Health Benefits Paramount for Workers When Choosing an Employer

By Staff Report

Jan. 7, 2008

Employers contemplating cutting back on medical benefits might want to mull this: A new survey shows that workers place an extremely high value on health care coverage.

In fact, according to a survey of 1,200 adults sponsored by the Center for State and Local Government Excellence, 84 percent of the respondents said that health insurance has become a “very important” characteristic when choosing a new job.

In fact, medical insurance outranked all other 14 benefits and offerings in the survey. Remarkably, pay ranked 10th on the survey—right below “being creative and intellectually stimulated.”

Another benefit—the corporate pension plan—ranked fourth, cited by 76 percent of respondents as being most important when evaluating a potential job.

“Increasingly, people are becoming aware of the severe consequences of not having either health care or retirement benefits,” says Elizabeth Kellar, executive director for the center. “The responses likely speak to people’s growing insecurities, to the point where many people now say that they won’t even consider a job that doesn’t offer health insurance.”

The cost of providing health care has risen dramatically in recent years. During the past five years, the price of offering medical insurance to workers has increased by 63 percent, according to a study of corporate health care costs conducted by consulting firm Towers Perrin.

That rise, the report notes, has created an “affordability burden” for many employers. As a result, many companies are reducing fixed health-care costs and are shifting more of these expenses to employees through larger deductibles, more sizable employee contributions, and a greater reliance on consumer-driven health plans.

On the retirement side, Kellar points out that as corporations cut back on traditional defined-benefit pension plans to better manage expenses, employees are increasingly becoming dependent on defined-contribution plans, such as 401(k)s. This has prompted workers to place more emphasis on specific defined-contribution features—such as company matches in 401(k)s—when considering new job opportunities.

Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail

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