The erosion of such benefits outside the government has been continuing and could well accelerate in the future, according to a study by the TowersWatson consulting firm that once again underscored the value of the government’s offerings through the Federal Employees Health Benefits program, for which virtually all active employees, retirees and spouses are eligible.
It found that only 23 percent of more than 500 companies it contacted were confident that they would continue offering health insurance benefits a decade from now, the lowest rate since it started asking that question in 2003 and only about a third of the rate from 2007.
"Economic conditions, frustration with high cost levels and limited success in encouraging employees to adopt healthier lifestyles have been persistent challenges for companies . . . companies have never been more uncertain about the future of their health care programs over the long term," it said.
Companies "are seeking to balance benefits with employees’ need for access to affordable health care, a secure retirement and a competitive salary," it said. "Some are quantifying the impact of changes to their reward programs, including health care benefits, on critical employee behaviors and actions, such as retention or engagement. They are using the data to reallocate reward programs and budget in ways that ensure the program delivers the highest potential value to employees for the lowest cost to the company."
It added that four out of 10 employers "view subsidizing health care benefits for retirees of no importance to their employee value proposition."
Like the government, companies have been tweaking their health insurance offerings to create financial and other incentives for employees to participate in wellness programs and other steps to hold down costs. The private sector also has been shifting more of the cost of premiums to employees in recent years while the FEHB cost-sharing formula has remained unchanged. However, on average the employee contribution among companies studied, about 24 percent, was below the average employee contribution toward FEHB premiums of about 30 percent.
