Transforming how benefits work.

Welcome aboard. That phrase may be heard by a new employee more than a few times on the first day of a new job, and at some point during those initial, frenzied days, the employee usually is handed a packet filled with benefit options from which to choose.

Those choices will center on what health insurance, retirement plan and other optional benefits are offered. Employee benefits are part of a company's total compensation package: Some are required, while others are discretionary, designed to give the employer a competitive edge.

This guide is intended to help benefits professionals, such as human resources officers and insurance brokers, survey an evolving benefit landscape that at the moment has employees searching for more and better benefits while employers scramble to cap or reduce costs.

For example, private-industry employees paid an average 28% toward the cost of their family coverage premium, according to the 2007 Kaiser/HRET Survey of Employer-Sponsored Health Benefits, leaving the employer to pick up the rest of the average monthly bill--about $730.

Since the cost of benefits has risen dramatically, more employers are rethinking a notion that they and employees have largely held--that benefits are an entitlement. As a result, more companies may shift more of those costs to its employees.

Enter consumer-driven health plans. Such plans feature low premiums and high deductibles.

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Enrollment in these plans is still low, but increasing. As contribution amounts keep going up for managed-care plans, the employee may decide that the trade-off of lower premiums is worth the potential for higher out-of-pocket costs.

From the employer's vantage point, cost-sharing becomes a little more even--the employee pays a percentage of the bill, or coinsurance, instead of a flat copayment.

The decline of the defined benefit plan--usually a pension plan funded by the employer--is well-documented. The Department of Labor's historical tables show participation in defined benefit plans has shrunk from 30.1 million people in 1980 to 20.6 million in 2004, the last year the information was made available.

Meanwhile, defined contribution plans like 401(k) accounts have exploded. According to those same tables, 18.9 million similar workers in 1980 were enrolled in a defined contribution plan, which is funded typically by the employee with help from the employer. In 2004, that number had ballooned to 52.5 million.

With the Roth option and hybrid plans growing in popularity, retirement plan choices keep multiplying. And on the health-care side, HighMark Inc.'s Healthcare Visa Gift Card shows that even a visit to the doctor now can be given as a gift.

The employee benefit market keeps shifting, and as more of the nation's baby boomers enter retirement, the added pressure on employers to add some form of long-term-care insurance, supplemental disability insurance, or to change how life insurance is designed will likely further change compensation practices.

And as those changes occur, the A.M. Best Co. will be paying close attention.

With A.M. Best's Consumer Center at www.ambest.com, you can keep in step with all the insurance products needed to protect your family's financial well-being. Through ratings of insurance companies, up-to-the-minute news, multiplatform tutorials and much more, planning to ensure the financial future you want can be a lot easier.

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