Confirming a trend reported by others, a new survey indicates a majority of employees, if forced to choose, would prefer to have higher health care benefits than salary.

This latest finding from Principal Financial Services annual survey of health care outlook supports similar findings over the past two years.  In the Principal study, 75% of respondents reported that preference. Numbers from other studies have been lower, in many cases a plurality of respondents.

Nonetheless, the desire for health care benefits is still strong among Americans. Employers pay more than $10,000 per employee for health care benefits, a figure that is increasingly forcing many companies to move more of the costs to employees.

The appeal of HSAs as a way to ease this transition is also showing up in other surveys, including the 2006 Outlook Survey just completed by Information Strategies, Inc, the parent of www.hsafinder.com.

According to Principal, if given the choice between a salary increase and increased health care coverage, most American workers favor health care. Over 75 percent of working Americans would prefer $6,200 in employer-provided health insurance rather than the identical amount in pay. Further, employees with coverage also reported they are twice as likely to accept lower pay for more health benefits, rather than the reverse. These findings are outlined in the seventh annual Health Confidence Survey released today by the Employee Benefit Research Institute (EBRI) and Mathew Greenwald and Associates, Inc., underwritten by the Principal Financial Group.®

"We've learned through The Principal Financial Well-Being Index SM that high-quality benefits actually encourage employees to work harder and result in a more motivated workforce. Through this latest EBRI research we see that overall, people value the importance of employee benefits - so much so that not even a sizable salary increase can take the place of good health care coverage," said Carey Jury, vice president of the Health Division of the Principal Financial Group. "The fact that employees are willing to choose health coverage over money in their pocket further illustrates just how important health benefits are to American workers today."

Having a quality health plan is also shown to increase job loyalty. Nearly one-third of Americans say they stay with their current employer because they are unsure if they would be able to find alternative affordable healthcare coverage with another employer.

Health Care Costs Risk Americans' Nest Eggs

The rising cost of health care has forced workers to shift priorities. Forty-eight percent of those surveyed were forced to decrease contributions to other savings; 30 percent had difficulty paying for other bills; and 26 percent used up all of their savings in the past year due to increased spending on healthcare. One-quarter of respondents say they have reduced retirement savings contributions because of growing medical bills.

"Americans are coping with the rising cost of health care in a variety of ways, but it is clear that rising health costs are causing financial pain among many, and are leading to a reduction in savings in general-and retirement savings in particular," noted EBRI CEO Dallas Salisbury.

Prevention Slows Rising Medical Costs

Many Americans say increased healthcare costs have led them to change their behavior. For those experiencing increased costs over the last year, 74 percent reported they take better care of themselves to help curb costs; 58 percent talk to the doctor more carefully about treatment options and costs; and 57 percent only go to the doctor for more serious conditions or symptoms.

"The first step in bringing down health costs is perhaps one of the most challenging - getting people to change their lifestyle and make healthier decisions on a daily basis," noted Jury. "This research shows that American workers are beginning to take ownership of the heath care cost issue. By getting active, eating right and taking other such precautions to stay healthy, people will notice a decrease in trips to the doctor and pharmacy - saving them money."

Currently, two in three Americans agree they simply follow the advice of a medical professional when they seek care. This attitude is equally true about the prescriptions they receive.

"For far too long, Americans have been passive health care users where we need to be active health care consumers. More people need to be prepared and follow through in having a discussion with their health care provider on treatment options and resulting costs. Doing so will empower consumers to become involved in improving their health and will save them money in the short and long-term," said Jury.

Health Savings Account Gains Interest

The EBRI survey showed that interest is emerging in health savings accounts (HSAs). When individuals (with non-governmental coverage) were asked how interested they would be in high deductible plans with a health savings account, 11 percent reported they were extremely interested or very interested. When the portability feature was mentioned, interest doubled. And when the employer contribution component to this type of plan was brought up, nearly one-quarter of respondents expressed interest.
"The second step to immediately addressing the healthcare cost issue involves employers looking into creative ways to offer their employees valuable healthcare coverage, while encouraging them to become engaged. HSAs are the newest way owners of growing businesses can provide health care coverage, along with the opportunity for employees to participate in the decisions made about their health and health care," said Jury.

For a copy of The Principal Financial Well-Being Index, visit www.principal.com/research