METLIFE STUDY FINDS SIX OUT OF TEN EMPLOYEES ARE CONCERNED ABOUT COVERING OUT-OF-POCKET MEDICAL COSTS
~ 74% of Employees Who Are Very Worried about Meeting Out-of-Pocket Medical Expenses Don't Have A Three-Month Salary Savings Cushion to Tap Into. ~
NEW YORK, July 23, 2013 – Findings from MetLife's 11th Annual Study of Employee Benefits Trends, reveal that concerns about addressing healthcare costs are impacting both employers and employees. Sixty-one percent of employees are worried about having enough money to meet out-of-pocket medical costs that are not covered by health insurance and employers are facing tighter benefits budgets, with half (50%) of surveyed employers stating that cost-sharing with employees is an important benefits strategy. These concerns are creating a delicate balancing act for employers—how to meet employees' protection needs while keeping benefits costs down and maintaining loyalty.
Employers can help employees address these rising costs by making supplementary health benefits available through the workplace. Some of these voluntary benefits, such as accident and critical illness insurance, can help employees cope with unplanned medical costs. These employee-paid benefits allow workers to fill the gaps between their health insurance coverage and out-of-pocket expenses without having employers add to their benefits budgets.
"As they continue to recover from the recession, employees are looking to employers to provide a stronger and wider safety net," said Michael Fradkin, senior vice president, Voluntary & Worksite Benefits at MetLife. "In fact, according to the MetLife Study, 58% of employees who are very concerned that their employer will no longer offer medical insurance strongly agree that voluntary supplemental benefits are important for managing their health care costs."
Employees Facing Financial Stress
In addition to covering out-of-pocket medical costs such as co-pays, premiums and deductibles, the Study also found other areas of financial stress for employees:
- Fifty-five percent of employees report they worry about meeting their monthly living expenses and financial obligations;
- Fifty-eight percent of employees are concerned about having enough money to make ends meet;
- Fifty-three percent describe themselves as living paycheck to paycheck.
Addressing Loyalty Concerns
However, while the number of companies stating that a voluntary benefits strategy is important has grown from 32% in 2010 to 58% in 2012, employers may be concerned about the effect of benefits cost-sharing on employee loyalty.
According to the MetLife study, less than half (47%) of employee respondents report feeling very loyal to their company and a third (34%) of employees strongly agree with the statement, "Having to pay a larger share of my benefits premium costs would make me feel less loyal to my employer." But this does not mean that employers should shy away from voluntary benefits.
"A strategic use of voluntary benefit offerings can actually be a loyalty booster and a smart solution when walking this loyalty and budget tightrope," added Fradkin. "Smart employers count on the importance of benefits for their employees and build on the fact that employees place even greater value on having benefits that meet their individual needs. According to the study, 77% of workers say that they value a variety of benefits to choose from as well as more personalized options."
This gives employers an opportunity to strategically and cost-effectively expand their benefits portfolio by adding voluntary health benefits without concern about a negative impact on loyalty. Sixty-one percent of employees report that having a choice of benefits that lets them customize a benefits program to meet their needs would increase their loyalty to their employer.
Employers can receive actionable steps on the strategic use of voluntary benefit offerings and walking the loyalty/budget tightrope at BenefitTrends.MetLife.com. Additional insights from MetLife's 11th Annual Study of Employee Benefits Trends will be added to the website throughout the year, and visitors to the website can sign-up to receive automatic updates as new data is posted.
MetLife's 11th Annual Study of Employee Benefits Trends was conducted during October 2012 and consisted of two distinct studies fielded by GfK Custom Research North America. The employer survey comprised 1,503 interviews with benefits decision-makers at companies with staff sizes of at least two employees. The employee sample comprised 1,422 interviews with full-time employees age 21 and over, at companies with a minimum of two employees.
GfK is one of the world's largest research companies, with more than 11,500 experts working to discover new insights into the way people live, think and shop, in over 100 markets, every day. GfK is constantly innovating and using the latest technologies and the smartest methodologies to give its clients the clearest understanding of the most important people in the world: their customers. To find out more, visit www.gfk.com/us or follow GfK on Twitter: www.twitter.com/gfk_en.
Metropolitan Life Insurance Company (MetLife) is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 50 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.