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May 01, 2002
The Incredible Shrinking Benefits
The newspaper reports that such coveted extras as health benefits, paid maternity leave, tuition reimbursement, and employee 401(k) matches have all been affected.
Here's a breakdown:
Health care. Skyrocketing costs have employers charging workers more co-pays and deductibles for doctor and hospital visits. On the other end of the equation, more than 40 percent of firms with self-funded plans are reducing benefits this year, according to a study by banking and securities firm Credit Suisse First Boston. USA Today notes the percentage is well above the 25 percent that planned to cut benefits a year ago.
401(k) plans. General Motors reduced its 401(k) match from 80 cents on the dollar to 20 cents, and DaimlerChrysler and Ford Motor suspended their matching contributions. Other companies outside the auto sector also have followed the trend.
Other extras. The number of employers offering mental health insurance has dropped from 84 percent to 76 percent in the past five years, according to an April study by the Society for Human Resource Management. President Bush said Monday that he would sign legislation mandating "mental health parity," meaning that health plans offering mental-health benefits would have to put them on the same footing as all other benefits.
Meanwhile, paid maternity leave not covered by short-term disability fell by 27 percent over the past five years. "We've seen cutbacks in things that may seem more frivolous, like concierge service and pet-care insurance," says Dave Patel at SHRM.
Retiree benefits. Coverage for retiree benefits is declining at firms of all sizes. The percentage of companies with 200 or more workers offering retiree benefits fell from 41 percent in 1999 to 34 percent last year, according to a survey by the Kaiser Family Foundation, the Commonwealth Fund and the Health Research and Educational Trust. That's the lowest rate in five years.
"This is part of a steady trend we've seen over the past decade," says Tricia Neuman, a vice president and director for the Medicare policy project at Kaiser. "Costs are the main driver."
still-shaky nature of the economy has more employers trimming employee perks and benefits, according to USA Today.