Chapter 17: Employee Benefits: Issues, Challenges, and Opportunities

Demographic and cost trends increasingly result in challenges that HRM professionals and their organizations must face in providing benefits today. These trends make it unlikely that organizations in the United States can continue to indefinitely shoulder the cost of the benefits programs they have in place. “Innovative thinkers have developed some programs that are seeking to better equip workers to make informed decisions about their health care. This includes information about the cost and success of different treatment options that is readily accessible and more transparent than that provided today. The purchasing power of America’s large employers may be the force necessary to drive the medical industry to adopt these new standards. In addition to demographic and cost challenges, the cost of benefits can be affected by legislative and regulatory action. Those who make the nation’s laws would be well served to keep in mind the other factors affecting employer costs when making changes to the framework on which benefit plans are based. Proposed changes must consider carefully the effect that those modifications will have on employers who are responsibly funding their benefit obligations. Increasing the cost of benefits for those who currently provide them, risks undermining the very programs that legislators and regulators are likely trying to secure.” (Employment Policy Foundation, 2005)