"One common employer misconception is that older employees value benefits more than younger employees," said Anita Potter, assistance vice president, LIMRA group product research. "In fact when it comes to benefits, younger employees value benefits nearly as much as older employees. The different values that employees place on benefits appear to be more a function of life experience rather than life stage, income or education levels."
In the past, employers felt they needed to provide robust benefits package to attract and retain good employees. The struggling economy with close to nine percent unemployment rate and the rising costs of benefits has many employers choosing to downgrade or eliminate their benefits or shift the costs to their employees. In a 2009 LIMRA study, employers who felt that offering benefits was necessary to attract and retain good employees had declined from 2004 levels.
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"Overwhelmingly, our research found that employees simply did not know how much their benefits were worth," noted Potter. "Without understanding the value of their benefits, how are employees making knowledgeable choices about who they work for and the benefits they select?"
As employers continue to shift the rising costs of benefits on their employees (60 percent indicated they would in 2011), employees need to know the price components of their benefits package and what financial or lifestyle changes they will face if any of these components are revised. It was interesting to note that when an employee understood the current cost of a benefit and the exact amount of the projected cost increase, it affected the employee's decisions about their overall benefit package.
While overall, employees are more willing to pay higher premiums to keep their current plans for benefits that they use on a regular basis, such as medical, dental, and vision insurance; the study found that one-third of employees are finding it difficult to pay for their benefits. One of the biggest factors affecting their ability to afford benefits is income. Households with the annual incomes under $25,000 are especially vulnerable, but households with annual incomes of $50,000 also report difficulties with paying for benefits. Today, these income groups account for approximately 59 million households in the United States.
The report, "What Is $1 billion an hour worth? Employee Perspectives on Benefits" examined employees' access to and participation of their benefits programs; knowledge and understanding of their benefits; and their attitudes towards issues surrounding their benefits, including the recession, health care reform and cost-shifting. The study also examined whether there was a distinction between generations on the types of benefits valued.
LIMRA surveyed 1,500 employees and weighted the results to represent the U.S. labor force (i.e. size of employer, public and private companies, full- and part-time employment, gender).
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