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CCH® BENEFITS — 12/01/10

Workers Highly Value Health Benefits, But Are Wary Of Health Reform

from Spencer’s Benefits Reports: The great majority of employees (90%) who receive employer-sponsored health benefits said that these benefits are as important as getting a salary, according to the recently released Mercer Workplace Survey. Furthermore, 83% of participants, up from 73% in 2008, said that the out-of-pocket expenses they pay are probably (45%) or definitely (38%) worth the cost. While this sentiment is widespread across demographic groups, it is particularly high among participants 50 years of age and older (46% of participants in this age group) and low among participants in the 35 to 49 years age group (32%).

“It stands to reason that as a result of the recent global recession, high unemployment, and general uncertainty, employees have such positive feelings about their employer-sponsored health plan coverage,” said Suzanne Nolan, partner and director of marketing and communications for Mercer’s outsourcing business. “This resounding appreciation from employees across the board presents employers with a great opportunity to design and optimally position their health benefits as a critical component of their total rewards and employee engagement strategies.”

However, employees are not yet comfortable with the effect health care reform may have on them personally, Mercer found. More than 43% of those surveyed with employer-sponsored coverage see health reform as making their situation “worse off.”

The health reform-related skepticism “coincides with the general unease and anxiety participants already feel about planning for health care expenses in retirement,” Mercer noted. Fewer than four in ten (37%) participants are “somewhat” or “very confident” that they know how they will cover their health care expense in retirement, a figure that has been relatively stable since 2008 [before health reform was even a glimmer in the national scene]. The concern with the effect of health care reform appears to be reflected most in insured workers closest to retirement: Survey participants 50 years and older view health care reform more negatively than participants overall in every related aspect of the survey:

However, based on the general survey question, “From what you have heard or read, how do you expect health care reform recently passed by Congress to affect you personally when it comes to …,” it may be that the survey participants were not familiar with the primary elements of health reform and how they might affect them, positively or otherwise. Mercer recognized this factor, as “the Mercer Workplace Survey was fielded in May and June of 2010, while health care reform was in the news but the proposed changes were not fully explained or understood,” said Tracy Watts, partner in Mercer’s Health and Benefits business. “Nevertheless, these concerns are understandable and well-founded given that we see employers looking to shift some of the costs associated with health care reform to employees. As we enter the traditional open enrollment time of the year, it is crucial that employers understand employee skepticism within the context of planning and communicating their 2011 health care benefits offering.”

The Mercer Workplace Survey represents the responses of 1,502 active 401(k) participants who also were enrolled in their employer’s health plan. For more information, visit http://www.mercer.com/articles/workplacesurvey2010.

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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