Nearly one-third of employers expanded their benefit packages in the last 12 months in an effort to attract and retain top talent, according to the Society of Human Resource Management’s 2017 Employee Benefits Survey.

Increases in health (22%) and wellness (24%) offerings, as well as providing healthcare benefits to employees’ spouses and domestic partners, were major strategies from organizations in helping to remain competitive.

In 2014, 71% of companies offered opposite-sex spouses healthcare coverage, while only 46% offered it to same-sex spouses. That gap closed to just 10 percentage points in 2017, according to the report.

[Image credit: Bloomberg]
[Image credit: Bloomberg]

Ninety-five percent of employees now offer healthcare coverage to opposite-sex spouses, while 85% offer it to same-sex spouses. Although to control healthcare costs, 19% of employers have restrictions or a surcharge for coverage for opposite-sex spouses, and 16% have restrictions for coverage for same-sex spouses, SHRM says.

But some political uncertainty is causing challenges to employers as it relates to employer-sponsored health benefits, says Chatrane Birbal, SHRM’s senior advisor in government relations.

One tax that is currently on the table is the ACA excise tax , she says, and the House-passed American Health Care Act proposes to delay this tax to 2026 and there are proposals to fully repeal the tax.

“While the excise tax is not scheduled to take effect until 2020, HR professionals and employers are already restructuring their health care benefit offerings to avoid the tax,” Birbal notes. “As 2020 approaches, more employers will closely scrutinize their health benefit offerings and will make the necessary changes to avoid the excise tax.”

If the 40% excise tax is not repealed, many employers may be forced to cut benefits, alter wellness and chronic care prevention programs, and reduce innovative new benefit offerings, she warns. “Further, employees will be negatively impacted by higher copays and deductibles and could even cause some to decline employer-provided health care,” she adds, noting SHRM supports full repeal of the excise tax.

“Recruiting difficulty has continued to increase over the last five years, and competition for talent is high,” added Shonna Waters, vice president of research for SHRM. “Most companies are now using benefits as a strategic tool for recruiting and retaining talent in this competitive environment.”

Alongside the focus on healthcare, employers also are taking a deep dive into wellness programs, with about three in every five employers offering general wellness programs, according to the report.

Nearly one-quarter (24%) reported increased wellness benefits offerings in the past year, with the most common wellness benefit being providing wellness resources and information (71%). According to the study, 62% gave wellness tips or information at least quarterly in the form of a newsletter, e-mail, column, tweets, etc.


Addressing costs

While many organizations have been extending healthcare coverage to employees’ families, two-thirds of those surveyed said they were very concerned about controlling healthcare costs while another 31% were somewhat concerned.

From 2016 to 2017, healthcare costs increased for 79% of organizations, with an 11% increase, on average, according to SHRM.

One strategy that some organizations are using to mitigate healthcare costs is to implement restrictions on coverage for spouses and domestic partners. One of the more common cost-curbing strategies employers used was adding a surcharge or denying coverage if the employee’s spouse was offered coverage by another employer.

Other cost-saving measures included providing only secondary coverage, charging higher premiums or cost-sharing amounts, and not allowing employees to use pretax earnings to pay for spousal premiums, the report notes.

Health savings accounts are another tactic. More than one-half (55%) of organizations offered HSAs in 2017, according to SHRM’s report, and more than one-third (36%) provided an employer contribution to the HSA, also showing an upward trend. Meanwhile, flexible spending accounts have seen a slight dip over the past years, according to the study. In 2013, 72% of organizations were offering an FSA and that number has tapered off to 65% this year.

Because benefit programs are so important, but costly, to remaining competitive in the talent war, SHRM says it’s imperative for employers to leverage their benefit packages to the fullest extent possible. It offers these tips to employers to help get the most bang for the buck.

1. Conduct employee surveys and analyze organizational data to learn what benefits are most valued, if there are differences among employees and what employees want that your organization is not providing.
2. Benchmark your organization’s benefits against others in your industry. Look for gaps where your organization either lags or leads your competitors.
3. Align benefits with organizational strategy, values and culture to help foster employee commitment, sense of purpose and engagement.
4. Implement strategies to help manage the cost of benefits.
5. Review your benefits communication strategy to make sure benefits are understood and used by employees. For benefits with low uptake or use, consider revising the communication strategy and providing more frequent communication about the benefits.

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