How Senior Living Providers Are Changing Employee Benefits

With labor challenges looming large, senior living providers rely on solid benefits plans to attract and retain workers. But some providers are considering whether changes are needed.

That’s according to recently released survey findings from advisory, broking, and solutions company Willis Towers Watson (Nasdaq: WLTW) and senior housing industry association Argentum.

“Senior living operators continue to be challenged by high turnover and benefits cost control,” the report authors stated.


Specifically, turnover rates continue to be 45% or higher for full-time employees, most senior living companies in the survey stated. In total, 35 companies responded, with one-quarter identifying themselves as having a national footprint. They ranged in size from fewer than 100 to more than 10,000 employees.

Source: State of the Industry 2016, Argentum and Willis Towers Watson
Source: State of the Industry 2016, Argentum and Willis Towers Watson

Part-time workers are not eligible for health benefits at 66% of the companies that responded. Limiting eligibility in this way is one method of benefits cost control being adopted by senior living providers.

Other cost control efforts include high-deductible plans. In an increase from last year’s survey, nearly 25% of respondents offered a high-deductible health plan (HDHP) with a $6,500 maximum. The most common HDHPs offered a $2,500 or $3,000 deductible.


Many respondents also increased dependent contributions at a higher rate than employee-only contributions in 2016, and replaced ancillary benefits with 100% employee-pay-all voluntary benefits. In keeping with Affordable Care Act rules regarding what constitutes an affordable employer-sponsored plan, many senior living companies also set employee-only contributions to 9.5% of the lowest employee wage level.

Looking forward to 2017, one common plan is to expand the scope of employee wellness programs. Among providers that currently do not have a wellness program, 32% anticipate having one in the future. These are intended to reduce the number of employees with health risks. Currently, on average, 29% of an operator’s employee population is obese, 22% have hypertension/high blood pressure, and 22% are affected by tobacco use, the survey found.

Yet, even when a wellness program is offered, providers may find it difficult to get employee participation. Most providers that already have a wellness program reported that fewer than 25% of employees participate.

On-site flu shots, employee assistance programs, and tobacco cessation programs are among the most common wellness initiatives.

The average expense for each employee enrolled in a health plan in 2015 was around $6,900 for the year, the survey showed. This counts both employer and employee plan costs. Those costs are expected to increase to about $7,100 for 2016 and then surge to about $7,900 in 2017.

Over the next three years, top priorities for managing benefits programs are focusing more on employee well-being, reviewing benefits within a total rewards context, and evaluating plan design strategy.

Written by Tim Mullaney

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