Benefits and Compensation

Healthcare Benefits—Who’s Offering What? (SHRM Survey)

The survey, sent to a random sample of SHRM members, had 510 respondents, which was a 13% response rate. SHRM released the survey at its Annual Conference and Exposition, held recently in Orlando.

Ninety-eight percent of employers offer some type of healthcare coverage to full-time employees, and the most common offering is a preferred provider (PPO) plan, says the survey.

Employers are reallocating benefits dollars as the country comes back from the recession. Not many organizations are going back to prerecession benefits, says Evren Esen, SHRM’s Director of Survey Programs. As healthcare costs rise, employers are maintaining the healthcare insurance at the expense of other coverage, he adds.

For example, says Esen, education assistance for undergraduates has seen a dip in the number of organizations offering it.

How Are Employers Deciding Which Benefits to Offer?

Employers’ decisions about what benefits to offer tend to be based on three analyses, says Esen.

  • What is important to our employees?
  • What benefits do the greatest number of employees use?
  • What package of benefits will have the biggest impact?

If the return on investment (ROI) on a particular benefit is low, those benefit dollars may be reallocated, he adds.

Wellness Programs on the Increase

“An increase in wellness offerings is a trending tactic for companies looking to save on long-term healthcare costs often associated with chronic diseases such as diabetes and high blood pressure,” says Bruce Elliot, SHRM’s manager of compensation and benefits.

The rise in general wellness initiatives is likely because wellness programs can affect such a large swath of employees, plus they have a high ROI, says Esen. Estimates put wellness ROIs at about 3 to 1, he adds, although it takes 3 to 5 years for the programs to take effect.

The 5-Year Trends

Esen notes that the 5-year trend analyses show gains in the following wellness programs (Percents indicate the number of respondents currently offering the benefit.):

  • Health and lifestyle coaching (47%)
  • Preventive programs specifically targeting employees with chronic health conditions (42%)
  • Subsidies or reimbursements for fitness center memberships (34%)
  • Discounts on premiums for taking a Health Care Assessment (21%)

Other programs currently offered include:

  • Smoking cessation (42%)
  • Participatory weight loss (32%)
  • On-site fitness centers (20%)
  • Nutritional counseling (20%)
  • Nap room and on-site vegetable garden (3% each)

The 5-year trends analysis also shows increases in the percentage of organizations offering:

  • Mental health coverage
  • Contraception coverage
  • Vision insurance
  • Coverage for bariatric and laser vision surgery
  • Health Savings Accounts (HSAs)

The median cost for employee-only coverage was $5,838, and the median percentage paid by the employer was 80 percent.


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The chart below shows the prevalence of various employee health benefits:

Benefit Currently

Offering

Planning

to Offer

Prescription drug program coverage    95%    0%
Dental insurance    95%    1%
Mental health coverage    87% <1%
Mail-order prescription program    84% <1%
Preferred provider organization (PPO)    84%   0%
Accidental death and dismemberment insurance (AD&D)A    84%   0%
Contraceptive coverage    84% <1%
Vision insurance    83% <1%
Chiropractic coverage    83% <1%
Employee assistance program (EAP)    74%   2%
Long-term disability insuranceA    74%   1%
Short-term disability insuranceA    70%   1%
Medical flexible spending accountsB    68%   1%
Supplemental accident insurance    46% <1%
Health savings account (HSA)    45%   4%
Bariatric coverage for weight loss    38%   1%
Acupressure/acupuncture medical coverage    36% <1%
Health maintenance organization (HMO)    33%   0%
Healthcare premium flexible spending accountC    32%   1%
Employer contributions to HSAs    32%   2%
Consumer-directed healthcare plan (CDHP)    30%   3%
Critical illness insuranceD    30%   1%
Infertility treatment coverage other than in vitro fertilization    29% <1%
Laser-based vision correction coverage    28% <1%
In vitro fertilization coverage    26% <1%
Long-term care insurance    24%   1%
Hospital indemnity insurance    22% <1%
Point of service (POS) plan    22% <1%
Intensive care insuranceE    21% <1%
Retiree healthcare coverage    18% <1%
Health reimbursement arrangement (HRA)    17%   1%
Wholesale generic drug program for injectable drugs    16%   1%
Elective procedures coverageF    15% <1%
Alternative/complementary medical coverage    14%   1%
Pharmacy management program   14%   1%
Indemnity plan (fee-for-service)   12% <1%
Gender reassignment surgery coverage     7% <1%
Exclusive provider organization (EPO)     7%   1%
Experimental/elective drug coverage     4% <1%
Mini-med health plan     2%   1%

A Does not pertain to employee-paid supplemental insurance.

B IRC Section 125

C IRC Section 125 Cafeteria Plan allowing for premium conversion

D Provides funds to help cover extra expenses upon diagnosis of a critical illness or condition

E Provides funds to help cover the extra expenses for accidents or illnesses that result in an admission to a hospital intensive care unit

F Any nonemergency surgical procedure other than laser-based vision correction coverage

G Independent of medical plan management

Source: 2014 Employee Benefits: A Research Report by SHRM


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The table below shows the prevalence of various wellness related benefits.

Wellness Benefit Percent

Offering

Planning

to Offer

Wellness resources and information   79%    4%
Wellness programs   62%    8%
Wellness publicationA   61%    6%
On-site seasonal flu vaccinations   58%    2%
24-hour nurse lineB   51%    1%
Health screening programsC   47%    6%
Health and lifestyle coachingD   47%    7%
CPR/first-aid training   45%    2%
Smoking cessation program   42%    5%
Preventive programs specifically targeting employees with chronic health conditions   42%    7%
Health fairs   38%    6%
Rewards or bonuses for completing certain health and wellness programs   36%    8%
Fitness center membership subsidy/reimbursement   34%    3%
Weight loss program   32%    7%
Healthcare premium discount for getting an annual health risk assessment   21%    6%
On-site fitness center   20%   1%
Nutritional counseling   20%   2%
Standing deskE   20%   3%
Healthcare premium discount for not using tobacco products   19%   5%
On-site blood pressure machine   14%   3%
Healthcare premium discount for participating in a wellness program   14%   5%
On-site fitness classesF   14%   2%
Off-site fitness class subsidy/reimbursement   12%   2%
Healthcare premium discount for participating in a weight loss program    9%   4%
On-site sick room    9% <1%
On-site medical clinic    7% <1%
On-site massage therapy services    6%   2%
Fitness equipment subsidy/reimbursement    5%   1%
On-site stress reduction program    3%   2%
On-site nap room    3%   0%
On-site vegetable gardens    3%   1%

A For example, newsletter, column.

B Available to help employees make more informed healthcare decisions.

C For example, glucose, cholesterol.

D Used to help employees change and better manage their health habits.

E Provide or subsidize the cost of replacing a regular desk with a standing desk.

F For example, yoga, aerobics.

Source: 2014 Employee Benefits: A Research Report by SHRM

You can access the entire SHRM 2014 Employee Benefits Survey here.

In tomorrow’s Advisor, survey results about other types of benefits, plus an introduction to the all-things-compensation-and-benefits website, Compensation.BLR.com®.

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