Managing Costs, Health Care Reform Are Top Benefits Priorities

By Stephen Miller Jun 28, 2010

SAN DIEGO—The Society for Human Resource Management’s (SHRM) 2010 Employee Benefits survey report, released June 27 at the SHRM 62nd Annual Conference & Exposition held here, reveals that HR professionals are focused on managing the escalating costs of employee benefits, especially in the areas of health care and retirement.

The survey was conducted in February 2010—just weeks before passage of the health care overhaul law—by polling a random sample of SHRM members. A key finding: 72 percent of HR professionals said the benefits offerings at their organizations have been affected by the economic downturn.

“The ability to manage these ever-increasing costs, along with the new health care legislation, will have a new and profound impact on employee benefits programs in the future,” according to the survey report’s authors. “Across all industries, HR professionals will be called upon to lead their organizations through this complex and volatile landscape to develop benefits strategies that enhance productivity, attract and retain employees, and build a strong employer brand.”

Uptick in Consumer-Directed Health Plans

Nearly all companies (98 percent) offered health insurance benefits, the survey found, and 37 percent offered health care coverage to part-time employees. An increasingly popular means of curtailing overspending is the use of consumer-directed health plans, which typically combine high deductibles with lower premiums and a tax-advantaged health care spending account.

In 2010, 16 percent of respondents indicated that they provided some type of consumer-directed health plan, up from 12 percent in 2008. Individually owned health savings accounts (HSAs) funded by employers or employees were offered by 11 percent of respondents in 2010, up from 8 percent in 2008, while 6 percent offered employer-owned and -funded health reimbursement arrangements, up from 5 percent in 2008.

Promoting Wellness

Preventive health and wellness benefits are designed to help maintain or change employees’ behavior in order to achieve better health and decrease health risks. By preventing or lessening the incidence of adverse health conditions, employers hope to save on long-term health costs. Three-quarters (75 percent) of companies provided wellness resources and information in 2010, and 59 percent offered wellness programs.More thanone-quarter (28 percent) offered rewards or bonuses as incentives for completing certain health and wellness activities.


More than one-quarter offered rewards or bonuses for

completing certain health and wellness activities.


Among the health benefits offered by fewer organizations in 2010 than in 2006: contraceptive coverage, health care coverage for foster children, hospital indemnity insurance, long-term-care insurance and surcharges for spousal health care coverage. The health benefits offered by more organizations included employer-matched contributions to HSAs, mental health coverage and rehabilitation assistance.

Preventive Health and Wellness Benefits

Offered by respondents' organizations in 2010

Wellness resources and information


On-site seasonal flu vaccinations


Wellness programs (general)


24-hour nurse line


Health screening programs


Health fairs


Smoking cessation program


Fitness center membership subsidy/reimbursement


Health and lifestyle coaching


Programs targeting employees with chronic health conditions


Weight loss program


Source: SHRM 2010 Employee Benefits report

Retirement Benefits Under Pressure

Despite the desire of employees for more help with retirement savings, this benefit took a hit as organizations sought to reduce spending. Among the savings and retirement benefits offered by fewer organizations in 2010 than in 2006: individual investment advice (40 percent in 2010, down from 48 percent in 2006) and retirement planning services (39 percent, down from 52 percent in 2006). Traditional defined benefit pension plans continued their decline (27 percent, down from 48 percent in 2006).

The only retirement savings and planning benefitsoffered by more organizations in 2010 than in 2006 were 401(k)-type defined contribution plans and automatic enrollment into these plans.

Family-Friendly Benefits

Large organizations were most likely to provide family-friendly benefits such as child care services, elder care benefits, and adoption and foster care assistance. The only exception was a policy of bringing a child to work in an emergency, which was more likely to be found at small and medium-sized organizations than at large ones.

Realizing value

The survey report notes the following ways organizations can further leverage their benefits programs:

• Monitor legislation and its potential impact. The 2010 health care reform law, in particular, will affect how organizations administer health care benefits. HR professionals will be relied on to lead their organizations through this complex legislation.

Communicate with employees. A disconnect exists between the dollar amount organizations spend on benefits and employees’ perception of the value of their benefits package. Total compensation statements, benefits workshops, employee meetings and social networking tools can help ensure that the benefits program is valued, understood and used by employees.

Review programs and ask for employee feedback. An organization’s benefits program should be reviewed and assessed not only to monitor associated costs and value but also to evaluate its competitiveness. A majority of HR professionals review their organizations’ benefits programs at least once a year. Benchmarking, needs assessments and employee surveys can help customize benefits programs to meet employee needs and remain competitive.

Stephen Miller is an online editor/manager for SHRM.

Quick Links:

SHRM Online Benefits Discipline

SHRM Online Health Care Reform web page

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