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CCH® BENEFITS — 3/12/08

One-Third Of Employers Offer Consumer-Driven Option

From Spencer's Benefits Reports: More than one-third of surveyed employers offered a consumer driven health plan option in 2007, according to a recent benefits survey from the International Foundation of Employee Benefit Plans.

The survey, which elicited 1,233 responses from corporations, professional service firms, public employers, and multiemployer benefit plans in the U.S. and Canada, was summarized in the February 2008 Newsbriefs from the International Foundation of Certified Employee Benefit Specialists.

Overall Results

In the United States, about 50% of respondents estimated their benefit costs as a percentage of payroll to be 31% or more. In terms of health care, 35.7% of all respondents offered some type of consumer driven health care (CDHC) option. Of these, the most popular was a high deductible health plan (HDHP) with a health savings account (HSA), offered by 20.1% of respondents.

The five most popular prescription drug cost-management tools and techniques were mail-order drug programs, drug formularies, three or more cost-sharing tiers, pharmacy benefit managers, and mandating or promoting generic drug use.

More than half of survey participants offered some form of adoption benefits; 30% offered paid leave and 28.4% offered unpaid leave beyond the amount mandated by the federal Family and Medical Leave Act.

For all U.S. respondents, 16.7% of respondents have a cash balance pension plan. Just over 75% of organizations offer one or more defined contribution pension plans. Overall, the most commonly offered pension plan is a 401(k) plan, at 78.3%.

More than 70% of respondents offer short and long term disability benefits, and 58.2% offer paid sick leave.

Specific U.S. Results

Corporations: Forty-two percent of corporations offer some type of CDHC option, the most common being a HDHP with an HSA. Almost 30% have a cash balance pension plan. Sixty-one percent offer some type of adoption assistance; 24.3% offer financial assistance; and 26.7% offer paid leave. Just over 95% offer some type of flexible benefit arrangement, most commonly a health flexible spending account.

Professional service firms: Just under 44% of professional service firms offer some type of CDHC option, most commonly a HDHP with an HSA, offered by 29.7%. Over 80% offer a defined contribution pension plan; and the two most commonly offered are 401(k) plans (87%) and profit-sharing plans (30.2%).

Public employers: Eighty-six percent of public employers offer a defined benefit pension plan, and 62.1% offer a defined contribution pension plan.The three most common types of DC plans offered are IRC Sec. 457 plans (59.7%), IRC Sec. 401(a) qualified retirement plans (38.9%), and 401(k) plans (36.1%). Sabbaticals are more common among public employers than in other sectors; 23.3% offer unpaid sabbatical leave and 12.9% offer paid sabbatical leave.

Multiemployer plans: Seventy-six percent use one or more provisions to help employees retain health care coverage during periods of unemployment or noncovered employment. Of these, 66.7% of plans have self-pay provisions, 37.7% use reciprocity agreements, and 36.2% use hour banks. Over 86% of multiemployer plans fully or partially self-fund their health care benefits.

To purchase a copy of Employee Benefits Survey:U.S. and Canada 2007, visit http://www.ifebp.org/Bookstore/iscebs.htm.

For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.

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