FSA Friday - 7/13/18 - Millennials and Gen Z steering the future of employee benefits

Today's workforce is unlike any other in U.S. history, because no fewer than five generations of people are represented. This means employers have to find benefits that cater to a wider range of needs and expectations than ever before.

But it's the two youngest generations -- millennials and Gen Z -- that make up the lion's share of workers, at nearly 40% of the employee population. And this number is growing, meaning they're driving the most change in how benefits will be offered.

In this week's FSA Friday, we look at an article that shows how today's youngest employees are putting the most pressure on companies to adapt, and how that might affect older generations along the way.

3 ways millennials and Gen Z will put pressure on benefit costs - Michael Showalter, BenefitsPRO

It's not really surprising that aging employees tend to need more from their benefits. As Showalter points out, older generations have higher employer plan enrollment, choose more comprehensive benefits, and take advantage of family plans.

On the other side of the fence, millennials and Gen Z workers tend to focus on the bottom line, choosing plans with lower costs (and lower value), rolling the dice on potential medical costs that might arise. The younger workers might also still be covered under their parents' plans, which is -- of course -- the least expensive option of all (for them, anyway).

But what does this mean for employers as these younger generations age, start families and begin more thorough planning for their futures? If an employer has high retention rates, the costs of providing increasing levels of benefits could grow significantly over the years.

And if a company can't afford to offer the same levels of coverage over time, they may not meet the needs of the employees who chose to not enroll in the first place.

In other words, it's no longer just about making sure employees are healthy now. Instead, company benefit plans need to grow with these younger generations, to make sure they stay satisfied -- with their benefits, and their jobs.

FSA Friday is a weekly roundup of the latest topics, tips and headlines to keep you updated on all things flex spending. It appears every Friday, exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram, YouTube and Twitter.

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