Tight labor market means workers look for more in the way of benefits
Tuesday, February 11th, 2020
The coronavirus has shaken stock markets, but the economy has continued to add jobs. That’s great if you’re looking around for a new opportunity. But if you’re an employer seeking the kinds of workers you need for your business to succeed, it’s a challenging environment.
It’s a matter of supply and demand. If you want to attract the best (or even adequate) workers, or retain the valuable employees you already have, you’re likely to have to offer more than you did just a few years ago – and we’re not just talking salary.
Benefits become a bigger factor
In fact, while salaries have gone up in key industries, they haven’t quite kept up with inflation, according to one study last year. But base pay isn’t all that increasingly marketable workers are looking at.
To gain a leg up in the competition for talent, employers are offering benefits and perks they wouldn’t have dreamed of a decade ago, such as flexible work, career development opportunities and paid family leave.
This is definitely true when it comes to health benefits.
High-deductible plans may not cut it anymore
As employers struggled with the skyrocketing cost of medical plans, workers often had no alternative to high-deductible plans that bore little resemblance to the traditional plans that employees enjoyed a generation ago.
Now, some employees are seeing something more like the generous older plans offered alongside, or instead of, the high-deductible ones. And some employees are clamoring for even more choices.
A survey of large employers by the National Business Group on Health recently found that, for the third year in a row, the percentage of employers that offer high-deductible plans as the sole option will decline in 2020. The number of firms that will offer these plans as the only option is down by 14 percentage points from two years ago.
Of course, high-deductible plans are hardly disappearing. Fifty-eight percent of employees in 2019 worked at companies that offered a high-deductible plan with a savings account.
There are things besides the law of supply and demand that drive the healthcare strategies companies choose. Things such as government policy.
No more ‘Cadillac tax?’
The “Cadillac tax,” a provision of the Affordable Care Act that would impose a tax on health plans that exceeded certain dollar thresholds, was a motivating force behind the move toward high-deductible plans several years ago. But the tax, which was set to take effect in 2018, has been pushed back to 2022, and there are moves in Congress to repeal it.
And that’s part of what is fueling the move in the other direction.
It’s a complicated environment out there, and you’ll want to make sure that the packages your company is offering compares well to those offered by your competitors. We can help you with that. Now, long before open enrollment comes around at the end of 2020, is a good time to consult with the employee benefits professionals at South Risk Management.