Workplace benefits of all stripes harder to come by
Brace yourself for another year of stinging health insurance costs.
As open enrollment periods begin in workplaces, workers are facing the annual shock of rising health care costs. You may not see a horrible rise in premiums — at least not an increase as extreme as the last few years. But you are likely to have to pay higher deductibles before your insurance kicks in, as well as copays when you go to the doctor or hospital.
As health care costs climb and businesses deal with a slow-growing economy, companies are passing more health care costs onto their employees. And they’ve been cutting back other benefits, too, over the last few years, according to a survey by the Society for Human Resource Management.
Gone are the days when companies routinely relocated workers and their spouses. Also on decline have been child care centers at work and child care referrals. Fewer employers are matching charitable contributions when their employees make donations, and while many of the cuts are not vital, employees are no longer receiving help like subsidies for cars and parking — even when they need vehicles for work. Even flu shots in the workplace, 24-hour nurse lines, ATMs on-site, smoking cessation programs, and tuition assistance related to jobs have been cut by many.
The few benefits that have increased are those that cost employers little or help reduce costs. For example, companies have found that they can make employees happy by letting them dress casually and telecommute. So 83 percent of companies are allowing casual attire. About 54 percent are being flexible with work schedules and 60 percent are allowing telecommuting — a huge jump over the 20 percent doing it a decade ago.
Companies that are trying to bring in young workers are making changes to recruit and retain them. Relaxed dress and workplace hours presumably help. A new benefit — helping employees pay off student loans — now is embraced by 4 percent of employers, says the Society for Human Resource Management. And some employers interested in keeping women on a career track are paying to freeze eggs while employees delay pregnancy. Still, only 2 percent of companies are paying to freeze eggs, while 26 percent of companies provide paid maternity leave to women.
With unemployment low, two-thirds of organizations say they are having trouble filling positions. So more money is going toward bonuses — either to entice people to take a job or stay on a job. As health care costs rise, 23 percent of companies have added services that diagnose or give prescriptions over the phone or via video.
Most companies review their benefits plans each year, and while 60 percent say they’ve kept their benefits the same, the cuts they do make have most often been in health care. When cutting benefits, 66 percent of companies have made cuts in health care. Health, dental and vision insurance remain mainstays of benefit packages, but now 94 percent of companies, instead of 96 percent in 2015, offer vision insurance. Mental health coverage now is provided by 85 percent versus 91 percent. Disability insurance may cover less of an employee’s salary when a person is injured or sick and can’t work for many weeks or months.
Health insurance premium increases have slowed compared with the 20 percent total rise since 2011, according to the Kaiser Family Foundation. But the average family will pay 6 percent more in 2016 over last year — or an annual premium cost of $5,277. And premiums tell only part of the story. Companies are reducing costs by increasing the deductibles and copayments employees must handle. These are costs beyond the premium people see listed in their benefits materials. For individuals, the average deductible is $1,478.
Rising costs are enticing people to move to high-deductible plans so they reduce what they pay out of their paycheck each month for premiums, but Sarah O’Leary, founder of ExHale Healthcare Advocates, warns people to be careful about snap judgments. She said too many people don’t add up likely expenses and end up paying thousands more than they expect. One woman that O’Leary advised wanted her lowest-cost insurance plan, but failed to think about the hip replacement she was going to need — a medical procedure that would cost her thousands of extra dollars out of pocket.
Also, don’t sign up for any plan without checking first to see if your favorite doctor and hospital are covered, she said. Insurance plans change who they will cover each year, so assume nothing. If your doctor or hospital isn’t covered, you will incur huge costs.
To help decide whether to use a traditional health insurance plan, such as a preferred provider organization, or a high-deductible plan that charges you less upfront — but requires you to pay thousands before insurance help kicks in later — try this financial calculator.
With a bewildering array of choices at some workplaces, people also sometimes overspend on insurance without realizing they are buying duplicates. For example, many comprehensive health insurance plans will cover eye injuries or diseases. So vision insurance may not be necessary unless a person is planning to buy glasses or contacts, and even then full costs usually aren’t covered. O’Leary suggests calling optical outlets to ask about prices and insurance discounts before committing to insurance. The insurance might not be worth a limited discount.
Cancer treatment also is provided by most insurance policies, so the cancer insurance showing up in the list of workplace benefits typically isn’t essential for medical care, said Gary Kushner, of Kushner & Co., a Michigan-based benefits consultant. Instead, he said, cancer insurance would be selected to cover time off of work in the event of the serious illness if disability insurance wasn’t enough. Disability insurance covers living expenses during serious illnesses or accidents and can be calculated by dinkytown.net.
To determine how much life insurance you would need if you or a spouse died, visit dinkytown.net.
Gail MarksJarvis is a personal finance columnist for the Chicago Tribune and author of “Saving for Retirement Without Living Like a Pauper or Winning the Lottery.”