Employment Resources

The annual insurance renewal process is a difficult time for employees and employers alike, especially when faced with the rising cost of health care. Employers do their best to make the plans they offer affordable, and employees are often unhappy with the amount they must pay to receive coverage for their families. If employers take a proactive approach toward addressing health care costs with their employees, the financial burden of carrying benefits can be softened. By introducing employees to money saving strategies that can reduce the overall cost of health care for the company, rising premium costs can be stopped in their tracks.

Cost Effective Strategies for Purchasing Prescription Medication

Here are a few suggestions that can help employees and employers save on health care costs.

• When prescribed a new medication at the doctor’s office, ask for a sample before filling a full prescription. Pharmaceutical representatives leave samples of many medications with physicians, and this is a cost effective way to see if the medication is beneficial or not. For instance, many patients must try different anti-depressant medications before finding the right one. Instead of having the insurance company pay upwards of $125 for each prescription, patients can try different medication samples until the best results are achieved.
• Many patients who experience pain and inflammation are prescribed NSAID, or non-steroidal anti-inflammatory, medications. The family of NSAID medications ranges greatly in strength and most drugs are available in brand-name and generic form. Patients should experiment with generic NSAID medications to see if they receive the same results as from their brand-name counterparts. Choosing to go with a generic medication will save the employee money in co-pay costs and save the employer money in overall costs.
• Doctors generally become familiar with a certain medication and prescribe it over and over again, and at times they must be asked by patients to use an alternative medication on their provider’s formulary. When a patient opts to go with a formulary medication instead of a similar non-preferred one, the savings gets passed on to both the employee and the employer.
• Employees should be reminded to follow the directions of their doctors carefully when taking prescribed medications. Skipping doses of required medications to extend the time between renewals will not save you or your insurance plan any money in the long run. Missing doses or not following the warnings of your doctor can lead to illnesses and hospital stays, which are emotionally draining on your family and financially draining, as well.

Passing Down the Saving to Employees. All of this advice makes sense and is sure to reduce the overall health care costs companies face, but without seeing a difference in the amount employees pay in premiums, workers might not see the incentive of making everyday choices to reduce the cost of health care. Employers must live up to their promise of lowering health care premiums when employees work toward lowering overall expenses, otherwise they will not see why it is worth the effort.

All examples in this article are for purposes of illustration and should not be construed as medical advice. Prices are estimates based on current retail market value.

A commonality in many workplaces is the rift between employees and management when it comes to health care benefits. Employees usually accuse the company of being too frugal, and management is unable to find a compromise that makes everyone happy. In the end, employees of the company are left feeling like their hands are tied. Luckily, a recent session at the Society for Human Resource Management’s (SHRM) 2010 Annual Conference explained how one company, with fewer than 150 employees, saved around $2 million simply by creating a partnership between the employees and management staff. Together, the company was able cut the soaring costs of medical coverage while still providing excellent benefits to employees and their families. SHRM recommends an ongoing four-stage method to help control health care costs. Through evaluation, education, communication, and motivation, management and employees can work together to keep the costs of health care down.

Evaluation. Health insurance claims are processed by the provider or a third-party administrator, and in most cases, employers do not see the complete picture of how the benefits are being used. By requesting summative claims data, employers are able to see how money is being spent and who it’s going to.

An evaluation of claims data can reveal unnecessary expenses, like miscoded treatments, erroneous charges, and misuse of the system. Employers will also notice ways to cut costs without reducing the benefits, such as when employees are prescribed medicines that are either available over-the-counter or in the formulary. The data will provide insight into the amount of out-of-network care that is being used.

A thorough evaluation gives employers the information needed to better educate their employees on how to use their health benefits efficiently and eliminate unnecessary spending at the same time.

Education. Just as people tend to breeze through owner’s manuals and other instructions, the Explanation of Benefits statements from the insurance provider usually gets the same treatment. Without a complete understanding of how costs are determined and why rates go up, many employees operate under the guise that “if it’s covered, then just tack it on my bill.”

Meeting with small groups of employees is a great way to educate the staff on how the prices of their insurance premiums are related directly to how the employees, as a staff, use the insurance. Higher annual costs equal increased premiums for the following year and lower annual costs result in cheaper rates.

Give cost efficient suggestions to the staff, letting them know how they can help reduce the amount they spend each year. Recommend using only in-network physicians and clinics, and explain how doctors can provide samples of medication before writing expensive prescriptions for drugs that might not work. Since health care plans often cover the families of employees, make sure to host educational sessions where spouses can attend, as well.

Communication. Communicating the positives of cost effective health care coverage should begin at new employee orientation and continue throughout employment. Dedicating a wall or bulletin board to display current usage data and dollar figures is a key component to keeping employees up to speed on the state of their insurance programs. By making this general data known, employees are able to hold themselves accountable and see how the improvements they have made are affecting the system.

Motivation. With a little motivation from management, employees can see that their bosses are serious about reducing the amount they have to pay for insurance. Rewarding the employees when quarterly costs go down with picnics or even a one-month reprieve of premium charges can motivate the staff to continue to work toward more efficient health care usage.

On September 3, 2010, the Internal Revenue Service (IRS) issued Notice 2010-59, a guidance reflecting statutory changes related to the use of health reimbursement arrangements (HRA) and health flexible spending arrangements (FSA) for payment of over-the-counter drugs and medications.

Related to accident and health plans that are provided by employers, including FSAs and HRAs, The Patient Protection and Affordable Care Act (PPACA) revised the definition of medical expenses. The definition of qualified medical expenses for Archer Medical Savings Accounts (MSA) and Health Savings Accounts (HSA) were also revised by PPACA. This will involve several changes for over-the-counter drug reimbursement, cafeteria plans, HRA and FSA debit card usage, etc.

Incurred expenses for non-prescription over-the-counter medications and drugs bought on or before December 31, 2010 can be reimbursed without taxes in accordance with the employee plan. However, as of January 1, 2011, an employer-provided health plan, such as an FSA or HRA, can only pay or reimburse the cost of drugs and medications under the following circumstances:

• The medication is insulin
• A prescription is required for the medication
• The individual acquires a prescription for a medication available without a prescription (over-the-counter medication.)

Note that a prescription is defined as a hand written or electronic medication order for a particular individual to have a particular medication or drug. It must abide state legal requirements and be composed by a healthcare professional who is legally authorized to issue prescriptions for the state it was written in.

HRAs and FSAs that use a debit card will also have new special rules. The IRS notice purports that current debit card systems are not capable of recognizing and maintaining that over-the-counter medications were in fact prescribed by a healthcare professional – as in compliance with the new definition of payable/reimbursable over-the-counter medication medical expenses. As a result, health HRA and FSA debit cards should not be used to buy over-the-counter drugs or medications after December 31, 2010. In an effort to smooth and facilitate the transition, the IRS will not be challenging FSA and HRA debit card usage for incurred expenses through the 15th of January in 2011. Thereafter, plans are required to ensure cards have been reprogrammed so that they cannot be used in the purchase of over-the-counter drugs or medications.

Those with a health FSA should be careful, as some FSAs contain a grace period provision to allow use of unused funds not spent by December 31 of a given year to reimburse incurred expenses for the initial two months of the subsequent year. Even if an individuals’ existing FSA includes this grace period provision, over-the-counter medications bought without a prescription (after the deadline) will not be eligible for reimbursement under the new rules outlined in the IRS notice.

Finally, cafeteria plans may also need revising to adhere to the new over-the-counter medication requirements. Despite the tenet against retroactive amendments, this notice allows an amendment to conform cafeteria plans to requirements adopted by June 30, 2011. For incurred expenses after January 1, 2011 or HRA and FSA debit purchases after January 15, 2011, the amendment may be retroactively effective.

According to experts specializing in language and language testing to help clients sell a product or sway public opinion, a key point to note is that it’s not what’s said, it’s what employees hear about health benefits changes. In fact, it is critical for employers to choose words that are effective and resonate with the workforce to earn employee support for more cost-conscious and waste-reducing health care decision making. When it comes to effectively engaging employees, polling data brings out several key points.

Trust

Employers should understand the world view of their employees. Fearful Americans are more likely to have distrust of leaders and employers. However, when it comes to employer distrust, 51% of Americans identified ethical business practices as what would most likely lead them to be distrusting.

Priorities

Employers should be aware of employee personal priorities and highlight this awareness in health care benefit and benefit change messages. Americans responded as follows when asked about personal priorities:

• More money (men)
• More time (women)
• More choices
• Fewer hassles

Employee-Driven Choices

Some experts prefer the term “employee-driven” to “consumer-driven” because employee-driven highlights the employer relationship instead of denoting a purely dollar relationship. Employees favor more personal control over health care decisions, which can be a selling point for employee-driven changes, but they don’t look favorably on cost shifting.

As demonstrated by research showing a 51% negative outcome by Fortune 500 employees to an employer saying “positive changes in our benefits” were made, Americans don’t want surprises; they want predictability and stability. So, employers need to show how a change will bring less bureaucracy and hassle. An employer should demonstrate the increase in predictability and simplicity and barrier reduction that comes with shifting decision-making to employees.

Complaints

Monthly premium costs * High co-pays * Plan confusion

The above are common complaints about health care plans. Employers shouldn’t just make meaningless assertions. Instead, they should create value with numbers and emphasize that employee-driven plans are easier to comprehend and can have lower premiums. Furthermore, employees should hear the reasoning behind why it matters. It is also important to note that unsustainable health care spending only results in higher premiums and the business having a less secure position.

Desires

Polls show that employees desire the following factors when it comes to their health care coverage:

• Company commitment to provide health care
• Be viewed as humans, not numbers
• Trust in treatment availability, without delays like prior authorization
• Doctor-patient relationship protection
• Decrease triggers (such as abuse, waste and fraud) of higher cost

Essentially, employees want access to their doctor, their hospital, and the ability to afford both. Employees also want a sense of control, which relates to trust that their coverage will be there and predictability and stability in the insurance provider not denying needed services.

Communication and Presentation

Polls clearly show that communication and presentation matter, and that past popularity doesn’t equate to current popularity. Polls from just five years ago showed that a booklet was the No. 1 response on preferred delivery of health care information. However, a recent poll showed only 26% still favoring a handout or booklet and 51% preferring email or online delivery. Employers should be aware that:

• Most employees don’t want or read verbose text. Effectiveness comes from a brief, simple, consistent, and credible message that isn’t presented in a patronizing manner.
• Employees are 60% more apt to read a page with a health care applicable graphic.
• Question and answer style formats work best.
• The message should always be positive.

Polls are clear – employee trust, personal priorities, choice, desires, common complaints, and employer presentation and communication all matter when it comes to health benefit changes.

The Patient Protection and Affordable Care Act (PPACA) enacted this year has many titles and subtitles that don’t actually have much to do with how health care coverage is provided or delivered by health plans. One such provision includes a requirement for employers to use employee W-2 forms to report the value of whatever Health insurance is provided to an employee. This provision is set to become effective in 2011. All W-2 Forms issued in January 2012 must include the Health insurance value information.

However, employers need to be primed for the new requirement before the effective date, as IRS regulations have a “quirk” where former employees can request a W-2 from employers at any time during the year. By law, the previous employer only has 30 days to respond to the W-2 request. Essentially, this quirk means that employers should be ready to comply with the valuing Health insurance provision by early 2011.

There are two main reasons behind the new provision to value Health insurance. Firstly, it should provide a means to educate employees about the cost of whatever Health insurance benefits are being received. Congress decided that the W-2 Form would be the best portal for employees to get this information. The second reason has to do with the excise on “Cadillac” health plans. It was determined that compliance with the provision to value Health insurance would also help employers to know if they have a high-cost plan subject to the excise tax on “Cadillac” plans. This knowledge would then provide ample time for any desired coverage modification before the excise tax takes effect in 2018. A third reason is that this provision could be a tool to monitor compliance of the PPACA employer and individual “pay or play” mandates that will become effective in 2014.

Although the IRS has yet to issue specific compliance guidance and such for this new Health insurance valuing provision, there are a few points that are already clear.

• Employer-provided Health insurance is still a tax-free benefit; the provision will not change the existing tax status.
• All employers offering applicable employer-sponsored coverage must report the collective cost of coverage. Amounts under self-funded medical reimbursement plans, amounts under health reimbursement arrangements or HRA’s, employee assistance plans, employer-provided Medicare Supplemental insurance, mini-med, limited coverage plans, or any other major medical coverage are all examples of applicable employer-sponsored coverage.
• The following would be examples of that which isn’t required to be reported – value of a specific illness or disease coverage, health savings account contributions, stand-alone vision and dental plan values, and medical flexible spending accounts salary reduction contributions.
• The basis of the value placed on the W-2 form will be the coverage provided to an employee and employees that are similarly situated. A “similarly situated employee” is determined by the coverage option selected under the plan. Take a plan that offers family, employee plus 2, employee plus 1, and employee only coverage for example. This plan will have four categories of similarly situated employees, with each category being representative of each of the offered coverage types. Employers will report the value of the appropriate coverage option for all employees that select each coverage type.
• Value is determined using the same method that COBRA premiums are calculated. The determined value will have nothing to do with usage. Employers that aren’t familiar with COBRA, a smaller employer that isn’t subject to COBRA for example, and those that haven’t calculated COBRA premiums for all coverage options will need to start. It will also need to be broken down for similarly-situated employees.

It’s clear that employers need to start planning to implement the requirements of this provision now. Employers are being counseled to periodically monitor for incoming technical IRS guidance on the provision. For example, guidance related to setting COBRA premiums for self-funded plans is expected to be released by the IRS shortly. Until the guidance is available, employers should instruct payroll personnel to initiate system updates that will add a feature to obtain and report the information needed for compliance.

Although the pharmaceutical spending trend has declined in recent years, according to the Segal Company’s 2010 Health Plan Cost Trend Survey, the projected prescription drug trend is still 9.1% for the coming year, well above the country’s general inflation rate. This year’s figure is down significantly from the high of 19.7% reported in 2001.

Running counter to this trend is spending for so-called specialty drugs, which according to the same survey is expected to be nearly 18% for 2010 or double that of the general prescription drug trend. The biggest driver of the specialty drug trend is the growth in prescription drug use among children according to the 2010 Drug Trend report from Medco. This growth was almost four times greater than the increase of prescription drug use among the general population. During the past nine years, the spike in specialty drugs has been driven by the increased use of antipsychotic, diabetes, and asthma drugs among children. In 2009, researchers found that more than one in four insured children in the US, and almost 30% of adolescents took at least one prescription drug for a chronic condition.

Sadly, the obesity epidemic in the US is taking a toll, and no longer applies to adults only. Consequently, more 10- through 19-year-olds are developing diseases that used to be seen only in adults. Many of these diseases require ongoing, and expensive, drug therapy. Another large contributing factor for specialty drug use in children is the diagnosis of ADHD. About 13% of prescription drug benefits spent on children are for ADHD treatments. Furthermore, research is now showing that many children who begin drug therapy for ADHD continue the therapy through the ages of 20-34.

In addition to medications that treat mental illness, diabetes, and asthma in children, what are other specialty drugs and why do they come at such a cost? The term “specialty drugs” encompasses types of pharmaceuticals that might differ from other prescribed products in their development, in how they are administered to the patient, and in their storage and handling requirements. For example, some specialty drugs are biologics-genetically engineered drugs. Some require administration by injection or infusion, or administration only by a medical professional. Some have special storage, handling and distribution requirements, meaning that they may not be available through the local pharmacy.

Specialty drugs target complex and chronic conditions. Medical conditions for which specialty drug therapy currently is available include cancer, mental illness, human growth hormone disorders, hemophilia, psoriasis, multiple sclerosis, rheumatoid arthritis, immune disorders, infertility, Crohn’s disease, Parkinson’s disease, lupus, diabetes and HIV/AIDS.

Though expensive, a specialty drug — like any appropriately prescribed and properly managed pharmaceutical — ultimately can be a cost-effective part of a patient’s therapy if it aids in that patient’s recovery or prevents a condition from worsening, alleviates pain, or averts the kinds of medical costs and complications that can result from hospitalization and more intrusive interventions. However, because the cost of specialty drugs is so high, health plans and pharmacy benefit managers have implemented various controls to ensure that the outlays for these medications are well-spent and geared toward achieving the desired outcomes. Support services that commonly are seen in specialty drug management programs include injection training, extensive patient education, 24/7 dispensing services, patient monitoring to assure compliance, and automatic refill reminders.

Pharmaceutical market trends and the ongoing development of an increasing number of specialty drugs indicate that this area of pharmacy will grow, and with it the potential impact on an employer’s health care costs. Employers would be well advised to get a handle on how their employee population is utilizing these products, and how their health plan and/or pharmacy benefit manager (PBM) is managing the benefits. Areas to examine include plan design, the plan’s or PBM’s initiatives to secure discount pricing and dispensing fees, and how the plan or PBM ensures optimal patient compliance with their specialty drug regimen.

Employers are bracing for the financial impact of the new health care reform law, according to a survey from Mercer. A quarter of the nearly 800 employers surveyed said they expect compliance with the first round of mandates included in the law to add at least another 3% to their projected 2011 plan costs; 28% expect an additional increase of 1%-2%, and 13% project an additional increase of less than 1%.

Three of the “immediately” effective health care reform provisions — effective for plan years beginning after September 23, 2010 (January 1, 2011, for calendar year plans) — are discussed below. Given that these and other health care reform provisions include requirements for coverage expansion, for certain types of benefits and for restrictions on benefits limitations, concerns about cost increases are well-founded.

Three health care reform provisions that are likely to have some immediate financial impact on employers are:

1. Expansion of coverage to employees’ young adult children. The health care reform law requires that plans that provide coverage for dependent children now make that coverage available until a child turns age 26. (Until 2014, grandfathered plans can limit this coverage expansion to adult children not eligible for other employer-provided coverage.) In the Mercer survey, 20% of employers said this provision of health care reform was a significant or very significant concern to them. The impact of this coverage expansion will vary, of course, depending in large part on an employer’s demographics — and for some employers, adding a group of young, healthy individuals could possibly help their plan cost. To moderate the impact of this piece of health care reform, employers should take steps to ensure that only truly eligible dependents are on the plan, by conducting dependent audits. As indicated by the Mercer survey, other steps employers said they are considering to blunt the impact of this mandate include requiring proof that dependents do not have coverage available through their own employers (49%); adding contribution tiers based on the number of dependents covered (20%); and imposing higher premium shares for all dependents (16%).

2. Elimination of lifetime limits on benefits. The law prohibits lifetime dollar limits on “essential” health benefits. And this list is long, encompassing most of the types of benefits found in the typical health care plan (e.g., ambulatory patient services, emergency services, hospitalization, maternity/newborn care, mental health and substance abuse benefits, prescription drugs, etc.). (This provision phases in to apply to annual limits, which are banned after 2013.) In the Mercer survey, 21% of employers said this provision was a significant or very significant concern.

3. Preventive care benefits. Plans must cover certain preventive care services without any cost-sharing (deductibles, copayments) required for the employee or dependent receiving the service. Many plans, in particular consumer-directed health plans, already provide full coverage for certain types of preventive care, as a strategy to enable the detection and treatment of illness or disease in the early stages, and as a means to alert employees to lifestyle issues that might be harming their health. Whether this provision “costs” all employers is yet to be seen; some research shows that preventive services, especially when part of a comprehensive health promotion and wellness strategy, generate a return on the investment that an employer makes in the program.

Noncompliance with these or other provisions in the health care reform law also has a cost for employers, in the form of excise taxes and penalties. Therefore, it’s essential to review the pending mandates, not only to ensure compliance, but also to determine how to fold them into an effective and comprehensive health care cost management strategy.

The Patient Protection and Affordable Care Act enacted a package of Health insurance reforms for group health plans, including benefit mandates and Health insurance market reforms. “Grandfathered plans,” plans in effect on March 23, 2010 (the date of enactment), are exempt from certain but not all of the law’s provisions.

The Internal Revenue Service, Department of Labor’s Employee Benefits Security Administration and Department of Health and Human Services have jointly issued an interim final rule regarding grandfathered plans, in particular, what changes to grandfathered plans will and will not affect a plan’s status.

Among the Act’s provisions that do not apply to grandfathered plans are the following:

• The requirement that preventive care services, including immunizations and screenings, are covered with no cost-sharing for plan participants.
• Requirements under Sec. 105(h) of the Internal Revenue Code that plan provisions do not discriminate in favor of highly compensated employees.
• Maintenance of claims and appeals processes that include external review.
• Certain benefits requirements involving provider choice, emergency services and clinical trials.

According to the interim final rule, if a grandfathered plan does any of the following, it will lose its grandfathered status:

• Eliminate all or substantially all benefits to diagnose or treat a particular condition. This includes the elimination of an element necessary to treat the condition (for example, if a plan provides counseling and prescription drugs for a mental health condition, and eliminates the counseling benefit while maintaining the prescription drug benefit, it will be considered to have eliminated substantially all benefits for the condition and lose its grandfathered status).
• Increase coinsurance rates, to any extent at all, for plan participants.
• Increase participant copayment levels by more than the greater of $5 (adjusted annually for inflation) or a percentage equal to medical inflation plus 15 percentage points.
• Increase a fixed-dollar cost-sharing requirement other than a copayment-such as a deductible-by more than medical inflation plus 15 percentage points.
• Lower employer cost-sharing by more than five percentage points (for example, decreasing employer cost-sharing while increasing the percentage of employee cost-sharing from 10% to 20%).
• Add or tighten limits on what an insurer pays (for example, capping or lowering the annual dollar amount covered by a plan for specific services or adding an annual dollar limit maximum where one did not exist on March 23, 2010).
• Change insurance carriers or purchase a product from a new insurance carrier.

Plan changes such as premium increases and changes in third-party administrators will not cause a plan to lose its grandfathered status. The interim final rule includes special provisions for insured collectively bargained plans. If the collective bargaining agreement was ratified before March 23, 2010, a fully insured plan will be considered grandfathered until the date on which the last agreement relating to the coverage in effect on that date is terminated. Self-insured collectively bargained plans are subject to the same rules as grandfathered plans that are not under a collective bargaining agreement.

As noted above, although grandfathered plans are not subject to some of the Act’s provisions, they are subject to others, such as the prohibition on lifetime limits on the dollar value of benefits and the prohibition on coverage rescissions, except in cases of fraud or an intentional misrepresentation of a material fact by an enrollee. A grandfathered plan also is required to disclose to plan participants that, as a grandfathered plan, it may not include certain elements of the consumer protections provided for under the Act.

Although grandfathered status can offer significant advantages, especially in regard to avoidance of some of the Act’s benefits mandates, employers will need to assess how these balance against the need or desire to modify plan provisions or change carriers in response to rising plan costs and rates.

As employees learn more about the availability of generic medications, they begin to make more cost efficient choices in the doctor’s office. Seems like a simple enough concept, and now there is more evidence to prove it.

A recent report from CVS Caremark has found a strong correlation between the amount of education employees receive regarding the use of generic medications and the reduction of the employers’ overall health care costs.

The 2010 Insights Report found that CVS Caremark was able to improve their GDR, or generic dispensing rate, by more than 3% in 2009 to 68.2% by educating customers on the money-saving advantages of generic medications. This increase also came during a time when few noteworthy generic alternatives were introduced.

Proactively, employers have designed their plans to maximize the availability of generic medications, while creating outreach programs in the workplace and with plan physicians. According to CVS Caremark, these tactics have been able to increase GDR dramatically, up to 90% in some drug classes.

Outreach programs and other tactics, like preferred drug lists, have been working for some time now. A Harris Poll study from October 2006 to December 2008, found that the amount of adults who would select generic alternatives to brand name medications jumped from 68% to 81%. Since more generic medications are hitting the market, this percentage is likely to increase.

In recent years, the patents ran out on brand name medications that have sold nearly $71 billion combined, and within the next five years, patents are expected to lapse on brand name drugs that sell more than $100 billion each year, all together.

The CVS Caremark research team predicts that this new wave of generic therapeutics could result in doctors writing about 80% of their prescriptions for generic alternatives as early as 2012.

The announcement of new generic drugs is music to employers’ ears, as they continue to look for ways to steer employees toward more cost efficient health care methods. As workers begin to understand how their use of generic medications is safe and financially responsible, the cost of benefits can be reduced, saving everyone money.

According to a recent report from the Society for Human Resource Management (SHRM), employees consider benefits and job security as the two most important factors that contribute to their overall job satisfaction. This marks the fourth time in as many years that these two factors topped the SHRM’s annual Employee Job Satisfaction survey.

The survey also polled HR professionals on their thoughts about job satisfaction, and found similar results. HR professionals agreed with the employee population on the value of job security, positioning it as their second most important factor. An astonishing 72% of the HR population polled selected the employee-supervisor relationship as the most important factor effecting job satisfaction, ranking No. 1 in the survey for the seventh time in the past eight years. In comparison, only 48% of employees polled selected “relationship with supervisors” as an important factor, ranking it seventh on the list. The 2010 survey was made up of 25 elements spread across four categories, and included factors regarding wages, benefits, work environment, and advancement opportunities, among others. To ensure the validity of the survey’s results, the SHRM polled a wide sample of over 600 employees and 589 HR professionals, all from the United States.

This year’s survey had other interesting results. Employee compensation fell to its lowest rank ever this year, coming in at fifth on the employees’ poll. Last year, compensation fell out of the top five rankings for HR professionals, and this year it was listed as the ninth largest contributor to job satisfaction.

Besides job security, employees and HR professionals appear to agree that having opportunities to utilize skills/abilities while at work contributes to overall satisfaction. It is the third consecutive year this factor has ranked in the top five in both surveys, with employees placing more emphasis on this choice in 2010 than in previous years.

SHRM included a new choice in this year’s survey that received a lot of attention from both sides of the table. For the first time in the survey’s history, participants could select “organization’s financial stability” as a key contributor to job satisfaction, receiving enough selections to rank fourth on both surveys.

As for employee benefits, a secondary survey revealed that health care coverage was the most important benefit, followed closely by paid time off. Despite the amount of significance employees place on benefits, only 38% of employees polled felt “very satisfied” with their current medical benefits. Conversely, the majority of employees were very satisfied by the amount of paid time off they received.

Some employers are concerned about how health care reform could affect the benefits they offer, which could also affect job satisfaction. On the brighter side, this year’s employee survey showed that “the work itself” was selected enough to tie for fourth, pointing out that satisfaction does not only come in the form of paychecks and paid vacations.