After falling off the radar screen in last year's survey, rising health care costs are once again the dominant concern of employee benefit professionals for 2000, according to a nationwide survey recently released by the International Society of Certified Employee Benefit Specialists (ISCEBS) and the Human Capital Advisory Services Group of Deloitte & Touche LLP. These findings are consistent with the tremendous upward pressure on health care costs that employers have seen developing in recent months. The price hikes are heavily linked to pharmacy benefit costs, which have grown from 15-25 percent in 1999.

The 363 participants in the nationwide survey, all of whom are Certified Employee Benefit Specialists (CEBS), were asked to identify their top five benefit priorities for the new year from their perspective both as an employee benefit professional for their employer, and as an employee.

Responding from the perspective of employee benefit professionals, nearly 71 percent of those completing the survey reported that rising health costs are their top concern for 2000. The majority of respondents reported, however, that their benefit strategy was driven by concerns on attraction and retention issues rather than costs.

"As a sign of the tight labor market, workforce issues have taken a front seat when it comes to benefit priorities," said Dennis Wootan, CEBS, president of ISCEBS and director benefits administration with Northrop Grumman Corporation in Los Angeles. "Attracting and retaining the best employees has now become a serious business. As a result, employers are feeling the pressure to provide the best perks ever, from retirement packages and stock option plans, to affordable, quality health care."

Rounding out the list of top concerns for benefits professionals: the use of Internet/intranet applications (60.8%); providing financial/retirement planning tools and information (46.9%); providing increased investment education (40%); and emphasizing/improving quality of employee communication materials (40%).

Retirement a Personal Priority

When asked to respond from their perspective as an employee, three of the top five priorities are related to retirement. Retirement planning permeated the list; investment options and additional ways to save for retirement were top concerns. Respondents also seemed concerned about their personal well-being, as education regarding health risks and how to control them made the list of this year's top concerns.

These results are consistent with the 1999 survey results. Baby boomers are nearing retirement and younger workers are realizing the value of saving now. Many older workers realize they haven't saved enough, while younger workers recognize that they cannot rely on Social Security savings to be enough to live on in the future or may not exist at all. We seem to be acknowledging the fact that we're growing older, both in terms of health status and retirement planning.

Dick Kleinert, CEBS, is a partner with the Human Capital Advisory Services practice of Deloitte & Touche.

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