Shared-funding or employee-paid benefits plans offer employers in certain industries a way to offset their health-care costs while attracting new talent--an important consideration with a labor shortage on the horizon.
"Benefits are important to employees--so much so that they are willing to negotiate for them or leave a job because of the lack of them," said Mike Simonds, senior vice president of marketing and product development at Unum Group, formerly known as UnumProvident Corp., which recently released a report outlining trends in benefits decisions specific to nine industry sectors.
The retail trade was the only industry studied in which the No.1 funding choice for recently issued long-term disability policies was 100 percent employee-paid. In the legal services sector, Unum marked a shift toward more 100 percent employee-paid LTD plans when looking at sales from 2003 to 2005. Employee funding has also played an increasing role in LTD plans purchased in the education sector and in management consulting and marketing.
For short-term disability insurance, the number of plans sold over the last three years requiring 100 percent employee funding has grown in the health services and financial services sectors.
Manufacturing is the major exception to this trend. According to Unum's research, this sector has not moved away from employer-paid STD plans, and employer-paid LTD plans are still the more popular option. Manufacturing employers pay an average of 80 percent of premium contributions for employee health care, the highest of any nongovernmental sector. Unum noted that this sector provides the highest levels of benefits because skilled workers are scarce and recruiting efforts for young employees are coming up short.
Industries studied were education, retail, legal services, engineering/architecture, financial services, health services, information services, management consulting and marketing, and manufacturing.
April 15, 2007
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