NEW YORK, February 28, 2005 – Despite the escalating cost of healthcare insurance, few employees understand the full and growing magnitude of their company’s investment. More than one-quarter (28%) of full-time employees believe that their company spends less than $1,000 per employee annually on medical and nearly half (49%) believe their company spends less than $2,000, according to the recently released MetLife 2004 Employee Benefits Trend Study. Only 27% of full-time employees estimate correctly that their company spends $4,000 or more per year. Nationally, companies spend an average of $7,289 per employee annually for family coverage and $3,137 for single coverage, according to the Kaiser Family Foundation and Health Research and Education Trust. Divorced/separated employees and those in a domestic partnership are most likely to assess their employer’s contribution realistically, with 41% and 44% of these employees respectively estimating their company’s investment at $3,000 or more per year, compared with 38% of employees overall.
Employee communications may be partially to blame for the misperceptions by today’s workers. Currently, only 31% of employees give their companies’ benefits communications program high marks. Roughly the same percentage (36%) give high marks to their companies’ benefits package, up only slightly from last year (32%).
Currently, 60% of full-time employees (and 71% of those aged 21-30) don’t understand which benefits best meet their needs. To fill the gap, 27% of full-time employees overall (and 40% of those age 21 – 30) rely on friends and relatives for financial advice, while 46% don’t consult with anyone. Among older workers, 53% of employees age 51 – 60 and 56% of employees age 61 – 69 don’t consult with anyone.
"A robust communication and educational plan is a critical component of any benefits program,” notes Hirschhorn. “Our research shows that when employees understand their insurance, savings and retirement needs, they make better benefits decisions and have higher levels of benefits and job satisfaction. In fact, among full-time employees who are highly satisfied with their companies' employee benefits, overall job satisfaction is nearly three times as high as it is for employees who are not satisfied."
As voluntary benefits (i.e., benefits for which employees pay all or most of the cost) become increasingly popular, benefits education is all-the-more critical. “With employees now responsible for funding an ever-increasing percentage of their own benefits, they need better decision support tools to make informed decisions,” adds Hirschhorn.
More than one-third (34%) of the full-time employees surveyed say they are interested in having their employer provide a wide array of voluntary benefits. Employees view the payroll deduction associated with voluntary benefits as a “convenient way to make payments” (62%) and as a means for becoming “more disciplined about saving” (51%).
The ability to sign up for insurance without going through a medical exam is also a strong selling point for 50% of employees. In terms of buying patterns, young workers (25%) – in addition to African American (28%), Hispanic (25%) and Asian (20%) employees – are more likely than their peers to purchase their financial and protection products at work.
The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2004 and consisted of two distinct surveys. The employee survey, fielded by NOP World, polled 903 full-time employees, age 21 and older, at companies with at least two employees, and 1,542 voting-age consumers. The employer survey was conducted by TNS NFO and polled a total of 1,528 HR/Benefits executives from companies with at least two employees participated in the employer survey.