70% of House Supports Repealing the Cadillac Tax

Three hundred members of the House of Representatives signed on to legislation to repeal the Cadillac tax. Rep. Frank Guinta (R-NH) introduced H.R. 879, and Rep. Joe Courtney (D-CT) introduced H.R. 2050. The number of cosponsors signifies that nearly 70% of members in the House support the effort to repeal the Cadillac Tax. Congressman Frank Guinta (R-NH) said, “One way or another, the Cadillac Tax will meet its end. Three hundred cosponsors of legislation to permanently ax the tax is a milestone.”

The Cadillac Tax is a 40% tax on the cost of employer-sponsored health coverage that exceeds certain benefit thresholds – initially, $10,800 for self-only coverage and $29,100 for family coverage in 2020. More than just premiums are counted when determining the cost of the plan. The cost of wellness programs, on-site clinics and other plan features designed to reduce plan expenses are also included, so virtually everyone in an employer-sponsored plan would be affected. James Klein, president of the American Benefits Council, said “This tax does not just affect high value plans. It will hit workers, retirees, and families with ordinary coverage who have the misfortune to suffer catastrophic health events or have chronic conditions that are expensive to treat.”

Consumer-Driven Health Plans Gain Ground

Thirteen percent of the privately insured U.S. population was enrolled in a consumer-driven health plan (CDHP) in 2015, according to a report by the Employee Benefits Research Institute. Sixty-three percent of those enrolled in CDHPs had an HSA; 13% had an HRA, and 24% had the option of an HSA-eligible health plan, but had not opened an HSA.

Pet Health Insurance Is One of the Fastest-Growing Employee Benefits

One in three Fortune 500 companies offers pet insurance as a voluntary benefit, according to Nationwide. As one of the fastest-growing voluntary benefits in the U.S., more than 5,000 companies and organizations have added Nationwide pet insurance to the voluntary benefits portfolio, including Chipotle Mexican Grill, Hewlett-Packard, Levi Strauss & Co., Microsoft, T-Mobile, Xerox, Adidas, and Yahoo!. “Since 65% of Americans own at least one pet, two-thirds of employees may be shouldering sizable pet-care costs. Offering pet insurance as a voluntary benefit will appeal to prospective pet lovers and help retain pet-owning employees,” said Scott Liles, president and chief pet insurance officer for Nationwide. As the popularity of pet health insurance expands, some companies are subsidizing a percentage of their employee’s cost. Several employers now pay as much as 100% of their employees’ pet insurance premiums. “With the cost of core benefits on the rise, companies are looking for offerings that can be added to a benefit portfolio at no expense to the employer. Pet insurance fills that need,” said Liles

Manufacturing Leads Adoption of High-Deductible Health Plans

Manufacturing

A survey by Benefitfocus reveals distinct differences in benefit offerings among manufacturing, education, and health care industries. Manufacturing leads the adoption of high-deductible health plans (HDHPs), education favors traditional plans (PPOs, HMOs, etc.) and the health care industry offers the most voluntary benefits. Manufacturing is the only industry of the three, in which more companies offer a combination of HDHPs with traditional plans than traditional plans only (48% to 46%). Manufacturing employees selected an HDHP over a traditional plan 46% of the time. The findings suggest that manufacturing employers have an opportunity to encourage employees to participate in health savings accounts (HSAs) or flexible spending accounts (FSAs) to cover higher out-of-pocket costs associated with HDHPs. Only 23% of education employers offer at least one HDHP. Traditional health plans dominate the mix of benefits. HMOs made up 44% of employee enrollments, which suggests an opportunity to offer a wider range of lower cost benefit options for a multi-generational workforce.

Employees in the health care industry face high deductibles regardless of plan selection, but are better equipped to cover unexpected medical costs with voluntary benefits (including critical illness, accident, and hospital-indemnity insurance). Health care employers offered gap products at the highest rate of the three industries at 12 percentage points above the average. Nearly half of health care workers selected a voluntary plan when given the choice.

The Importance of Employee Engagement

Many employers say that employee engagement is as a key strategy for their company, but many are cutting funding for these initiatives, according to a study by TalentKeepers. (Editor’s note: The Ivy Business Journaldescribes employee engagement as when an employee is fully involved in and enthusiastic about about their work.) The TalentKeeper study finds that more than 80% of employers say that employee engagement is a priority. The number of employers that say they are very effective in engaging employees nearly doubled from 14% in 2015 to 26% in 2016.

Seventy-two percent of employers say that poor engagement has the biggest effect on morale and culture compared to 50% in 2014. However, employee engagement budgets have fallen for the third straight year. In 2014, 71% of employees had some funding for engagement compared to to 61% in 2016. “Best-in-class employers dedicate some of the highest percentages of their labor and operations budgets to engagement strategies, said Craig Taylor, a vice president at TalentKeepers. For the past four years, corporate leadership has has had a growing effect on turnover. “This emerging trend should motivate us to refocus efforts on making leaders the primary reason people stay. In 2015 Millennials became the largest cohort in America workforce. Forty percent of employers are acknowledging that [trend] by providing formal training for leaders on how to manage them. This is incredible growth in just two years ˗ up from 25% in 2014,” said Taylor.

Top 20 Employee Benefits & Perks

A Glassdoor.com surveys reveals that 57% of people say benefits and perks are among their top considerations when accepting a job. Four in five would prefer new perks over a pay raise. The following are the top five benefits that matter most to employees:

  1. Healthcare insurance (medical, dental): 40%
  2. Vacation/Paid time off: 37%
  3. Performance bonus: 35%
  4. Paid sick days: 32%
  5. 401(k) plan, retirement plan and/or pension: 31%

The following 20 companies provide perks and benefits that go beyond the basics:

  • Netflix offers one paid year of maternity and paternity leave to new parents. Parents can return part-time or full-time and take time off as needed throughout the year. Overall Benefits Rating: 3.7 out of five.
  • REI offers two paid days off, called “Yay Days,” a year for employees to enjoy their favorite outside activity. Overall Benefits Rating: 4
  • Salesforce offers employees six days of paid volunteer time off a year. If they use all six, they get a $1,000 grant to donate to a charity of their choice. Overall Benefits Rating: 4.5
  • Spotify provides six months of paid parental leave, plus one month of flexible work options for parents returning to the office. The company also covers costs for egg freezing and fertility assistance. Overall Benefits Rating: 4.2.
  • World Wildlife Fund employees take Friday off every other week. Overall Benefits Rating: 4.5.
  • Airbnb, the Best Place to Work in 2016, gives its employees an annual stipend of $2,000 to travel and stay in an Airbnb listing anywhere in the world. Overall Benefits Rating: 4.6
  • PwC offers its employees $1,200 per year for student loan debt reimbursement. Overall Benefits Rating: 4
  • Pinterest provides four months of paid of paid time off for parental leave, plus an additional month of part-time hours, and two counseling sessions to create a plan to re-enter the workplace. Overall Benefits Rating: 4.7.
  • Burton employees get season ski passes and snow days to hit the slopes after a big snowfall. Overall Benefits Rating: 4
  • Twilio offers employees a Kindle plus $30 a month to purchase books. Overall Benefits Rating: 4
  • Twitter is well-known for providing perks such as three catered meals a day, but some lesser-known benefits include on-site acupuncture and improv classes. Overall Benefits Rating: 4.3
  • Accenture covers gender reassignment for their employees as part of its commitment to LGBTQ rights and diversity. Overall Benefits Rating: 4
  • Walt Disney Company offers free admission to its parks for employees, plus their friends and family, and discounts on hotels and merchandise. Overall Benefits Rating: 4.
  • Facebook provides $4,000 in “baby cash” to employees with a newborn. Overall Benefits Rating: 4.7.
  • Evernote hosts classes through Evernote Academy, which offers team-building courses like macaroon baking. Overall Benefits Rating: 4.3.
  • Epic Systems offers employees a paid four-week sabbatical to pursue their creative talents after five years at the company. Overall Benefits Rating: 4.3
  • Adobe shuts down the entire company for one week in December and one week over the summer. Overall Benefits Rating: 4.6.
  • Asana employees have access to executive and life coaching services outside of the company. Overall Benefits Rating: 4.9.
  • Zillow pays for nursing mothers to ship their breast milk when traveling. Overall Benefits Rating: 4.5.
  • Google provides the surviving spouse or partner of a deceased employee 50% of their salary for the next 10 years. Overall Benefits Rating: 4.6

While benefits and perks are a great way to get employees in the door and interested in a company, they’re not among the leading factors that keep employees satisfied on the job and with a company long-term. According to Glassdoor Economic Research, culture and values, career opportunities, and senior leadership are most important in cultivating employee satisfaction.

Consumers Overlook HSA Investment Options

Investment options in health savings accounts (HSAs) are fairly new and not widely used, but they tend to draw larger contributions and have higher balances. In many cases, HSAs allow account owners to invest in mutual funds and other options, much like a 401(k) plan. So how are they working? A report by the Employee Benefits Research Institute finds the following:

  • In 2014, 6.4% of HSA owners used the investment option portion of the account.
  • People contributed $2,636 annually on average when they had investments and $1,224 when they did not have investments.
  • Annual distributions for health care claims averaged $1,777 from HSAs with investments, and $1,293 from HSAs without investments.
  • End-of-year account balances averaged $10,261 among HSAs with investments, and $1,709 in HSAs without them.

Benefits Remain a Key to Retention and Recruitment

Small-business owners looking to recruit and retain top employees need to pay close attention to their benefit offerings, according to a survey by Aflac. A majority of workers employed in small businesses are willing to consider a job with slightly lower pay, but better benefits. Half of potential job-changers say that improving their benefit package could keep them right where they are.

The battle for talent is getting tougher with the unemployment rate at 5.3%. Thirty-four percent of decision-makers expect to hire full-time employees in the next 12 months, and 28% expect to hire part-time employees. The study found the following:

  • 59% of workers at small companies are at least somewhat likely to accept a job with slightly lower pay, but better benefits.
  • 49% of small-business employees who agree, at least somewhat, that they’ll be looking for jobs in the next year say improving their benefit package is one thing their employers could do to keep them in their jobs.
  • 87% of employees agree, at least somewhat, that voluntary insurance is part of a comprehensive benefit program.

Small-business owners appear to be listening. Twenty-two percent of small-business employers offer voluntary insurance compared to 18% in 2014. Small-business employees who are enrolled in voluntary benefits are more likely to be very satisfied or extremely satisfied with their jobs and their benefit packages. They are also more likely to say that their benefit package meets their family’s needs.

Some Really Good Reasons to Maintain Employee Health Benefits

Employers who fail to fully sponsor their employees’ health benefits would face widespread employee dissatisfaction, lower productivity, and the loss of nearly a third of their employees within a year, according to new research by Accenture. Seventy-six percent of workers say health insurance is a vital factor in staying with their employer. Thirty-one percent say that if they lost their health insurance, they would leave their job within 12 months, with 15% saying that they would quit immediately. If their employer dropped health coverage 64% of workers said they would be very dissatisfied with their employer; 34% would be less motivated to work hard; and 21% would be absent more often. For a company with 1,000 employees who earn an average salary of $50,000, these turnover costs could climb to more than $3 million in the first year alone

How to Improve Your Employee Benefit Plan

How to Improve Your Employee Benefit Plan
Just three factors are integral a successful employee benefit plan, according to a study by Navera and Met Life. They are: having the right mix of benefits, having more choice within a broader range of benefits, and having effective enrollment education and selection confidence. The study reveals the following:

  • Employees who have five or fewer benefits are less loyal and less likely to recommend the company as a great place to work.
  • Employees who have 11 or more benefits are more loyal and more likely to recommend the company as a great place to work.
  • The two main drivers of employee confidence in their benefit selection are having easy-to-understand benefit information and effective benefit communications.
  • Less than half of employees agree strongly that their company’s benefit communications educated them on benefits and helped them understand how much they would pay for services.

Navera CEO Steve Adams said, “It’s now time to take technology-enabled self-service benefit enrollment from theory to reality…Technology-enabled platforms deliver information in a way that is easy to navigate and available anytime…A portfolio approach to benefit selection replaces the traditional serial process of selecting benefits. In the serial approach, employees make their medical selections first, then dental, and then vision, then disability, then group life, and so on. Employees are required to make an independent purchase decision about each of these benefits. Alternatively, a portfolio approach enables employees and their families to see how the benefits they select work together to provide them with the most complete and cost-effective coverage.”

Last Updated 02/24/2021

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