A Study on Health and Retirement Benefits

By Insurance.com Posted : 08/14/2008

In this uncertain economy, the need for—and importance of—better employee benefits is greater than ever.

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Harris Interactive, on behalf of the Principal Financial Group, conducted the Principal Financial Well-Being Index - Second Quarter 2008 survey online between April 30 and May 7, 2008. This quarterly survey polls employees over 18 working at a small or mid-sized business, and retirees, to identify concerns about finances, health and retirement benefits, as well as to examine workplace trends. The results are then compared to the same quarter from previous years.

Notable results

  • Health insurance has been rated as the most important benefit for the past five years
  • Health insurance is also the benefit that employees most want improved
  • Health Savings Accounts are less well-known than before
  • Respondents are concerned about the economy, rising prices, and job security
  • Most respondents think the country is in a recession
  • Fewer employees than previously believe that good benefits will result in harder work and better performance
  • More employees than previously said that good benefits keep them at their current employer
  • Females rated dental insurance and life insurance as important more often than males did
  • Stock options are rated as more important than before, but still rank last

Benefit importance
As seen in the table below, health insurance and defined contribution plans are rated as the most important benefits to employees, while stock options are rated as the least important. This is an interesting statistic because many companies tend to offer stock options as a type of benefit, especially to those working in upper management.

Importance of
Benefit Program
Q2 2008 Q2 2007 Q2 2006 Q2 2005 Q2 2004
Health Insurance 86% 88% 89% 89% 92%
Defined Contribution Plan 71% 74% 72% 70% 72%
Dental Insurance 67% 70% N/A N/A N/A
Defined Benefit Plan 55% 55% 55% 57% 56%
Disability Insurance 52% 51% 55% 55% 54%
Life Insurance 50% 47% 49% 52% 50%
Profit Sharing/Bonus 43% 40% 43% 42% 47%
Stock Options   21% * 17% 20% 17% 16%

What benefits should be improved?
Health insurance is at the top of the list of benefits employees would like to see improved. As seen in the chart below, employees' desire for improvement of health insurance is most important, but less so than in previous second quarters.

Benefit Most
Needing Improvement
Q2 2008 Q2 2007 Q2 2006 Q2 2005
Health Insurance 37% 40% 42% 41%
Defined Contribution Plan 20% 17% 17% 14%
Life Insurance  5%  4%  3%  4%
Profit Sharing/Bonus Plan  4%  4%  4%  6%
Defined Benefit Plan  3%  4%  3%  4%
Disability Insurance  3%  3%  1%  3%
Tuition Reimbursement  2%  3%  3%  3%

What effect do benefits have?
Many companies offer benefits to attract and keep good workers. The results below show that although good benefits may not increase productivity, many workers measure their companies' concern for them by the benefits they provide. They also use this to determine whether they will look for another job or not.

Comparison of Agreement Percentage Q2 2008 Q2 2005 Q2 2004
"Having good benefits encourages
me to work harder and perform better."
63% * 68% 63%
"Having good benefits keeps me
working for my current company."
63% * 57% 62%
"My company is concerned about
my long-term financial future."
28% * 24% 22%

Which issues are most important?
As seen below, the survey reveals that more people are worried about job security, and less about their long-term financial future. This suggests that people are starting to focus more on the near-term—things like unemployment, rising prices, and a weakening economy—than they are on planning for the future.

Importance of
Issue
Q2 2008 Q2 2007 Q2 2006 Q2 2005 Q2 2004
Job Security   47% * 39% 45% 52% 47%
Long-Term Financial Future   41% * 49% 41% 36% 35%
Challenging Work 12% 12% 14% 12% 19%

Although the Principal Well-Being Index is only a broad microeconomic indicator of workers' attitudes, it reveals that opinions may be shifting amid financial uncertainty. Many workers are becoming increasingly concerned about spending, saving, benefits, and job security.

Thinking about your own health insurance benefits? Visit Insurance.com's health insurance section to get a health insurance quote. Here you can evaluate multiple quotes from top health insurance companies, which helps you find the best health insurance coverage for you and your family.

* - Significant variation from prior results

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Originally posted September 16, 2004.

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