U.S. Markets close in 1 hr 57 mins

Silicon Valley takes benefits 'arms race' to health care

A pillow is placed on a couch at Twitter headquarters in San Francisco, California October 4, 2013. REUTERS/Robert Galbraith

By Christina Farr

SAN FRANCISCO (Reuters) - High salaries and free food aren't enough any more in Silicon Valley, where maturing companies are competing for talent with creative health care and "wellness" programs that use gadgets to promote good behavior.

Standard benefits at the largest technology companies, including Google Inc and Apple Inc, range from fertility treatments to deluxe on-site medical clinics, to new technology treats like health-tracking bracelets.

The health largesse separates Silicon Valley’s raging economy from many other sectors in the United States, but tech companies' experiments with perks show signs of spreading, benefits managers say.

Keeping employees healthy pays off in ways from increased productivity to lower health costs. Cutting obesity decreases risks of diabetes and other costly chronic diseases, for instance.

Silicon Valley employers see themselves fighting for good engineers.

"It’s absolutely a key way to recruit talent," said Joe Gracy, global benefits head at Yahoo, which offers the Valley standard slew of fertility and other benefits as well as 16 weeks of paid leave for new mothers and 8 weeks for new fathers.

Computer science students like James Mishra, who will graduate from the University of Minnesota in 2015, are among the most in demand by tech employers. Mishra will be booted off his parents' insurance at 26, he said, so he considers health benefits to be a "deciding factor."

Though young entrepreneurs still start businesses in garages, the tech sector's average age is in line with industry as a whole, according to benefits companies.

John Adams, the thirteenth employee at Twitter, said healthcare had become a prime concern. When he was younger, he looked for jobs that offered stock, the chance of an initial public offering, and a big salary. "That works when you're in your 20s and 30s," he said. "[It] doesn't work as you age."

Benefits consultant Towers Watson found technology and telecoms firms will pay an average $10,450 per employee in 2014, close to the top of the range, based on a survey of expected expenses. Healthcare and energy both offer slightly more, while wholesale and retail employees will get $8,162.

Dan Bernstein, a principal at benefits consultant Mercer in San Francisco, describes a "perks arms race" that includes health. "Infertility is huge," he said, adding that Silicon Valley appeared to offer even better benefits that tech overall.

"Tech companies are an outlier," said Jennifer Benz, chief executive of Benz Consulting, which works on benefits with employers like Salesforce, Intuit Inc and Adobe. "We see a lot of experimenting going on."

Silicon Valley is spending "big on babies," including premature infants, said Lauren Vela, executive director of the Silicon Valley Employers Forum.

Some 103 tech firms surveyed by Mercer in 2013 covered health benefits for same-sex partners more frequently than the national average, and were more likely to offer coverage for part-time employees, acupuncture, and health management programs, such as nurse advice lines and behavior modification programs. For a graphic see: http://link.reuters.com/qus92w

"Second opinion" services like Grand Rounds Health are also popular.

Apple said its full health benefits, including fertility treatment up to $15,000, are offered to all Apple employees, up to and including part-time employees at the Apple retail stores.

Many marquis benefits have spread. Google says it was among the first to first to cover “transitioning and necessary gender reassignment surgical procedures”. Now 17 percent of surveyed high-tech companies now cover gender reassignment surgery, compared with 5 percent among large companies overall, Mercer said.


Silicon Valley firms are enthusiastic creators and investors in tech services and gadgets, as well.

Tax and accounting software maker Intuit recently signed a deal with MDLive, a startup funded by former Apple chief executive John Sculley, to provide secure video chats with doctors.

Intuit’s benefits program manager Sarah Lecuna said she receives at least one new pitch from a new “wellness program” every day and is evaluating a concierge medical service and a diabetes management tool, among others.

Whether wellness programs can cut costs is an open question.

But about 50 percent of Intuit employees sport a wearable device which tracks their activity, such as the Max, from Virgin Group's Virgin Pulse. Intuit give employees cash for increasing their activity, for instance.

Last year, shortly after Yahoo CEO Marissa Mayer joined Jawbone's board, Yahoo provided free branded Jawbone UP activity trackers for a program called the "100 mile challenge." Apple uses wearables, as well.

Benefits managers say they only look at data in "aggregate," meaning they won't penalize and do not track individual employees who do not engage in these wellness programs.

Silicon Valley is not alone in focusing on wellness. The percent of companies offering rewards and penalties for goals like weight loss and cholesterol management is expected to more than double in 2015 to 46 percent, according to Towers Watson.

The researcher found that tech already is ahead in some measures of health, with low smoking rates. Moreover, only 23 percent of tech workers are obese, significantly lower than every other sector.

Google, for one, is using low tech to help avoid sweets. Although it offers free food, it doesn't want employees to eat too much dessert or drink too much soda. The low-tech answer? Sweets are put on a shelf that's harder to see.

(Reporting By Christina Farr, editing by Peter Henderson)

  • Business

    Micron Technology Is Under the Gun as Demand Outlook Worsens

    The price of (MU) stock has fallen nearly 40% since the summer, but the upside has diminished as well, according to Susquehanna analyst Mehdi Hosseini. “Recent checks imply incremental weakness in Cloud and Enterprise spending expectations” for the first half of 2019, Hosseini wrote on Tuesday. Hosseini lowered his price target for Micron to $45 from $75, implying upside of about 17% from the current level.

  • Why Tesla Stock Jumped Tuesday
    Motley Fool

    Why Tesla Stock Jumped Tuesday

    Shares of electric-car company Tesla (NASDAQ: TSLA) popped on Tuesday, rising as much as 7.5%. The stock's rise comes after the electric-car company scheduled its earnings report about a week earlier than usual with just two days' notice, leading to some speculation that the automaker may have achieved its goal to become profitable during the quarter. Citron Research, which had previously encouraged investors to short Tesla stock, is now reversing its stance on the stock.

  • Business

    Tesla's Early Earnings Report Date Likely a Positive, Morgan Stanley Says

    With Tesla at “the most critical point in the ramp of its most important product (Model 3) and is arguably at the most critical point of its liquidity/access to capital since it has been a public company,” it’s doubtful that it would “pull forward the introduction of adverse news into the market now,” according to analyst Adam Jonas. According to data compiled by Bloomberg, the company has 10 buys, 12 holds, 13 sells, and an average price target of $304. Tesla is likely to provide details on the Model 3 ramp pace “that coincide with an extraordinary inflection in the volume of Tesla vehicles leaving the factory,” Jonas says.

  • Larry Kudlow details plans for Trump's middle-income tax cut
    Fox Business Videos

    Larry Kudlow details plans for Trump's middle-income tax cut

    President Trump commits to a new middle-income tax reduction of 10 percent to be voted on after Election Day; Director of the National Economic Council Larry Kudlow explains.

  • 5 Deeply Discounted Value Stocks That Haven't Been This Cheap in at Least a Decade
    Motley Fool

    5 Deeply Discounted Value Stocks That Haven't Been This Cheap in at Least a Decade

    October has been a wake-up call for investors that the stock market won't go up in a straight line, even if we'd like it to. Sure, Bank of America (NYSE: BAC) has seen its stock catapult higher from its Great Recession lows, but its forward P/E of 9.8 would represent a more-than-decade low for the stock.

  • Why Investors Are Paying a Premium for These 3 Biotech Stocks
    Motley Fool

    Why Investors Are Paying a Premium for These 3 Biotech Stocks

    Amarin stock exploded in September because it looks like Vascepa will become the next go-to drug for this enormous population. During the 8,179-patient Reduce-It trial, patients given Vascepa in addition to their normal statin treatments were 25% less likely to suffer a major cardiovascular event such as a heart attack. Over the past year, Amarin Corporation actually lost $92 million because sales of Vascepa just haven't kept pace with operating expenses.

  • 4 Things Aurora Cannabis Did Right Before Its NYSE Debut
    Motley Fool

    4 Things Aurora Cannabis Did Right Before Its NYSE Debut

    Aurora Cannabis (NASDAQOTH: ACBFF) (TSX: ACB) has sought to make it even easier for U.S. investors to buy its shares by arranging to have its shares listed on the New York Stock Exchange. Beginning tomorrow, Oct. 23, Aurora will join the elite group of cannabis companies whose shares trade on major U.S. exchanges. Getting ready for the increased exposure that a NYSE listing brings takes time and effort, and Aurora Cannabis hasn't wasted any time.

  • 3 High-Growth Stocks That Could Soar
    Motley Fool

    3 High-Growth Stocks That Could Soar

    Technology stocks have been beat-up in the last few weeks as volatility has reared its ugly head once again. Three growing technologists that have plenty of room to grow in the years ahead are Palo Alto Networks (NYSE: PANW), Arista Networks (NYSE: ANET), and Control4 (NASDAQ: CTRL). Nicholas Rossolillo (Palo Alto Networks): After a massive 60% return in 2018 through the summer months, shares of cybersecurity outfit Palo Alto Networks have pulled back nearly 20% from their all-time highs.

  • Suze Orman missed the point of retirement, and that’s why she went back to work

    Suze Orman missed the point of retirement, and that’s why she went back to work

    Suze Orman did a smackdown of the FIRE (Financial Independence/Retire Early) movement on Paula Pant’s podcast. Coach Carson posted a balanced, informative response, appreciating Suze’s admonition to be sure you have enough for a risk-free retirement. Suze enumerated a string “what can go wrong” scenarios as evidence that early retirement (on less than $10 million) leaves you vulnerable when life hands you lemons — a whole tree of lemons.

  • Finance

    Here's the tax bite on $1.6 billion Mega Millions and $620 million Powerball jackpots

    Strategies can be employed to reduce the amount of your win that is taxed, although they are best explored with the help of an experienced tax advisor. While it's anyone's guess who will end up winning the Mega Millions and Powerball jackpots, there's at least one guaranteed recipient of a chunk of the loot — the IRS. With the Mega Millions jackpot at $1.6 billion and Powerball's top prize at $620 million, that tax bill will be hefty even if the winner employs strategies to reduce their taxable income.

  • Is the New Energy Transfer LP a Buy?
    Motley Fool

    Is the New Energy Transfer LP a Buy?

    Last week, Energy Transfer LP (NYSE: ET) emerged on the scene after the former Energy Transfer Equity completed the acquisition of its affiliate Energy Transfer Partners in a unit-for-unit exchange that simplified this complex midstream franchise. The transaction also created a much stronger company that has the financial resources to fund a significant slate of expansion projects. The new Energy Transfer is a behemoth in the midstream sector.

  • Business

    3M Stock Plunges on the Double Disappointment of Earnings and Guidance

    (MMM) (MMM) stock is sinking Tuesday, after the industrial giant reported third-quarter earnings. Where we were: 3M has underperformed the market this year, along with many industrial peers. Shares of 3M are suffering following the company’s disappointing earnings and outlook, and weighing on the industrial sector as whole.

  • These stocks may be sacrificed in a cold war with China
    CNBC Videos

    These stocks may be sacrificed in a cold war with China

    Jim Cramer says the escalation in the United States' trade war with China could end in an outright cold war that debilitates parts of the stock market.

  • Trump Floats 10% Middle Class Tax Cut With Election Looming. The Only Problem: Congress Isn’t in Session

    Trump Floats 10% Middle Class Tax Cut With Election Looming. The Only Problem: Congress Isn’t in Session

    President Donald Trump announced a new 10% tax cut would come into effect before the midterms, intended only for the middle class, not for businesses—nor the rich. Congress isn’t in session, congressional leaders haven’t heard about it, nothing has been drafted, and Trump seemed to have invented it from whole cloth on Oct. 20, based on a confirmation provided by a White House spokesperson who spoke to CNBC. Trump’s talk of a 10% tax cut comes a few weeks after the House took advantage of the attention focused on the Senate confirmation hearings for Supreme Court justice Brett Kavanaugh to pass $3.8 trillion in additional tax cuts on top of the December 2017 changes.

  • Business

    Microsoft Looks Set to Beat Earnings Expectations Again

    If history is any indication, analysts are understandably bullish about Microsoft’s first-quarter earnings on Wednesday—especially in the wake of its drubbing during tech’s big selloff earlier this month. (MSFT) (MSFT) has beaten analysts’ revenue estimates 19 of the last 20 quarters, and it is expected to report earnings of 96 cents per share on revenue of $27.88 billion, each up 14% from a year ago, according to FactSet. More important, Microsoft’s earnings should provide a key harbinger for the state of tech.

  • Business
    Motley Fool

    Parsing Visa's Big Quarterly Dividend Hike

    The ubiquitous financial services player Visa (NYSE: V) isn't exactly an income stock -- its dividend yield has fairly consistently been below 1% for years. Which raises two interesting questions for MarketFoolery host Chris Hill and senior analyst Jason Moser. In this segment from MarketFoolery, they discuss Visa's cash cow structure, its stock repurchases, and the M&A possibilities it thus far seems to be ignoring.

  • News

    Here's how much money you should have saved by 50

    Fidelity, the nation's largest retirement-plan provider, recommends having the equivalent of six times your annual salary saved. To get to that number, Fidelity recommends saving 15 percent of your annual income. Make sure to invest these funds instead of leaving them in a traditional low-interest savings account.

  • Why These 3 Top Marijuana Stocks Slumped Today
    Motley Fool

    Why These 3 Top Marijuana Stocks Slumped Today

    With earnings season hitting a crescendo this week, investors are looking closely at the specific prospects for certain corners of the market, and that's contributing to disparities among the various major benchmarks followed most often by investors. Amid the crosscurrents, marijuana stocks took particularly hard hits, and New Age Beverages (NASDAQ: NBEV), Tilray (NASDAQ: TLRY), and Canopy Growth (NYSE: CGC) were among the worst performers on the day. All three of these stocks have given back some of their gains following the long-awaited legalization of recreational cannabis in the Canadian market last week. In the month leading up to the Oct. 17 start date for legal cannabis sales, New Age Beverages tripled in value, while Tilray had more than doubled since the end of August, and Canopy Growth had seen more modest gains of between 10% and 20%.

  • Verizon beats Wall Street estimates, shares hit 18-year high

    Verizon beats Wall Street estimates, shares hit 18-year high

    The largest U.S. wireless carrier by subscribers has been focusing on upgrading its network and winning over more customers in a saturated market as rivals AT&T Inc , Sprint Corp and T-Mobile have been focusing on merger deals and paying down debt. Verizon shares rose 3.4 percent to $56.87, their highest in more than 18 years. The company said it added a net 295,000 phone subscribers who pay a monthly bill during the third quarter, easily beating the estimate of 161,000 provided by research firm FactSet.

  • Dow tumbles nearly 550 points at lows amid corporate outlook, China selloff

    Dow tumbles nearly 550 points at lows amid corporate outlook, China selloff

    It was a punishing start for stocks Tuesday as investors reacted negatively to quarterly results from a handful of blue chips and the cessation of a two-day rebound for China’s embattled stock market, reviving fresh questions about global economic growth prospects. The Dow Jones Industrial Average (DJIA) 548.62 points at its low and remained was recently 460 points, or 1.8%, at 24,862. The S&P 500 (SPX) fell 55 points, or 2%, to 2,696, retreating below a psychological and technical mark at 2,700, while the Nasdaq Composite Index (COMP) slid gave up 177 points, or 2.4%, to 7,291.

  • Why Nektar Therapeutics Crashed 17.2% Today
    Motley Fool

    Why Nektar Therapeutics Crashed 17.2% Today

    After delivering a disappointing update on NKTR-214 in cancer patients this summer, Nektar Therapeutics' (NASDAQ: NKTR) shares have been struggling. The company didn't report any news today, so a negative report issued by Plainview LLC this month may be to blamed for its 17.2% tumble today. In February, Bristol-Myers Squibb (NYSE: BMY) inked a blockbuster deal to license rights to NKTR-214 following positive data last year for NKTR-214's use alongside Bristol-Myers' Opdivo.

  • What the Market Missed in Kinder Morgan Inc.'s Results
    Motley Fool

    What the Market Missed in Kinder Morgan Inc.'s Results

    Kinder Morgan (NYSE: KMI) can't seem to catch a break these days. Despite its completing what management dubbed a "momentous" quarter, shares of the natural gas pipeline giant barely budged this week. It was a head-scratching outcome considering that its financial results came in well above its guidance, which the market seems to have completely missed.

  • The stock market's 'dead cat bounce' is over and the rolling bear market is making a comeback, Morgan Stanley says
    Business Insider

    The stock market's 'dead cat bounce' is over and the rolling bear market is making a comeback, Morgan Stanley says

    The stock market may have bounced back following its sharp sell-off at the beginning of October, but Morgan Stanley says the selling is going to pick back up soon. Tread carefully in tech and consumer discretionary, Morgan Stanley warns.

  • What to Expect from Bristol-Myers Squibb’s Q3 Earnings
    Market Realist

    What to Expect from Bristol-Myers Squibb’s Q3 Earnings

    Bristol-Myers Squibb (BMY) is expected to report its third-quarter earnings on October 25. Analysts expect Bristol-Myers Squibb’s revenues to increase 8.87% from $5.25 billion in the third quarter of 2017 to $5.72 billion in the third quarte of 2018. In the last four quarters, Bristol-Myers Squibb’s revenue growth has been 3.93%–10.89%.

  • One of the largest cannabis companies is going public on the New York Stock Exchange
    Business Insider

    One of the largest cannabis companies is going public on the New York Stock Exchange

    Aurora Cannabis, one of the largest Canadian marijuana producers, is going public on the New York Stock Exchange. Aurora is joining a select list of Canadian cannabis producers, including Tilray and Cronos, that are able to list on US-based exchanges.