Controlling benefit costs is top concern for employers
By Alan Goforth
It probably comes as no surprise to HR professionals that providing benefits is the major concern among their peers across the nation.
And the two biggest challenges in the benefits arena for employers are the need to control costs while attracting and retaining a competitive workforce, according to the second annual Benefits Strategy & Benchmarking Survey, conducted by Arthur J. Gallagher & Co. More than 1,800 businesses of all types, sizes and geographies participated.
"Although organizations may be aware of the changes that are shaping the future of the employee benefits market, the survey suggests that many are not yet ready to face the challenges these changes will bring," said James W. Durkin Jr., president of Employee Benefit Consulting and Brokerage. "Those that adequately adapt to the current reality will optimize their ability to mitigate future costs."
Sixty-seven percent of employers said controlling benefit costs is their No. 1 challenge. Their strategies for accomplishing this objective include:
- Increasing employee plan contributions (54 percent).
- Increasing deductibles (43 percent).
- Increasing out-of-pocket maximums (36 percent).
- Increasing copayments (30 percent).
- Retirement plans continue to shift toward a defined-contribution model, with 64 percent of respondents offering a 401(k) plan.
- Of those, 70 percent match employee contributions.
- Employers like wellness programs, with 44 percent of participants offering a program to their employees.
- However, even with the increase in the number of employers offering a wellness program, most programs (61 percent) have a budget of less than $10,000.
- Although employees often are interested in long-term care as a voluntary benefit option, 82 percent of employers do not offer this benefit.
"There's no doubt that the changing benefits landscape will present organizations with complex challenges for years to come," Durkin said. "A holistic, innovative, data-driven employee benefits strategy is needed to strike the optimal balance in managing the best interests of employees and employers. This approach allows organizations to respond to change with agility, helping them to minimize risk, maximize rewards and drive growth."
Originally published on BenefitsPro.com