When news first broke about Walmart’s plans to cut medical benefits for nearly 30,000 part-time employees, I could almost hear HR professionals around the nation gasp in unison. And while the news hit hard for many, I couldn’t help but think, and so it begins. “It” being the natural progression in our nation’s adoption of President Obama’s Affordable Care Act. Big-name retailers are slowly but surely complying with the mandatory healthcare legislation, moving employees who clock under 30 hours off their health insurance and searching for cost-saving alternatives instead.
My job as Vice President of HR is to balance the needs of both the employer and the employee, while also attracting and retaining top talent. Often times I’m faced with questions such as:
- Where is healthcare heading?
- What does this mean for me, the employee?
- Will my employee medical benefits drastically change?
The only way for me to answer is by looking at current industry statistics and trends. Below are several thought-provoking facts and figures:
- Sixty-two percent of employees surveyed said health care and medical benefits were “very important” to their overall job satisfaction.
- Fifty-seven percent of workers are at least somewhat likely to take jobs with lower pay but better benefits.
- Ninety-four percent of large employers remain committed to offering health plans for at least the next five years.
- The percentage of Americans with employment-based health insurance coverage has declined—from 69.7% in 2000 to 59.5% in 2011.
- By 2018, approximately 40 million Americans will purchase insurance through private exchanges, up from 3 million this year.
What can we conclude from these numbers? First, medical benefits are clearly important to most people. Thus, employers will continue to search for alternative ways (including defined contribution plans and non-insured discount benefits) to bring the best healthcare coverage options to their workers. Studies show only 5% of employers plan to exit healthcare completely within the next five years. You can breathe easy now!
Second, receiving medical benefits from employers has been a way of employee life for the last 75 years. We, as Americans, have grown accustomed to having our employers provide health insurance, so for employers to completely abandon their employees now would be almost impossible. Though, like Walmart and other mega retailers, a shift in how medical benefits will be distributed is heading our way. Employers will have to find a balance between attracting and retaining valuable employees with a rich benefit package and reducing healthcare costs. Tricky? Yes. Doable? I believe so.
– Sandy Heard, VP of Human Resources & Training
Copyright © 2014 by New Benefits, Ltd. All rights reserved.
Sources:Society for Human Resource Management Employee Job Satisfaction and Engagement research report; 2014 Aflac WorkForces Report; 2014 Accenture research report; Robert Wood Johnson Foundation; Mercer’s 2013 National Survey of Employer-Sponsored Health Plans