Closing the benefits gap between married and single employees

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It pays to be married in the American workforce.

Married employees get more paid time off than their single counterparts and receive more employer-contributions to their healthcare and pension plans. Ninety percent of companies offer more benefits to employees who are married than those who are single, according to a new report by Thomsons Online Benefits.

“I don't think companies are deliberately penalizing single employees, [but] the changing nature of the family structure and what happens outside of work has to be reflected inside of work,” says Matthew Jackson, vice president of client solutions at Thomsons.

Jackson points to the language used in many employee benefits policies in the U.S., which caters to workers in more traditional family units.

“Benefits were created back in the 1800s to protect you and your family into retirement. The legal definition of partner in a policy, for example, refers to spouse,” Jackson says. “It's about bringing this world more up to date and in line with what society is like today. If companies follow these policies to the letter, it's not inclusive or acknowledges how the workforce is changing.”

The changing landscape of the American family means employee benefits may not be serving the majority of the working population. According to Census data, there are 110.6 million unmarried people in the U.S. over age 18. Single women, for example, make up a larger part of the workforce today than at any other time in history.

But benefits have not kept up with changing workforce demographics. Married employees receive 3.6 more days of PTO, and more time off for bereavement leave than their single counterparts, the Thomsons study finds. Seventy percent of employers only offer paid family leave to those with children, despite the fact that 39.8 million Americans are caring for ailing relatives or those with disabilities.

“Workplaces need to broaden the definition of things like bereavement leave and partner coverage and broaden the definition of dependent,” Jackson says. “This is where the argument for personalized benefits comes in — you do you, within the boundaries of the law.”

The biggest opportunity to personalize benefits is in healthcare, especially considering the large cost disparity for married and single employer healthcare contributions. Thomsons finds the average monthly employer contribution to a married employee’s healthcare plan is $462, compared to $344 for a single employee. Over the course of 10 years, married employees receive an additional $14,160 in healthcare benefits.

“If you’re single, you’re missing out on benefit value. [Employees] can get that back in some sort of health allowance that’s more suited to [their] lifestyle,” Jackson says. Offering a flat fee healthcare benefit is one way employers shift the decision making from “life stage to life choice,” he says. Netflix, for example, offers $15,000 to every employee for healthcare costs, regardless of dependents like spouses or children.

“There's a big movement to change these things across the industry,” Jackson says. “We’re hearing from employees, allow me to choose what’s suitable for me.”

While 83% of employers agree benefits should serve all of their employees equally, just 59% of companies actually offer the same menu of benefits to all employees, regardless of marital status. But Jackson says supporting workers at all stages of life is critical to retaining top talent.

“Offering packages that significantly benefit people who make some life choices over others breeds resentment amongst employees and could harm retention,” he says. Younger companies, especially in the tech space, have made significant strides to level the playing field and offer a more personalized package.

“The newer companies on the block that aren't burdened with legacy are more likely to be pioneers in this space,” Jackson says. But he believes the greater accomplishments are by older companies making changes that take their employees’ needs into account.

“It's more impressive when companies are reinventing themselves and transforming the way they do things. They have to undo a lot of norms that have been done for decades,” Jackson says. “There's a lot of room and opportunity for change, and it's all certainly moving in the right direction. It's happening right now.”

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