With benefits making up about a third of total compensation costs, it’s important that employers get the most out of them. According to the Bureau of Labor Statistics, the average health insurance cost per employee per hour has gone up by about a third in the past 10 years, and employers are looking for ways to manage that cost. SHRM’s 2017 Employee Benefits Report highlights some of the trends, especially when dealing with health insurance. Here’s what you need to know.
Employers Balance Offerings With Costs
Employers have had to cut back on some coverage options to control costs, such as by reducing coverage for spouses and partners in some cases. Employers also charge higher premiums and offer high-deductible plans, which often offer less coverage, to pass on some cost responsibility to employees. At the same time, employers are increasingly helping employees manage costs through Health Savings Accounts and other accounts.
While the use of medical Flexible Spending Accounts has dropped from 72 percent in 2013 to 63 percent in 2017, the use of HSAs has risen from 42 percent to 55 percent over the same period. Employer contributions to HSAs have also risen; 26 percent of employers offered contributions to HSAs in 2013, while 36 percent did so in 2017. If your organization has made the move to high-deductible plans, make sure you also offer ways for employees to save for healthcare costs.
Wellness Programs Help Lower Costs
Employers have long used wellness programs to give employees the tools they need to improve their overall health in the hopes of affecting healthcare costs. And it seems to be working: The report found that 77 percent of organizations said their wellness programs were somewhat or very effective in reducing healthcare costs. In addition, 88 percent said their wellness programs were somewhat or very effective in improving employee health.
Examine your wellness program to ensure it’s doing all it can to help address healthcare costs. You may need to expand it, or use surcharges on some wellness issues, such as charging employees who smoke more for their coverage, to make up any cost increases. The report found that 19 percent of companies add a smoking surcharge to healthcare premiums.
Benchmarks and Surveys Find the Best Value Point
Benefits play a large role in job satisfaction and retention: The report found that while almost 90 percent of employees are at least somewhat satisfied with their jobs, 2 out of 5 are considering whether to look for another job in the next 12 months. And the top reason for looking for an external position was higher compensation and pay, followed by better overall benefits.
When trying to balance health insurance with cost, benchmarking is a great tool to help ensure your benefits compare favorably with your competitors’. In addition, periodically surveying employees can help you understand understanding what they value so you can build packages that provide the best balance for everyone.
Winston Benefits is an HR solutions company that helps businesses enhance and optimize employee benefit plans, enrich compensation and rewards programs, and save money on benefits communication, enrollment and administration. Contact us to learn more.