'Employee choice' benefits model gaining traction
Finance executives in a broad cross-section of industries—including financial services, health care and manufacturing—are moving toward greater employee responsibility for making benefit choices, according to James Gemus, senior vice president, Group Life and Voluntary Benefits, Prudential Group Insurance. "An increasing number of employers expect to move to an 'employee choice' benefits model over the next two years, giving employees greater responsibility for choosing the types and levels of benefits selected," Gemus says. "An employee choice system allows executives to strike a balance between cost and benefit because in this model, each employee is provided with a fixed amount of funding for benefits, and employees select their benefits using those funds, as well as their own funds."
A new report, prepared by CFO Research Services in collaboration with Prudential and titled "The Future of Retirement and Employee Benefits: Finance Executives Share Their Perspectives," shows a gradual movement to employee choice in benefits programs. Fifteen percent of respondents described their company’s current strategy as an employee choice model, and another 29 percent expect their companies to adopt this strategy within two years.
And with 69 percent of respondents indicating their companies are likely to expand the range of voluntary benefits offered to employees, Gemus notes, "many of these companies are exploring voluntary benefits offerings as a means of striking the right balance between offering a full menu of benefits options and keeping a cap on costs."
Interested in more information? Watch a portion of James' remarks, read the news release or report. To speak with James, contact Sheila Bridgeforth.
