Taking a cue from Aetna, Ascension Health and companies beyond the healthcare industry, Tufts Health Plan is raising its minimum base wage.
Watertown, Massachusetts-based Tufts Health Plan, the year's highest rated health plan in the National Committee for Quality Assurance survey, is now paying its employees a minimum of $15 per hour. The raise is $1 more per hour than Tufts' previous floor, and $6 more than Massachusetts' $9 minimum wage.
"We care about our employees and recognize that their talents and dedication are central to fulfilling our mission," said Lydia Greene, Tufts Health Plan's vice president of human resources and diversity. "Offering an equitable wage positively impacts the financial security of many of our workers immediately."
The raise will be felt by only about 1 percent of Tufts' 2,400-person workforce, but it is part of a strategy to lure some of the best and brightest, Greene said. "We are always looking for innovative ways to recruit and retain top talent and our dedication to our employees shows through our offerings and in our culture."
Along with compensation, the company pitches benefits including the standard medical, dental and 401(k) packages, as well as education reimbursements, flexible scheduling, a "robust employee discount program" and onsite "concierge services," such as dry cleaning, banking, "car detailing," a fitness center and a wellness clinic.
The third-largest private insurer in Massachusetts, Tufts has 1,033,000 members, including some in New Hampshire and Rhode Island. The nonprofit company brought in $4.3 billion in revenue last year and earned income of $59 million--$52 million of it from investments. In the first quarter of 2015, Tufts Health Plan took an operating loss of $24.2 million, with investment income of $4.2 million.
"Looking ahead, we are very excited about our future prospects, building upon creative provider partnerships and new-to-market initiatives, such as our expansion into New Hampshire with Tufts Health Freedom Plan and the introduction of our first-of-its-kind tiered network product in Rhode Island called Lifespan Premier Choice," said Umesh Kurpad, Tufts Health Plan chief financial officer.
Tufts' decision to raise its minimum wages suggests there is a market for the talents of healthcare and insurance workers, even in lower-paid, entry-level positions such as customer service representatives--and even as nearly 10 percent of the American workforce is employed in the $3 trillion healthcare industry.
In January, Aetna committed to raising its minimum wage to $16 per hour, starting in April. CEO Mark Bertolini had read "Capital in the Twenty-First Century," the tome on income inequality by French economist Thomas Piketty, and Aetna managers were trying to improve retention and productivity among customer service representatives. "After we had looked at a number of options to help our lowest-paid employees, I finally said, 'How about we just pay them more?'" Bertolini recalled.
This past spring, the nation's largest nonprofit hospital system, Ascension Health and its 11 subsidiaries, committed to an $11 minimum wage for some 7 percent of its workforce, about 10,500 employees in more than 20 states.
Healthcare, a sector with many wage-based and middle class jobs, as well as seven-, eight- and nine-figure executive compensation, is facing pressure to raise its income floor like other retailers, including Walmart, which raising its minimum wage to $10 next year.
Amid the transition to a retail sort of health insurance and healthcare, some of the more progressive health companies are adopting strategies from some of the more progressive and profitable retailers in paying employees as much as $15 or $16 per hour, about $30,000 to $33,000 annually for a full-time worker.
Unlike other retailers that have focused on minimizing labor costs, the likes of QuikTrip, Trader Joe's, and Costco pay their workers above minimum wage, offer consistent raises and "start with the mentality of seeing employees as assets to be maximized," as Zeynep Ton of MIT's Sloan School of Management told The Atlantic.