group Insurance “The more employers understand how plan design affects employee behaviors, the better positioned they are to ensure their plans are aligned with objectives that serve employee and business needs.”