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A LIMRA study found that employers underestimate how important benefits are to their younger employees. LIMRA surveyed employees to find out how important various benefits are to them, then collected employers’ perspective on how much their employees value different benefits and if they believed it varied between younger and older employees. The results were remarkable.

LIMRA found when it comes to benefits, younger employees value benefits nearly as much as older employees (chart 1). The different values that employees place on benefits appear to be more a function of life experience than life stage, income or education levels.

However, employers surveyed believed that older employees value benefits more than younger employees (chart 2), which could affect employers’ future decisions on what benefits they offer in the coming years.

Since 1999, health care costs in the U.S. have increased 131 percent1, and the estimated increase for 2013 is expected to be 6.5 percent2. With the companies still feeling the results of a sluggish economy, it is not surprising that employers are looking for ways to reduce benefit costs.

Over the past 12 months, LIMRA has surveyed employers’ perspectives on the impact of health care reform and how they plan to react. The study revealed that nearly half of small business employers feel that health care reform will have a negative effect on their ability to offer non-medical benefits within 3-5 years, and more than a third of large employers agreeing with that assessment. In fact, at least a quarter of U.S. employers are considering eliminating non-medical benefits — including 25 percent of those employers offering life insurance — no doubt as a way to defray the increasing costs of medical care.

These economic strains coupled with employers’ misperceptions of how much their younger employees value benefits could result in many cutting benefits. It is important that carriers and producers educate employers on how much these benefits are valued by all their employees and introduce ways to allow them offer these benefits to their employees without increasing their costs, like offering voluntary benefits.

1 2012 Employer Health Benefits Survey, Kaiser Family Foundation
2Milliman Medical Index (MMI), 2013

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