Surveys show concern over health benefits.

Despite a sputtering economy, organizations in 2004 continued to provide a variety of benefits, the most common being health care insurance and prescription drug programs. However, the rising cost of health care underscores the need for more education for employees and employers in choosing

Two surveys from the Society for Human Resource Management (SHRM) offered these conclusions and were released at the SHRM Annual Conference and Exposition, held in June in New Orleans. Each survey was fielded to a random sample of SHRM members and had a 21 percent to 22 percent response rate.

Health Care Proves Challenging

The vast majority of organizations continued to offer traditional health care options, according to the SHRM 2004 Benefits Survey Report, such as prescription drug programs (98 percent) and dental insurance (95 percent). A growing percentage of companies were including alternative healing methods, such as acupressure and acupuncture (34 percent, up from 26 percent in 2003). However, the percentage of companies offering long-term care insurance in 2004 dropped to 38 percent from 47 percent in 2003.

A second survey showed respondents' growing difficulty in managing health care costs. The SHRM 2004 Health Care Survey Report showed that changing plan design features, increasingly complicated coverage options and recent legislation are making the task of managing health benefits more difficult and time-consuming. "With the escalating costs of health care in recent years, it is no longer possible to approach health care casually," said the report.

The survey showed that HR professionals are extremely concerned about rising costs and that their organizations are passing much of the cost increases on to employees. However, employers and employees are reaching the limits of what they will or can pay for essential coverage, forcing hard choices, the report noted.

While one-quarter of HR professionals surveyed for the report said they plan to offer health savings accounts (HSAs), more than one-fifth of survey respondents were not aware that Congress created HSAs in 2003.

HR professionals "need to educate themselves, their senior management, their organizations and their employees" on a regular basis, said Jessica Collison, manager of SHRM's survey program. "The better educated you are, the better purchasing decisions you're going to make."

Communication provides tangible benefits now, the report noted. Many actions employers take to save money for workers "may not be apparent to employees," it said. HR professionals should "ensure that benefit plan design changes and changes to employer and employee contributions are communicated in a timely manner and in a way that demonstrates their impact on the bottom line for the employee."

The survey indicated that some HR professionals are interested in partnering with other organizations to obtain cheaper, higher-quality health care. However, they are hesitant to embrace such partnerships without additional information and, in many cases, new legislation to foster it and protect participating companies.

"A lot of people aren't even aware that they could potentially do this," Collison stated.

Among the survey's key findings:

* The top three health care concerns of HR professionals are costs for employer, employee and prescription drug coverage.

* Three-fourths of HR professionals said their organizations have changed their health care plan design in 2002 or 2003, with cost being the primary reason.

* Nine percent of respondents reported decreasing the scope of the medical benefits they provide, and only 3 percent indicated their organizations have considered eliminating health care coverage.

Most Benefits Stay Stable

Most compensation-related benefits stayed the same in 2004, according to the 2004 Benefits Survey Report--nearly all organizations continued to offer direct deposit (97 percent) and automatic payroll deductions (96 percent). HR professionals indicated that 36 percent of their organizations offered spot bonuses, up from 22 percent in 2003.

Dependent care flexible spending accounts remained the most popular family-friendly benefit for the fifth year in a row, with 73 percent of respondents' organizations offering the benefit.

This year's report contains an in-depth section on leave benefits, including data for military leave, which has become more relevant in the past year with the U.S. sending more troops overseas. Almost one in five HR professionals (17 percent) indicated that their organization offers paid military leave beyond what may be required by law, a decrease from 28 percent in 2003.

On another timely topic, respondents indicated that although 39 percent of organizations offered domestic partner benefits, they were more likely to extend these benefits to opposite-sex partners (34 percent) than to same-sex partners (27 percent). Still, the percentage of companies offering benefits to employees' same-sex partners has grown over the past few years, according to the report. In 2001, only 16 percent of organizations made this benefit available to employees, while 23 percent did so in 2002 and 2003.

Steve Williams, director of SHRM's research department, noted, "Benefits are extremely important with regard to job satisfaction." HR professionals can use the report to see what kinds of benefits other organizations are offering and "to stay competitive" as the economy improves and employees become more likely to consider switching companies, he said.

SHRM surveys are available free to members at www.shrm.org/research.

Organizations Partner To Save Health Care Dollars

Partner with others  16%
Do not partner       84%

Source: 2004 Health Care Survey Report.

Note: Table made from pie chart.

--HR NEWS STAFF

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