By simple accounting standards, employers should be dancing in the street at the possibility of eliminating health care benefits in 2014.
It’s not like these benefits come cheap, but they’re not planning to do that. In fact, a new Mercer study finds that very few employers are planning to drop health benefits:
- Only 6 percent of employers with 500 or more employees.
- Just 3 percent of employers with 10,000 or more employees.
- One-fifth of employers with 10–499 employees.
Now, who knows whether employers answered honestly or not? And who knows what the motivation is behind these figures?
Perhaps they’re not going to drop health benefits because they fear the stigma — benefits have been touted as an employee attraction and retention vehicle for so long, who wants to be the first employer to thumb their nose at that?
Then again, 2014 is a bit away, and who knows what will actually happen? With a few years’ planning, more employers may drop benefits after all, positioning their elimination as a way to restore salaries and invest in people in other ways.
Why health care benefits are valuable
Or maybe, just maybe, the majority of employers are planning to retain benefits because they know they’re valuable as well as costly. Take a look at these facts:
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- Job satisfaction wanes when benefits reductions occur (MetLife 8th Annual Study of Employee Benefits Trends);
- Employees who are satisfied with their benefits report higher job satisfaction (MetLife study);
- Employees describe health benefits as a loyalty driver (MetLife study);
- Employees say benefits are as important as getting a salary (Mercer Workplace Survey);
- Employees feel appreciated when their company provides benefits (Mercer survey).
There’s a halo effect to providing health care benefits. There’s also a financial upside, because remember, individuals can also play this drop-the-health-insurance game. And they may, especially if insurance continues to be financially out of reach, even with the exchanges.
Perhaps employers have considered the full cost-benefit equation and determined that providing health benefits still outweighs not providing them. Perhaps they’ve decided that when you add up the value derived from employees who are productive, engaged, and appreciative, the value of these benefits is, to quote an oft-cited American Express commercial, priceless.
This was originally published on Fran Melmed’s Free-Range Communication blog.