Bankers Cooperative Group, Inc. (BCG), the health insurance provider for NJBankers members and associate members, has released the results of the ninth annual New Jersey Bankers Association Employee Benefits Survey.
While the survey focused on NJBankers bank members, national norms were utilized where appropriate in order to provide a frame of reference. Key Findings include:
Restrictive Base Plan Offerings – In order to reduce costs, employers are cutting back on their base plan offerings by not offering out-of-network benefits. In 2015, 58.1% of employers offered a base plan with out-of-network benefits. This percentage plunged to 23.9% in 2019.
Spousal Benefits – All respondents offer employee spouses health coverage. However, 9.3% of employers will charge an additional employee contribution or “surcharge” if the spouse can get coverage through their own employer. The 9.3% lags way behind one national survey figure of 20.1%.1
Plan Cost Sharing – While NJBankers member banks tried to preserve the take home pay of employees through little or no increases in payroll deductions, there was a trend to have users of the plan pay more at point of service through changes in deductibles, co-pays and coinsurance.
Rate Increases – The average medical increase for respondents was 9.08%. This increase is slightly higher than some of the national survey averages of around 5%.2 Interestingly, banks in the three middle assets categories experienced increases only slightly higher than the national average. The banks in the smallest and largest asset categories experienced double digit increases. The difference may be partially justified because respondents are New Jersey-based and the state has substantial costs associated with state mandated benefits. Some experts calculate that mandated benefits are costing New Jersey companies 4%-8% more than similarly situated companies in other states.
Employee Contributions – While plan costs increased slightly over 9%, the employee’s share of the total plan cost went down slightly. What caused this anomaly? Some experts think the answer lies with The Tax Cuts and Jobs Act, President Trump’s signature legislation. This act, which slashed the corporate tax rate from 35% to 21%, also came at a time when the unemployment rate stood at just below 4%, a 48-year low. As a result, companies thought long and hard about putting more of a financial burden on employees.3
Employee Choice – NJBankers members offer their employees a wide range of plans. Almost 70% of respondents offer employees a choice of two or more plan offerings. This contrasts markedly with data from the Kaiser Family Foundation where only 20% of respondents offered two or more plans.4
Wellness Programs – The percentage of respondents offering Wellness Plans held steady at 36%. The prevalence of Wellness Programs is higher at banks in the largest asset group. The programs at large banks are more likely to be customized and designed in-house while smaller banks often use insurance company packaged programs.
Employee Well-Being Programs – Over the past several years, many employers have gone beyond compensation and benefits programs to define their culture. Banks are no exception. A new question was added to the survey to track this trend. The survey found that the industry is paying attention to activities such as flexible work arrangement; diversity & inclusion initiatives; local community events; time off for volunteering endeavors; personal financial counseling; and more. Personal financial counseling is garnering much attention as research shows the number one source of employee stress is personal finances.
Worksite Benefits – Employers have realized that core benefits they offer may not meet all employees’ needs. Approximately 70% of respondents offered at least one employee-pay-all-program. The most common programs are additional life insurance, hospital expense, critical illness, accident and additional disability. Some fast-growing products include identity theft and pet insurance.
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