Benefits October 4, 2001

Most Employers Have Reservist Policies in Place

October 4, 2001(PLANSPONSOR.com) - As the military gears up for the war on terrorism, thousands of employers must grapple with the issues of compensation and benefits for employees called up for service. Watson Wyatt conducted a study to find out how employers are dealing with these issues.
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The study revealed that employers, while aware of the future negative financial consequences of military action on their businesses, were showing a great deal of generosity towards military reservists and their families. At the same time, employers are wary of the future negative financial impact this crisis will have on their business.

The survey found that

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  • some 80% of the employers surveyed already have compensation policies in place for reservists,
  • a further 10% plan to implement one
  • almost three-quarters have medical policies in place for reservists,
  • while a further 14% plan to implement one

Pay Policies

When asked how their organization will handle compensation for reservists called to active duty, 60% of employers reported that they plan to institute differential pay policies for some period of time to make up the difference between regular and military pay. And while 14% remain undecided, only 10% of those interviewed said that they would not be providing any compensation.

Medical Policies

Some 47% of the employers surveyed report they will exceed the Consolidated Omnibus Budget Reconciliation Act of 1986 or the Uniformed Services Employment and Reemployment Rights Act of 1994 (COBRA/USERRA) statutory minimum coverage for reservists and their dependents by providing full medical benefits for some period of time.

Of those interviewed,

  • just over 40% will provide employees with full benefits for between five and seven months,
  • almost a quarter will extend full benefits for more than nine months,
  • while 18% will provide them for three to five months, and
  • the same percentage will provide them for one to three months

Outlook

Employers were also asked how they think recent events will impact their businesses,

  • 45% are uncertain,
  • 31% do not predict a negative financial impact,
  • a quarter of the sample expect to be affected negatively

In addition, of those expecting to be negatively affected,

  • None are planning a workforce reduction, and
  • Only 2% will reduce their merit increase budget

Numbers

A total of 51 employers, representing a total of approximately 500,000 full-time employees, responded to the survey.

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