In an attempt to save money in hard economic times, some companies have opted to reduce their participation or eliminate health-care programs for their employees.
A study conducted by Grant Thornton, an accounting and management consulting company, of 1,825 mid-sized companies in the United States, including 30 in the Salt Lake area, showed that in spite of increasing costs, middle-market companies are reluctant to drop employee health-care coverage.Many even feel an obligation to provide the coverage.
The study showed company health-care benefit costs increased 18.3 percent in the last year and that small and mid-sized companies now spend 7.8 percent of their payroll costs on employee medical insurance.
"Yet, an overwhelming 88 percent of the respondents said they were not very likely to drop health-care benefits in the next two years, even if costs continued to rise," according to the survey.
Seven in 10 respondents will continue to provide health-care insurance because they believe this benefit is necessary to attract qualified employees, Grant Thornton found. Another 28 percent feel it an employer's responsibility to offer health-care benefits.
The reasons for retaining health-care benefits for employees varied according to the size of the company. Thirty-five percent of the respondents with 20 or fewer employees believe they have a duty to offer benefits to their workers, a figure that dropped to 24 percent in companies with 100 workers or more.
The survey said small companies were less likely to view health care as part of a competitive strategy. Only 62 percent of the respondents from smaller companies were likely to maintain health-care benefits because they are necessary to attract skilled employees.
On the other side, 76 percent of the companies with 100 or more employees view health-care benefits as a vital personnel recruitment tool, the survey said.
Larry C. Worrell, senior manager of Grant Thornton, said, "It's not uncommon for small companies to nurture a family environment in which the owner feels an obligation to provide health-care coverage to their workers."
Yet, in large companies, health-care coverage is viewed as a bare-minimum prerequisite and prospective employees expect no less than comprehensive health-care benefits, , Worrell said.
The study found that 75 percent of the companies surveyed require employees to contribute to their coverage with workers paying an average 26 percent for individual health-care benefits and 32 percent of family premium costs.