Organizations have made notable progress to embed diversity, equity and inclusion (DE&I) within their culture in the past few years. While DE&I remains a top priority on boardroom agendas, many business leaders are exploring other areas where it can have a positive impact — including employee benefits.
Of the 1,200 global companies that responded to Aon’s 2022 Diversity, Equity and Inclusion Survey, 8 percent offered additional healthcare coverage to lower-income employees compared to the 40 percent of companies that offered additional coverage to high-income employees.
Employee benefits can be a challenging area to erase disparities due to health insurance affordability, local policy design, eligibility limits and minimum headcount requirements within global and regional markets. Local policy constraints mean multinational companies are often forced to compromise on employee benefits in ways they would not normally choose. In a world where the focus on inclusion within preventative care, fertility, gender realignment and other key DE&I areas is increasingly important to companies, so too is having benefits design flexibility across geographical borders.
For many years, large multinational companies were the primary users of employee benefit captives due to the significant health and risk premiums they had available to place in the captive. However, the minimum premium required to make captives financially worthwhile has fallen substantially in recent years and continues to drop.
Small and mid-sized employers can now afford to set up benefit captives — and with this comes many business advantages. Employers benefit from greater employee attraction and retention rates when they provide more affordable healthcare options to a wider audience of employees. Captives can advance DE&I goals by providing employers with more flexibility around healthcare access, including region-specific and socioeconomically diverse employees.
Next Steps for Embracing Employee Benefit Captives
Employers are adopting employee benefit captives solutions more than ever. Approximately half of Aon’s new captive insurance business originates from conversations generated within our reinsurance solutions practice. Captives can help companies manage their healthcare costs and provide the necessary design and eligibility flexibility to ensure every employee receives a global standard of coverage.
Here’s a brief checklist to find out if employee benefit captives are suitable for your firm:
Can Employee Benefit Captives Help Your Organization Make DE&I Progress?
1. Do your benefits in different regions uphold your DE&I principles?
Companies should ensure employee benefits support aligns with country, region-specific or global DE&I goals so they can address and make progress on local and company-wide DE&I initiatives.
2. Does your employee health insurance plan extend benefits to groups that may be considered ineligible (e.g. hourly or reduced schedule employees)?
When employers consider the healthcare coverage of all employees, they obtain a resolute picture of their healthcare costs and gaps, which affects workforce resilience.