64% of employees cost between $5,000-$15,000 per year in benefits for their employers. To help control costs, employers are increasingly shifting costs to employees through higher deductibles and lower premiums. However, this can make benefits unattractive to employees. Alternative approaches include mandating specific pharmacies or provider networks, implementing generic drug policies, and offering high-deductible health plans paired with health savings accounts. Providing better benefit services can increase employee satisfaction and help companies achieve their goals by boosting value and output.

1. Total Annual Benefit Costs Per Eligible
Employee
Under $5,000
$5,000 - $9,999
$10,000 - $14,999
$15,000 - $19,999
$20,000 +
The Goal: Educate BSD producers aboutcurrenttrend/state of employer benefit
services, with the hopes that their clients will show potential interest in using
Gallagher for their benefits services as well.
Current State of Employer Benefits1
 Job mobility is increasing  Employers offer wider range of benefits to retain employees
 Competition amongst employers to attract and retain employees
 To help achieve your organizational goals, employers should “maximize the overall value
of your various human capital investments”
 Social and legal mandates are changing the dynamic between wages and benefits
 The two most popular strategies for reducing benefit costs are “cost-shifting to
employees” (increase deductible, lower premiums) and changing medical plan carriers
o Unattractive to employees and early talent
1 Source: 2015 Benefits Strategy and BenchmarkingGuide
64% of employees cost between
$5,000 - $15,000 per employee
each year in benefits
1

2. Suggested Steps towards Innovative Employee Benefits2
 Mandate specific pharmacies
 Mandate narrower provider network
 Implement mandatory generic drug policies
 Health Savings Accounts/High deductible health plan
 Self-Fund
SecondaryKey Points
 More than 40% of companies are now offering Wellness Plans, but the majority of them
say the participation rate amongst employees is low
 Many employees could be bankrupted by a serious accident or loss (no long term
disability coverage or life insurance)
 Coverage gaps are more apparent in smaller organizations, leaving both employees and
employers more exposed
Specific Areas of Opportunity
 Industries that offer great benefits, who might be looking to better manage or shop
around given the Cadillac Tax
o Technology Companies
o Finance
o IT
o Manufacturing
 Industries that typically do not offer lots of benefits, or may be uneducated about their
necessity
o Retail
o Food services
o Small-sized organizations
Increasing employeesatisfaction throughinvesting resourcesin betterbenefit services will increase value
and output, helping the company better attain its goals.
2 These suggestions may be subjectto change bearingin mind the effects of the Cadillac tax,which was recently
delayed from going into effect for another two years until 2020.
2