According to a survey on workers' perception of employee benefits, both high- and low-wage earners say benefits are vital to their health and financial security.
"Frequently when these programs are offered, there is a notion that ... certain employee benefits programs are mainly valued and benefited by the highest-paid population," said Dallas Salisbury, president and CEO of the Employee Benefit Research Institute, during a recent symposium on the current state of employee benefits and insurance in the United States.
"Yet in this survey, we found consistently, as with life insurance, the population of those rating a [benefits program highly] was much higher among those at the bottom end of the income scale," he added.
EBRI hosted the symposium jointly with The Financial Services Roundtable to highlight the survey findings, which polled workers' perceptions of employee benefits and insurance products. The event also focused on the workplace as a venue to educate Americans about voluntary benefits, supplemental insurance and retirement security.
Protecting the purse strings
In the survey, 52% of participants "felt confident that benefits offered to them at work would protect their financial well-being." When asked to rate (on a scale of 1 to 5) different benefits in terms of providing financial protection, 85% rated health insurance a 5, while 69% rated retirement saving a 5. The number increased, however, to 80% as workers' ages and incomes rose.
A similar jump occurred with life insurance, as 48% of respondents rated life insurance a 5, increasing to 67% among workers making less than $35,000. With disability insurance, 39% of workers rated long-term disability a 5, jumping to 52% among workers making less than $35,000, and 35% rated short-term disability a 5, which rose to 45% among workers making less than $35,000.
Benefits matter
The survey was completed in September among 1,007 adults (501 men and 506 women) living in private households in the United States.
The findings may surprise some employers who had only perceived employee benefits within the context of employee recruitment and retention.
Employees, however, realize that with health care reform, high unemployment and slow economic growth, their workplace benefits can serve as financial protection.
Overall, 94% of workers said that their employer offers benefits, with 79% admitting they were familiar with all of the insurance and retirement benefits offered by their employer.
Further, 36% of employees have taken a job because of the benefits and insurance an employer offered; 40% have stayed in a job because of the benefits and insurance an employer offered; and 10% left a job because of the benefits and insurance an employer offered.
However, the survey didn't ask participants if a slow recovery in the labor market had an impact on whether they stayed in the job or left an employer.
The survey results also reveal why some workers haven't enrolled in their company's benefits programs or purchased insurance products through the workplace.
For example, 32% said they are getting benefits outside of the workplace; 23% received a better offer elsewhere; 19% could not afford the benefit offerings; 9% intended to, but hadn't gotten around to it yet; 5% didn't understand what their employer was offering or how to sign up for it.
Shoring up retirement security
Over the last 25 years, "we have seen a massive shift of the responsibility for retirement security from the employer and government to the individual. This is a trend that will continue for a while," said Ron O'Hanley, president of asset management and corporate services at Fidelity, during his presentation at the event.
To say that America is in a retirement crisis is an understatement, he said, and urged the financial services industry to create best practices around educating Americans on how and when they need to save for retirement, and how to protect and grow their retirement assets.
O'Hanley cited research by McKinsey and Company that reports 37% of American households that have retirement plans are going to have less than they need in terms of adequate retirement savings.
In addition, last year, less than 80% of Americans who are eligible to participate in an individual retirement account did so, said Salisbury.
Employees consistently see workplace benefits as financial protection with a particular focus on short-term needs. To workers, certain benefits serve as a financial safety net for unanticipated events dealing with health and disability, explained
"The survey underlines the strength of employees' desire for benefits programs. There is a far greater trust [in employers] and an assumption that they are being looked out for and negotiated for responsibly," he says.
A key takeaway for employers from the EBRI/Opinion Research Corporation survey is that they need to continue to create requirements or defaults that increase the number of employees that take advantage of wellness and preventive-care tools. "It's about taking care of the lethargy in busy lives, which creates a mentality in which the worker says, 'Well, I meant to do that, but I just don't have the time to get around to it,'" Salisbury says.
To combat such lethargy, more employers are instituting mandatory health risk assessments and programs that pay 100% for wellness and preventive benefits to eliminate the barriers of copays.
On the retirement income side, "we have seen the use of automatic enrollment and default tools to heighten levels of participation," he says.
