Benefits menu: employers consider a variety of voluntary (employee-paid) benefits.

• Author: Held, Shari
• Position: Employee Benefits

the economy heads toward recovery many Indiana employers are still trying to manage health-insurance costs yet keep employees happy.

A survey conducted by MetLife in the third quarter of 2002 indicates that nationwide, many companies are offering less-conventional benefits--group legal services, financial planning, college savings plans, auto insurance--in addition to traditional benefits, to sweeten their benefit packages.

While large employers have been doing this for a while, "it's just beginning to hit the mid-size and smaller marketplace," says Leah Fouts, certified employee benefit specialist for Forrest Sherer, an independent insurance agency headquartered in Terre Haute.

Keith Saunders, employee benefits consultant for Tobias Insurance Group Inc., an insurance-brokerage company based in Indianapolis, says smaller companies are less likely to offer the full gamut of less-conventional benefit products. "If you look at the size of employers in Indiana, a very high percentage of them have less than 500 employees. Indiana is primarily what insurance companies refer to as a smaller-group marketplace," he says.

"Employers are in a Catch 22, The cost pressures are pushing them one way, yet they can't substantially reduce their level of benefits or they will have problems with retention of their existing employees. I think the objective of most employers now is to verify that they are getting the best value for their dollars spent. Cost control has become the No. 1 priority for Indiana employers in today's economy," says Saunders.

To keep costs down, Indiana companies are shopping around--getting quotes from multiple companies annually instead of every three or four years as they did in the past.

"It's just not assumed that they are going to take that increased hit like they may have done four years ago, says Kenneth Lizer, president of Employer's Administrative Services of Indiana, a Fort Wayne-based PEO specializing in human resources, payroll and benefits administration. PEOs assume most employment responsibilities for their clients, including benefit research recommendation and administration.

Lizer says as employers search for cost-reduction options there has been increased interest in Section 125 plans, which allow group insurance premiums to be deducted from wages on a pretax basis and flexible spending accounts to be set up with pretax dollars for health and dependent care.

Employers can opt for higher deductibles or co-pays to...