A Further Exploration of Employer Benefits
A survey study of US employers aims to determine whether they prioritize financial or nonfinancial criteria when selecting health plans.
Being that many individuals found themselves on an employment-sponsored health insurance in 2023—including 60.4% of people in the United States under the age 65 (about 164.7 million people)1—its importance speaks for itself. This statistic alone demonstrates employers’ impact on the overall healthcare network.
There has been previous research showing that in a small sample of companies, costs and changes in costs were large concerns.2 Left up to interpretation was whether this was consistent across the board, and if so, this would suggest a major prioritization of financial and cost factors when it comes to selecting health benefits.
Knowing this, a study published in JAMA Health Forum3 sought to explore this concept further. Do purchasers of employee health benefits emphasize financial versus nonfinancial measures when it comes to their plan-picking decisions?
Investigators created an employee healthcare benefits survey derived from a combination of research and input from experts. The survey was given in two waves—May 2022 to July 2022 and November 2022 to April 2023—and was sent to a randomly selected sample of US employer (HR administrators from randomly selected nongovernmental organizations that had at least 50 employees) and consisted of 41 multi-part questions, focusing on factors such as the weight that they placed on benefits plans’ costs compared to member experience, access to care, and equity.
Participants were also asked questions concerning the prioritization of financial compared to other considerations during the third-party benefits administrator selection process.
Out of the 1,159 total companies that were sampled, 251 of them (22%) responded, but 30 of these companies were excluded due to having less than the 50 employees that were required. Regarding the 221 qualified companies, 147 (67%) reported using a benefits consulting firm, signifying that the companies, along with their benefits consultants, were dedicated to financial as opposed to nonfinancial performance factors when it came to decision-making.
There were 125 companies (74%) that followed health benefit cost trends, while 109 (64%) tracked spending on the highest cost cases. Meanwhile, 14 (8%) traced the time employees spent having questions answered, and 12 (7%) looked into how often employees deferred care due to activities of the insurance company.
Out of the 37 paired differences comparisons when it came to the proportion of financial versus non-financial items, six proportions (16%) drastically varied, with proportion differences of 0.22 or less. These finding suggests that the financial component was separate from organizational characteristics and other factors.
“The data we present in this survey study likely reflect the taken-for-granted emphasis by employers on financial measures of health plan performance, to the neglect of other ways of assessing health plans,” concluded the study investigators. “What we found may indicate the institutionalization of the prioritization of financial criteria in benefits administration. Because measures matter, employers’ emphasis on financial aspects may contribute to the problems observed in health benefits administration and health plan performance.
“Health benefits plans exhibit numerous problems, ranging from employee dissatisfaction to problematic access to healthcare. As measurement is important in focusing attention and efforts, employers could and should act to incorporate a much broader and more comprehensive set of measures assessing how health plans operate. By expanding what they manage and measure beyond costs, employers might help expand attention to other dimensions of health plan performance implicating employee health and well-being.”
References
1. Claxton G, Rae M, Winger A. Employer-sponsored health insurance 101. KFF. 2024. Accessed November 4, 2024. https://www.kff.org/health-policy-101-employer-sponsored-health-insurance/
2. Pfeffer J, Vilendrer S, Joseph G, Kim J, Singer SJ. Employers’ role in employee health: why they do what they do. J Occup Environ Med. 2020;62(11):e601-e610. doi:10.1097/JOM.0000000000001967
3. Pfeffer J, Olsen E, Singer SJ. Emphasis on Financial vs Nonfinancial Criteria in Employer Benefits’ Measurements. JAMA Health Forum. 2025;6(1):e245229. doi:10.1001/jamahealthforum.2024.5229
