Are Your Benefits Holding Up?


As companies enter the season when they typically change health and pension benefits -- usually, not for the better -- employees appear to have mixed feelings about their medical and retirement benefits. They see their benefits as worse than they used to be and unlikely to improve much in the near term. And a significant percentage say they might be willing to change jobs to find better benefits once the economy recovers. Yet a majority don't regard their benefits as terrible just yet. Those are the key findings of our Oct. 7 Reader Survey.

Readers seem most disenchanted with the trend in health benefits. Of the nearly 650 who responded, some 29% said, taking into account what they're required to pay and the breadth of coverage they get in return, their employer-provided health benefits are about the same or better than they were three years ago. But 67% said their benefits are somewhat or much worse than three years ago. And some 74% think their health benefits will be somewhat or much worse three years from now than they are at the moment.

To put that in perspective, 8% of those who responded say the maximum out-of-pocket expense they can incur for hospitalization under their current plan is zero -- while 6% say their out-of-pocket maximum is more than $6,000, and 2% say they don't get health benefits. The vast majority -- 65% -- can end up paying $2,000 ro $6,000 a year for hospitalization. On the plus side, though, about 77% regard their health coverage as adequate or better, vs. the 20% who say their health benefits are somewhat less or much less than adequate.

FEW UNNEEDED VISITS. Readers blame a variety of factors for the rise in health-care costs that has motivated employers to trim benefits. In descending order of importance, they cite excessive drug prices, the aging population, ineffective hospital cost-management, excessive doctor fees, a lack of federal pressure to keep health costs under control, and, lastly, excessive health-care use by patients.

They seem sure that the latter has a minor impact: Asked how often over the past five years they or members of their family have made doctor or hospital visits that weren't absolutely necessary -- a factor employers typically blame for rising costs -- less than 5% of respondents said they make such visits somewhat or very often. More than 82% said they do so rarely or never.

Readers seem a bit more optimistic about their pension plans. Only 44% say their pension plan is somewhat or much worse than it was three years ago, vs. the 40% who think it is about the same or better. And 84% think that three years from now the amount they'll have for retirement will be about the same or higher. Asked how adqequate their pension will be, however, readers tell a different story. About 57% think that the amount of income their pension will provide will be somewhat less than adequate, or inadequate, vs. the 33% who expect to have adqequate income.

SAVE MORE FOR LATER. Readers primarily blame the economy and the markets for the potential inadequacy of their pensions, though they also blame employers for moving out of plans that provide guaranteed benefits and into 401(k) plans that shift the risk companies formerly assumed onto employees. Some also blame federal law, for making it too easy for companies to change plans, plus themselves -- for investing their pension money too conservatively.

Some readers get a particularly good deal under their company plans: 18% say they don't have to contribute anything to them, and 12% say they contribute less than 5% of their gross income, vs. the 35% who contribute 5% to 10% and the 24% who contribute 11% to 15%.

Some 69% would be willing to contribute more to their pension plan now in order to have more later -- if they could afford to. Since apparently they can't, only 24% intend to stop working when they reach retirement age. By contrast, 41% intend to work part-time, 9% intend to work full time at a different occupation, and 12% don't plan to retire.

READY TO JUMP? Those who responded feel strongly about the value of their benefits -- a feeling expressed in disparate ways: Nearly 38% say that when companies start to hire again, they'll look for an employer that provides better health and pension benefits. Yet 41% say they're unlikely to do so -- and will stick with what they've got.

Here are the detailed results of the survey, which as always was unscientific, since anyone who wished to could participate:

Which of these benefits does your employer provide (or do you buy if you're self-employed)? Please check off every one that you have:

Option

Total

%

Health-care plan

599

24.65 %

Pension plan

452

18.6 %

Paid vacation

570

23.46 %

Paid holidays

564

23.21 %

Other

224

9.22 %

My employer provides no benefits

11

0.45 %

I'm not employed

10

0.41 %

Don't know

0

0.00 %

Taking into account the amount you're required to contribute and the breadth of care you get, how would you say your company-provided health plan compares with three years ago? It's:

Option

Total

%

Much better

20

3.22 %

Somewhat better

29

4.66 %

About the same

132

21.22 %

Somewhat worse

256

41.16 %

Much worse

159

25.56 %

My employer doesn't provide health benefits

13

2.09 %

Not sure

13

2.09 %

Taking into account the rate at which your nest egg has grown and the amount you think you'll need for retirement, how would you say your company-provided pension plan compares with three years ago? It's:

Option

Total

%

Much better

11

1.77 %

Somewhat better

34

5.48 %

About the same

209

33.66 %

Somewhat worse

128

20.61 %

Much worse

132

21.26 %

My employer doesn't provide pension benefits

90

14.49 %

Not sure

17

2.74 %

Regardless of the cost of your health plan, how would you describe the level of care it provides for you and your family?

Option

Total

%

Much more than adequate

88

14.1 %

Somewhat more than adequate

140

22.44 %

Adequate

256

41.03 %

Somewhat less than adequate

79

12.66 %

Much less than adequate

44

7.05 %

My employer doesn't provide health benefits

14

2.24 %

Not sure

3

0.48 %

Hospital charges (for operations, for example) are usually the biggest expense covered by a health-care plan. Not counting monthly premiums and co-payments for doctor visits, what's the maximum out-of-pocket amount for hospitalization an employee has to pay under your current health plan?

Option

Total

%

Zero

53

8.49 %

Up to $2,000 a year

260

41.67 %

Up to $4,000 a year

111

17.79 %

Up to $6,000 a year

36

5.77 %

More than $6,000 a year

40

6.41 %

My employer doesn't provide health benefits

13

2.08 %

Not sure

111

17.79 %

Based on your recent experience, do you think that three years from now your health plan will be:

Option

Total

%

Much better

5

0.81 %

Somewhat better

19

3.06 %

About the same

131

21.1 %

Somewhat worse

273

43.96 %

Much worse

181

29.15 %

Not sure

12

1.93 %

When employers raise employee costs for health care, they often say one goal is to dissuade employees from going to the doctor or the hospital more often than they need to. Over the past five years, how often would you say you or members of your familly have made doctor or hospital visits that weren't absolutely necessary?

Option

Total

%

Very often

6

0.96 %

Somewhat often

21

3.38 %

Neither more nor less often

76

12.22 %

Rarely

192

30.87 %

Never

322

51.77 %

Not sure

5

0.80 %

Who or what do think is most responsible for causing health-care costs to rise much faster than the overall rate of inflation? (Choose as many as you feel are responsible):

Option

Total

%

The aging of the population

351

18.17 %

Excessive doctor fees

250

12.94 %

Ineffective hospital cost-management

296

15.32 %

Excessive drug prices

441

22.83 %

Excessive health-care use by patients

172

8.90 %

Lack of federal pressure to keep costs under control

254

13.15 %

Other

153

7.92 %

Not sure

15

0.78 %

How would you describe the amount of income your pension plan or individual retirement account is likely to provide once you reach retirement age?

Option

Total

%

Much more than adequate

9

1.46 %

Somewhat more than adequate

41

6.65 %

Adequate

155

25.12 %

Somewhat less than adequate

171

27.71 %

Inadequate

179

29.01 %

My employer doesn't provide a pension plan

52

8.43 %

Not sure

10

1.62 %

What percentage of your gross income do you contribute each year to your pension plan?

Option

Total

%

Zero

109

17.67 %

Less than 5%

73

11.83 %

5% to 10%

214

34.68 %

11% to 15%

146

23.66 %

16% to 20%

42

6.81 %

More than 20%

17

2.76 %

Not sure

16

2.59 %

Based on your recent experience, do you think that three years from now the amount you'll have for retirement will be:

Option

Total

%

Much higher

50

8.10 %

Somewhat higher

337

54.62 %

About the same

126

20.42 %

Somewhat lower

44

7.13 %

Much lower

41

6.65 %

Not sure

19

3.08 %

Who or what do think is most responsible for the fact that the amount of money your pension plan isn't growing faster? (Choose as many as you feel are responsible):

Option

Total

%

Yourself, for investing that money too conservatively

112

8.71 %

The economy

416

32.35 %

The markets

364

28.3 %

Employers, for switching employees to 401(k) plans rather than guaranteeing pension benefits

200

15.55 %

Federal law, for allowing companies too much leeway to change plans

169

13.14 %

Not sure

25

1.94 %

Given your current assessment of how adequate your pension is likely to be, what do you plan to do when you reach retirement age?

Option

Total

%

Quit working

147

23.82 %

Work part-time

253

41.00 %

Work full-time at a different occupation

56

9.08 %

I don't plan to retire

75

12.16 %

I don't have a pension plan

30

4.86 %

Don't know

56

9.08 %

Assuming that you have the money to do so, how willing would you be to contribute more to your pension plan now in order to be able to retire earlier?

Option

Total

%

Very willing

255

41.26 %

Somewhat willing

173

27.99 %

Neither more nor less willing

65

10.52 %

Somewhat unwilling

24

3.88 %

Not willing at all

30

4.85 %

I don't have to money to do so

41

6.63 %


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