Trends in Employee Benefits

Several of the employee benefit trends that were prevalent in 2010 are likely to continue into 2011. Here are some of the key developments in employee benefits:

Cost Containment
Employers will continue to adopt various means for limiting their health care cost increases. Many will increase employees' share of costs by raising deductibles, co-payments, and coinsurance.

Consumer-Directed Health Plans
This type of health plan will continue to gain favor as a coverage option. Consumer-directed plans place more responsibility on the individual for managing health care costs. In one survey of employers, fifty-eight percent of those surveyed said health care reform will drive large employers to adopt consumer-directed plans as the only type of health plan for their active employees.

Wellness Programs
These programs will be increasingly implemented to help health plan participants improve and manage their health and thereby hold down their long-term health costs. Wellness programs often target life style changes that can assist in managing diabetes, hypertension, etc.

Retiree Health Benefits
These plans will fade further from the picture of employer-sponsored benefits as employers continue to cope with increasing health care costs.

Generics
Efforts will continue to move health plan participants to switch from brand-name to generic prescription medications, and employees' share of prescription drug costs will continue to rise.

Savings By Default
Automatic enrollment of employees into 401(k) plans will continue. Of course, employees will have the opportunity to opt out of the plan.

Annuities
The availability of annuities as a distribution option for 401(k) accounts will likely increase. A survey found that almost 25% of employers with 401(k) plans offer annuities.

Employers recognize the importance of employee benefits to their recruitment and retention efforts. However, they must continue to manage a balance of offering attractive benefits while containing costs. SESCO Management Consultants is available to assist with your human resource issues. You may contact us by phone at 423-764-4127 or by email at sesco@sescomgt.com .