This document summarizes findings from a SHRM survey on employee health care benefits in California. Key findings include: - Many organizations are unsure if employees will pay more for health care costs in the future, though around 1/5 expect employees to cover the majority of costs within 3-5 years. - Common strategies to control costs include increasing employee premium contributions and promoting health/wellness. - Respondents were split on whether their organizations planned to increase employee premium contributions for the next plan year. - Most organizations currently pay the majority of total health care costs, though some expect this to change to employees paying more.

1. SHRM Survey Findings: Employee Benefits
in California—Health Care
April 23 2014

2. • This is part three of a series of SHRM survey findings examining employee benefits in the
workplace of California organizations.
• The following topics are included in the six-part series titled Employee Benefits in California:
» 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: Communicating benefits
Employee Benefits in California—Health Care ©SHRM 2014 2
Introduction

3. • For the purpose of this survey, the term total health care costs includes employer-paid premiums,
administration costs and any possible individual medical claims covered by the employer.
Employee Benefits in California—Health Care ©SHRM 2014 3
Definition

4. • How are organizations trying to control the costs of health care? The
majority (79%) of organizations are “very concerned” about controlling health care costs. The top
three activities organizations have engaged in to control health care costs include 1) increasing the
employee share contributed to the total costs of health care (40%), 2) creating an organizational
culture that promotes health and wellness (38%), and 3) providing lower-cost generic prescription
or over-the-counter drugs (34%).
• Can employees expect to pay a larger portion of total health care costs
in the future? Looking into plan year 2014, 24% of organizations reported they plan to
increase the employee share contributed to the total costs of health care, whereas 22% of
organizations do not plan to increase the employee share; 54% were unsure.
Focusing on the next three to five years, 21% of organizations currently paying the majority or an
equal portion of health care costs believe that employees at their organizations will eventually be
paying the majority of health care costs.
Employee Benefits in California—Health Care ©SHRM 2014 4
Key Findings
California

5. • The current expectation of whether employees will take on more of their
health care costs is largely unclear. Many organizations (36% in California, 40%
nationally) are not sure if employees will be responsible for the majority of health care costs in the
next three to five years. However, roughly one-fifth of organizations (21% in California and
nationally) expect that employees will cover the majority of total health care costs in that time frame.
• Organizations are using several strategies to control health care costs,
and may continue to add more as organizations comply with the Affordable
Care Act (ACA). More than two out of five organizations (44% in California, 45% nationally)
increased the employee share contribution in 2013 to battle rising health care costs. Many
organizations also promoted health and wellness (38% in California, 41% nationally). Organizations
taking this more proactive approach to support preventive health may see positive outcomes such
as fewer health care claims.
As health care costs continue to increase, HR professionals will have to determine modifications to
their organization’s health benefits plan, and whether these changes will have any impact on their
organization’s overall total rewards strategy. For instance, will trimming or eliminating health care
benefits hinder an organization’s ability to attract and retain talent?
Employee Benefits in California—Health Care ©SHRM 2014 5
What do these findings mean for the HR profession?

6. How did your organization’s total health care costs
change from the last plan year compared with the plan
year before?
6
Note: Only respondents whose organizations provide health care were asked this question. Respondents who
answered “not sure” were excluded from this analysis. Percentages may not total 100% due to rounding.
78%
16%
6%
72%
19%
10%
Increased
Remained
the same
Decreased
California (n = 308)
Overall (n = 366)
Employee Benefits in California—Health Care ©SHRM 2014

7. How concerned is your organization about controlling
health care costs?
Employee Benefits in California—Health Care ©SHRM 2014 7
Note: Only respondents whose organizations provide health care were asked this question. Respondents who
answered “not sure” were excluded from this analysis.
79%
19%
2%
0%
83%
16%
1%
0%
Very
concerned
Somewhat
concerned
Not very
concerned
Not at all
concerned
California (n = 345)
Overall (n = 411)

8. Which of the following activities has your
organization engaged in for the purpose of
controlling the costs of health care?
Employee Benefits in California—Health Care ©SHRM 2014 8
Note: Only respondents whose organizations provide health care were asked this question. Respondents whose
organizations had not conducted any activities to control the costs of health care were excluded from this
analysis. Percentages do not equal 100% due to multiple response options.
Activity
California
(n = 351)
Overall
(n = 417)
Increased the employee share contributed to the
total costs of health care
40% 39%
Created an organizational culture that promotes
health and wellness
38% 41%
Provided lower-cost generic prescription or over-
the-counter drugs
34% 39%
Provided educational initiatives related to health
and wellness
33% 45%
Offered consumer-directed health plans (e.g., HRAs,
HSAs)
33% 40%
Increased employee participation in preventive
health and wellness initiatives
31% 43%
Provided incentives or rewards related to health and
wellness
25% 35%
Other 5% 7%

9. Employee Benefits in California—Health Care ©SHRM 2014 9
Comparisons by organization staff size
2,500 to 24,999 employees (57%) >
1 to 99 employees (19%)
100 to 499 employees (27%)
Which of the following activities has your
organization engaged in for the purpose of
controlling the costs of health care?
Comparisons by organization staff size
• Organizations with 100 to 24,999 employees were more likely than those with 1 to 99
employees to indicate they provided lower-cost generic prescription or over-the-counter drugs to control the
costs of health care.
Comparisons by organization staff size
100 to 499 employees (35%)
500 to 2,499 employees (44%)
2,500 to 24,999 employees (60%)
> 1 to 99 employees (14%)
Note: Only statistically significant differences are shown.
• Organizations with 2,500 to 24,999 employees were more likely than those with 1 to
499 employees to indicate they increased employee participation in preventive health and wellness initiatives to
control the costs of health care.
Comparisons by organization staff size
2,500 to 24,999 employees (63%) >
1 to 99 employees (12%)
100 to 499 employees (16%)
• Organizations with 2,500 to 24,999 employees were more likely than those with 1 to
499 employees to indicate they provided incentives or rewards related to health and wellness to control the
costs of health care.

10. Employee Benefits in California—Health Care ©SHRM 2014 10
Which of the following activities has your
organization engaged in for the purpose of
controlling the costs of health care? (Continued)
Comparisons by organization staff size
• Organizations with 500 to 2,499 employees were more likely than those with 1 to 99
employees to indicate they provided educational initiatives related to health and wellness to control the costs
of health care.
Comparisons by organization staff size
500 to 2,499 employees (44%) > 1 to 99 employees (18%)
Note: Only statistically significant differences are shown.
Comparisons by organization sector
• Publicly owned for-profit organizations were more likely than privately owned for-
profit and nonprofit organizations to indicate they provided incentives or rewards related to health and
wellness to control the costs of health care.
Comparisons by organization sector
Publicly owned for-profit (44%) >
Privately owned for-profit (21%)
Nonprofit (15%)

11. Which one activity has been the most successful in
terms of helping your organization control the costs
of health care?
Employee Benefits in California—Health Care ©SHRM 2014 11
Note: Only respondents whose organizations provide health care and conduct some kind of activity to control the
costs of health care were asked this question.
Activity
California
(n = 281)
Overall
(n = 365)
Increased the employee share contributed to the total
costs of health care
31% 20%
Created an organizational culture that promotes health
and wellness
17% 12%
Offered consumer-directed health plans (e.g., HRAs,
HSAs)
14% 22%
Increased employee participation in preventive health
and wellness initiatives
10% 13%
Provided lower-cost generic prescription or over-the-
counter drugs
9% 10%
Provided incentives or rewards related to health and
wellness
7% 9%
Provided educational initiatives related to health and
wellness
6% 7%
Other 6% 7%

12. In plan year 2013, did your organization increase the
employee share contributed to the total costs of
health care?
Employee Benefits in California—Health Care ©SHRM 2014 12
Note: Only respondents whose organizations provide health care were asked this question. Respondents who
answered “not sure” were excluded from this analysis.
44%
56%
45%
55%
Yes
No
California (n = 318)
Overall (n = 389)

13. In plan year 2013, did your organization increase the
employee share contributed to the total costs of
health care?
Employee Benefits in California—Health Care ©SHRM 2014 13
Note: Only statistically significant differences are shown.
Comparisons by organization staff size
500 to 2,499 employees (58%) > 1 to 99 employees (27%)
Comparisons by organization staff size
• Organizations with 500 to 2,499 employees were more likely than organizations with 1
to 99 employees to increase the employee share contributed to the total costs of health care in plan year 2013.
Comparisons by organization sector
Publicly owned for-profit (67%) > Privately owned for-profit (39%)
Comparisons by organization sector
• Publicly owned for-profit organizations were more likely than privately owned for-
profit organizations to increase the employee share contributed to the total costs of health care in plan year 2013.

14. In the next plan year, does your organization plan to
increase the employee share contributed to the total
costs of health care?
Employee Benefits in California—Health Care ©SHRM 2014 14
Note: Only respondents whose organizations provide health care were asked this question.
24%
22%
54%
24%
21%
55%
Yes
No
Not
sure
California (n = 341)
Overall (n = 406)

15. In plan year 2013, is your organization paying the
majority (more than half) of the total health care
costs?
Employee Benefits in California—Health Care ©SHRM 2014 15
Note: Only respondents whose organizations provide health care were asked this question.
90%
6%
4%
92%
5%
3%
Yes, the
organization is
paying the
majority of the
total health
care costs
No, the
organization
and employee
pay an equal
share of the
total health
care costs
No, the
employee is
paying the
majority of the
total health
care costs
California (n
= 335)

16. In three to five years, do you believe employees at
your organization will be paying the majority of
health care costs?
Employee Benefits in California—Health Care ©SHRM 2014 16
Note: Only respondents whose organizations provide health care were asked this question. Respondents whose
organizations indicated that employees were paying the majority of total health care costs were excluded from
this analysis. Percentages may not equal 100% due to rounding.
21%
44%
36%
21%
39%
40%
Yes
No
Not
sure
California (n = 320)
Overall (n = 390)

17. Demographics
Employee Benefits in California—Health Care ©SHRM 2014 17

18. 31%
36%
18%
10%
5%
1 to 99 employees
100 to 499 employees
500 to 2,499
employees
2,500 to 24,999
employees
25,000 or more
employees
Employee Benefits in California—Health Care ©SHRM 2014 18
Demographics: Organization Staff Size
n = 310

19. 60%
19%
13%
7%
2%
Privately owned
for-profit
Nonprofit
organization
Publicly owned
for-profit
Government
sector
Other
Employee Benefits in California—Health Care ©SHRM 2014 19
Demographics: Organization Sector
Note: n = 322. Percentages do not equal 100% due to rounding.

20. Percentage
Professional, scientific and technical services 24%
Health care and social assistance 13%
Manufacturing 12%
Finance and insurance 10%
Government agencies 8%
Educational services 8%
Transportation and warehousing 7%
Retail trade 7%
Whole trade 6%
Real estate and rental and leasing 5%
Accommodation and food services 4%
Administrative and support and waste management and remediation services 4%
Construction 4%
Information 4%
Utilities 4%
Religious, grantmaking, civic, professional and similar organizations 3%
Mining 2%
Arts, entertainment and recreation 2%
Repair and maintenance 2%
Agriculture, forestry, fishing and hunting 2%
Personal and laundry services 1%
Other 9%
20Employee Benefits in California—Health Care ©SHRM 2014
Demographics: Organization Industry
Note: n = 328. Percentages do not equal 100% due to multiple response options.

21. Employee Benefits in California—Health Care ©SHRM 2014 21
Demographics: Other
U.S.-based operations only 79%
Multinational operations 21%
Single-unit organization: An
organization in which the location
and the organization are one and the
same.
30%
Multi-unit organization: An
organization that has more than one
location.
70%
Multi-unit headquarters determines
HR policies and practices.
59%
Each work location determines HR
policies and practices.
5%
A combination of both the work
location and the multi-unit
headquarters determines HR policies
and practices.
37%
Is your organizationa single-unit organization or a multi-unit organization?
For multi-unitorganizations, are HR policies and practices determined by
the multi-unitheadquarters, by each work location or by both?
Does your organization have U.S.-based operations
(business units) only, or does it operate
multinationally?
n = 324
n = 325
Note: n = 234. Percentages do not equal 100% due to
rounding.
Corporate (company-wide) 78%
Business unit/division 15%
Facility/location 16%
Note: n = 234. Percentages do not equal 100%
due to rounding.
What is the HR department/function for whichyou
responded throughout this survey?

22. SHRM Survey Findings: Employee Benefits in
California—Health Care
• Response rate = 13%
• 373 HR professional respondents in California organizations
from a randomly selected sample of SHRM’s membership
participated in this survey
• Margin of error +/- 5%
• Survey fielded May 3-June 7, 2013
Survey Methodology
Employee Benefits in California—Health Care ©SHRM 2014 22

23. • SHRM Research Findings: Health Care Reform—Impact of Health Care
Coverage and Costs
• SHRM Research Findings: Health Care Reform—Challenges and Strategies
• Health Care Reform Resource Page
• SHRM Toolkit: Managing Health Care Costs
• California's Group Health Premiums Outpace National Average
Employee Benefits in California—Health Care ©SHRM 2014 23
Additional SHRM Resources

24. About SHRM Research
• For more survey/poll findings, visit www.shrm.org/surveys
• For more information about SHRM’s Customized Research Services,
visit www.shrm.org/customizedresearch
• Follow us on Twitter @SHRM_Research
Project leaders:
Christina Lee, researcher, SHRM Research
Yan Dong, SHRM Research
Project contributors:
Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research
Evren Esen, director, Survey Research Center, SHRM Research
Copy editor:
Katya Scanlan, SHRM Knowledge Center
24Employee Benefits in California—Health Care ©SHRM 2014

25. 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.
25Employee Benefits in California—Health Care ©SHRM 2014