Not a big surprise, but health insurance plans have consistently topped the list of workers’ most precious employer-sponsored benefits in the last two decades, according to the Employee Benefit Research Institute (EBRI), even outpacing favorability of tax-qualified retirement plans.
A new report from EBRI, “Views on the Value of Voluntary Workplace Benefits: Findings from the 2015 Health and Voluntary Workplace Benefits Survey,” penned by EBRI researcher Paul Fronstin and Ruth Helman at Greenwald & Associates, reviews decades of benefits usage data and assesses what the future might have in store. The research shows “consistency in the value of some benefits and substantial change in the value of others,” EBRI says.
For example, between 1999 and 2015, the percentage of workers ranking health insurance as the first- or second-most important benefit varied only slightly, between 74% and 82%. This while the ranking of availability of retirement savings plans fell substantially from 2001 to 2015. EBRI’s numbers show retirement plans were the first- or second-most important benefit for nearly seven in 10 employees in 2001, while just 36% say the same thing today.
EBRI believes part of the effect may be due to the introduction of additional benefits in its surveys during that time, such as paid time off, but it also highlights the increased pressure many workers face from rising health care costs—not to mention the lingering effects of the financial crisis and the damage it did to many wage earners. EBRI finds three-quarters of workers state that the benefits package an employer offers prospective workers is extremely (36%) or very (41%) important in their decision to accept or reject a job.
Currently, about 30% of employees say they are “only somewhat satisfied” with the benefits offered by their employer, while 20% are not satisfied at all. Looking beyond comparison rankings to the individual benefit offerings employers may offer, fully 88% of workers report that employment-based health insurance “is extremely or very important,” far more than for any other workplace benefit.
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EBRI finds the availability of health insurance through an employer is considered so important “that six in 10 report they are planning to work longer than they would like in order to continue receiving health insurance through their employer.”
In this group the plurality (44%) responded with comments regarding the general importance of having health insurance for financial security, while another 36% suggested they would “be unable to purchase it on their own due to its cost.” Other reasons EBRI frequently heard mentioned include the desirable quality of the employer’s plan (28%), inadequacy of Medicare for the individuals’ needs (20%), and dissatisfaction with non-employment-based options for health insurance (13%).
EBRI says a retirement savings plan, rated extremely or very important by 75% of workers, and dental or vision insurance (70%) are also among the highest-rated benefits when viewed individually. Smaller but still sizable groups cite as extremely or very important a traditional pension or defined benefit plan (50%), disability insurance (47%), life insurance (46%), and post-retirement health insurance (41%).
Looking across benefits packages, workers consistently identify lower cost (compared with purchasing benefits on their own) and greater choice as strong advantages of employment-based benefits. “However, they are split with respect to their comfort in having their employer choose their benefits providers, and think the possibility that they may have to pay the full cost of any voluntary benefits is a disadvantage,” the report explains.
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EBRI finds benefits coverage in the workplace, including health insurance, is far from universal.
“Eight in 10 workers report their employer offers them health insurance,” the report notes, while 70% each indicate they are offered dental insurance and a retirement savings plan. Vision insurance and life insurance are offered to two-thirds each, and approximately one-half report their employer offers them short-term disability insurance, long-term disability insurance, a health savings account (HSA) and accidental death and dismemberment insurance.
Just a third are still offered a traditional pension or defined benefit plan, EBRI says.
“Fewer report being offered supplemental health insurance for workers (25%) or other non-core, ancillary benefits,” EBRI says. “Further, not all workers offered a benefit at the workplace take advantage of it.”
For example only about 85% and 82% of those who could purchase health insurance or retirement investments at work do so, respectively. About the same take-up rate is identified for dental and vision insurance, while fewer, about two-thirds, choose to pay into a defined benefit plan when given the option.
View the full report on EBRI’s website by clicking here.