Back Button
Menu Button

Iowa Employer Health Premiums Up 7% in 2012

David P. Lind BenchmarkToday we issued our Press Release on the results from our 14th annual Iowa Employer Benefits Study©. As you might imagine, there is a wealth of data coming from this years’ survey, but perhaps the most striking number for me is also the headline number – 7 percent.

This number is BIG because it is…well, the SMALLEST number we have observed in the last 14 years. We have been surveying employers since 1999 (2001 was the first year we began asking questions on premium adjustments). With this relatively “tame” increase, Iowa employers reported making the following changes to their health plans during the past 12 months:

  • Increased deductibles (20 percent of respondents)
  • Raised out-of-pocket maximums (16 percent)
  • Increased office visit co-payments (12 percent)
  • Increased prescription drug co-payments (11 percent)
  • Changed insurance companies (9 percent)
  • Reduced pay raises or bonuses (5 percent)
  • Began wellness program initiatives (5 percent)

Since 1999, the annual single premium has increased by 164 percent (up $3,392), while the family premium increased by 146 percent (up $8,049). From 2011 to 2012, the premium for single coverage on all types of medical plans (HMO, PPO, Indemnity, CDHP) increased by eight percent, while the family premium increased slightly by two percent.

Overall, employee contributions for single medical coverage is 20 percent of the total single medical premium ($1,065 annual). For family coverage, the average Iowa employee contributes 34 percent of the family premium ($4,657 annual). Last year, the contribution level was 18 percent and 33 percent, respectively.

The summary report will be published on our website within the next two weeks.

The above information is just a small fraction of our survey results. To learn more, we invite you to stay in touch by subscribing to our blog.

Employee Loyalty – A Huge ‘Benefit’

David P. Lind BenchmarkAccording to MetLife’s 10th Annual Study of Employee Benefits Trends report (released in March 2012), only 42 percent of employees indicated they felt a strong sense of loyalty toward their employer – a seven-year low. Interestingly within this same report, 59 percent of employers felt a strong sense of loyalty toward their employees…a seven-year high!

Another part of this study caught my attention, yet I’m not all that surprised.

About 61 percent of employees (generations included – Boomers, X, and Y) who were very satisfied with their benefits said they felt a strong sense of loyalty to their employer versus only 24 percent of employees who were very dissatisfied with their benefits. If offering strong benefits provides greater loyalty from employees is more causation (rather than a correlation), employers have hope on developing a long-lasting sense of loyalty to their employees.

Not a bad thing!

A few other interesting tidbits from this study include:

  • More than half of surveyed employees (58 percent) said that benefits were an important reason to stay with their employer, and this was highest among Generation Y (born 1981 – 1994) at 63 percent and with Generation X (born 1965 – 1980) who followed at 62 percent.
  • While 66 percent of employees said that health benefits were an important driver of their loyalty, only 57 percent of EMPLOYERS believed this to be the case.  Hmmm…
  • 59 percent of employees indicated that retirement benefits were “very important” when influencing loyalty to their employer, while only 42 percent of employers recognize this. Another Hmmm…
  • A large majority of employers see opportunities to leverage their benefits programs to engage their employees. Leveraging benefits can retain employees more effectively, increase employee productivity, and attract employees.

How loyal are your employees? If loyalty is high, maybe your benefits package is a bigger contributor than you might think. If it is low, there is hope, according to this study! Offering quality employee benefits can be very expensive, but it might be more costly to NOT offer such benefits.

Finding Skilled Talent

David P. Lind BenchmarkSurvey findings were recently published by Deloitte Consulting LLP revealing the top five priorities in 2012 for U.S. employers relating to ‘Total Rewards’. Studies like this are helpful because it provides a glimpse into the national psyche of the corporate “mind” regarding compensation, benefits, perks and other direct/indirect payments to employees. This particular study is the 18th year of the Top Five Total Rewards Priorities series.

We all know that unemployment in this country is much too high (especially for those who are currently seeking employment). From this study, when 330 respondents ranked the most significant challenge facing their organization in the next three years, I was surprised to learn that TALENT SHORTAGE is the top challenge! We have high unemployment, but shortage of talent? This sounds a little counterintuitive to me.

What gives?

Deloittes’ explanation is that HR professionals “believe today’s surplus of job seekers has not translated to a talent surplus. Rather, employers are facing heightened competition for highly skilled talent that is not necessarily present in the large pool of unemployed.” About one quarter of the study respondents pointed to the shortage, motivation and retention of qualified talent, which is up from 16 percent in 2011.

According to the Deloitte study, here’s the list of the most significant challenges in the next three years:

  1. Shortage, motivation, and retention of qualified talent (25%)
  2. Rising cost of Total Rewards (21%)
  3. Health care reform complexity (18%)
  4. Uncertain economic conditions (10%)
  5. Total Rewards administration that meets or exceeds expectations (7%)

Having shortages in skilled positions is nothing new to employers. A labor surplus (due to high unemployment) does little to resolve labor shortage issues for key positions in some organizations (i.e. skilled production, engineering technologists, scientists, etc.). To fill these positions, employers will need to find new approaches to develop these skilled positions, regardless of the unemployment rate. Developing thoughtful training and recruitment initiatives, coupled with partnering with community colleges (and other vocational entities) will most likely help employers fill these skilled positions in the future. Vermeer Manufacturing in Pella has done just that by developing smart programs to fill these vital positions.

Without a doubt, Iowa’s workforce is our precious resource. We must continue to reinvest (and retool) in this resource to maintain competitive advantages here, nationally, and of course, internationally. We also must find ways to attract new people to Iowa and retain our existing residents…especially in rural areas. David Swenson, an economist at Iowa State University, recently wrote a piece in the Des Moines Register addressing precisely this issue.

It just makes good sense.