Companies under pressure to reduce health benefits costs
Hywel Roberts, October 24, 2014
Almost half (49%) of companies are under pressure to reduce short-term costs on employee health benefits, according to research by Aon Employee Benefits.
The Aon Benefits and Trends Survey is based on a poll of 430 professionals, a large number of whom work in HR. It suggested cost is the key factor for 97% of employers when making decisions around benefits, but 70% said they would be unwilling to reduce employee benefits to cut costs.
About two-thirds (64%) of respondents said their companies would value a five-year projection on total benefits costs, driven by 98% viewing sustainability of premiums as important to the long-term benefits strategy.
The report also reveals three-quarters of companies do not identify and manage known health risks among their employees, but half are keen to investigate the impact of these issues in the future.
Aon Employee Benefits head of health and risk Stephen Hackett said that serious health risks, such as cancer, mental health and musculoskeletal disorders cause “huge problems” for organisations.
“Serious illness can hit an employer hard, potentially impacting recruitment, retention, productivity, motivation, health programmes and, of course, rising insurance costs,” he said.
The pressure for the private sector to reduce costs on health benefits is being mirrored in the public sector.
Lancaster University Management School distinguished professor of organisational psychology and health Cary Cooper said public sector health and wellbeing budgets have been decimated in recent years.