Public Employers Looking for Ways to Cut Benefit Costs

October 24, 2011 ( - Budget woes are hitting public sector employers hard — and the effects are going to be felt in their employee benefits programs, according to a new survey conducted by Colonial Life & Accident Insurance Company with members of the International Public Management Association for Human Resources.

The vast majority (80%) of human resources managers responding to the survey said their organization is looking at ways to reduce the cost of their employee benefits plan. More than half (58%) said controlling costs is the benefits program’s top priority. The ability to retain key employees and create employee satisfaction rated a distant second priority at 20%.  

The survey showed public sector employers plan to make significant changes in their benefits programs within the next year, including: 

  • Increasing employees’ health insurance premiums – 64%; 
  • Implementing wellness programs/promoting healthy behaviors – 52%; 
  • Increasing employees’ health deductibles and copays – 45%; and 
  • Redesigning health plans to include higher deductibles – 27%. 
In addition, the survey found public sector HR managers almost unanimously agree it’s important for employees to understand their benefits and appreciate their employers’ investment in them, with 89% saying it’s very important. However, like their counterparts in commercial industries, they don’t think their employees actually do understand their benefits. Just over half (54%) reported their employees have some understanding, and only 42% said their employees have a good understanding.