Unbiased Analysis of Today's Healthcare Issues

Benefits: Employers’ greatest pricing pressure

Written By: Jason Shafrin - Nov• 05•10

A survey conducted by Grant Thornton reveals that employee benefits rank at the top of employer cost control concerns.  According to the survey, “A vast majority (84%) cited employee benefits (e.g., health care, pensions) as their greatest pricing pressure — up from 68% six months earlier.”

In response, about one-third of employers plan to cut employee health benefits.  The good news is that more employers are planning to increase health benefits compared to March 2010.

Change in Employee Health Benefits Oct 2010 Mar 2010
Increase 21% 6%
Same 49% 66%
Decrease 30% 29%

Most economists believe that employers view health insurance as a cost just like salary. Thus, the downside of increasing health insurance benefits is that salary increases would not be as high as they would with a smaller increase in employee benefits.

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