U.S. employees paying the price for benefits

2006

Despite the ever-rising cost of medical insurance and increased pressure on expenses, the majority of U.S. employers accept that is vital to offer competitive employee benefits packages in order to attract and retain top talent.

"Employee Benefits: 2006 & Beyond," a new study by Prudential Financial Inc, found that fewer than a quarter (22 per cent) of employers think that competitive benefits packages are anything less than highly important.

Eight in 10 employers of all sizes felt that they need to offer and subsidise a wide range of benefits as part of their recruitment and retention strategy.

However, as companies look to balance employee needs with the bottom line, many are reducing the cost of their benefits expenses by increasing employee contributions, offering a wider range of voluntary benefits and introducing more flexible plan designs.

To this end, the report predicts that costs will increasingly be shifted onto employees, with the number of employers expecting to increase employee cost-sharing doubling by 2010.

Three-quarters of firms also expect to implement consumer-driven health plans and integrated health and disability management initiatives.

Meanwhile according to Prudential Finacial's Ed Baird, a small but growing number of employers - dubbed "The Progressives" - are taking a more strategic approach to their benefits challenges

"For example, progressive firms focus on programs that manage risk rather than chase costs, such as wellness and prevention, disease state management, mental health counseling and work/life balance initiatives," he said.

These employers understand their employees' financial and lifestyle concerns and are interested in helping employees address their needs, he added.

On average, the report suggests, some one in 10 U.S. employers (about 68,000 businesses nationwide) consider themselves "progressive", while almost a third view themselves as "above average," meaning they have a progressive benefit philosophy, but take a slightly more conservative approach in adopting new programmes and strategies.

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