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October 15, 2006 at 04:00 PM
Most U.S. businesses are looking at new ways to keep benefits costs balanced with the need to remain competitive as employers, finds a new study by Prudential Financial Inc., Newark, N.J.
Eighty percent of employers say it’s important to offer and at least partly finance a wide range of employee benefits, according to the study “Employee Benefits: 2006 & Beyond.”
When asked to describe their commitment to benefits, 44% called it “highly important” to offer competitive benefits, while only 22% said it was “less important.”
Although the commitment to benefits was strong across all company sizes, more than half of firms with over 500 employees labeled generous benefits as important, compared to 40% of those with fewer than 100 employees.
However, budget concerns were pushing many employers to think about increasing employee cost-sharing and offering a wider range of voluntary benefits, where employees pay all the cost, Prudential reports.
The study found 19% of employers increased employee contributions this year, while 37% expect to do so by 2010.
Among other cost-saving moves, 24% implemented consumer-directed health plans this year (41% expect to do so by 2010); 16% offered a wider array of voluntary benefits (31% by 2010); and 19% integrated health care and disability management programs (34% by 2010).
In addition, 75% expect to implement CDHPs and integrated health and disability management initiatives by 2010.
Plan sponsors may also begin to show increased interest in flexible benefits, including low-cost, employer-paid plans that start with basic levels of coverage that may later be supplemented by voluntary benefits, according to Prudential’s analysis.
