Despite the fact organizations are facing rising health care costs, many employers are directing more of their financial resources toward wellness and health benefits, according to new research conducted by the Society for Human Resource Management (SHRM). However, this shift comes at a price. Evren Esen, director of SHRM’s Survey Programs, pointed out in a media statement that as health benefits increase, other perks are being cut.
For example, the 2014 SHRM Employee Benefits Survey shows a trend toward decreasing employer provided financial and compensation benefits such as tuition assistance, dependent care flexible spending accounts, and executive incentive bonus plans.
Health Benefits Remain Key
The 2014 SHRM Employee Benefits Survey, sponsored by Colonial Life & Accident Insurance Company, queried 510 randomly selected HR professionals about 300 benefits and found that health benefits remain of prime importance – 98% polled offer some type of health care coverage to their full-time employees. According to the report, the most common health insurance offered is a preferred provider organization (PPO) plan. The survey found the median annual cost for employee-only coverage is $5,838 and the median percentage employers contribute toward employee-only health care coverage is 80%.
The SHRM report also revealed that over the last 5 years there’s been an increase in the number of organizations providing workers with mental health coverage, contraception coverage, vision insurance, and coverage for bariatric and laser vision surgery. “Offering health benefits is critical to employee recruitment and retention,” said Bruce Elliott, manager of compensation and benefits at SHRM. “However, the rising cost of health benefits, especially health insurance, has made it challenging for some employers to continue offering it. Because of that, employers are evaluating all their benefits and making adjustments.”
One of those adjustments revealed by the survey is a shift of some health care costs to employees over the past 5 years. For example, there has been a 12% increase in the number of organizations offering health savings accounts (HSAs). These tax-advantaged medical savings accounts are available to employees enrolled in a high-deductible health plan (HDHP) and can be used to pay for qualified medical expenses at any time without federal tax liability or penalty.
Increased Focus on Wellness
The new SHRM report also shows HR leaders are recognizing the importance of preventive health measures. “An increase in wellness offerings is another trending tactic for companies looking to save on long-term health care costs often associated with chronic diseases such as diabetes and high blood pressure,” Elliott said. The top wellness benefits offered by survey participants to prevent and manage chronic diseases and other health-related issues include: health and lifestyle coaching (47%), preventive programs targeting workers with specific chronic health conditions such as diabetes (42%), subsidies or reimbursements for fitness center memberships (34%), weight-loss programs (32%), onsite fitness centers (20%), and nutritional counseling (20%).
Other Key Findings from the 2014 SHRM Employee Benefits Survey:
- The number of organizations (58%) offering paid-time-off (PTO) plans has significantly increased since 2010 when less than half (47%) offered PTO plans.
- Companies are reporting a shift to defined contribution retirement savings plans and Roth 401(k) savings plans; only 24% of organizations surveyed now offer defined benefit pension plans that are open to all workers.
- Contraceptive coverage is the most commonly offered women’s health benefit and is offered by 84% of companies polled.
- Almost 60% of organizations currently offer some form of telecommuting. 54% of respondents reported they offer telecommuting on an ad-hoc basis, 29% permit part time telecommuting and 20% allow it on a full-time basis.
- Not only are fewer organizations offering undergraduate tuition assistance (54% in 2014 compared to 62% in 2010), but fewer organizations are offering graduate tuition assistance, as well.
- Several family-friendly benefits have decreased over the past year including domestic partner benefits for same-sex and opposite-sex partners and adoption assistance.
Several new benefits were added to this year’s survey. Results from the HR participants polled revealed that less than 1% of organizations offer divorce insurance, 13% provide safety bonuses and/or incentives, 20% offer free snacks and beverages to employees, 4% have electric vehicle charging stations available for workers and 62% provide employees with various company paraphernalia.