Law firms are unique with respect to benefits programs. Medical plans in the legal industry are typically more generous—and far more idiosyncratic—than those of other employers. Frenkel Benefits, with the assistance of a large actuarial firm, recently completed a customized survey of more than 50 national law firms, with about 500 employees each, to determine this industry’s most critical trends.
Key findings and analyses of the survey are summarized below. A more thorough summary of these points is available in pdf.
- Domestic partner and transgender coverage – More than 70% of law firms already offer domestic partner coverage. If state and/or federal tax law prohibits this extension of coverage, some firms are increasing employees’ gross incomes to cover the difference. Some law firms are even looking into coverage of transgender surgery.
- Salary-banded contributions – Law firms are more likely to vary employee contributions with salary, so higher-paid employees pay more than lower-paid employees for the same coverage. Unlike other industries, this is fairly standard practice for law firms.
- Family contributions – Law firms are increasingly charging a punitive rate for employees who wish to cover their dependents; beyond the cost of the additional coverage, the median family pays more than double the percentage of the premium rate of a single employee.
- Self-insurance – Despite significant incentives to self-insure, law firms have been slow to move from being fully insured; only 50% of large (500+) law firms in our study were self-funded.
- High deductible health plans (HDHPs) – In large part due to tax incentives offered to partners, 28% of law firms offer HDHPs, as opposed to 11% of other industry averages. When coupled with Health Savings Accounts (HSAs), HDHPs yield even greater tax incentives; 84% of law firms that offer HDHPs also offer HSAs.
- Wellness programs – Surprisingly, law firms offer more wellness programming, such as health club discounts and screenings, than other industries. However, we believe that law firms are offering these programs as an employee perk more than a cost-reduction strategy.
- Out-of-network benefits changes – Law firm employees tend to use more out-of-network providers than others, in part because of a lack of cost sensitivity. I addressed this in an earlier blog post. Because of changes to the carriers’ reimbursement schedules, lawyers may find themselves paying tremendously higher balance bills than a few years ago.
Again, the entire summary can be found here. What are your reactions to the trends we’ve observed in the legal industry? Do you expect other industries to follow the lead law firms are setting in areas like domestic partner coverage and implementation of HDHPs?