euclid managers legislative review

VOL. XXIII, ISSUE 10 – October 2018

SHRM 2018 Employee Benefit Report

With unemployment levels at record lows, employers are more likely to be competing for new employee talent.  At the same time, they’re equally engaged in efforts to retain their existing employees who are already trained and productive. Employee benefits have long been critical elements in attracting and retaining employees.

This issue of Legislative Review reviews highlights from the Society for Human Resource Management (SHRM) survey of 2018 Employee Benefits, The Evolution of Benefits.

Benefits As Strategy

Ongoing benefit efforts by employers are often focused on saving money, especially when discussing health coverage. But, at the heart of health coverage and other benefit decisions should be a strategy that warrants the investment of company funds.  The SHRM study found that companies using benefits in recruiting and retaining talent had better results than those who did not. Company performance was markedly better by 58% versus 34%. Recruiting was more effective
by 19% versus 8%. And, retention efforts were more effective by 28% to 11%.

More than one-third of firms increased benefits offerings in the last year. Among firms that increased benefits they were most likely to increase the following:
• Health related benefits (51%)
• Wellness (44%)
• Employee programs and services (39%)
• Family friendly, flexible working and increased leave (28%).

As expected most employers stated that they were increasing benefits to retain employees (72%) or attract new employees (58%). More than one-half of employers (54%) also stated that they enhanced benefits in response to employee feedback. Few employers (5%) decreased benefits in the last year. Large firms were more than twice as likely to have decreased benefits. Of firms that decreased benefits, 59% decreased health benefits. This may reflect the continuing trend of employers toward high deductible health plans.

Health Care Benefits

Among the firms surveyed, 98% offered at least one of nine (9) types of health plans in 2018. The survey found that 95% of firms with fewer than 50 full-time equivalent employees provided health coverage as well.  PPO plans are the most popular plans with 84% of firms offering them. Consumer-directed health plans (CDHPs) run second at 40%. HMO plans are offered by 35% of employers.

The chart below illustrates the prevalence of plans by type and how they’ve changed – or not – over time.  Click here for Chart

The inclusion of HSAs has increased with the increase of consumer-directed plans. More than one-half (56%) of employers offered HSAs in 2018. Employer contributions to HSAs increased over the years moving from 32% in 2014 to 37% in 2018.  Offers of HRAs (health reimbursement arrangements) held relatively steady over the past five (5) years. Flexibles pending accounts declined slighted across the five (5) years from 68% in 2014 to 63% in 2018.

Premium Sharing

Many employers benchmark the amount or percentage of premiums that employers contribute to health coverage. Most employers share the cost of coverage
with the employee as the table above shows.

About one-fifth of employers restrict coverage for spouses and domestic partners. Some firms bar them if they are eligible for coverage by their own employer or some other entity. Other firms impose a surcharge for coverage.

Only 18% of employers charge higher premiums for smokers through a smoking surcharge.

Other Health and Life Related Benefits

The study found that 44% of firms who increased benefits in the past year increased wellness benefits. Most of the wellness plans qualify as a general wellness program.  Fitness competitions, first aid and CPR training and standing desks were among the more popular programs.

Company paid group life insurance continues to be popular with 85% of firms offering it. Supplemental life insurance is offered by 80% of firms. There was also a
notable increase in employers offering life insurance for dependents increasing by 13 percentage points since 2017.

Another Hidden Value of Benefits

Paid leave benefits were also considered by the survey. Most employers (92%) reported that paid leave benefits are important especially for job satisfaction.

Sick leave benefits may also help with health coverage costs. Employees without paid sick leave were three (3) times more likely to delay seeking medical care. They were also three (3) times more likely to forgo care entirely. These employees are likely less productive. Also, as many employees will attest, employees who come to work sick often make co-workers sick as well.

Letter from Karen Knippen

This SHRM survey has many nuggets of interest to brokers and their clients. It’s no surprise that the biggest challenge this past year for most employers
(70%) was the increase in health costs. I can’t remember a year where employers were optimistic about health costs.

Many employers are reviewing their benefit offers with an eye toward next year. This SHRM survey and others can be helpful in considering steps to take to meet an employer’s strategic goals for employee retention and recruitment

Sincerely yours,
Karen Knippen Signature
Karen Knippen, RHU, REBC Senior Vice President

EUCLID MANAGERS has been serving the independent agent since 1976 with a portfolio of group health, life, disability, dental and individual health. We proudly represent UnitedHealthcare of Illinois, Delta Dental of Illinois, MetLife and UnitedHealthOne Individual. We encourage your feedback and suggestions. Please call your EUCLID MANAGERS Marketing Representative or Marcy Graefen at (630) 238-2915 for more information.

The information contained in this publication is intended for the general information of our clients. It should not be construed as legal advice or legal opinion regarding any specific or factual situation.