Robust, holistic group benefits packages are on the rise over the last decade. Their prevalence has been amplified given the tumultuous events of the past year’s pandemic. With healthcare costs and inflation expectations moving higher, it makes sense why employer-sponsored health benefits and financial tools are becoming even more desired and widespread.
Health insurance and retirement plans remain the most sought-after employer-sponsored benefits. A 2020 MetLife survey indicates 86% of employees cite health insurance as a “must have,” and nearly 70% mention a retirement plan as a “must have.” The next most desirable benefits are dental, vision, life, and disability insurance, ranging from 69% to 41% of employees considering these benefits as “must haves,” respectively.
One solution employers seem to be using effectively are Health Savings Accounts (HSAs). There has been a 30% increase in the frequency of this offering over the last five years. According to the Society for Human Resource Management (SHRM), 39% of employers offering HSAs contribute funds to their employees’ accounts. HSAs are individually owned health savings accounts that are triple-tax advantaged, meaning they allow for 1.) pre-tax contributions, 2.) tax-free earnings within the account, and 3.) tax-free withdrawals on qualified medical expenses.
Offering a retirement plan is another way employers can provide value and help their employees get set up for long-term financial success. Retirement benefit plans are as popular now as ever. A whopping 93% of employers offer a traditional 401(k) or similar retirement plan, and 74% of employers match employee contributions at some level according to SHRM.
There are other solutions that also help employees with the rising costs of healthcare and financial uncertainty. These are supplemental coverages like dental, vision, disability (income protection), and life insurance. There are also plans for accident coverage, critical illness coverage, hospital plans, and more. These plans are generally designed to “fill the financial gap” in the event of health-related issues, especially where healthcare coverage may fall short. They are cost-effective and convenient to attain in the employer-offered setting.
According to MetLife, 69% of employees say having a wider array of benefits would increase loyalty to their employer. Employers have taken note. SRHM reports that more than 1/3 of organizations have increased their benefit offerings in the last 12 months. Now 97% of employers offer dental, 91% offer vision, 83% provide some basic life coverage, and 71% and 61% offer long-term and short-term disability coverage, respectively.
It is a win-win situation for everybody involved for employers to offer a well-rounded group benefits package! Employer contributions towards insurance premiums and retirement plan matching are generally tax-deductible expenses, which lower the business’ taxable income. Additionally, a robust benefits package helps employers attract and retain the high-quality talent they are looking to hire and keep for the long-term. SHRM found in 2018 that employers who offer a benefits package strategically experience 2.5 times higher retention rates than those who neglect their benefits offering.
Employees, if you are not happy with the menu of benefit options you have available through your employer, we encourage you to speak with your HR or management to express your views.
Employers, ask your valued employees for feedback! BCS Wealth Management is here to assist. Let us know if you would like a complimentary, comprehensive review of your current group benefits package.