Survey calls law firm benefit changes ‘stealth cost shifting’

April 9, 2014
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Large law firm benefit trends paint a somewhat  “conflicted picture” as firms try to manage plan expenses while at the same time lag behind the broader market’s adaptation of consumerism to save costs, based on results of a national survey.

Frenkel Benefits, the independent employee benefits division of Frenkel & Co., an insurance brokerage firm, released the results of its 2013 biennial Law Firm Survey. The survey looks at emerging trends in the benefit programs of large law firms.

Adam Okun, who wrote a blog post on the results for the company, called the design changes made by firms “stealth cost shifting,” – changes that preserve the more visible features of the health plans but reduce the plans’ cost in less recognizable ways.

Some key points highlighted by Okun based on the 51 participating law firms surveyed:

•    PPO/POS plans are the most popular, which include more than 50 percent of law firm employees. High deductible health plans are only popular with partners, who enroll in them because of their favorable tax treatment.

•    Health care inflation at law firms was 7 percent, which exceeded national employer-sponsored health care plan inflation by 2 percent. Okun says this reflects the industry’s reluctance to dilute benefit levels.

•    Wellness offerings from law firms have scaled back.

•    There is also a noticeable movement away from blanket coverage of post-retiree medical for partners and more firms are offering transgender surgery coverage, infertility benefits and domestic partner coverage.

“Given the ongoing contraction in demand for legal services and the consequential imperative to examine the underlying cost/expense structure of big law firms, it will be interesting to see when the industry will pivot from traditionally paternalistic, high-cost benefits plans to consumer-directed, employee-activating models,” Okun writes.

I was unable to find a link to the actual survey, but you can read a little more about it on Frenkel Benefits’ blog. Here’s a link to the 2011 survey results if you’re interested to see how this year’s results compare.
 

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