Employees who've been impacted, directly or indirectly, by the coronavirus or the economic crisis are rethinking which benefits they need. (Photo: Shutterstock)
The pandemic and economic challenges of 2020 have brought unprecedented changes to the way companies operate and employees work. This evolution requires companies to transform their benefits as well in order to make sure that they're continuing to meet the needs of workers.
The moves come as workers are paying more attention to benefits than they have in the past. Three-quarters of workers participating in open enrollment this year say they feel that access to benefits through their employer is more important than ever before, and the same percentage say the current environment has made them realize that benefits are a much more important part of a job.
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That makes a comprehensive and cohesive benefits package a competitive advantage for companies, particularly when it comes to attracting and retaining the best talent. In spite of rising health care costs, employers remain committed to providing the robust benefits packages their employees need. However, it's not enough to simply stick with a benefits package and enrollment process that worked pre-pandemic.
A changing workplace and evolving employee expectations
Looking ahead to 2021 and beyond, it's clear that many of the changes we've seen this year will become permanent. Both companies and employees are more receptive and appreciative of working remotely, and of the technology required to allow them to do so efficiently. The reliance on gig workers and part-time employees, already on the rise pre-pandemic, has continued to increase. This is driven by employers looking for ways to make their businesses as efficient and agile as possible in an uncertain economy.
That has also meant a change in the way employees communicate with each other and with their company. Virtual meetings have become a standard way of doing business, and employers are using technology to communicate with workers (and customers) in a variety of other ways, including via email, text, social media and apps.
Telehealth has become commonplace—and the preferred method of care for many during the pandemic. Just as workers and employers have adapted to using video conferences, they've adapted to digital approaches to everything from benefits enrollment to training and onboarding.
In terms of benefits, employees who've been impacted, directly or indirectly, by the coronavirus or the economic crisis are rethinking which benefits they need. They are assessing the role benefits play in providing a safety net for their family to protect their mental, physical and financial health. They may be more open to considering voluntary benefits they haven't considered in the past, such as hospital indemnity or a critical illness life insurance plan, and they may also be open to reevaluating their health insurance plan to make sure they're adequately covered.
Employees who took advantage of the Coronavirus Aid Relief and Economic Security (CARES) Act provisions that allowed for additional 401(k) withdrawals or loans this year were likely grateful that their employers offered such an option. But looking ahead, they'll need guidance on how to replenish those funds and get back on track for longer-term financial goals.
How benefits can keep up
Employers and benefits providers
Employers and benefits providers have already made significant changes to their benefits offerings and enrollment procedures in response to the pandemic and its subsequent transformation of the workplace. Many of those changes will likely remain in place through 2021 and beyond, even after the pandemic subsides and society settles into a "new normal," whatever that may look like.
For many, the most visible change is a shift to virtual open enrollment.
While many employers enabled online enrollment in the past, they also provided in-person educational opportunities, distributed hard copies of materials, and used office signage, benefits fairs and other in-person messaging as part of their enrollment push. This year, all that communication has gone digital. The most successful providers are reaching out often, and on as many platforms as possible, to educate workers about what's available.
In general, providers and employers continue to take an increasingly holistic view toward benefits. They want to make sure that their benefits packages help employees improve their physical, mental and financial health, given the pandemic has proven their interconnectedness and impact on employee productivity and the bottom line.
Going forward, employers and benefits providers may look to boost their voluntary benefits offerings, or increase the education around existing voluntary benefits that employees may not realize are available to them. Examples include benefits such as personal accident, mental health care, and caregiving services. These benefits allow employees to create a more customized benefits package reflective of their individual needs.
With many companies continuing to control costs through layoffs, furloughs and reduced hours for employees through 2021, they'll need to make sure they adequately communicate to all employees their benefits eligibility, and their options to obtain benefits if the employer can no longer provide them. Contract and gig workers, for example, may be able to purchase benefits via an association or affinity group.
Regulatory considerations
Other necessary changes in the benefits space over the next few years will require action from policymakers. Coronavirus already spurred Congress to require some employers to offer two-week paid sick leave (via the Families First Coronavirus Response Act), a move that for years has failed to gain traction. That mandate will expire at the end of this year, but extending it would be both good for businesses and good for public health. Another possible solution is a public-private partnership, which has a proven history of providing adequate and appropriate financial security to American workers.
Regulators might consider other important changes in the benefits space as well, such as allowing employers to auto-enroll workers in certain benefits like life or disability insurance. Just as auto-enrollment in 401(k)s has transformed retirement savings, insurance auto-enrollment could go a long way toward making sure all Americans have proper coverage. This is particularly important as the benefits landscape adapts to the needs of our changing world. Changes in benefits can often be both confusing and overwhelming for employees to research and understand, which can result in employees defaulting to the same coverage and solutions they've always used. Auto-enrollment can truly help workers help themselves. Employers could of course opt out of coverage they don't want or need.
The pandemic has highlighted the fragility of many employees' financial health, even as it may have threatened their physical health and battered their mental health. While no one knows for sure what the future will hold, it's clear that in the years to come, American workers will need reliable benefits from work more than ever.
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