Employees See More of Their Benefits Cost

March 25, 2003 (PLANSPONSOR.com) - Over half of the most popular employee benefits are now having the tab picked up by both the employee and the employer.

Cost-sharing has become the norm in medical insurance (offered by over 99% of employers), prescription drug coverage (offered by 94% of employers) and dental insurance (81% of employers offering), according to a recent study of over 500 employers (with a minimum of 10 employees) by Eastbridge Consulting Group.

However, employees are still not footing a portion of the bill for all of the benefits being presented. Offered by more than a third of those polled, the most frequent employer-pay-all benefits are:

  • group term life
  • accidental death & dismemberment (AD&D)
  • long-term disability
  • short-term disability.

Not surprisingly, results show that the employees’ share of the cost will likely trend upward. Evidence of this is nearly half of the employers responding that to control the cost of the company’s benefits program, they are very likely to increase the employee benefits contribution in the next one to two years.

Mercer HR Consulting found very similar results, with one in four employers in Mercer’s study – and nearly half (49%) of large employers – responding that employees will pay a larger share of health-plan costs in 2003. Furthermore, one-fifth of all employers, and 44% of large employers, said that in 2003 they would shift more costs to employees through plan design changes in any type of medical plan (See Employers Near Pain “Threshold” on Health Care: Mercer ).

But employers still realize the value of offering these benefits and chipping into the employee benefits cost. In fact, only 5% of the respondents said that they are likely to drop some benefits completely and only slightly more (10%) said they are likely to move selected benefits to a voluntary (employee-pay-all) basis. Identified as the most likely benefits to move from a cost-shared or employer-paid basis were:

  • dental
  • long-term disability
  • life
  • vision

The move toward offering at least one voluntary benefit has become the rule and not the exception, however, with 64% of all employers responding to having one such offering on their benefits plate, according to Eastbridge data.