Health Care Studies

Employers: Benefits Are More Important than You Realize!

That’s what the Seventh Annual Study of Employee Benefits Trends – Findings from the National Survey of Employers and Employees shows. In fact, their data says health benefits are valued by 75 percent of employees, while employer perception is that 59 percent of their workers value health benefits. That’s a pretty big gap … combined with a number that states that well under half of employees (43 percent) actually understand which benefits fit their needs. Yikes!

It’s clear from all the numbers that employees value benefits more this year than in the past. Employees are talking more control of their finances and are increasingly looking to the workplace for help—even if it’s fully employee-paid benefits. Employees are also becoming more aware of their personal risk exposure, which leads to greater appreciation for benefits and company loyalty: Forty percent of employees say benefits play an important role in their decisions about whether to remain with their employer.

Here are some more key figures:

When asked which benefits are an important factor in employee loyalty (2007-2008), “salary/wages” decreased in importance by four percent while “other insurance benefits” (life, dental, disability, vision) climbed in importance by 18 percent (51% to 69%).

41% …

of employees consider workplace benefits to be the foundation of their personal safety net.

51% …

of all employees now state that they obtain most of their financial products through the workplace.

46% …

of employees have expressed greater interest in learning more about the benefits offered through their workplace.

73% …

of employees highly satisfied with their benefits were also satisfied with their jobs.

22% …

of employees not satisfied with their benefits said they were satisfied with their jobs. (Take note, employers!)

33% …

of employees expressed concern that their employer may reduce or cut benefit expenses in the next 12 months because of the economy.

90% …

of Americans believe that it is important for companies to continue to offer benefits, even if they must pay most or all of the cost!

Employer objectives and employee priorities seem to intersect, but they do not fully align. This, in our opinion, opens up opportunities to potential new benefit offerings.

If you’re surprised by any of these numbers—especially if you’re an employer—feel free to contact us at Stephenson Welsh Insurance Services to see if changes in your benefit offerings would better serve your employees while better positioning your company for retention and growth.

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Recent Survey: Health Benefits Not on the Chopping Block

According to a recent survey by Workscape, the vast majority of employers are not reducing health care benefits or forcing workers to shoulder more costs despite the state of the economy. Only 20 percent of responding companies reported a reduction or reconstitution of benefit offerings.

The fact that most companies are not decreasing their commitment to employer-sponsored health benefits, even though they are often the costliest of benefits, underscores the critical role of such plans in the overall compensation mix,” said Tim Clifford, President and CEO of Workscape. “Most organizations realize that in order to survive the recession and be poised for growth when the economy rebounds, employees must remain healthy and have peace of mind knowing that their families are protected.”

This is clearly good news for the industry and good news for most small businesses and employers. One way or another, employers are finding a way to make this work and doing everything possible to not cut health benefits. Forty-four percent of companies responding to the Workscape survey are opting for high deductible plans to offset costs, but all indications are they’re still funding those plans at 100 percent for employees. Some employers are taking steps to cut 401(k) or disability benefits. A small percentage of employers are going to higher employee contributions to pay for their benefits, although the vast majority are not.

The bottom line is to this point, employees’ health benefits are still sacred.

While disability and 401(k) plans as well as ancillary products may suffer cuts in the short term, that’s much better than the early predictions about how the steep recession would impact the health care sector. Instead of a catastrophic impact, this survey shows that employer-sponsored health benefits have withstood the economic downturn and are, in essence, considered the very last to go when a company is struggling financially.

As brokers, we think that’s absolutely the right decision. Health insurance is critically tied to employee satisfaction and is necessary for sustainability. In most industries, benefits are a retention tool. Most employers realize they need to offer quality health insurance to attract and retain quality employees. When considering two jobs that are of equal interest, a savvy talent will usually gravitate toward the superior benefit package. This is especially true in the small- to mid-market space and the technology sector.

When one employer offers quality benefits and another doesn’t, that makes the decision for the sought-after talent rather easy. There’s no way you’re going to recruit someone away from another organization without offering a quality benefits package, and there’s little chance of holding onto a top talent for long without benefits good enough to keep him or her put.

Our job as brokers is to work with clients to make sure offered benefits fit within their budget while still attracting or retaining key personnel. It makes little sense to offer an overly rich benefits package that you can’t afford. But it makes a great deal of sense to offer a solid health insurance plan to your employees at a fair price. There are high-quality yet value-priced health care options out there that are still going to make your employees happy. That’s what a good broker helps you achieve as part of the broker-client partnership.

Make sure you can have open, honest communication with your broker to say something like: “Hey, times are tough and we need to tighten our belt. What other strategies can we utilize to not break the bank while still offering good benefits?”

If you’re an employee considering a new company, talk to an experienced broker or experienced professional who can help you determine which benefit offering will best serve you.

If you’re an employer or small business owner, don’t destroy your business offering unaffordable, unsustainable benefits. There are affordable alternatives out there that will allow you to still offer quality benefits and retain top talent without breaking the bank. And if you don’t have an experienced HR department or have offered the exact same benefits to your employees for years, you better have a good broker take a look under the hood. Chances are you’re paying much more than is necessary, and without a sound strategy in place you’ll suffer though huge premium increases on outdated offerings.

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