Evolving employee benefits: new options for insurance and retirement plans.

• Author: Stomierowski, Peg
• Position: EMPLOYEE BENEFITS

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Employers reviewing and assessing employee benefit options in a period of prolonged recession and federal health care reform may be experiencing some sweaty palms.

Besides the rising cost of health insurance premiums, companies are bracing for the challenge of complying with changing rules and regulations--some haven't yet come on line--and learning to adjust to new ambiguities. Matt Larkin, vice president of employee benefits for Wells Fargo Insurance Services in Alaska, explained many of the changes are to be phased in over a period of years--some not until 2014.

His department, with offices in Anchorage, Soldotna and Homer, is one of several broker services that offer to review and compare bids, then advise businesses on how best to arrange insurance programs. After salaries and wages, health and retirement plans tend to top the expectations of prospective employees, and small businesses also hoping to recruit top talent find it hard to compete with the benefits that larger companies can offer.

Recent insurance industry research suggested while traditional benefits offered by large employers remained key factors in employee loyalty--health coverage more so than retirement benefits--advancement opportunities and company culture had yielded importance. While employee benefits showed resilience in the wake of the recession, for employers, controlling the associated costs seemed to have become a greater priority by 2010 than employee retention. Attention remained trained, in the meantime, on productivity.

The need to cut costs has led some firms to accept higher deductibles for core health plans--and to offer voluntary benefits a la carte-style, including disability, life and dental insurance, as well as supplemental insurance to help with the costs of accidents, hospital stays or critical illness, according to "The Value of Voluntary Benefits," an April Entrepreneur magazine article.

While the pending changes are expected to have widespread effects, larger firms are more likely to be already turning to consultants and educating their employees about navigating the changes, Larkin said, while it's the smaller employers that might be expected to feel more stressed and confused about what it all means.

Small businesses face premiums that are 18 percent higher on average than large businesses pay for the same coverage, according to the Small Business Administration (SBA). Sam Dickey, SBA spokesman in Anchorage, said changes associated with the health reform act should allow some of these...