The one benefit employers won't touch

Companies are cutting back on every conceivable employee benefit – except medical coverage for dependents
AUG 22, 2011
As businesses struggle to recover from the recession, they are cutting back on employee benefits – except for ‘third-rail' benefits that most don't dare touch. That's according to a survey of around 156 business executives conducted in February through May by benefits consulting firm Corporate Synergies Group and the Financial Executive Research Foundation. Executives reported that they are increasing the employee's share of the cost for several components of their benefits packages and cutting back others. The reason? What else – concern over rising costs. The shifting of the benefits burden over the last five years includes increased co-pays and/or deductibles (88%), high-deductible plans or health savings accounts (42%), and reduced coverage levels (38%). Dependent coverage, however, is the big untouchable. Indeed, only 2% of employers said they had dared to tread there, even as 21% said they have reduced or eliminated salary increases and/or bonuses for employees in order to continue offering medical coverage as costs continue to surge. Employers were a bit more willing to cut back on non-medical employee benefits, with 9% saying they had done that. Not surprisingly, employers are attempting to match the benefits their competitors offer in order to retain their best employees, the executives said. But the report added that “most are looking to cut where their competitors are cutting as well.” Self-insuring remains popular, particularly with larger firms. Among firms with more than 500 employees, 79% said they provide medical benefits through self-insurance. Almost half of the surveyed companies self-insure, and 8% have moved to self-insurance within the past five years. Employees are doing their best to cope with their rising share of the cost of insurance. The most popular route is to move to a higher deductible plan (60%), while only 11% dropped their dependents from coverage.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.