Small Businesses Committed To Offering Benefits
The vast majority of small and mid-size companies continue to offer benefits to employees despite the challenging business climate and rising premium costs, according to a survey by Employee Benefits News (EBN) magazine and Genworth Financial.
The online poll of more than 500 benefits decision makers from firms with 10 to 500 employees found that 99% of respondents said their companies offered a health care plan to workers, and more than 80% offered life, disability, and retirement benefits.
Asked to choose from a list of reasons for offering employee benefits, almost all respondents agreed, either strongly or somewhat, that good benefits help in attracting and recruiting job candidates, and in retaining current employees. Most also agreed that companies should provide benefits to employees and their families, and that employees expect good benefits packages. Another primary motivation for offering benefits cited by survey participants was the awareness that competitors and other businesses offer benefits.
The employees of the companies surveyed bore an average of 19% of the cost for single medical coverage, and 39% for family coverage. Some 80% of respondents said their firms offered PPO plans, and 44% offered HMO plans. In addition, 53% of respondents provided flexible spending accounts (FSAs) for employees. Just 7% reported offering consumer-driven health plans, and 3% gave employees the option of opening health savings accounts (HSAs).
The most frequently offered non-medical benefits among the employers surveyed were life insurance, dental insurance, retirement plans, long- and short-term disability, and long-term care insurance. While 82% of the companies surveyed said they had a 401(k) plan, 17% said they offered no match. Another 14%, however, reported offering a match of more than 5%. Of the companies with a 401(k) match, the average was 3.25%.
"The fact that life, disability, and retirement benefits remain widely offered by small to mid-sized businesses is further evidence of an impressively strong commitment to offer a broad spectrum of benefits—in spite of other competitive business pressures and generally rising benefits costs," said Rone Baldwin, president of Genworth Financial’s Employee Benefits Group.
Asked where or from whom they get their benefits advice, 79% of respondents said a broker, and 38% said the Internet. Smaller numbers reported using a consultant, an accountant, or local business groups. The survey results showed that brokers often have significant influence over what benefits are offered, and the providers or carriers selected. More than three-quarters of the employers surveyed purchased benefits from brokers, while just 16% said they purchased directly from providers.
Looking forward, one-third of respondents said their companies planned to offer more benefits in the next two years, and 53% intend to continue to offer the same benefits they do currently. Another 8% were uncertain, and just 6% said their companies plan to scale back benefits.
