While many employers expect an increase in the cost of providing benefits to employees, two-thirds of them responding to a new survey from Deloitte are making no immediate changes to their benefit programs, signaling a "wait and see" approach for final healthcare reform provisions that will likely reduce plan design flexibility.
Deloitte and the International Society of Certified Employee Benefit Specialists' survey, "2011 Top Five Total Rewards Priorities," indicates employees may need to take on greater health benefit cost-sharing.
"Though the economy is rebounding, there are ominous signs that employees may soon need to start contributing more of their paycheck to total rewards programs," said David Lusk, a principal with Deloitte Consulting LLP. "With concern for their ability to afford retirement, many employees are increasing contributions to retirement savings plans, while employers are seeking more opportunities to share healthcare costs with them. This results in competing objectives."
[See related story: Reform could prompt employers to drop health insurance]
The Top Five Total Rewards Priorities survey series is an annual barometer of talent and benefits management challenges facing organizations. The survey's 242 respondents ranked the Top Five priorities for 2011 as:
- The cost of providing healthcare benefits to employees.
- The willingness of employees to pay an increasing portion of benefit plan coverage and to manage their own reward budget.
- The ability of reward programs to attract, motivate and retain talent.
- The ability to adjust to and comply with current and future provisions of healthcare reform legislation.
- Clear alignment of Total Rewards strategy with business strategy and brand.
Additional survey findings include:
- 85 percent of respondents expect healthcare reform to increase benefits costs per employee.
- Controlling total healthcare costs is the primary focus of 63 percent of the employers surveyed; 73 percent indicated that healthcare reform will drive them to re-evaluate benefits over the next 12 months.
- Regarding health and welfare plans, 30 percent plan to consider increasing employee cost-sharing for active employee plans over the next 12 months, 62 percent have considered increasing cost-sharing for active employee plans over the past 12 months, and 30 percent indicate they will consider increasing employee cost sharing for active employee plans over the next 12 months.
- 75 percent of employee respondents ranked their ability to afford retirement, including post-retirement healthcare, in their top three personal challenges.
- Down 9 percentage points from 2010, 60 percent of employees ranked job security among their top three concerns.
- 48 percent of respondents plan to increase their level of contribution to qualified retirement plans, while those planning to delay retirement also decreased to 34 percent in 2011 from 41 percent in 2010.
"Challenges associated with attracting, motivating and retaining talent remain a concern for organizations rebounding from the recession," said society president Steven Grieb, CEBS. "A clear priority for businesses today is their understanding, preparation and management of costs and provisions associated with healthcare reform legislation."