Patterns in healthcare spending affecting other employer-offered benefits

With healthcare costs rising, employers are turning toward wellness programs to counter some of the financial strain, according to the 2015 SHRM Employee Benefits Survey report released by the Society for Human Resource Management (SHRM).

In another recent study, SHRM found that 77% of organizations saw increases in their costs. Of those organizations, nearly one-quarter (24%) had an increase of 16% or more in their overall healthcare coverage costs.

"Wellness benefits provide employers with a preventative approach that can reduce healthcare expenses for organizations over the long haul," explained Evren Esen, director of SHRM's survey programs. "Rising healthcare costs also remain a primary driver for how other benefit costs are allocated, as employers are still evaluating the impact of the Affordable Care Act."

The top wellness benefits offered to manage chronic diseases and other health-related issues include wellness resources and information (80% of respondents) and wellness programs (70%). Additionally, wellness benefits such as health and lifestyle coaching, smoking cessation programs, and premium discounts for getting an annual risk assessment have risen in the past five years.

Five-year trends also show a slow shift of healthcare costs to employees. For example, consumer-directed health plans such as health savings accounts (HSAs) have risen by 8 percentage points, and employer contributions to HSAs have also increased by 10 percentage points.

The report also shows five-year trend increases in the percentage of organizations offering mental health coverage, contraception coverage, vision insurance, short-term disability insurance, critical illness insurance and coverage for laser-based vision surgery.

The survey of 463 randomly selected HR professionals examines more than 300 benefits.

Among other findings:

  • The most common benefits were paid holidays (offered by 98% of respondents), dental insurance and prescription drug programs (both 96%), mental health coverage and professional memberships (both 91%), and organization-provided break room/kitchenette and traditional 401(k) or similar defined contribution retirement savings plan (both 90%).
  • The shift to defined contribution retirement savings plans and Roth 401(k) savings plans continues, with only 26% of organizations reporting that they now offer defined benefit pension plans that are open to all employees.
  • The most commonly offered women's health benefit is contraceptive coverage (83%).
  • Three out of five (60%) organizations offered some form of telecommuting: 56% of respondents reported that their organizations offered telecommuting on an ad-hoc basis, 36% part of the time, and 22% on a full-time basis.
  • The three family-friendly benefits that have decreased over the last five years were bringing children into work in an emergency (22%), child care referral services (9%) and on-site parenting seminars (1%).
  • The percentage of organizations paying for certification/recertification fees in 2015 (78%) increased, compared to 71% in 2011.

New benefits added to this year's report include egg freezing for nonmedical reasons (2%), paid surrogacy leave (5%), company-provided fitness bands/activity trackers (13%), company-organized fitness competitions (34%), and company-provided student loan repayment (3%).

What's in and what's out? For an infographic summarizing benefits that have increased and decreased over the last five years, click here.