Employers are on the lookout for ways to mitigate the costs involved in complying with changes to the legal requirements of employee benefits administration. One option being explored and tried by some companies is shifting some of the cost of health care benefits to employees by asking them to pay more out of pocket.
Companies that have more than 50 employees are subject to tax penalties under the Affordable Care Act if they don’t provide employees with adequate options for health coverage. This makes it especially tempting for growing companies to weigh the cost of such penalties against the cost of insuring employees in considering whether to forego providing health benefits altogether.
Companies that wish to attract and retain talented workers, however, may want to rethink that strategy. Two recent studies on workplace benefits have found that workers value their employee benefits solutions now as much as ever.
The Perceived Value of Employee Benefits
Despite changes to the health care system brought about by the Affordable Care Act, workers continue to place a high value on health care benefits. A recent workplace study conducted by Mercer Research found that a whopping 93 percent of participants agree with the statement, “My health benefits are as important as my salary.” These findings are in line with a 2014 study on workplace benefits conducted by Guardian Life Insurance Co. That study found that, on a scale of 1 to 10, the average degree of value people place on their workplace benefits has risen to 7.1, up .3 points from a 2012 survey.
The Guardian study also found that 80 percent of respondents received all of their health, disability and retirement benefits through their employer, while 79 percent said that such benefits are crucial to their decision to stick with a job.
The Shifting Sands of Reality
Unfortunately for employers, the fact remains that there is a need to manage the costs associated with employee benefits administration that may have diminishing effects on worker satisfaction and perception of well being. In the wake of companies shifting the costs of benefits to their employees, the Mercer study found that the percentage of employees under the age of 50 who perceive that their workplace benefits are “definitely worth” the associated out-of-pocket expenses has dropped from 45 percent in 2012 to only 30 percent in 2014.
To help mitigate the negative impact on employees’ perceptions of their workplace benefits, Guardian’s assistant VP for group marketing, Phyllis Falotico, advises companies that “it’s extremely important they have a solid understanding of their options and personal relevance of the benefits offered,” according to SHRM Online.
With employees shouldering much of the cost and responsibility for their workplace benefits, it’s essential that those managing human resources provide education for employees on which benefits are best suited to their individual situations. Providing information and transparency about the realities surrounding workplace benefits can help companies provide the reassurance necessary to workers’ well-being and overall job satisfaction.
Of course, the best way to improve employee satisfaction and attract and retain top talent is to offer a good benefits package in the first place. SourceOne Partners can work with you to make this a painless process, helping you determine the best options for fitting employee benefits into your budget, whether that means managing benefits in-house or outsourcing to a PEO service.
SourceOne Partners offers PEO and employee benefits solutions, with offices in Boca Raton, Ft. Lauderdale, and Miami. SourceOne also has offices in New Jersey. We are PEO brokers who understand the needs of small businesses regarding employee benefits administration. Call us at 561-674-0748 for a consultation or contact us online.