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Guardian: Do-it-yourself plan sponsors offer lousy benefits

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Insurers, brokers and workers may have an incentive to team up to get U.S. employers to share benefits administration chores with outside companies: Employers that outsource tend to offer much better benefits.

Guardian Life Insurance Company of America has published data supporting that possibility in a summary of results from an online survey of 1,001 U.S. benefits decision makers. All of the participants were at U.S. businesses with at least five full-time employees.

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About 16 percent of all participating employers outsource as much responsibility for benefits administration as possible, and 15 percent handle all administration responsibilities internally.

In practice, Guardian found, the do-it-yourself (DIY) employers tend offer major medical coverage, and that’s about it.

About 96 percent of the total outsourcers offer major medical coverage, and 78 percent also offer dental coverage. Sixty-four percent offer short-term disability (STD) plans, and 61 percent offer LTD plans.

Meanwhile, only 59 percent of the DIY employers offer dental plans. Fewer than half offer STD or LTD plans.

See also: Voluntary goes mainstream

The DIY employers were almost as likely as the total outsources to say they want to increase employee satisfaction with the value of the benefits package, but the DIY employers were not even all that likely to offer basic benefits such as life insurance: Just 51 percent offer any kind of employer-paid or voluntary life insurance benefits, compared with 69 percent of the total outsources.