Employers Globally Offer Benefits Choices to Employees

October 22, 2009 (PLANSPONSOR.com) - One in four employers now offer employees choice in the benefits they receive, with a third of the remainder also considering doing so, according to a survey of more than 1,700 organizations in 47 countries excluding the U.S.

A Mercer news release said 27% of employers it surveyed provide at least some choice in the benefits they offer, while 14% have comprehensive flexible benefits programs. Comprehensive or “full flex” programs are defined as having core benefits and optional benefits, with credits and a spending account.

Of the employers who currently offer a standard package of benefits to all employees, 37% say they are either planning to add choice or are considering it.

The most important reason for providing choice cited by respondents is to “respond to diverse workforce needs and values,” but others cited the ability to manage costs.Although the most common reason given for not offering choice is the perceived cost (given by 60% of respondents without choice programs), the majority of employers offering choice have found that it is either cost neutral (42%) or saves money (30%).

The majority of respondents agree that their choice programs have met their original objectives (82%). In addition, most employers say the employee response to their program has been positive (83%).

According to the news release, across all survey respondents:

  • Insured benefits most likely to be offered are medical (71% for employees, 48% for dependents), life insurance (57%), dental (52%), accident (47%), and vision care (35%).
  • The range of allowances includes those for mobile phones/telecommunications (29%), cars (29%), gym memberships (28%), child care (24%), food (18%), public transportation (15%), and housing (13%).
  • Other benefits commonly offered include retirement/employee savings plans including voluntary pension (46%), health screenings (28%), and holiday buy/sell options (24%).

Nearly half of non-U.S. employers with comprehensive flex programs surveyed by Mercer say they handle them exclusively or primarily in-house (49%), and more than one-fourth (28%) outsource the entire process, with just the key decisions remaining in-house. Another 23% use a co-source approach with a mixture of in-house and outsourced resources, with claims payment and administration and the help desk/call center most often outsourced.

The majority of respondents' employees enroll via an online enrollment system (68%), while 47% use printed materials and 7% use a telephone voice-response system. Some of these employers use a combination of methods.

Beth Umland, Mercer's head of health and benefits research,noted in the news release that nearly two-thirds (62%) of all respondents said that a very important priority for their health and benefits programs for the next few years would be "to increase employees' understanding and appreciation of benefits."