Although many businesses continue to scale back on expenses due to current economic conditions, maintaining employee benefits programs is likely to remain a top priority in 2010.

While recessionary cost-cutting measures among businesses in the United States often included reductions in employee benefits packages to avoid layoffs, recent reports suggest that this trend may be reversing in 2010. Despite sluggish growth in personal incomes, more employees are looking to enlarge their work-based benefits coverage while more businesses are striving to meet demand for benefits as a method of retaining top talent and strengthening productivity.

In a fall 2009 survey from MetLife, approximately nine out of 10 employees said they plan to maintain or increase their benefits coverage or the number of benefits selected in open enrollment programs in 2010. Despite 37 percent of employees stating that their discretionary income had fallen over the previous year, only 11 percent of workers said they plan to decrease their benefits package.

“Recent economic events have caused many to be more mindful and appreciative of the benefits provided to them at work, which often form the foundation of their personal safety nets,” Ronald Leopold, vice president for U.S. business at MetLife, said in an announcement of the findings.

“In fact, despite some decreases in discretionary income, very few employees plan to pare back when it comes to selecting benefits for 2010. This shows that they continue to value their benefits as essential to helping them plan for the future while protecting themselves and their families,” Leopold added.

According to MetLife’s findings, employer communication makes a key difference in how effectively workers engage in their benefits planning. Many employers are becoming more closely involved in benefits program selection and companies are increasingly supporting benefits expansion efforts.

In a more recent survey, from Watson Wyatt and the National Business Group on Health in November, 42 percent of employers noted an increase in employee use of the company health plan and 47 percent saw an increase in the number of workers participating in employee assistance programs.

As a result of expanding benefits usage, 51 percent of companies planned to maintain or increase their health and productivity program budgets, versus 44 percent who planned to make cuts to these initiatives. Moreover, 72 percent of firms already improved their on-site programs for stress management and employee assistance.

It is well documented that employee health influences overall business health, and according to Shelly Wolff, national leader of health and productivity consulting at Watson Wyatt, “Companies are finding some relief from high benefit costs by investing in programs that improve the health of their workers.”

“Workers who haven’t lost their jobs are under great amounts of stress and are increasingly turning to their employer for advice, treatment or assistance that goes beyond basic coverage when they get sick,” Wolff said in a statement. “Still, employer initiatives that effectively deal with stress are limited.”

Health care costs remain a large concern, especially as more companies expand their benefits coverage and invest in employee wellness initiatives. A September report from the Business Roundtable, an association of CEOs of large U.S. companies, and human resources firm Hewitt Associates, found that at the current rate of rising expenditures, employment-based health care costs would increase to $28,530 per employee by 2019, nearly triple the current average of $10,743 per worker.

“The costs of the U.S. health care system have put America’s companies and workers at a significant competitive disadvantage in the global marketplace,” Ivan Seidenberg, chairman of the Business Roundtable and chairman and CEO of Verizon Communications, said in an announcement of the findings. “Failure to implement reforms that address inefficiencies will erode U.S. economic competitiveness at a time when our nation can least afford it.”

These issues are likely to remain top priorities as small-business finances continue to struggle with employee coverage costs and as an ongoing U.S. health care reform plan takes shape.

Earlier

Lose Your Perks, Keep Your Work

Keep Your Business and Employees Healthy

Health Care Bleeds Small-Biz Finances

House Unveils Health Care Bill

Resources

Employee Benefits Selections “Recession-Resistant”…
MetLife, Sept. 3, 2009

Despite Economic Pressures, Employers Enhancing Programs That Boost Worker Health…
Watson Wyatt, Nov. 30, 2009

Health Care Reform: The Perils of Inaction and the Promise of Effective Action
Hewitt Associates and Business Roundtable, Sept. 14, 2009

…Health Care Costs Will Skyrocket to Nearly $29,000 per Employee in the Next Decade Without Effective Reform
Business Roundtable, Sept. 15, 2009