Two ways health execs can help employers manage health benefit programs
Two Willis Towers Watson surveys have interesting findings about employee healthcare benefits.
Wage increases are not keeping pace with healthcare cost increases, according to two new surveys.
Employers expect healthcare costs to increase by 5.5% in 2018, up from a 4.6% increase in 2017, according to the 22nd annual “Best Practices in Health Care Employer Survey” by Willis Towers Watson.
Despite uncertainty about the future of healthcare legislation, employer confidence in offering employee healthcare benefits has reached its highest level since the passage of the Affordable Care Act in 2010, according to the survey. The survey also showed that. 92% of employers are “very confident” their organization will continue to sponsor health benefits in five years.
The survey was completed between June 2017 and July 2017. Results reflect respondents’ 2017 health program decisions and strategies. Results provided are based on 555 employers with at least 1,000 employees.
Future outlook: Employers’ benefit strategies
“Executives at managed care organizations are facing the same challenges as leaders at employers across the wide range of industries face-how to attract and retain talent,” says Julie Stone, a national health care practice leader at Willis Towers Watson.
Sejen
In that regard, total compensation including health benefits and salary are critical to maintaining a competitive edge, says Laura Sejen, managing director, Human Capital and Benefits at Willis Towers Watson.
The data show that healthcare costs will rise 5.5%. However, a second survey, The Willis Towers Watson Data Services Salary Budget Survey, shows employee salaries will increase just 3%.
According to the second survey, U.S. employers expect to hold the line on pay raises in 2018, with increases projected to average 3% for most groups of employees. The survey also showed that employers continue to reward their top performers with significantly larger raises as part of their overall efforts to retain their best performers and strengthen their commitment to paying for performance.
Exempt employees who received the highest performance ratings were granted an average salary increase of 4.5% this year, about 73% larger than the 2.6% increase given to employees receiving an average rating, according to the survey.
Meanwhile, annual performance bonuses, which are generally tied to company and employee performance goals, are projected to hold steady or decline slightly in 2018 for most employee groups. Discretionary bonuses, generally paid for special projects or one-time achievements, are also projected to hold relatively steady compared with bonuses awarded last year and budgeted for this year.
The salary budget survey was conducted between April 2017 and July 2017, and includes responses from 819 companies representing a cross section of industries.
Employers are rethinking how to administer limited salary budgets to keep their best and brightest Sejen noted.
“As the survey results show, some organizations are moving away from differentiating increases based on an employee’s previous year’s performance altogether while others are focusing on rewarding employees for skills development,” Sejen says. “So, while organizations may be forecasting 3% increases, the landscape of how and when they are giving increases varies considerably.”
Internal server error