Health Care Benefits Optional But Not Expendable

From Except for Social Security, workers’ compensation and a few state requirements, employers are free to choose whether to provide other benefits.

Many companies are considering dropping health insurance.

Many companies are scaling back health insurance.

With continually rising costs and the advent of health care reform, some companies are paring benefits. MetLife’s ninth annual Study of Employee Benefits Trends reveals that in the six months before March 2011, 20% of employers reported they had decreased employee benefits, the highest level since the fall of 2008. Employers continue to scale back on health care coverage for employees (91%) and spouses and dependents (89%), according to the MetLife study.

More than 2 in 5 corporations offer one or more high-deductible health plan options, almost 98% offer dental benefits, and almost 83% offer one or more defined-contribution pension plans, according to the International Foundation and International Society of Certified Employee Benefit Specialists’ Employee Benefits Survey: U.S. and Canada 2011. And as of March 2009, paid sick leave was available to only 61% of private industry workers according to the U.S. Bureau of Labor Statistics.

With 2014 health care reform provisions on the horizon, nearly 1 in 5 employers responding to Lockton Benefit Group’s May 2011 Employer Health Reform Survey said they were considering ending group health coverage. Most of the survey’s respondents plan to retain health coverage as a recruitment and retention tool, and because of concerns about the costs employees would have to pay if they used health exchanges to obtain coverage.

Some experts believe employees would leave companies in droves if benefits were taken away, and spur a resurgence in unionization.

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