Are Your Benefits Holding Up?

More of our readers are unhappy with their health-care coverage than with their retirement plans

As companies enter the season when they typically change health and pension benefits -- usually, not for the better -- employees appear to have mixed feelings about their medical and retirement benefits. They see their benefits as worse than they used to be and unlikely to improve much in the near term. And a significant percentage say they might be willing to change jobs to find better benefits once the economy recovers. Yet a majority don't regard their benefits as terrible just yet. Those are the key findings of our Oct. 7 Reader Survey.

Readers seem most disenchanted with the trend in health benefits. Of the nearly 650 who responded, some 29% said, taking into account what they're required to pay and the breadth of coverage they get in return, their employer-provided health benefits are about the same or better than they were three years ago. But 67% said their benefits are somewhat or much worse than three years ago. And some 74% think their health benefits will be somewhat or much worse three years from now than they are at the moment.

To put that in perspective, 8% of those who responded say the maximum out-of-pocket expense they can incur for hospitalization under their current plan is zero -- while 6% say their out-of-pocket maximum is more than $6,000, and 2% say they don't get health benefits. The vast majority -- 65% -- can end up paying $2,000 ro $6,000 a year for hospitalization. On the plus side, though, about 77% regard their health coverage as adequate or better, vs. the 20% who say their health benefits are somewhat less or much less than adequate.

FEW UNNEEDED VISITS.

  Readers blame a variety of factors for the rise in health-care costs that has motivated employers to trim benefits. In descending order of importance, they cite excessive drug prices, the aging population, ineffective hospital cost-management, excessive doctor fees, a lack of federal pressure to keep health costs under control, and, lastly, excessive health-care use by patients.

They seem sure that the latter has a minor impact: Asked how often over the past five years they or members of their family have made doctor or hospital visits that weren't absolutely necessary -- a factor employers typically blame for rising costs -- less than 5% of respondents said they make such visits somewhat or very often. More than 82% said they do so rarely or never.

Readers seem a bit more optimistic about their pension plans. Only 44% say their pension plan is somewhat or much worse than it was three years ago, vs. the 40% who think it is about the same or better. And 84% think that three years from now the amount they'll have for retirement will be about the same or higher. Asked how adqequate their pension will be, however, readers tell a different story. About 57% think that the amount of income their pension will provide will be somewhat less than adequate, or inadequate, vs. the 33% who expect to have adqequate income.

SAVE MORE FOR LATER.

  Readers primarily blame the economy and the markets for the potential inadequacy of their pensions, though they also blame employers for moving out of plans that provide guaranteed benefits and into 401(k) plans that shift the risk companies formerly assumed onto employees. Some also blame federal law, for making it too easy for companies to change plans, plus themselves -- for investing their pension money too conservatively.

Some readers get a particularly good deal under their company plans: 18% say they don't have to contribute anything to them, and 12% say they contribute less than 5% of their gross income, vs. the 35% who contribute 5% to 10% and the 24% who contribute 11% to 15%.

Some 69% would be willing to contribute more to their pension plan now in order to have more later -- if they could afford to. Since apparently they can't, only 24% intend to stop working when they reach retirement age. By contrast, 41% intend to work part-time, 9% intend to work full time at a different occupation, and 12% don't plan to retire.

READY TO JUMP?

  Those who responded feel strongly about the value of their benefits -- a feeling expressed in disparate ways: Nearly 38% say that when companies start to hire again, they'll look for an employer that provides better health and pension benefits. Yet 41% say they're unlikely to do so -- and will stick with what they've got.

Here are the detailed results of the survey, which as always was unscientific, since anyone who wished to could participate:

Which of these benefits does your employer provide (or do you buy if you're self-employed)? Please check off every one that you have:

Option Total %  
Health-care plan 599 24.65 %
Pension plan 452 18.6 %
Paid vacation 570 23.46 %
Paid holidays 564 23.21 %
Other 224 9.22 %
My employer provides no benefits 11 0.45 %
I'm not employed 10 0.41 %
Don't know 0 0.00 %

Taking into account the amount you're required to contribute and the breadth of care you get, how would you say your company-provided health plan compares with three years ago? It's:

Option Total %  
Much better 20 3.22 %
Somewhat better 29 4.66 %
About the same 132 21.22 %
Somewhat worse 256 41.16 %
Much worse 159 25.56 %
My employer doesn't provide health benefits 13 2.09 %
Not sure 13 2.09 %

Taking into account the rate at which your nest egg has grown and the amount you think you'll need for retirement, how would you say your company-provided pension plan compares with three years ago? It's:

Option Total %  
Much better 11 1.77 %
Somewhat better 34 5.48 %
About the same 209 33.66 %
Somewhat worse 128 20.61 %
Much worse 132 21.26 %
My employer doesn't provide pension benefits 90 14.49 %
Not sure 17 2.74 %

Regardless of the cost of your health plan, how would you describe the level of care it provides for you and your family?

Option Total %  
Much more than adequate 88 14.1 %
Somewhat more than adequate 140 22.44 %
Adequate 256 41.03 %
Somewhat less than adequate 79 12.66 %
Much less than adequate 44 7.05 %
My employer doesn't provide health benefits 14 2.24 %
Not sure 3 0.48 %

Hospital charges (for operations, for example) are usually the biggest expense covered by a health-care plan. Not counting monthly premiums and co-payments for doctor visits, what's the maximum out-of-pocket amount for hospitalization an employee has to pay under your current health plan?

Option Total %  
Zero 53 8.49 %
Up to $2,000 a year 260 41.67 %
Up to $4,000 a year 111 17.79 %
Up to $6,000 a year 36 5.77 %
More than $6,000 a year 40 6.41 %
My employer doesn't provide health benefits 13 2.08 %
Not sure 111 17.79 %

Based on your recent experience, do you think that three years from now your health plan will be:

Option Total %  
Much better 5 0.81 %
Somewhat better 19 3.06 %
About the same 131 21.1 %
Somewhat worse 273 43.96 %
Much worse 181 29.15 %
Not sure 12 1.93 %

When employers raise employee costs for health care, they often say one goal is to dissuade employees from going to the doctor or the hospital more often than they need to. Over the past five years, how often would you say you or members of your familly have made doctor or hospital visits that weren't absolutely necessary?

Option Total %  
Very often 6 0.96 %
Somewhat often 21 3.38 %
Neither more nor less often 76 12.22 %
Rarely 192 30.87 %
Never 322 51.77 %
Not sure 5 0.80 %

Who or what do think is most responsible for causing health-care costs to rise much faster than the overall rate of inflation? (Choose as many as you feel are responsible):

Option Total %  
The aging of the population 351 18.17 %
Excessive doctor fees 250 12.94 %
Ineffective hospital cost-management 296 15.32 %
Excessive drug prices 441 22.83 %
Excessive health-care use by patients 172 8.90 %
Lack of federal pressure to keep costs under control 254 13.15 %
Other 153 7.92 %
Not sure 15 0.78 %

How would you describe the amount of income your pension plan or individual retirement account is likely to provide once you reach retirement age?

Option Total %  
Much more than adequate 9 1.46 %
Somewhat more than adequate 41 6.65 %
Adequate 155 25.12 %
Somewhat less than adequate 171 27.71 %
Inadequate 179 29.01 %
My employer doesn't provide a pension plan 52 8.43 %
Not sure 10 1.62 %

What percentage of your gross income do you contribute each year to your pension plan?

Option Total %  
Zero 109 17.67 %
Less than 5% 73 11.83 %
5% to 10% 214 34.68 %
11% to 15% 146 23.66 %
16% to 20% 42 6.81 %
More than 20% 17 2.76 %
Not sure 16 2.59 %

Based on your recent experience, do you think that three years from now the amount you'll have for retirement will be:

Option Total %  
Much higher 50 8.10 %
Somewhat higher 337 54.62 %
About the same 126 20.42 %
Somewhat lower 44 7.13 %
Much lower 41 6.65 %
Not sure 19 3.08 %

Who or what do think is most responsible for the fact that the amount of money your pension plan isn't growing faster? (Choose as many as you feel are responsible):

Option Total %  
Yourself, for investing that money too conservatively 112 8.71 %
The economy 416 32.35 %
The markets 364 28.3 %
Employers, for switching employees to 401(k) plans rather than guaranteeing pension benefits 200 15.55 %
Federal law, for allowing companies too much leeway to change plans 169 13.14 %
Not sure 25 1.94 %

Given your current assessment of how adequate your pension is likely to be, what do you plan to do when you reach retirement age?

Option Total %  
Quit working 147 23.82 %
Work part-time 253 41.00 %
Work full-time at a different occupation 56 9.08 %
I don't plan to retire 75 12.16 %
I don't have a pension plan 30 4.86 %
Don't know 56 9.08 %

Assuming that you have the money to do so, how willing would you be to contribute more to your pension plan now in order to be able to retire earlier?

Option Total %  
Very willing 255 41.26 %
Somewhat willing 173 27.99 %
Neither more nor less willing 65 10.52 %
Somewhat unwilling 24 3.88 %
Not willing at all 30 4.85 %
I don't have to money to do so 41 6.63 %
I don't have a pension plan 21 3.40 %
Don't know 9 1.46 %

Once companies start to hire again, how likely will you be to look for a new job primarily to get better health and pension benefits?

Option Total %  
Very likely 116 18.68 %
Somewhat likely 115 18.52 %
Neither more nor less likely 122 19.65 %
Somewhat unlikely 54 8.70 %
Unlikely 201 32.37 %
Not sure 13 2.09 %
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