Employees Likely to Shoulder Health Care Costs

In response to higher expected costs, U.S employers appear poised to implement more employee health care and other benefit plan cost sharing, according to the 17th annual Top 5 Total Rewards Priorities survey conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS) and Deloitte Consulting LLP.

The survey was conducted in January 2011 among HR and benefits professionals from a diverse cross-section of U.S.-based organizations. Survey participants were asked to respond as representatives of their employers, with the exception of two questions asking about their personal challenges and plans as employees.
While a large number of employers expect an increase in the cost of providing benefits to employees, two-thirds of them are making no immediate changes to their benefits programs as they await health care reform regulations that might reduce plan design flexibility.

For 2011, employers ranked their top five priorities regarding total rewards (defined as compensation, benefits, perquisites and any other direct or indirect payments to employees) as follows:
  1. The cost of providing health care benefits to employees.
  2. The willingness of employees to pay an increasing portion of benefits plan coverage.
  3. The ability of reward programs to attract, motivate and retain talent.
  4. The ability to adjust to and comply with current and future provisions of health care reform legislation.
  5. Clear alignment of total rewards strategy with business strategy and brand.

Confronting Rising Costs

Regarding the total reward challenges facing employers:
  • 85 percent of employers expect health care reform to increase benefits costs per employee.
  • 73 percent said health care reform will drive them to re-evaluate benefits over the next year.
  • 63 percent said controlling total health care costs is their primary focus as HR/benefits professionals.
  • 62 percent have considered increasing cost sharing for active employee plans over the past year

As employees, HR and benefits professionals said their top three personal challenges were:
  1. Their ability to afford retirement, including post-retirement health care (ranked among the top three challenges by 75 percent of respondents).
  2. Job security (60 percent).
  3. The need to increase their retirement plan contributions (48 percent).

Source: Society for Human Resource Management and ISCEB/Deloitte, Top 5 Total Rewards Priorities Survey