NEWARK, N.J.–(BUSINESS WIRE)–As uncertainty rises surrounding the potential impact new health care legislation will have, companies are reprioritizing business objectives to limit their exposure to increasing costs associated with providing health-related benefits.
According to Worker Productivity as the Next Frontier in Benefits Cost Management, the second in a series of research briefs stemming from Prudential’s 5th annual study of employee benefits, 7 in 10 plan sponsors say controlling health care costs is “highly important” to them. And three of their top five benefits objectives in 2010 are cost-related, namely, employers are placing greater emphasis on productivity-focused strategies such as wellness initiatives, absence management and benefits integration. Achieving work/life balance, maintaining a healthy lifestyle and reducing stress are top of mind for employees and they expect their employers to help them reach these goals.
“Making sure employees are healthy and active at work is in everyone’s best interest as it helps keep health care costs down and increases productivity,” said Jim Porter, vice president of product development for Prudential’s Group Insurance business. “Going forward more companies will start investing in wellness, prevention and return-to-work programs as part of a short-term/long-term employee retention and cost management plan.”
In 2007, return-to-work initiatives, programs that provide accommodations to assist employees return to work after an absence, were the most common cost-management strategies among plan sponsors. Since then, there’s been moderate growth from 39 to 45 percent in program participation and nearly half of all survey participants say using both return-to-work and absence management systems has been highly effective in improving the productivity of their workforce.
“Because of recent economic turmoil and pending health care legislation, employers realize how comprehensive their benefits strategies must be and are increasingly looking for opportunities to bundle products,” said Porter.
More than half (54%) of plan sponsors surveyed have started combining parts of their medical, pharmacy, disability, and workers’ compensation products into integrated plans. As might be expected, most benefits integration programs are in the early stages of implementation, so success is difficult to gauge. But 57 percent of plan sponsors involved in these types of activities say they have measurable cost-savings goals in place and have already seen modest improvement.
“Overall, redefining and streamlining benefits packages to reflect the needs of your workforce is a win/win that shows that business objectives and an employee’s best interests can be on the same page,” said Porter.
The Worker Productivity as the Next Frontier in Benefits Cost Management report is the second in a series of research briefs stemming from Prudential’s 5th annual Study of Employee Benefits: Today and Beyond. The study was conducted via the internet during April and May of 2009 and consists of three distinct surveys targeting plan sponsors, plan participants, and brokers/consultants. The research was conducted for Prudential by the Center for Strategy Research, Inc., a Boston-based independent market research firm.
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