Compensation at health plans will rise slightly in 2011

Health insurer employees will see compensation rise a bit in 2011 with median salary budget increases expected to reach 2.9 percent for executives and 3 percent for all other employees, according to findings from the Hay Group's 2010 Health Insurance Survey. 

On the gloomier side, median salary structure adjustments hit a 10-year low. In 2010, survey respondents were planning an average salary structure increase of just 2 percent, according to the Hay Group’s analysis of median salary structure adjustments for 2010. The previous low was 2.7 percent in 2008 and the high was 3.1 percent in 2001. 

C.J. Bolster, national director for Hay Group’s Healthcare Practice, told FierceHealthPayer that the bad economy and uncertainty surrounding the healthcare reform are behind the low salary structure adjustments. "A lot of companies are trying not to get too far in front of themselves," he said. "That's why you’re seeing more emphasis on variable pay in the management and leadership ranks in this population."

Organizations will have some flexibility in giving raises to those employees who add value. Merit increases will climb in 2011 by about 0.5 percent, depending on employee level.

With questions around the new payment structure under the healthcare reform and the economic recovery, health insurers will need to define performance metrics that are aligned with the overall business strategy and provide payout opportunities that mean something to employees, Cheryl Mikuls, Hay Group VP, said in a statement.

Nearly half of organizations polled had not reviewed their performance-based employee incentive plans in five to 10 years, compared to the cross-industry standard of three to five years.

The Hay Group's 2010 Health Insurance Survey is based on data from 66 health insurance and Blue Cross Blue Shield organizations and the salary data for 88,000 employees. 

To learn more:

- read the Hay Group's press release 

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