By Pension and Benefits Editorial Staff
Financial executives see the value in offering benefits to employees, but are concerned about ever increasing costs, according to recent research from CFO Research and Prudential Financial. The survey also found that many companies are considering outsourcing some parts of benefits administration.
Value vs. cost. According to the survey, 63 percent of financial executives said that employee satisfaction with benefits is important for their company’s success, and 65 percent believe that employee benefits are critical to attracting and retaining employees.
However, the cost of benefits programs continues to rise steeply. Controlling the cost of medical benefits for active employees is the top benefits-related priority for finance executives surveyed, selected by 35 percent of respondents. In second place is minimizing benefit cost increases overall (25 percent). And nearly one-fifth of the respondents (19 percent) said that complying with local, state, and federal regulations with their benefits programs is a top priority.
One approach to managing the rising costs involves giving employees more control over their benefits packages, allowing them to customize coverages to suit their particular situations, according to CFO Research and Prudential. One of the most widely employed cost-saving strategies noted by respondents (30 percent) was to replace some employer-paid benefits with voluntary benefits. In addition, 28 percent of respondents want to try to consolidate benefits with fewer carriers and vendors, while 18 percent expect to change carriers or vendors outright.
Outsourcing. The survey also found that many companies are turning to outsourcing for a variety of benefits programs. Nearly half (46 percent) reported either that they have already outsourced reporting and regulatory compliance for the Patient Protection and Affordable Care Act (ACA) to their insurance carriers or to other vendors (26 percent), or that they are at least considering it (20 percent).
Forty percent also said their company is either outsourcing, or considering outsourcing, administration of requirements for the Americans with Disabilities Act (ADA). Similar numbers currently outsource Family Medical Leave Act requirements (25 percent) or are considering doing so (13 percent). Although fewer respondents report outsourcing local or state leave mandates (17percent), the survey noted that equally as many (17 percent) would consider it.
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