Mercer, the world’s leading consultancy for health, wealth and talent performance announced today that while benefits remain a critical part of the overall employee experience, the perceived value of workplace benefits among employees who participate in both health and retirement plans is starting to erode. This alarming trend was revealed in the latest edition of the Mercer Workplace SurveyTM, an authoritative and broadly cited study that measures the attitudes and perceptions of benefit plan participants nationwide. The good news is that Mercer has identified ways to enhance both benefit delivery and choice, thereby improving employee perception of benefits.
With benefit coverage cost, reach and adequacy seeming to dominate US news headlines, this drop in perceived value should be of major concern to employers, legislators, regulators and other concerned parties. A closer examination of the findings shows that the decreased value perception is being driven by concerns about rising out-of-pocket health costs. And, perhaps of most concern, workers under 50 years of age who say their benefits are “definitely worth it” in terms of what they pay out of pocket has dropped precipitously in just two years from 45% to 30%.
Even with these concerns, participants overall see benefits as critically important. In fact, 93% agree with the statement “my health benefits are as important as my salary,” while 86% disagree with the statement “my benefits don’t matter much to me.”
“Year after year, we find our survey respondents ranking benefits as one of the most important components of their employment value proposition,” said Kerry Donoghue, Partner, Health and Benefits Business Leader for Mercer’s benefits administration business. “We feel strongly, however, that there are some areas of concern that plan sponsors must take into account as they evaluate and design their benefit plans, particularly as it relates to discontent about rising out-of-pocket expenses and an overall level of relative dissatisfaction among younger employees.”
“Out-of-pocket expenses for employees are likely to continue to rise,” said Beth Umland, Director of Research for Mercer’s Health and Benefits business. “We’re seeing more cost-shifting and rapid growth in high-deductible consumer-directed health plans as employers are asked to cover more employees under health reform. So it’s critical for sponsors to explicitly communicate the value of the overall benefits program they provide and consider offering educational resources and tools to help participants better manage their health care spending. Giving employees more choice can also help build perceived value.”
Mercer is encouraging plan sponsors to address the erosion in perceived benefits by designing and implementing benefit plans that are more relevant and customizable to the individual participant. A full array of plan options, such as consumer-directed health plans and private exchanges, can give plan sponsors and their participants potential savings and greater flexibility that more closely aligns with their personal situation and lifestyles.
About the Mercer Workplace Survey
The 2013 Mercer Workplace Survey tracks employee attitudes toward, and experiences with, employer-sponsored retirement, health, and benefits programs. The survey represents a national cross-section of active 401(k) participants, defined as those currently contributing to a 401(k) plan regardless of balance, or those having a balance of $1,000 or more with their current employer whether or not they are currently contributing. Eligible non-participants and those only holding balances at previous employers are not included in this research. Respondents are also required to be enrolled in their employer’s health plan. Online interviews were completed with 1,506 participants between May 28 and June 5, 2013. The survey’s margin of error is plus/minus 2.4%. To download the executive summary, please visit http://www.mercer.com/workplace-survey. An infographic that depicts key related findings can be viewed at http://mthink.mercer.com/health-benefit-costs-calm-before-the-storm/.
Mercer is a global consulting leader in talent, health, retirement, and investments. Mercer helps clients around the world advance the health, wealth, and performance of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 42 countries, and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital. With over 53,000 employees worldwide and annual revenue exceeding $11 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights.