To remain or become an employer of choice, an institution’s employee value proposition (EVP) needs to be compelling to both employees and candidates. Given how difficult it is to hire and keep talent, institutions also need to pay attention to the competitiveness and fit of their employee benefits. Benefits are a key component of total compensation, one of the pillars of the EVP.

About CUBS

CUBS is the most detailed higher education employee benefit benchmark study in the U.S. Segal has conducted CUBS biennially since 2012. CUBS draws on information from our proprietary database of over 400 private and public higher education institutions.

The 2022 CUBS examined health benefits, including prescription drug coverage, wellness programs and mental health services; tuition benefits and other financial security benefits; life-stage benefits; post-employment benefits; and sabbaticals and other leave programs offered to these employee groups: faculty, administrative and professional staff, and clerical and support staff.

How can CUBS help you?

Benchmarking your institution’s benefits against its peers helps identify where it may not be competitive.

It can also help isolate benefits that should be refined or better promoted to your workforce.

And notably, since institutions still face budget constraints, using benchmarks is a great way to help prioritize where to invest in benefits.

Key findings

Segal’s 2022 CUBS data pointed to the impact of the COVID-19 pandemic on the employee benefits offered by higher education.

These benefits evolved as a result of COVID-19:

• The annual premium cost increase for medical coverage was 5 percent or less for all medical plan types, on average, in part because of lighter-than-usual claims expense during the height of the COVID-19 pandemic, when many employees avoided seeking in-person healthcare.
• Institutions are either offering more services that promote physical and mental health, well-being and financial security or highlighting more of these services on their websites, which makes sense given that the need for assistance with stress, mental health issues, financial concerns and substance use surged during the pandemic.
• Some colleges and universities reduced or suspended contributions to their DC retirement plans, which was an immediate way to lower expenses.
• Public institutions continued to move away from DB plans as their sole retirement offering, particularly for new hires — a trend that’s likely to continue with many states facing budget issues exacerbated by the pandemic.

Although institutions made few changes to health coverage — an important benefit during the pandemic, when health and safety are top priorities — CUBS found that:

• Faculty and staff payroll contribution percentage increases for medical coverage were the same as or lower than premium cost increases for all plan types, except high-deductible health plans (HDHPs).
• There has been rapid growth in the percentage of institutions offering HDHPs with health savings accounts (HSAs) for tax-advantage savings.
• Institutions are increasing the out-of-pocket maximums in their medical plans, a cost-management strategy that requires the heaviest users of the healthcare system to share more of the cost without affecting the majority of faculty and staff.
• Institutions are using various strategies to manage the rapidly rising cost of their prescription drug coverage, including newer strategies like value-based designs (e.g., reducing copayments to improve access to an ongoing medication regimen and ensure the patient takes medication for certain chronic diseases, usually diabetes).

The 2022 CUBS also found ongoing trends identified in past CUBS editions:

• Institutions are managing the cost of highly valued tuition benefits by increasing the waiting period for employees, spouses and dependent children.
• Life-stage benefits that can be offered at little to no cost to institutions continue to be a growing part of the higher ed benefits package. They are a way to greatly improve faculty and staff benefits by offering more choices, which can help with recruitment and retention. Reflecting the fact that they are significant additions to a benefits package, CUBS found that these offerings are being more prominently displayed on benefits websites than in previous years.

There’s more in CUBS!

CUBS includes eight recommendations for how to address the specific needs of a multigenerational workforce, manage costs and improve employee engagement in benefits:

• Implement a cafeteria plan menu of benefits to improve employee satisfaction and ensure benefits equity.
• Educate employees about their medical coverage and incentivize them to take charge of their healthcare.
• Take advantage of new strategies for managing the rising cost of prescription drug coverage.
• Encourage employees to use services that promote health, well-being and financial security.
• Enhance life-stage and sustainability benefits that can be offered at low to no cost to the institution.
• Promote tuition benefits to attract and retain talent while making sure the design is affordable.
• Ensure your retirement benefits are competitive with what employers in other industries offer.
• Adjust your sabbatical benefits to keep them attractive while managing spending.

Much like our lives evolved in new way during the pandemic, so too have the employee benefits necessary to support today’s workforce. For instance, there is a greater appreciation that faculty and staff require different levels and types of support depending on their life stage. Employers that want to attract and retain today’s talent must offer programs that are relevant to each workforce cohort’s needs without “breaking the bank.” This deliberate approach will build and strengthen the affiliation between employees and their institution.