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Law Firm Benefits Survey Finds Conflicting Trends

The recently released 2013 biennial Law Firm Survey made by Frenkel Benefits analyzing key trends emerging in the benefit programs of large law firms has found a conflicted picture as law firms keep trying to balance expenses while embracing consumerism.

The survey, in which 51 large law firms participated (these law firms account for close to 25,000 law firm employees and $330 million spending on healthcare), found that most changes in plan designs were "stealth cost shifting" where the plan's costs were reduced in low profile ways while visible features of the health plan were preserved.

Key findings of the benefits survey are as follows:
  • Healthcare inflation at law firms exceeded national employer-sponsored healthcare plan inflation by 2 percent - indicating the legal industry is reluctant to cut down on health benefits. This differentiates the legal industry from other industry sectors. While nationally, healthcare inflation reached its lowest levels in 50 years and grew at a slower pace than the GDP, healthcare inflation at law firms was 7 percent. While the costs of dental plans increased by only 1% nationally for middle market employers, at law firms, dental costs plan costs increased by 4%.

  • At least 35% of the law firms surveyed increased the employee share of monthly premium as one of their primary cost-control strategies. This resulted in contribution increases greater than the plan's underlying medical trend.

  • More than 50% of law firm employees continue to enroll in PPO/POS plans, and in-network only HMO/EPO-style plans experienced a jump in enrollment from 13% to 22%. More efficient designs like HDHPs (High Deductible Health Plans) are popular only with law firm partners and few other law firm employees are interested in HDHPs.

  • Even though median in-network PPO plan deductibles and coinsurance have remained respectively at $500 and 90%, out-of-pocket maximums have increased by almost 50%.

  • Only two-thirds of law firms with more than 1,000 employees self-fund their medical claims, though the numbers have grown. In comparison, more than 80% of employers nationally self-fund medical claims. And after the introduction of the Affordable Care Act, it is now more common to find small employers go for self-funding - though this is not the case with law firms.

  • An important finding was that wellness offerings in law firms have been scaled back and fewer firms are providing newsletters, gym discounts and on-site screenings. However, there was an increase in firms offering on-site exercise facilities. Over 80% of law firms had not considered the expected ROI on their wellness initiatives.
Other key employee benefit trends marked by the Frenkel Benefits Survey include a movement away from blanket coverage of post-retiree medical for Partners and an increasing number of firms offering transgender surgery coverage, infertility benefits and domestic partner coverage.

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