EXCLUSIVE: 38% of employers do not know the cost of healthcare benefits

38% of employers do not know the cost of healthcare benefits

EXCLUSIVE: More than a third (38%) of respondents do not know how much providing healthcare is estimated to cost their organisation, according to research by Employee Benefits.

The Employee Benefits Healthcare research 2020, which surveyed 200 HR decision-makers found that this proportion has decreased slightly since 2019, having stood at 41%.

Among those that are aware of costs, respondents’ approximate healthcare spend has remained relatively consistent over the years. This year, 15% stated that they spend less than 1% of payroll, while 27% spend 1-3%. This compares with the 20% that spent less than 1% of payroll and 30% that spent 1-3% of payroll in 2013, for example.

Reasonable cost continues to be the most important factor when it comes to respondents’ decisions to buy, or continue to offer, benefits since this question was first asked back in 2006. Given the financial impact of the Covid-19 pandemic, and the mounting pressure on organisations to reduce expenditure during this time, this is hardly surprising.

This year, boosting the overall wellbeing of employees remains an important deciding factor with 75% of respondents citing this as key, as well as 67% that support mental wellbeing and 65% that have a general desire to support employees. There is a slow decline year-onyear in the proportion of respondents that base benefits decisions on a provider’s range; this year 63% said they did so compared to 69% in 2019 and 75% in 2018.

Given employers’ often considerable spend on healthcare benefits, the proportion that measure their return on investment (ROI) remains surprisingly low. However, it is inevitable that this will begin to change as a result of the financial constraints of the Covid-19 pandemic.

Click here to download the Employee Benefits Healthcare research 2020