If you are hired by a U.S. company, don't expect your benefits package to include a double-your-salary group life insurance policy. There's been a steady erosion in workers' benefits such as disability, 401k matches and group life insurance, according to numbers provided by the Bureau of Labor Statistics, the Society for Human Resource Management (SHRM) and LIMRA, a research marketing organization. This is a grim irony: Jobs are increasing nationwide, with more than 200,000 added each month this year. But all too often many of them are part-time or temporary jobs and lack the types of benefits workers traditionally received. And the decline in employee benefits parallels the loss in wages, which has fallen to a record low as a share of America's gross domestic product.
No life insurance fruit for your laborThere are two contributing factors to this decline. The first is corporate belt-tightening, which has been accelerating since the 2008 recession and forcing managers to find new ways to reduce costs. "In the budget-cutting process you go for the low-hanging fruit first," says Bruce Elliott, manager of Compensation and Benefits at Washington, D.C.-based SHRM. "You are trying to get the most cost savings with the least amount of pain to the employee. So before I monkey with the medical plan I will look for options such as cutting life insurance, because you will only use that once." The other factor is the increased cost of company health insurance plans. "I'm not surprised that companies are backing out of group life and disability programs," says Chief Economist Steve Weisbart of the Insurance Information Institute, which represents the insurance industry. "The problem is the continued and growing cost of health insurance. And companies can't pass that along directly to employees." Here are more trends, costs and laws for open enrollment for 2015 group health insurance plans.
Dwindling group life insurance optionsThe SHRM, which represents the Human Resource (HR) employees who actually do the hiring -- and firing -- for American business, says that 83 percent still offer company-paid life insurance. While it seems like a lot, that figure is down from 87 percent in 2010 and has dropped 3 percent since last year's report. This figure includes municipalities and schools, which normally have more inclusive benefits.
Your life insurance plan of actionIf you want to keep group life insurance, as well as other benefits that may have been reduced or lost, here's what to do:
LIMRA research shows that among private companies with more than 10 employees, only 52 percent offered group life insurance, down from 61 percent in 2009. It also saw reductions in other benefits, like medical insurance and short-term disability.While full-time employees face cutbacks, their part-time and temporary counterparts often have few or no benefits. The Bureau of Labor Statistics reported in July that only 14 percent of part-time workers in private industry had access to life insurance benefits and only about a quarter had any company medical benefits.