2015 Strategic Benefits―Health Care

October 15, 2015
SHRM Survey Findings: 2015 Strategic Benefits—
Health Care

2
Introduction
The 2015 Strategic Benefits Survey is part of a survey series administered annually since 2012 by the
Society for Human Resource Management (SHRM). This research is used to determine whether
various employee benefits are leveraged to recruit and retain top talent. The six-part series features
the following topics:
 Part 1: Wellness Initiatives
 Part 2: Flexible Work Arrangements
 Part 3: Health Care
 Part 4: Leveraging Benefits to Retain Employees
 Part 5: Leveraging Benefits to Recruit Employees
 Part 6: Assessment and Communication of Benefits
Definitions
For the purpose of this survey, total health care costs include employer-paid premiums, administration
costs and any individual medical claims covered by the employer.
2015 Strategic Benefits Survey—Health Care ©SHRM 2015
Introduction and Definitions

• Health care coverage: The vast majority (96%) of HR professionals indicated their organizations
provided employer-based health care insurance plans to their employees; just 2% of organizations
indicated they provided a subsidy for the cost of health care insurance and access to a private
exchange to purchase coverage.
» Of those organizations that provided employer-based health care insurance plans or no
health care coverage, more than two-thirds (72%) had “not at all” considered providing
subsidies to their employees to purchase health care insurance through a private exchange.
Very few (3%) planned on offering subsidies in 2016, 2017 or 2018; about two-fifths (42%)
were “not sure.”
• Anticipated changes in total health care costs: Three-quarters (76%) of HR professionals said they
anticipated their organizations’ total health care costs would increase between plan year 2014 and
plan year 2015; of those, the average anticipated increase in total health care costs was 13%.
• Actual changes in total health care costs: About three-quarters (76%) of respondents reported an increase
in total health care costs in plan year 2014 compared with plan year 2013.
• Controlling the costs of health care: About one-half (46%) of respondents indicated their organizations
increased the employee share contributed to the total costs of health care compared with the
previous plan year.
» Looking into plan year 2016, about one-quarter (25%) of respondents reported their
organizations plan to increase the employee share contributed to the total costs of health
care; however, the majority were not sure (54%).
3
Key Findings

• Controlling the costs of health care (continued):
 In plan year 2015, respondents indicated their organization was paying, on average, 76% of
total employee health care costs.
 For the purposes of controlling the costs of health care, about one-half of organizations
reported they created an organizational culture that promotes health and wellness (53%), a
statistically significant increase from 2013 (41%), and they offer consumer-directed health
plans (e.g., HRAs, HSAs) (48%). About one-third offer a variety of PPO plans, including
those with high and low deductibles and co-pays (35%), provide incentives or rewards
related to health and wellness (33%), and provide educational initiatives related to health and
wellness (32%).
 However, there was a statistically significant decrease in respondents who reported
their organizations provided incentives or rewards related to health and wellness
since 2014 (43%) and educational initiatives related to health and wellness since
2014 (56%), 2013 (45%) and 2012 (52%).
• Most successful activity to help control the costs of health care: About one-fifth (21%-22%) of respondents
indicated that offering consumer-directed health plans and creating an organizational culture that
promotes health and wellness were the most successful activities in terms of helping control the
costs of health care; 14% indicated the most successful activity was offering a variety of PPO plans,
including those with high and low deductibles and co-pays.
4
Key Findings (continued)

• Most valuable non-health care benefit: Two-fifths (40%) of respondents indicated they thought the non-
health care benefit employees would value most in the next three to five years would be retirement
savings and planning benefits; about one-fifth indicated they thought financial and compensation
(18%) or flexible working (16%) benefits would be the most valued.
Key Findings (continued)

• Despite some uncertainty about the effects of the Patient Protection and Affordable Care Act
(PPACA) on operating expenses, recent research has shown that the majority of organizations do
not plan to abandon health care coverage for their employees, even with an option of doing so and
paying a penalty in accordance with the act.1 Maintaining coverage can be seen as an effective tool
for recruitment and retention strategies, considering that other SHRM research has shown health
care is the most highly-valued benefit among employees.2
• Moving forward, HR professionals whose organizations do maintain coverage can expect to
perform extensive cost analyses on their health care plans. Health care expenses will continue to
increase, according to the majority of HR professionals, and employees will be expected to
shoulder a higher share of that burden. Nearly one-half of HR professionals said they increased
their employees’ share of health care costs in 2015.
• HR professionals should consider health and wellness programs as another means of keeping
health care expenses in check. There were significant increases in the percentage of organizations
that offered several of these benefits in the past five years, according to SHRM’s 2015 Employee
Benefits survey report. Among the wellness initiatives implemented by a higher number of
organizations in 2015 were wellness programs (general), health and lifestyle coaching, smoking
cessation programs, and preventive programs specifically targeting employees with chronic health
conditions, among others.
6
What Do These Findings Mean for the HR Profession?
1 SHRM Survey Findings: Health Care Reform—2015 Update
2 2015 Strategic Benefits Survey—Communicating Benefits; 2015 Employee Job Satisfaction and Engagement Report

2015 Strategic Benefits Survey—Health Care ©SHRM 2015 7
Key Findings
Health Care

8
What do these findings mean for the HR profession?Health Care Coverage Provided to Employees
96%
2%
1%
0%
Yes, we provide employer-based health care
insurance plans
Yes, we provide a subsidy for the cost of health
care insurance and access to a private exchange
to purchase coverage
No, but we contribute toward the cost of
purchasing health care insurance in other ways
No
Note: n = 440. Percentages may not total 100% due to rounding.

9
What do these findings mean for the HR profession?
Extent Organizations Have Considered and/or Plan to Provide Subsidies
to Employees to Purchase Health Care Insurance
2%
5%
21%
72%
To a large extent
To a moderate extent
To a small extent
Not at all
3%
55%
42%
Yes, in 2016, 2017 or
2018
No
Not sure
n = 409 n = 412
Plans to Offer Subsidies to Purchase Health
Care Insurance Through a Private
Exchange
Extent Organization Has Considered
Providing Subsidies to Purchase Health Care
Insurance Through a Private Exchange
Note: Respondents whose organizations provided employer-based health care insurance plans or did not provide health care coverage were asked
this question.

10
What do these findings mean for the HR profession?Organization Concern About Controlling Health Care Costs
74%
25%
1%
0%
79%
20%
1%
0%
83%
16%
1%
0%
84%
16%
1%
0%
Very concerned
Somewhat concerned
Not very concerned
Not at all concerned
2015 (n = 408)
2014 (n = 356)
2013 (n = 411)
2012 (n = 437)
1, 2
1, 2
Note: Respondents whose organizations provided health care coverage were asked this question. Respondents who answered “not sure” were
excluded from this analysis. Percentages may not total 100% due to rounding.
1Statistically significant difference from 2013.

11
What do these findings mean for the HR profession?Actual Change in Total Health Care Costs
76%
16%
8%
69%
20%
11%
72%
19%
10%
74%
17%
9%
Increased
Remained the same
Decreased
2015 (n = 358)
2014 (n = 324)
2013 (n = 366)
2012 (n = 399)
Note: Respondents whose organizations provided health care coverage were asked these questions. Respondents who answered “not sure” were
excluded from the analyses. Percentages may not total 100% due to rounding.
Did your organization’s total health care costs last plan year increase, remain the same, or
decrease compared with the previous plan year?

What do these findings mean for the HR profession?Anticipated Change in Total Health Care Costs
76%
18%
5%
Increase
Remain the same
Decrease
29%
37%
18%
7%
10%
5% or less
5%-10%
11%-15%
16%-20%
More than 20%
The average
anticipated
increase in total
health care costs
is 13%.
Anticipated Percentage Increase in Total Health
Care Costs Between Plan Year 2014 and 2015
Anticipated Change in Total Health Care
Costs Between Plan Year 2014 and 2015
Note: n = 359. Respondents whose organizations provided health
care coverage were asked this question. Respondents who answered
“not sure” were excluded from the analyses. Percentages may not
total 100% due to rounding.
Note: n = 136. Respondents who indicated they anticipate an increase in
their organization’s total health care costs in plan year 2015 (compared
with plan year 2014) were asked this question. Respondents who
answered “don’t know” were excluded from this analysis. Percentages
may not total 100% due to rounding.

13
46%
50%
45%
47%
Yes
2015 (n = 357, 394)
2014 (n = 338, 357)
2013 (n = 389, 406)
2012 (n = 410, 439)
25%
21%
54%
26%
23%
51%
24%
21%
55%
22%
18%
60%
Yes
No
Not sure
Change in Employee Share Contributed to Total Costs of Health Care
In the next plan year, does your organization
plan to increase the employee share
contributed to the total costs of health care?
Did your organization increase the employee
share contributed to the total costs of health
care this plan year compared with the
previous plan year?
Note: Respondents whose organizations provided health care
coverage were asked this question. Response options provided
were “yes/no/not sure.” Respondents who answered “not sure”
were excluded from this analysis. Only “yes” responses are
shown.
coverage were asked this question.

14
What do these findings mean for the HR profession?Percentage of Total Health Care Costs Paid for by Employer
16%
54%
30%
19%
48%
33%
21%
39%
40%
15%
50%
35%
Yes
No
Not sure
2015 (n = 379)
2014 (n = 344)
2013 (n = 390)
2012 (n = 421)
2%
12%
36%
51%
25% or less
26% to 50%
51% to 75%
76% or more
2015 (n = 290)
On average,
organizations are
paying 76% of
total health care
costs in 2015. 1
In the next 3 to 5 years, do you think employees
at your organization will be paying the majority
(more than half) of total health care costs?
In plan year 2015, approximately what
percentage of total health care costs is your
organization paying?
coverage were asked this question. Respondents who answered
“don’t know” were excluded from this analysis. Percentages may not
total 100% due to rounding.
Note: Respondents whose organizations provided health care coverage
were asked this question. Percentages may not total 100% due to
rounding.

29%
23%
21%
18%
40%
17%
39%
52%
Increased the employee share
contributed to the cost of
brand name prescription drugs
Increased the employee share
contributed to the cost of
brand name prescription drugs
Offered HMO health plan in
place of more costly health
care plans
Managed access to high-cost
specialty drugs (i.e., pre-
authorization requriements,
step therapy, special tiers,…
15
Activities Organization Engaged in for the Purpose of Controlling the Costs of
Health Care
53%
48%
35%
33%
32%
45%
44%
40%
43%
56%
41%
40%
35%
45%
45%
42%
40%
52%
Created an organizational culture
that promotes health and wellness
Offered consumer-directed health
plans (e.g., HRAs, HSAs)
Offered a variety of PPO plans,
including those with high and low
deductibles and co-pays
Provided incentives or rewards
related to health and wellness
Provided educational initiatives
related to health and wellness
2015 (n = 420)
2014 (n = 359)
2013 (n = 417)
2012 (n = 405)
2 1, 2, 3
1
1, 2, 3
Note: Respondents whose organizations provided health care coverage were asked this question. Percentages do not total 100% due to multiple
response options.
1Statistically significant difference from 2014. 2Statistically significant difference from 2013. 3Statistically significant difference from 2012.

16
Activities Organization Engaged in for the Purpose of Controlling the Costs of
Health Care (continued)
16%
10%
10%
10%
9%
11%
Placed limits on, or increased
cost sharing for, spousal health
care coverage
Provided discounted over-the-
counter drugs
Placed limits on, or increased
cost sharing for, dependent
health care coverage
Provided access to health
provider cost and quality
metrics to aid consumer
decision-making
Shifted to narrow and/or tiered
health provider networks (i.e.,
negotiating lower prices with
in-network providers)
4%
3%
7%
6%
5%
7%
5%
7%
9%
2%
8%
No longer offered PPO health
plans in favor of less costly
health care plans
Offered subsidies for the cost of
health care purchased through
a private exchange instead of
an employer-based health care
insurance plan
Other
None - We have not conducted
any activities to control the
costs of health care
2015 (n = 420)
2014 (n = 359)
2013 (n = 417)
2012 (n = 405)
1
Note: Respondents whose organizations provided health care coverage were asked this question. Percentages do not total 100% due to multiple
response options.

Most Successful Activity in Terms of Helping Organization Control the Costs of
Health Care
Most Successful Activity
Offered consumer-directed health plans (e.g., HRAs, HSAs) 22%
Created an organizational culture that promotes health and wellness 21%
Offered a variety of PPO plans, including those with high and low deductibles and co-
pays
14%
Increased the employee share contributed to the total costs of health care 9%
Offered HMO (health maintenance organization) health plan 7%
Provided incentives or rewards related to health and wellness 5%
Placed limits on, or increased cost sharing for, spousal health care coverage 4%
Provided educational initiatives related to health and wellness 3%
No longer offered PPO plans 2%
Note: n = 366. Respondents whose organizations provided health care coverage and conducted one of more activities to control the costs of health
care were asked this question.

Most Successful Activity in Terms of Helping Organization Control the Costs of
Health Care (continued)
Note: n = 366. Respondents whose organizations provided health care coverage and conducted one of more activities to control the costs of health
care were asked this question.
1 i.e., negotiating lower prices with in-network providers 2 i.e., pre-authorization requirements, step therapy, special tiers, etc.
Most Successful Activity
Increased the employee share contributed to the cost of brand name prescription drugs 2%
Provided access to health provider cost and quality metrics to aid consumer
decision-making
2%
Shifted to narrow and/or tiered health provider networks1
1%
Placed limits on, or increased cost sharing for, dependent health care coverage 1%
Offered subsidies for the cost of health care purchased through a private exchange
instead of an employer-based health care plan
1%
Provided discounted over-the-counter drugs 1%
Managed access to high-cost specialty drugs2
0%
Other 5%

In the next three to five years, which non-health care benefit from your organization’s benefits
package do you think will be the one your employees most value?
Most Valuable Non-Health Care Benefit in the Next 3 to 5 Years
Non-Health Care Benefit
Retirement savings and planning benefits 40%
Financial and compensation benefits (e.g., financial advice, bonus plans and subsidies,
educational assistance)
18%
Flexible working benefits (e.g., telecommuting, compressed workweek) 16%
Leave benefits 12%
Preventive health and wellness benefits (e.g., flu vaccinations, smoking cessation
program)
8%
Professional and career development benefits (e.g., professional training) 4%
Family-friendly benefits (e.g., adoption assistance, elder care referral service) 1%
Housing and relocation benefits 0%
Other 1%
Note: n = 360. Respondents who answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding.

Key Findings
Demographics

21
Note: n = 361. Percentages do not total 100% due to multiple response options.
Percentage
Manufacturing 23%
Health care and social assistance 16%
Professional, scientific and technical services 12%
Finance and insurance 10%
Government agencies 8%
Educational services 7%
Transportation and warehousing 6%
Retail trade 6%
Construction 5%
Utilities 4%
Mining, quarrying, and oil and gas extraction 4%
Demographics: Organization Industry

22
Key FinDemographics: Organization Industry (continued)
Note: n = 361. Percentages do not total 100% due to multiple response options.
Percentage
Wholesale trade 4%
Administrative and support, and waste management and remediation services 4%
Real estate and rental and leasing 3%
Accommodation and food services 3%
Religious, grant-making, civic, professional and similar organizations 3%
Arts, entertainment and recreation 2%
Repair and maintenance 2%
Information 2%
Agriculture, forestry, fishing and hunting 1%
Personal and laundry services 0%
Other industry 11%

23
Key FinDemographics: Organization Sector
57%
18%
13%
9%
3%
Privately owned for-profit
Nonprofit
Publicly owned for-profit
Government
Other
n = 355

24
Key FinDemographics: Organization Staff Size
n = 343
30%
35%
21%
10%
4%
1 to 99 employees
100 to 499 employees
500 to 2,499 employees
2,500 to 24,999 employees
25,000 or more employees

25
Key FinDemographics: Other
n = 359
U.S.-based operations only 77%
Multinational operations 23%
Does your organization have U.S.-based
operations (business units) only, or does it operate
multinationally?
n = 360
n = 226
n = 226
Single-unit organization: An organization in
which the location and the organization are
one and the same.
38%
Multi-unit organization: An organization that
has more than one location.
62%
Is your organization a single-unit organization or a multi-unit
organization?
For multi-unit organizations, are HR policies and practices determined
by the multi-unit headquarters, by each work location or by both?
Multi-unit headquarters determines HR
policies and practices.
56%
Each work location determines HR policies
and practices.
3%
A combination of both the work location and
the multi-unit headquarters determines HR
policies and practices.
41%
Corporate (companywide) 75%
Business unit/division 11%
Facility/location 14%
What is the HR department/function for which you
responded throughout this survey?

26
SHRM Survey Findings:
Survey Methodology
SHRM Survey Findings: Strategic Benefits—Health Care
Survey Methodology:
• Response rate = 12%
• 461 HR professionals from a randomly selected sample of SHRM’s membership participated in
this survey
• Margin of error +/- 5%
• Survey fielded May-June 2015
Project Lead:
Karen Wessels, researcher, workforce planning, SHRM Research
Project Contributors:
Evren Esen, director, SHRM-SCP, Survey Programs, SHRM Research
Bruce Elliott, manager, SHRM-SCP, Compensation and Benefits
Jennifer Schramm, manager, SHRM-SCP, Workforce Trends and Forecasting, SHRM
Research

Additional SHRM Resources
Health Care Reform Resource Page: shrm.org/healthcare
For more survey/poll findings, visit shrm.org/surveys
For more information about SHRM’s Research Services:
» Customized Research Service, visit shrm.org/customizedresearch
» Engagement Survey Service, visit shrm.org/peopleinsight
» Customized Benchmarking Service, visit shrm.org/benchmarks
Follow us on Twitter @SHRM_Research

About SHRM
Founded in 1948, the Society for Human Resource Management (SHRM) is the
world’s largest HR membership organization devoted to human resource management.
Representing more than 275,000 members in over 160 countries, the Society is the
leading provider of resources to serve the needs of HR professionals and advance the
professional practice of human resource management. SHRM has more than 575
affiliated chapters within the United States and subsidiary offices in China, India and
United Arab Emirates. Visit us at shrm.org.

2015 Strategic Benefits―Health Care

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