Many Employers Plan to Cut Back on Benefits as Cost Reductions Continue COLUMBUS, Ga., June 11 /PRNewswire/ -- Among the greatest challenges for today's small business owners is managing the cost of employee health insurance. According to an Aflac survey of 510 decision-makers at U.S. small businesses, 62 percent are finding it more difficult than a year ago to offer strong benefits packages and are seeking creative ways to reduce their insurance costs. "Employers are concerned about losing employees to competitors with better benefits packages, even while they may be struggling to reduce costs and make ends meet," said Paul S. Amos II, Aflac president and chief operating officer. "It's a cost-benefit balancing act." The study revealed that companies that experienced a decline in revenue over the past year are particularly pressured to reduce insurance costs, cut back on employee benefits and slash employee wages. In fact, 69 percent of companies with reduced revenues are finding it more challenging to offer strong benefits packages, compared with companies whose revenues stayed the same (56 percent). Nearly half of decision-makers (43 percent) say they are more likely to cut back on employee benefits, with 65 percent admitting they are more aggressively looking for ways to reduce insurance costs. The survey showed little difference in levels of concern based on the number of employees and company revenues. Among the few differences: Seventy-one percent of small businesses with staffs of 50 to 99 employees reported that they are more aggressively looking for ways to reduce insurance costs, while that number fell to 56 percent for companies with 10 or fewer employees. Quelling Employee Benefit Anxiety Is a Key Competitive Advantage While small business decision-makers struggle with costs, anxiety among their employees is also on the rise. According to a complementary Aflac consumer survey, 52 percent of workers are more concerned than a year ago about out-of-pocket medical expenses and 56 percent say an illness or injury would be a greater concern today than a year ago. Employees with young children are especially worried, with 60 percent reporting increased anxiety about illness or injury from one year ago. "Making sure that employees feel safe and secure about their health benefits can be a huge competitive advantage in today's business world," Amos said. "Studies have shown that benefits are one of the top retention drivers for workers, especially as costs escalate and service levels decline. Even in this challenging environment, making supplemental insurance policies available can certainly help small businesses retain their employees and effectively compete for talent as the economy recovers -- all with no direct cost to their businesses." Perhaps for this reason, almost half of decision-makers, 43 percent, report that they are more interested in voluntary and supplemental insurance benefits today than a year ago. Amos continued, "Not only does offering supplemental insurance help to strengthen a company's overall benefits package, but it truly provides a valuable service to employees. When they are sick or injured and cannot work, it provides them with cash to pay expenses that aren't covered by major medical insurance. It's a big win for both employees and employers." Survey Methodology The Aflac small business survey was conducted by Accelerant Research among a sample of 512 decision-makers at U.S. small businesses with 5 to 99 employees and annual revenues of at least $100,000 via an online survey between the dates March 9 and 12, 2009. The Aflac consumer survey was conducted online by Accelerant Research between March 2 and 5, 2009, among a U.S. sample of 1,243 adults, aged 18 years and older. The final sample is representative of the U.S. population based on census data for age, gender, ethnicity, geographic region and household income. About Aflac For more than 50 years, Aflac products have given policyholders the opportunity to direct cash where it is needed most when a life-interrupting medical event causes financial challenges. As the number one provider of guaranteed-renewable insurance in the United States and the number one insurance company in terms of individual insurance policies in force in Japan, Aflac insurance products provide protection to more than 40 million people worldwide. Aflac has been recognized by Ethisphere magazine as one of the World's Most Ethical Companies for three consecutive years and was also named by the Reputation Institute as the Most Respected Company in the Global Insurance Industry in 2008. In 2009 Fortune magazine recognized Aflac as one of the 100 Best Companies to Work For in America for the eleventh consecutive year. Fortune magazine also ranked Aflac No. 1 on its global list of the Most Admired Companies in the Life and Health Insurance category. Aflac appears on Hispanic Enterprise magazine's list of the 50 Best Companies for Supplier Diversity and on Black Enterprise magazine's list of the 40 Best Companies for Diversity. Aflac was also named by Forbes magazine as America's Best-Managed Company in the Insurance category. Aflac Incorporated is a Fortune 500 company listed on the New York Stock Exchange under the symbol AFL. For more information, visit aflac.com. (Logo: http://www.newscom.com/cgi-bin/prnh/20090422/CL03654LOGO) Media Contact: Mechell Clark Aflac (706) 243-8004 http://www.newscom.com/cgi-bin/prnh/20090422/CL03654LOGO http://photoarchive.ap.org/ DATASOURCE: Aflac CONTACT: Mechell Clark of Aflac, +1-706-243-8004, Web Site: http://www.aflac.com/

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