- Hispanic Resources
Employers are having difficulty offering benefits due to financial constraints caused by the poor economy and escalating
costs, particularly for health care, according to the Credit Union National Association’s (CUNA) 2010-2011 Credit Union Staff Benefits Survey Report.
In response, nearly 20% of employers reduced employee benefits during the second and third quarters of 2009, according to the Society for Human Resources Management.
And when asked about the likelihood of reducing employee benefits during the next six months—assuming current financial challenges continue—13% of organizations said it’s “very likely” they’d do so and 26% said it’s “somewhat likely.”
Among credit unions that reduced their 2010 health-care plan costs, roughly 35% to 40% increased employee cost-sharing for coverage, increased or enhanced employee communications, or added/increased use of wellness programs.
Employees also are concerned about their finances and their benefits packages.
Many employers are freezing or reducing salaries, reducing benefits, and increasing employees’ share of benefit costs. As a result, many workers are worried about getting by without the benefits that are cut and how to pay for the benefits they keep.
Forty-one percent of employees consider workplace benefits to be the foundation of their financial savings net, according to MetLife. What’s more, workers are increasingly concerned with protecting their families in case something were to happen to them or their spouses.
These trends illustrate that employers providing life and disability insurance policies to employees can alleviate workers’ concerns. Plus, offering these benefits may help retain and motivate employees as appreciation for these benefits translates into higher loyalty and engagement.
About two-thirds (62%) of credit unions provide group life insurance to employees and 30% offer dependent life insurance through their plan. More than half (55%) of credit unions provide long-term disability insurance and 30% provide short-term disability insurance.
Although 2009 recorded lower annual increases in per-employee health-care costs (6% to 9%, various studies report), cost
growth still outpaced inflation, and similar or higher cost growth is expected in 2010.
Many organizations achieved cost savings as a result of layoffs—fewer employees to cover equals lower costs.
Among credit unions, 2010 health insurance costs increased an average of 14% over 2009. Half of credit unions experienced cost increases of at least 10% over 2009 costs.
Reigning in employee health-care costs is a primary concern among employers. When asked which type of pricing pressure they’re most concerned about, 77% of finance executives cited employee benefits, according to Grant Thornton.
Plus, 33% said their companies were taking steps to reduce health-care spending. While increasing employee cost-sharing continues to be a common way to control costs, employers also are raising deductibles and co-payments, and investing in wellness and disease-management programs.
Additional strategies include reducing the number of health plan options to negotiate contract costs, tightening eligibility requirements for spousal and dependent coverage, and offering consumer directed health plans.