REI plans to extend healthcare benefits to all of its part-time employees and their families, a move that human resources experts view as leading edge among all employers.
REI's decision, in response to concerns over the persistent double-digit rise in the cost of healthcare, is intended to make it more affordable for 3,000-plus of the retailer's part-time employees (not previously eligible under REI's current plan) to care for their health, and the needs of their families. While REI has long offered a medical benefit package to part-timers who work a rolling average of 20 hours per week over a six month period, the new program is available to all part-time employees regardless of hours worked, through Strategic Resource Company, an Aetna company. The new plan will include annual coverage for routine health services such as doctor's office visits and annual exams, as well as hospital care (up to $10,000) and a prescription drug benefit.
The expanded benefits package, which will also be offered to REI's approximately 1,200 seasonal employees, will begin enrolling part-time REI employees with at least 30 days of employment on Nov. 1, with coverage beginning Jan. 1. The medical benefits will be subsidized by REI at 60 percent of cost, and will include additional options for a low-cost dental plan and a company-paid life and accident insurance policy.
REI employees participating in the plan, known internally as the PaTH (Part-Time Healthcare) plan, will each pay an individual medical/dental monthly premium of approximately $41 with a $150 deductible, and will receive access to the same Aetna network of 646,000 healthcare professionals as their full-time REI colleagues, including more than 385,000 primary and specialty care providers, and 3,908 hospitals nationwide.
According to a 2005 Watson Wyatt Data Services national survey report on employee benefits, less than two-thirds (60.7 percent) of retail respondents with more than 1,000 employees offer medical benefits to part-time employees, who work 1,115 hours or more per year. REI's offering will be made available to all part-time and seasonal employees working less than 20 hours per week, or 1,040 hours per year, after 30 days of employment.
“Most retailers, like REI, question whether they can remain profitable while trying to promote good health among their employees given the rising cost of healthcare,” noted Michelle Clements, REI vice president of human resources. “For REI, where our part-time employees often serve as the front line to the REI customer experience, we believe the answer is yes. As a company committed to healthy lifestyles and a positive workplace culture, we view this move as an extension of that commitment, and one that I believe will make for an even healthier and dedicated work team.”
“It would be very difficult to find another national retailer that is subsidizing its healthcare benefits for part-time employees at such a generous level,” said Thomas Pursley, of benefits consulting firm Mercer Human Resources Consulting. “This leading edge move sends a clear message to its employees that each is highly valued regardless of how many hours they clock, and validates REI's position as one of the nation's top employers.”
Earlier this year REI was named as the “Best Outdoor Chain Store” by Men's Journal magazine, and was included on the “100 Best Companies to Work For” list appearing in FORTUNE magazine one of only eight companies to have been included on each of the magazine lists and two book versions.
Other benefits extended to all REI employees include flexible scheduling, gear discounts, free gear rentals, tuition reimbursement, performance-based bonus incentive program, and gear grants to support employees' personal outdoor adventure challenges. “We believe that by offering a positive workplace environment and a strong benefits package, we'll maintain a high employee satisfaction and retention rate,” added Clements. Currently REI enjoys a low retail industry rate of employee turnover approximately 50 percent annually, compared to an industry average of 75 percent per year.