One-third of CFOs plan to reduce health benefits

by Anne Zieger on November 5, 2010

If the following survey is on the mark, healthcare benefits should be on the chopping block next year for many employers.  On the other hand, CFOs may be preparing for the day when the government effectively takes over competitive bidding for healthcare services.

The new survey, by Grant Thornton LLP, concludes that 30 percent of CFOs are planning on reducing healthcare benefits. Why?  Well, you won’t be surprised to read that a substantial majority (84 percent) cited these benefits as their biggest pricing pressure.

The CFOs, about one-fifth of whom also plan to reduce bonuses and stock options/equity, have gotten much more worried over their financial condition  since GT did a similar survey in March of this year. And with healthcare costs, at least over the short term, showing signs of continuing to expand, it’s small wonder they’re focused on cutting them back.

Not all benefit categories are at risk. For example, while health benefits are clearly taking a huge hit, the CFOs’ life and disability benefits plans seem to have remained stable.  And the number who plan to cut the level of 401 (k) matches  has actually fallen, from  21 percent to 10 percent.  What’s more, the number of CFOs planning salary raises shot up from 15 percent to 21 percent between March and October, GT found.

But health insurance is such a huge burden at the moment that it simply can’t wait, it seems.  Corporate CFOs  are probably hoping that they can hold off employee revolts by reminding them that they’ll soon have access to government-backed health exchanges and very substantial credits on the cost of premiums.  (Whether a gap of three years or so is “soon” by consumer standards is a story all of its own.)

Bottom line, my guess is that corporate leaders are already beginning to feel that it’s time for them to begin sliding out of the health benefits business. But how about you, readers?

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{ 1 comment… read it below or add one }

Mason November 7, 2010 at 4:24 pm

well written
i agree with you, sooner or later they will have to think over it eventually.

and by the way i like the new look of the site

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