Employers Shift to Employee-Controlled Benefits

Because of the economy and recent employment-related legislation, many employers have shifted to benefits that place primary responsibility and control on employees, a survey found.

The Society for Human Resource Management’s (SHRM) 2012 Employee Benefits Survey found that while most employee benefits stabilized this year, 73% of human resources professionals reported that the economic downtown negatively impacted employee benefit offerings (11% to a large extent and 62% to some extent). This is more or less the same as in 2011, when 77% said the economy negatively affected benefits to some or a large extent.   

More employers offer defined contribution (DC) retirement savings plans (92%) than defined benefit (DB) pension plans (21%) this year, putting the impetus on employees to manage their own retirement savings instead of relying on employer-provided pensions.   

In addition, over the last five years, benefits that reward employees for improving their health have jumped. For example, the percentage of employers offering health and lifestyle coaching jumped from 33% in 2008 to 45% this year, and rewards or bonuses for completing a health and wellness program increased from 23% in 2008 to 35% this year.   

“By shifting primary responsibility in controlling certain health care and financial benefits, employers are recognizing a shift in workplace culture,” said Mark J. Schmit, vice president of research at SHRM. “The new plans allow employees have more control over how they save for retirement and manage their health, while reducing costs for employers. These plans are also more flexible, and thus more attractive, to employees who will likely not spend an entire career with one organization.”



Employer spending on benefits remained stable this year with organizations spending, on average, 19% of an employee's annual salary on voluntary benefits, 18% on mandatory benefits and 10% on pay for time employees did not work.   

The survey of 550 randomly selected human resources professionals, sponsored by Colonial Life, also found: 

The five most common benefits this year are: paid holidays (97%); prescription drug program coverage (97%); dental insurance (96%); DC retirement savings plans (92%); and mail-order prescription programs (91%). 

Paid time off plans have become more popular: More than half of organizations (51%) provide paid time off plans, a combination of traditional vacation time, sick leave and personal days in one plan, up from 42% in 2009.  

Domestic partner benefits: A third of employers (35%) offer health care coverage to same-sex domestic partners, and 32% offer it to opposite-sex domestic partners. Fifteen percent provide domestic partner benefits, not including health care coverage, for opposite-sex partners, and the same percent offer the benefit to same-sex partners.  

Health care premium discounts for healthier behavior are on the rise: The number of employers offering health care premiums discounts for getting annual health risk assessments rose from 11% in 2008 to 21% this year, while those offering discounts for not using tobacco products increased to 20% this year from 8% in 2008.  

Pet benefits: Six percent of organizations offer pet health insurance, 5% allow pets at work, 1% pay for pet care expenses while an employee is traveling for business, and 1% have a “Take Your Pet to Work” day.