A recently completed benchmark survey that tracks insurance costs for Bay Area companies found that wineries in the North Bay spend significantly less on employee benefits while contributing more to employee premiums than other companies in other industries.
Cost for wineries’ health plans have increased at a lower rate than the rest of the Bay Area as a whole, and plan designs tend to be richer than other companies, meaning a better benefit level is provided, according to the Wine Industry Health and Welfare Benchmarking Survey.
[caption id="attachment_20525" align="alignright" width="97" caption="Chris Reiter"][/caption]
“So that basically means less cost and better benefits,” is how Chris Reiter, vice president of the employee benefits practice at Woodruff Saywer & Company, described the findings.
The Bay Area results of the survey, conducted as part of a national effort to track costs at the national level, were found by Novato-based Woodruff Sawyer & Company, which will present the full scale of its survey results at two upcoming seminars in mid June.
While the findings will detail costs from about 250 Northern California companies within a multitude of industries, Woodruff Sawyer & Company will focus specifically on the wine industry. The company counts several high-profile wineries among its clients, including Francis Ford Coppala Presents, Trinchero Family Estates and Opus One, all of which participated in the survey.
Of the companies surveyed in the Bay Area, 40 were wineries. But unlike previous surveys, this year the company did something different.
“Something new we did this year was separate a break-out for larger wineries,” Mr. Reiter said, noting that companies with more than 500,000 cases met the criteria for large-scale wineries.
“We thought it would be relevant to separate them because [the large wineries] have told us they don’t find much value in being compared to smaller companies.”
The 40 wineries in the survey account for 15,000 employees and approximately $150 million dollars spent on health care, Mr. Reiter said.
Compared to other industries, wineries have a higher level of benefits, including co-pays and deductibles, and employee contributions are lower than other industries, according to the survey. The results take into account costs for insurance services that include health, dental, vision, disability, life and retirement as well as factoring in paid sick days and time off, Mr. Reiter said.
Wineries paid less than other industries for both PPOs and HMOs. The median for Bay Area companies for PPOs is $456 per employee, compared with $406 for wineries, and $381 compared with $350 for wineries on HMOs. Wineries, in general, contribute about five percent more on employee premiums versus other industries as well.
“The net of all of this is when you’re looking at the three main things of the report – benefits levels, premiums and employee contributions – compared to other industries wineries tend to have richer benefits and the cost for premiums is less than other industries, and the percentage is higher for employee benefits,” Mr. Reiter said.
Although the numbers are clear on costs, Mr. Reiter said it’s difficult to determine precisely why wineries manage to spend less while providing more – with one possible exception. Compared with other companies with similar levels of employees, many of which are corporations, wineries, on average, are more often family businesses.
“One thing for sure is that wineries tend to be a little more paternalistic. A lot are still family-run businesses,” he said. “Because of that, they may place a lot of value on taking care of their employees and that translates into what to what benefits they provide for employees. I think that plays a part.”