Understanding Integration: What Do Employers Want From Integration?

American business is facing new impetus to keep costs down and improve productivity as the U.S. economy slows. Risk and HR managers are under the gun to demonstrate their contributions to the bottom line.

Insurance and benefits costs are on the upswing and key cost containment tools like managed care no longer meet the needs of employers and employees alike. Reducing benefits or cost shifting won’t do as employers seek to retain and attract a skilled, trained workforce.

Integrating delivery of employee health, disability and absence benefits shows great promise in assuring that these conflicting goals can be met effectively.

Goals are Wide-Ranging

In 2001, we asked employers what senior management’s goals were in approving their integrated benefits programs, and found that employers integrate for various reasons.

Senior management goals

When IBI calculated the percentage of respondents that mentioned each different goal, we found that cost savings was mentioned most often, followed by productivity issues: having employees at work contributing to their employer’s bottom line. In 1999, employers told us cost and productivity goals were rated almost equally important, even though they ranked cost higher.

Smaller employers

For small employers, the goals they seek are cheaper coverage, lower benefits costs, administrative ease and the direct benefit of having their small, often specialized workforce on the job and not absent. With a limited workforce small employers simply can’t cover absent employee’s duties with temp workers or overtime as easily as larger employers.

Large employers

Benefits integration goals for large employers are to minimize the costs of absence including the productivity effects of lost time on the corporate mission and bottom line. They also seek to beef up their benefits tracking systems across benefits lines and simply access to benefits for their employees through integration.

Mid-sized employers

Mid-sized employers share characteristics of both large and small employers. Their first focus is on medical care and quality as a means to assure employee satisfaction. They also seek to control lost days and unnecessary absence while simplifying benefits access through a single source.