Benefits – particularly health insurance - have replaced salary as the prime consideration of American workers when deciding to change jobs. But with costs spiralling, how much longer will employers be prepared to keep dipping into their pockets?
A new report by the Washington-based Employment Policy Foundation (EPF) warns that with fewer people in the workforce to produce the revenue companies need to pay for benefit programs over the next 30 years, it is unlikely that America's employers can continue indefinitely to shoulder the cost of the benefits programs they have in place.
"The American Workplace 2005: The Changing Nature of Employee Benefits," points out that growth in the labour force has slowed dramatically from nearly nine per cent in 1985-90 to barely five per cent in the last five years.
Meanwhile, for the first time, health insurance in 2004 became the most expensive employee benefit, surpassing paid leave.
At the same time, the EPF says, health-care costs are "growing at unsustainable rates" – more than eight per cent in 2004 - which was down from double-digit increases in previous years but still twice as fast as the overall economy.
As a result, "employers are being forced to make difficult decisions that have a direct impact on the quality of their workers' lives and on their own ability to survive," said Janemarie Mulvey, president of the EPF.
The problem is particularly acute for smaller employers, half of whom reported that year-on-year health care costs increased by between 10 and 20 per cent and almost one in ten of whom reported costs increasing by 30 per cent or more, according to a separate survey by Salary.com.
As a result, two-thirds of respondents had taken at least one step to reduce health care costs, such as an increase in co-payments for employees.
The Salary.com survey also found that 14 per cent of firms offer employees incentives not to enrol in employer-sponsored health plans or to encourage them to enrol in the health plans of their spouses.
Some small businesses pay employees cash or make contributions to their health savings accounts or retirement accounts to encourage them not to enrol in employer-sponsored health plans.
While health insurance costs have increased for employers and employees, the EPF report said that the problem is exacerbated because workers are "disconnected" from the cost of their medical treatments.
This is partly because they do not pay the full cost and partly because of a lack of "transparent information" about the price and quality of care.
On average, the EPF said, covered employees pay just 15 per cent of the cost of single-person coverage and just slightly more than 10 per cent of their heath-care costs for co-payments and deductibles.
As a result, consumers demand expensive health-care services without knowing the costs, further raising expenses, the study reported.
The study also noted that some 10 per cent of individuals are responsible for about 60 per cent of health-care costs.
One upshot of these combined pressures is a proliferation of workplace wellness programmes, education initiatives and incentives aimed at curbing healthcare costs.
But, as the National Bureau of Economic Research found recently, these carrots are also being backed by a big stick, with those whose lifestyles are perceived as being unhealthy the first to feel the heat.
Overweight workers in some firms are already finding themselves being paid less than slimmer counterparts in the same jobs. Others have fired workers who refused to quit smoking.
But with few signs that healthcare costs will moderate any time soon, what is already a contentious workplace issue is increasingly becoming a national crisis.