Benefits March 28, 2016

Employees Seeking Wage Growth Over Health Benefits

Between 2012 and 2015, the percentage of workers reporting that they would rather have fewer health benefits and higher wages has doubled, increasing from 10% to 20%, EBRI found.
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Although most American workers are satisfied with the health insurance benefits they have now, there is a long-term trend toward wanting more cash and fewer benefits, according to a survey by the Employee Benefit Research Institute (EBRI).

Fully one-third would change the current mix of wages and health benefits, which may reflect an intensifying desire for real wage growth, EBRI found. 

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Results from the 2015 Health and Voluntary Workplace Benefits Survey (WBS), conducted by EBRI and Greenwald & Associates, show that the percentage of workers reporting that they would trade wages to get more health benefits rose slightly in 2015 to 14% from 12% in 2014.

However, there appears to be a longer-term trend away from being satisfied with the mix of benefits and wages, toward more preference for fewer health benefits and higher wages. Between 2012 and 2015, the percentage of workers reporting that they are satisfied with the health benefits they currently receive fell from 74% to 66%. At the same time, the percentage reporting that they would rather have fewer health benefits and higher wages has doubled, increasing from 10% to 20%. 

NEXT: Confidence in continuation of health benefits

The EBRI report notes that enactment of the Patient Protection and Affordable Care Act of 2010 (PPACA) has continued to raise questions about whether employers will continue to offer health coverage to their workers in the future. Yet, the WBS finds that the importance of benefits as a factor in choosing a job remains high, and health insurance in particular continues to be, by far, the most important employee benefit to workers. 

Worker confidence that employers and unions will continue to offer health coverage fell between 2000 and 2003 but has remained well above 50% since then. Overall, lack of confidence in employers and unions continuing to offer health insurance continues to be low: In 2015, just 9% of workers are not too (5%) or not at all (4%) confident that their employer or union would continue to offer health insurance. The percentage not confident has bounced around between 5% and 17% since 2000.

Also, while workers say having a choice of health plans is important, and that they would like more choices, most workers express confidence that their employers or unions have selected the best available health plan. Moreover, they are not as confident in their ability to choose the best available plan if their employers or unions did stop offering coverage. Also, individuals are not highly confident that they could use an objective rating system to choose health insurance, nor are they very confident that a rating system could help them choose the best health insurance. 

The EBRI research uses data from the 2013-2015 Health and Voluntary Workplace Benefits Survey, conducted by EBRI and Greenwald & Associates, as well as historical data from the Health Confidence Survey (HCS). The full report, “Views on Employment-based Health Benefits: Findings from the 2015 Health and Voluntary Workplace Benefits Survey,” is published in the March 2016 EBRI Notes, online at www.ebri.org.

Data and Research March 28, 2016

Millennials Are Getting Serious About Savings

There was an impressive jump in the number of Millennials saving at least 5% of their income towards retirement or other long-term financial goals during the last year. 

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A new Bankrate.com survey shows 62% of Millennials are stocking away at least $5 of every $100 earned, up from 42% last year.

The survey further shows just 50% of other generations (ages 30 and older) are saving more than 5% of their pay, putting Millennials in the lead on healthy savings behavior.

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“The survey shows an evident migration to higher savings rates,” explains Bankrate.com Chief Financial Analyst Greg McBride, “with 29% of millennials saving more than 10% of their incomes, up from 22% last year. The good news is that many working Americans, millennials in particular, are saving, and saving more than last year. The bad news is that 21% of employed Americans claim not to be saving any of their paycheck—nothing for retirement, nothing for emergencies, and nothing for other financial goals.”

Also positive, the research shows a sizable increase in the number of Americans overall saving more than 10% of their incomes, up from 24% to 28% since last year. “One in six working Americans (16%) is saving more than 15% of their current incomes, up from one in seven (14%) last year,” McBride adds. “The percentage of working Americans saving 5% or less of income dropped, from 28% to 21% since last year.” 

Among income groups, higher savings rates predictably skew toward higher incomes and lower savings rates toward lower incomes, the research shows. “But even still, 27% of Americans with an income between $30,000 and $50,000 per year are saving more than 10% of their incomes, besting the 24% of households with an income between $50,000 and $75,000 doing the same.”

The news heading into the end of the first quarter of 2016 wasn’t all positive, however. The Bankrate.com Financial Security Index “was a touch lower, at 102.7, from the February result of 103.0.” Still, this is the third-best reading in the past nine months, McBride observes. “While job security and comfort level with debt are big contributors to improving financial security, rising net worth was the biggest,” he concludes.

Bankrate.com worked with Princeton Survey Research Associates International on the latest survey report, available here.

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