Our 2023 Predictions
We started this last year and thought it would be fun to do again!
Before we jump into the 2023 predictions, let’s see how I did last year. The 3 trends we predicted for 2022 were:
LTD rates going crazy.
This did happen, and if you talk to any benefits advisors this has been a struggle to deal with on renewals. Not only are loss ratios increasing on a case-by-case basis, but insurers are taking big losses. Keep in mind, the argument with higher interest rates, is that this should alleviate some of the cost pressures, but I think the losses are vastly outpacing investment of premiums in interest bearing products.
Personalization of Benefits.
This predication sucked on my part. Of course people want this. I think the context behind this was a genuine desire to support employees from a holistic perspective, health, wellness, education, not just insuring catastrophic risk as was the goal in the past. Much of what we see day to day at myHSA is exactly this.
Work from home.
I said I did not think this would stick; I was wrong. I think as I wrote this I was personally struggling with how to manage this from our company perspective so I was sharing a bias in the blog. I do not know a single person that is 100% solely back in the office. Hybrid is the “new normal” … but I still think Zoom meetings suck!
Now, what do I think will be in store for 2023?
Traditional Insurance. I do not see anything changing the industry in a drastic way. Maybe a hybrid disability product? But I do not think the industry really wants this yet. I do think the cost pressure in LTD could change this in the future, but not yet. Besides an Amazon or Google offering a marketplace, it seems like business as usual in the insurance space. Even if a large tech platform offers insurance, I do not think it uproots the benefits advisor as these are very complex plans and never a one size fits all solution. As employers look for more holistic approaches to total rewards, the insurance is one component to many other products and services offerings in a benefit plan. I think there are broader HR trends that will impact the benefits/total rewards space for 2023.
Wellness Space. I think this has been an overlooked part of our industry, but adoption is slow because there are a lot of old narratives and myths that still need to be debunked. So many advisors say there is no ROI on wellness because there is not a straight line between investment and measurable outcomes from different wellness initiatives. I know there have not been many formal studies done, but I come at it from the view that everyone knows preventative strategies are worthwhile rather than only offering reactive employee benefits. Many benefits are reactive in the employee space, where it is a shift to further offer preventative solutions that employees value. Think of how many large insurers did not offer a LSA or WSA 5 years ago; now, many offer some sort of wellness offering at a basic level. The exciting thing to me is that I think this is a whitespace for a wide range of things beyond just gym membership reimbursements as well. I am talking about incorporating concepts like helping real business problems like DEI in this space. Curating wellness plans specifically to target talent for certain groups, and support those that have needs outside traditional or mainstream offerings. Things like:
a. Gender affirmation
b. Non-mainstream therapies – Indigenous healers, as an example.
c. Financial health- Part of the definition of wellness for someone has a financial aspect.
d. Educational offerings. There could be a shift of a higher emphasis on acquiring skills versus pieces of papers in the form of degree.
Basically, any modality or service can be supported in a flexible wellness program.
I think it may be slow, but this aspect of wellness will continue to see growth in 2023
Mental Health. This is just simply not going away and it is important for employers to help reduce its impact on their workforce. It is no longer a silent problem that can be ignored. According to a Mercer study, 1/3 of LTD claims are directly related to mental health, so there are already tangible costs and consequences of doing nothing. This Sun Life chart shows the best image for where this was in Q2 2022 - and it is not slowing down.
Not to mention the harder to measure effects like presenteeism and absenteeism are hugely affected with mental health. I read an article yesterday from Lifeworks that stated 77% of workers have a moderate to high mental health risk. This clearly affects disability, drugs, HSA, and healthcare costs, as well as other aspects that impact the business, so this will be top of mind in 2023.
Work from home. I think this will continue to have a huge impact on HR and business as a whole. I will share my views that we struggled with it in 2022. Self-admittedly, I continue to struggle for the right balance both personally and as an office with a WFH strategy. As an open office business, you realize it is quite distracting after you have a few "deep work" days at home. So, if you forced everyone into the office, then in many roles you are slowing them down and not helping them produce great work. Personally, what I learned in 2022 was that I did not need to just decide for everyone what the policy should be, but to ask each person what the right WFH strategy is best for them. Their views were not the same and many want to be in office a lot more than you would think. Then as professionals, let them do what they need to meet their goals for their roles. Sounds like I have it figured out, right? I do not, but I needed to reassess a big part of how we operate our business to navigate a hybrid WFH. Only now are we putting together structure to follow for 2023, but I think with more structure we will be in a better place in 2023. I think many companies are exactly like us and that 2023 we’ll all continue to be in a transitionary phase and continue to tweak operations in a hybrid work environment, which I think is here to stay.
Steve McEwan COO & Co-Founder