Raises Second to Health Insurance

Aug. 15–Eric Dyches wouldn’t take a $5,000 raise to drop his health benefits. He switched careers to secure a good health insurance plan for his budding family of four.

Dyches, a human resource consultant at Orem-based Employer Solutions Group, is not alone in putting health care above cash. According to the 2005 Medco Monitor, a national survey, 58 percent of workers prefer a job with health benefits to one that pays $5,000 more. Only 14 percent of those surveyed picked the boost in salary as their first choice in benefits in negotiating for a new job.

“[Health insurance] has been a big factor in why I’ve chosen my career path, and why I’ve chosen the company that I’m with currently,” Dyches says. “Even though my family is healthy, we still need preventative care, and we do have accidents from time to time.”

The average premium has risen by double digits each year since 2001, but employers who have cut health benefits to save money are at a disadvantage when it comes to recruiting and retaining a quality work force, says Dyches’ boss Dee Henderson.

“Study data has shown that the better you are to your employees, the greater your profitability,” says Henderson, vice president of Employer Solutions Group, which provides human resource and administrative services to small businesses.

Small companies like Employer Solutions Group, which has 38 employees, have been hardest hit by rising insurance costs. Only 63 percent of businesses with fewer than 200 employees offer health benefits compared with 99 percent of large companies, according to the 2004 Employer Health Benefits Survey conducted by the Kaiser Family Foundation and the Health Research and Educational Trust. Between 2001 and 2004, the percentage of workers who receive health coverage from their employers dropped from 65 percent to 61 percent — a loss of 5 million jobs with paid health benefits.

But Employer Solutions Group has kept its award-winning health benefits intact — the company was recognized this year as one of the top 10 companies to work for in Utah by the Department of Workforce Services, based in part on its health plans. At the 8-year-old company, the average tenure of employees is six years.

For workers with families, picking employer-sponsored health plans is a better deal than a $5,000 salary increase. On average, those plans cost $9,950 annually, of which the employer pays $7,289, according to the 2004 Employer Health Benefits Survey. Workers who only need individual coverage could save money by taking a $5,000 raise instead of health benefits — the typical cost of an individual plan for 12 months is $3,695.

Lisa Kelly switched employers six months ago after a former co-worker encouraged her to apply for a job at CompHealth Group, a Salt Lake City-based medical staffing company. Her friend was working at CompHealth Group and raved about the benefits. Kelly was hired as a senior recruiting specialist and the monthly insurance deduction from her paycheck dropped by almost 60 percent.

The health benefits weren’t the only reason Kelly joined the company, but now she uses them as a selling point in recruiting other workers to join the company’s staff of 950.

“When I’m making an offer to someone, it’s the next question that’s asked,” Kelly says. “I’m sure a lot of companies lose good candidates because they can’t offer the health benefits that [employees] need.”

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MHS,