"As we come out of the pandemic and the economy slowly recovers, our goal with this report is to help employers make informed decisions – backed by data – about the benefits they offer to help drive recruitment and employee engagement," said David Reid, CEO and co-founder of Ease. "We've found that small businesses that survived the downturn were able to adapt and do more with less, and even rehire many of their employees. But with premiums on the rise nationwide, small businesses need to look for more flexible, affordable plan options and voluntary benefits to help attract new talent."

A relatively low number of returning employees

The study found that most categories of businesses in the small-to-medium range have brought back relatively few workers. Smaller companies, with fewer employees to start with, had the highest percentage of returning workers: companies with 1-10 employees brought back 38% of workers, the data showed. On the other hand, companies with 11-50 employees brought back only 2% of workers; companies with 51-100 employees brought back 3% or workers, and companies with 101-250 employees brought back 4% of workers.

Long-term trends seem to suggest that larger employers were increasing their workforce slightly more, pre-pandemic. In the years 2018-2020, companies with 1-50 employees saw a very small drop in employed workers, 1% or less, while companies with 51-250 employees increased their workforce by 1% to 1.5%.

The effect of COVID-19

Of course, everything changed in 2020. The study examined data from broker surveys and found that brokers reported a lot of activity around dealing with the pandemic and subsequent economic fallout.

The surveys showed that 81% of brokers said they had helped clients with a variety of outcomes associated with the pandemic. The report said the 81% of brokers reported helping companies with laying off employees and navigating COBRA; 74% said they helped with furloughs; 69% said they helped companies with remote work to hire employees and conduct onboarding or benefits selection activities; 33% said they helped with implementing a telehealth option for their clients' employees; and 19% said they helped with the closing of a business.

As many sources have shown, telehealth boomed in 2020; when including all the companies using Ease software, the data showed a 109% increase in telehealth enrollment. The biggest jump was among employers with 51-100 workers, these groups saw a 342% increase in telehealth enrollment.

Voluntary benefit offerings increased—and so did health costs

The study noted two other areas of increase: as employers tried to retain and recruit workers, they offered more in the way of voluntary benefits; and they also saw an increase in medical plan premiums and medical costs overall.

With voluntary benefits, larger companies tended to offer more than smaller companies. For example, companies with 101-250 employees averaged 3% more voluntary benefit offerings in 2020 than a company with 1-10 employees. The report noted that the number of voluntary benefits plans offered per employee overall has increased by 3% on average since 2018. The most popular offerings included dental, vision, life AD&D, and short/long term disability.

Health care costs also increased in 2020, the study found. "The COVID-19 pandemic deeply impacted the health care industry and medical premium costs were no exception," the report said. "Year over year, the average company in Ease saw an increase in individual medical premiums of nearly 6%, while family medical premiums increased nearly 4%, on average."

Health costs also increased—overall health care prices rose 1.8% in 2020; costs for physician services went up 1.7%. Costs for hospital services rose 3% from 2019, which was the same increase as seen in the previous year.

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