Advanced-HR - 2014 Total Benefits Benchmarking Study Total Benefits... · 2020. 9. 1. · This year, the Sequoia Total Benefit Benchmarking survey provides new valuable insights around

2014 Total Benefits Benchmarking Study August 2014 Sequoia Benefits & Insurance Services, LLC

Copyright © 2014 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved.

Contents

» Executive Summary p.2

» Benefits Snapshot p.4

» Medical p.9

» Dental p.21

» Vision p.26

» Basic Life & Disability p.29

» Retirement p.36

» Commuter p.40

» Perks & Company Culture p.42

» Wellbeing p.47

» Global Benefits p.49

» Time Off p.51

» HR Systems p.54

» Industry Trends p.58

Survey Methodology

This online survey was fielded between June and July 2014. The majority of the 224 participating companies are headquartered in the Bay Area.

80% of participants are Private, VC Backed

70% of companies are in the tech industry

The average age at participant companies is 26-35

50 or less 35%

50-199 41%

200-399 12%

400+ 12%

Size of Participant Companies


Executive Summary Background This year, the Sequoia Total Benefit Benchmarking survey

provides new valuable insights around year-over-year changes in specific benefits categories. New categories were added based on topics frequently discussed with clients – including time off policies, perks and HR systems. Responses in certain categories were broken out by company size ranges to show potential differences in offerings as companies grow.

The pressure is high for HR teams to deliver for

their company. “Making our employees feel protected, reducing their out of pocket expenses and increasing their understanding and ease of access to information about their benefits is table stakes for any HR team. But competing for talent in this market requires serious creativity,” said one HR VP at a high tech company, “you really have to go above and beyond. Benefits spend is now our fourth largest company expense so I’m more involved than ever with the Finance team, budgets and forecasting.”

The Sequoia Spotlight insights were added by Sequoia’s leadership team collectively representing more than 75+ years of benefits consulting experience.

The 2014 Total Benefits Benchmarking Study sheds light on the benefits investment categories and trends of tech companies in the Bay Area and Silicon Valley. It will help you make data-driven decisions for shaping your plans for this unique industry and region.

As evidenced by responses to the question about what is keeping HR professionals up at night, there is increasing concern about delivering a total benefits strategy that attracts and retains top talent.

2


Executive Summary Key Findings

Benefits spend: More companies are spending over $10,000 per employee per year on

employee benefits.

Eligibility & enrollment: Significantly more employers are offering benefits eligibility “on

date of hire” and enrollment in company benefits is over 80%.

Medical: Employer contributions for employee only benefits were relatively uniform

regardless of company size, trending towards 90%. Dependent contributions were less

consistent, but trending towards 70% for employee + family.

Dental: Benefits are getting richer with more companies offering higher annual maximums

and lower deductibles.

Retirement: 401(k)s are the predominant retirement plan option, most other program types

have diminished.

Commuter: Benefits have increased, not only to round out competitive employee offerings,

but now because of the mandate in Bay Area counties.

Time off: There is a definite trend towards offering “unlimited PTO.”

3


Benefits Snapshot

4


Benefits Snapshot

26%

38%

51%

52%

23%

31%

Long Term Disability

Short Term Disability

Yes, w/ tax choice Yes, w/o tax choice No

97%

94%

93%

88%

60%

45%

15%

3%

6%

7%

12%

40%

55%

85%

Dental Benefits

Commuter Benefits

Vision Benefits

Retirement Benefits

Voluntary Life Insurance

HSA or HRA

Infertility Benefits

Companies Offering the Following Benefits in Addition to Medical

Yes No

5


Benefits Spending

16%

7%

11%

9%

5%

23%

29%

Under $6,000

$6,000-$6,999

$7,000-$7,999

$8,000-$8,999

$9,000-$9,999

Over $10,000

Unsure

Average Benefit Spend per Employee

19%

76%

5%

20%

75%

5%

Yes

No

Unsure

Benefit Opt Out Waiver Credits Offered

2013 2014

Sequoia Spotlight •Many companies are spending over $10,000 per employee per year on their total benefits package. •Offering waiver credits for employees who opt out of benefits coverage is not very common and this trend remains consistent with 2013 results.

6


Benefits Eligibility & Enrollment Rate

42% 50%

5% 2% 2%

Date of hire First of the month following date of hire

First of the month following 30 days



Benefits Eligibility Dates

Sequoia Spotlight •Compared to responses in 2013, significantly more companies are offering benefits on the date of hire, 42% in 2014 compared to 22% in 2013. •Companies are seeing more than 80% of their employees enrolling in medical benefits.

3% 4% 12%

24%

57%

Under 50% 51-65% 66-80% 81-90% Over 90%

Employee Enrollment Rate

7


Benefits Funding & Contribution Strategy

Sequoia Spotlight •The majority of companies participating in the survey are fully insured (87%). •Of the companies who are fully insured, 53% are not considering moving to a self-insured arrangement. •80% of companies use a percentage based contribution strategy (instead of flat dollar amount).

Fully Insured

87%

Self Funded

13%

Current Medical Funding Type

53%

10% 9% 28%

Not Likely Somewhat Likely

Very Likely Not Sure

Considering Moving to Self-Insured Funding

20% 24%

56%

Flat Dollar Amount % of Premium of Base Plan % of Premium on Any Plan

Contribution Strategy

8


Medical

9


Medical – PPO Premiums & Contributions


Medical – PPO Deductibles Sequoia Spotlight •The majority of companies have a $250 deductible for single employees and $1,000 deductible for families. With the introduction of ACA plans with no deductible for smaller companies, there was a dramatic increase in under 50 companies with family deductibles of $500 or less.

11%

9%

10%

14%

39%

52%

60%

64%

0%

3%

0%

0%

29%

20%

20%

14%

8%

0%

0%

0%

5%

0%

0%

0%

8%

17%

10%

7%


Medical – PPO Maximums

Sequoia Spotlight •The majority of companies have a $2,000-$2,499 OOP max for single employees and $4,000-$4,999 OOP max for families.

0%

4%

0%

7%

35%

57%

70%

71%

34%

36%

30%

21%

16%

1%

0%

0%

16%

1%

0%

0%


Medical – PPO Coinsurance & Copays

Sequoia Spotlight •The majority of companies with more than 50 employees have 90% coinsurance and a $20 doctor visit copay.

3%

13%

10%

21%

24%

19%

20%

14%

45%

60%

70%

64%

11%

4%

0%

0%

18%

3%

0%

0%


Medical – HMO Premiums & Contributions


Medical – HMO

Sequoia Spotlight •Majority of companies have a $2,000-$2,999 OOP max for single employees and $4,000-$5,999 OOP max for families.

0%

2%

0%

0%

36%

39%

38%

36%

55%

59%

50%

64%

0%

0%

13%

0%

9%

0%

0%

0%


Medical – HMO/Kaiser

50% 3%

Kaiser Enrollment Rate

Not asked in 2013

Sequoia Spotlight •The majority of HMO plans have a $15 doctor visit copay. •Kaiser is offered at about half of Bay Area companies that participated in the survey, 40% of these companies have at least a 25% enrollment rate in the Kaiser option.

0%

0%

0%

0%

36%

38%

38%

36%

18%

45%

38%

50%

9%

14%

13%

14%

27%

2%

0%

0%

9% 2%

13%

0%


Medical – HDHP Premiums & Contributions


Medical – HDHP Sequoia Spotlight •The majority of companies have a $3,000-$3,999 employee OOP max and $6,000-$7,999 family OOP max. •Coinsurance on HDHP plans is 100% for companies with more than 200 employees.

7%

3%

0%

0%

53%

95%

100%

100%

13%

0%

0%

0%

27%

3%

0%

0%


Medical – HDHP Sequoia Spotlight •The majority of companies have a $2,500-$2,999 employee deductible and $5,000-$5,999 family deductible. •Employer contributions to HSAs cover close to half of the deductibles.

Average Annual Company Contribution to HSA Account

Employee Only $1,331

Employee + Family $2,070

20%

13%

0%

0%

0%

5%

0%

0%

67%

79%

100%

100%

0%

3%

0%

0%

13%

0%

0%

0%


Prescription Coverage Sequoia Spotlight •The majority of companies with over 50 employees offer a $10 generic copay, $25 preferred brand copay and $40 non-preferred brand copay.

0%

0%

0%

0%

87%

96%

91%

93%

5%

3%

9%

0%

8%

1%

0%

7%


Dental

21


Dental Sequoia Spotlight •Most companies have a $50 deductible for employees and $150 family deductible. There was a slight increase in companies offering dental without a deductible compared to 2013.

24%

7%

0%

5%

0%

3%

0%

0%

71%

84%

94%

95%

2%

3%

0%

0%

4%

3%

6%

0%


Dental Sequoia Spotlight •The majority of companies offer a $1,500 annual maximum, however companies with more than 400 employees offer $2,000+. •Across all company sizes, there was an increase over 2013 maximums, with more companies offering $2,000+ or no maximum.

11%

11%

0%

0%

2%

50%

0%

0%

68%

8%

44%

38%

16%

15%

31%

13%

2%

16%

25%

44%

2%

1%

0%

6%


Dental

Sequoia Spotlight •The majority of companies offer 100% coinsurance for preventive services, 90% for basic and 60% for major in-network.

100%

97%

100% 100%

0%

3%

0% 0%


Dental / Orthodontia

Sequoia Spotlight •The majority of companies with more than 400 employees offer orthodontia benefits for both adult and children. •Companies with fewer employees are less likely to offer ortho coverage or offer to children only. •The lifetime ortho max average for companies with more than 200 employees is over $1,500.

30%

41%

17%

75%

13%

30%

83%

25%

57%

30%

0%

0%


Vision

26


Vision Sequoia Spotlight •The majority of companies with more than 400 employees offer a $25 copay for vision materials and $10 copay for vision exams. •Companies with less than 200 employees offer a less than $25 copay for materials and $10 copay for exams.

4%

2%

0%

5%

45%

74%

63%

81%

2%

2%

6%

0%

49%

22%

31%

14%


Vision Sequoia Spotlight •The majority of companies offer eye exam and lens coverage every 12 months with frame coverage every 24 months.

100% 99% 100% 100%

0% 1% 0% 0%


Life & Disability

29


Basic Life Insurance

Sequoia Spotlight •The majority of companies offer basic life insurance as a multiple of salary. •If offering a Flat Amount, $50k is most common (to reduce imputed income tax administration).

36%

20%

14%

13%

35%

63%

86%

87%

29%

17%

0%

0%


Basic Life Insurance

Sequoia Spotlight •The majority of companies have a life Insurance benefit as a multiple of salary, most commonly 1x for companies under 200 and 2x for companies with more than 200 employees. •Income calculations typically include base salary, but companies with large incentive paid sales teams typically include commission. •The most common maximum benefit is $250k but companies with more than 400 employees trend higher to $500k.

0%

6%

8%

19%

92%

Overtime

Cash profit sharing

Bonus

Commission

Base salary

Income Calculation Includes

61%

61%

38%

26%

0%

1%

0%

0%

35%

35%

63%

74%

4%

3%

0%

0%


Short Term Disability

Sequoia Spotlight •The majority of companies cover 60% of salary with a weekly benefit of $2,500 for 12 weeks. •More than half of companies supplement disability or offer salary continuation.

0% 5% 11% 0%

95% 86% 83% 100%

5% 8% 6% 0%


Long Term Disability

Sequoia Spotlight •The majority of companies cover 60% of salary with a maximum monthly benefit of $10,000.

0% 5% 7% 5%

92% 86%

67%

89%

8% 9%

20%

5% 0% 0%

7% 0%


Retirement

34


Retirement Benefits

Sequoia Spotlight •401(k) retirement plans are the predominant option offered, followed by employee stock option purchase programs. Pensions and SEP/SIMPLE IRA plans have diminished to nearly 0%. •There are many options for record keepers, indicated by the high “other” ranking, however ADP and Fidelity lead the results.

Other includes: American Funds, theonline401k.com, John

Hancock, Lincoln, TIAA/CREF and T.Rowe Price

Other includes: Equity Grants 43%

1%

2%

3%

3%

4%

6%

6%

15%

16%

Other

ING

Mass Mutual

Ascensus

Paychex 401(k)

Vanguard

Principal

Transamerica

Fidelity

ADP 401(k)

Retirement Plan Record Keepers

90%

11%

5%

2%

1%

2%

401(k)

ESOP

403(b)

SEP/SIMPLE IRA

Pension

Other

Employer Sponsored Retirement Plan Options

35


Retirement Benefits

Sequoia Spotlight •The majority of companies have more than 50% participation in their retirement plan, with 80%+ participation on the rise compared to 2013 results. •There was an increase in automatic enrollment of 3-4% of salary compared to 2013.

34%

13% 6% 9% 9%

12% 17%

29%

7%

22%

5% 14%

7% 16%


Retirement Plan Provisions

Sequoia Spotlight •The majority of retirement plans allow Roth contributions and loans.

Yes 78%

No 22%

Roth Contributions Allowed

Yes 84%

No 16%

Loans Allowed

37


Commuter Benefits

38


Commuter Programs

Sequoia Spotlight •The majority of companies are offering a pre-tax commuter benefit followed by parking direct reimbursement.

Other responses included: commuter checks, CalTrain GoPasses, bicycle commuter program $75 Uber credit

82%

32%

7%

5%

3%

Section 125 Commuter Program (pre-tax)

Parking reimbursement

Shuttle/bus/zipcar

Taxi/shared ride

Onsite car share

Commuter Benefit Options

39


Perks & Company Culture

40


Food

“Other” responses include: Snacks & Beverages, Delivered Meals (ie Seamless) & Vending Machines

2%

3%

5%

20%

30%

40%

Cafeteria

Onsite Chef

Meal allowance

Other

Onsite Catering

Stocked kitchen

Meal Options

21%

43%

14%

46%

Breakfast

Lunch

Dinner

Snacks

Meals Provided

56%

13%

21%

10%

22%

21%

36%

21%

Daily

Weekly

On occasion

Not offered

Meal Frequency

2014 2013

Sequoia Spotlight •Most companies are providing lunch and snacks through a stocked kitchen or onsite catering. Overall meal frequency is on the rise. In 2014, 56% of companies provided daily meals compared to 22% in 2013.

41


Volunteering

Sequoia Spotlight •While companies are interested in giving back and establishing formal volunteer programs, the majority are volunteering on an ad hoc basis. Some companies are crediting employees with paid time off to volunteer as well as matching donations or volunteer hours.

1%

9%

14%

21%

78%

Match hours with donation

Company will match donations

Volunteer/Charity work is credited as paid time off

Other

No program

Companies with Volunteer Programs

Other includes: Company planned volunteer events, 4-16 hours time off to volunteer, paycheck deduction donations

42


Learning & Personal Services

Sequoia Spotlight •The majority of companies provide tuition assistance and online learning resources for employee development and investment in continuing education. •Legal assistance is the most commonly offered company sponsored service, followed by relocation.

Other includes: Conference allowance, in-house training

57%

37%

26%

25%

13%

Tuition assistance

Online learning resources

Book/resource rental

Lecture series

None at this time

Continuing Education

Other includes: EAP, house cleaning, onsite car maintenance, AnyPerk, dog adoption reimbursement and de-stress sessions.

36%

35%

22%

18%

7%

4%

3%

Legal assistance

Relocation services

None of these

Laundry/Dry cleaning

Haircuts

Adoption assistance

Onsite Counseling

Personal Services

43


Culture

Sequoia Spotlight •Casual dress, logo-wear, games and activities are being offered in more than half of participating companies. These differentiators are becoming more common to attract and retain top talent. •Only 17% of companies have 25% or more of their employees frequently working from home/telecommuting.

Other comments included: Happy hours, beer in office, book club, ski days, mountain bike days and team outings

97%

61%

60%

37%

27%

7%

Casual days

Branded Clothing during on boarding

Office games

Hackathons

Office Pets

Company Store

Extra Perks

0-25% 83%

25-50% 11%

50% or more

6%

Percentage of employees who frequently work from home/telecommute

44


Wellbeing

45


Wellbeing Programs

Sequoia Spotlight •60% of companies spend less than $500 per employee per year on their wellness program offerings. •40% of companies surveyed offer at least one wellness program listed below:

12%

6%

6%

7%

23%

10%

12%

8%

4%

11%

0% 5% 10% 15% 20% 25%

On-site gym / workout facility

On-site exercise classes

Wellness challenges

Hand out activity trackers e.g., Fitbit, pedometers

Wellness / fitness subsidy or discount program

On-site massage

Ergonomic evaluations

On-site or online wellness seminars

Lifestyle management programs e.g., smoking cessation

On-site biometric screening

50% of those that ran a challenge handed out activity tracking devices to their employees

50% of respondents offer a receipt based reimbursement program

Most lifestyle management programs are offered for free through all medical plans

46


Global Benefits

47


Global Benefits - Travelers

Sequoia Spotlight •The majority of companies with global benefit needs offer accident insurance for employees that travel internationally for business.

13%

22%

51%

8%

6%

Not offered

Medical benefits (separate from domestic policy)

Business travel accident insurance

Repatriation insurance

N/A

Companies offering additional benefits for employees that travel internationally for business

48


Global Benefits - Expatriates

Sequoia Spotlight •The majority of companies with global benefit needs are not offering expatriate benefits, but those who do, provide medical, dental, vision but fewer provide retirement benefits.

100%

80%

80%

57%

57%

57%

57%

53%

50%

43%

37%

33%

Medical

Dental

Vision

Accident

Death

Disability

Dependent medical

Housing

Emergency assistance/evacuation

Critical illness/short-term disability

Maternity

Retirement

Benefits Provided to Expatriates

Yes 32%

No 38%

No Expats

30%

Companies Offering Expatriate Benefits

49


Global Benefits – Inpatriates & Local Nationals

Sequoia Spotlight •The majority of companies with global benefit needs are not offering inpatriate medical coverage. •For local nationals, the majority are offering locally competitive/compliant benefit programs.

58%

45%

33%

20% 15%

Defined Benefit program -locally

competitive

Minimal - Locally Compliant Program

Defined Benefit program -

benchmarked to domestic US plan

Stipend or Subsidy - no defined

program

Health & Wellness program

Local National Benefits Inpatriate Medical Coverage

Yes 21%

No 43%

Not sure 36%

50


Time Off

51


Time Off

“Other” responses included: 5 weeks and 12 weeks, 1 week and paid sabbatical had 0 responses

14%

26%

6%

30%

17%

7%

28%

6%

18%

34%

2 Weeks

3 Weeks

4 Weeks

Based on tenure

Unlimited

Paid Time Off

2014 2013

26%

8%

17%

10%

9%

30%

15%

4%

21%

9%

9%

44%

No

< 5 days

5-6 days

7-9 days

10+ days

Unlimited

Separate Sick Days Offered

2014 2013

“No” responses means that sick time is part of PTO

Sequoia Spotlight •The majority of companies are offering unlimited PTO (including sick time). This trend was a significant increase over 2013 responses.

52


Time Off

4%

6%

2%

8%

10%

23%

47%

11%

15%

3%

7%

7%

6%

51%

1 week

2 weeks

3 weeks

4 weeks

6 weeks

> 6 weeks

None

Fully paid time off for Maternity/Paternity Leave

Paternity Maternity

2%

17%

50%

32%

< 5 holidays

6-8 holidays

9-10 holidays

11+

Paid Holidays

Sequoia Spotlight •The majority of companies are offering 9-10 paid holidays. •Paid time off for maternity and paternity leave is still in the minority, but those who are offering this benefit, the trend is to offer 6 weeks paid for maternity and 2 weeks paid for paternity.

53


HR Systems

54


HR Systems

Sequoia Spotlight •More than half of survey participants are using online systems for Benefits Administration, Employee Self-Service (personal information records) and Time & Attendance.

76%

61%

60%

51%

40%

40%

3%

Benefits Administration

Employee/Manager Self-Service

Time & Attendance

Recruiting/Talent Acquisition

New hire training and ongoing education

Performance Management

No system

Components of your current Human Capital Management System(s)

55


HR Systems cont.

Other: Algentis, Intuit, NetSuite Other: Cornerstone, Halogen, Paylocity, PulseHR Other: Algentis, Paychex, Kronos, HR Cloud

Sequoia Spotlight •There are many HR system vendors to choose from, indicated by the high response to “Other” across all system types. However, a few trends emerge: ADP is the predominant HRIS and Payroll system in use, followed by Bamboo for HRIS and Paychex for Payroll. The majority of companies are not using online systems for performance management yet. For those using a system, Small Improvements had the most responses.

62%

15%

11%

6%

3%

3%

31%

1%

ADP

Paychex

TriNet

Paylocity

Workday

ZenPayroll

Other

No system

Payroll Systems

42%

23%

15%

6%

6%

4%

43%

7%

ADP

Bamboo

TriNet

Workday

Paylocity Advanced HR

BENU SyncHR

Other

No system

HRIS Systems

13%

8%

6%

29%

45%

Small Improvements

Workday

SuccessFactors

Other

No system

Performance Management Systems

56


HR Systems

Partly integrated

36%

Fully integrated

21%

Not integrated

43%

HR System Integration

Sequoia Spotlight •20% of companies are using fully integrated HR systems that don’t require manual upload/download. •For companies pursuing new systems implementation, the timeframes have shortened since 2013, with 60% or more taking less than 8 weeks to get set up.

35%

33%

11%

4%

17%

34%

25%

13% 8%

20%

< 4 weeks 4-8 weeks 9-12 weeks 13-16 weeks More than 12 weeks

System Implementation Timelines

2014 2013

57


Industry Trends

58


Trends Due to Changes in Health Care Reform Sequoia Spotlight •Given the impacts of health care reform, the primary reasons cited for keeping coverage is to attract and retain employees.

10%

14%

83%

87%

89%

Maintain tax benefits

Avoid paying penalties

Retain current employees

Maintain employee productivity and satisfaction

Recruit talented new employees

Reasons for Keeping Coverage

59


Trends in Benefits – How Employers are Feeling

What keeps you up at night as it relates to driving a successful benefits program? 1. Keeping up with competitors to

attract and retain talent

2. Engaging your employees

3. Lowering costs

4. Keeping up with market changes

5. Measuring impact through data analysis

Yes 78%

No 12%

Not sure 10%

Employee Satisfaction with Overall Benefit Offering

Top

of

min

d

Least

Most

60


Benefits Wellbeing Risk Management

Global Benefits Compliance 401(k)

About Sequoia Founded in 2001, Sequoia Benefits provides benefits consulting and HR outsourcing solutions for innovative companies in the Bay Area. We make life easier for HR and finance teams, solve employees’ benefits questions & come through for our clients, no matter what.

Thank you!

If you have any questions or would like to participate in future benchmarking surveys, please email: [email protected]

61

sequoia.com

Documents

Advanced-HR - 2014 Total Benefits Benchmarking Study Total Benefits... · 2020. 9. 1. · This year, the Sequoia Total Benefit Benchmarking survey provides new valuable insights around