Benefit Trends & Industry Insights: Spotlight on COVID-19
New insights into employee benefit trends is an important topic in any typical year. But 2020 is far from typical due to the COVID-19 pandemic. The absence of a tested roadmap to address challenges that most employers now face for the first time makes this a particularly timely discussion. Benefit Technology Resources (BTR) was especially pleased to be part of a virtual Idea Exchange, hosted by bswift, where participants gained insights into current trends associated with benefit offerings and administration during a pandemic. BTR CEO Jamie Hawkins was one of three panelists. In addition, two members of our team attended, including Nikki Talley, our bswift benefits administration division manager. bswift is one of BTR’s pre-vetted solutions for the larger mid-market sector (300+ employees). Following are our takeaways and insights from the panel.
A big picture look at COVID’s impact. While it’s too early to make long-term predictions, some industries clearly feel a greater impact than do others, including retail, restaurant, hospitality and personal services. Kudos to employers that, short-term, continued to pay furloughed employees and/or cover insurance premiums. Regardless of the industry, few companies—especially small employers—will emerge from COVID unscathed and the true impact may not be felt (or understood) for some months. Consequently, there remains a great deal of uncertainty, and not just among employers. Insurers are experiencing plan-loss ratios never seen before and many technology providers are having to double down to respond to the growing and changing needs of their clients. There will likely be some big shifts in the market but exactly what those shifts will be…and whether they will be long term…is to be seen.
Changes to benefit offerings and plans. As employers face decreased revenues, changes to benefit packages may be unavoidable. There’s talk of reducing or eliminating 401(k) matches along with recently popularized benefits designed to attract and retain talent, such as college loan repayments. In general, however, employers would rather increase the employee-paid portion of the premium or lay off employees than cut benefits. Healthcare spending accounts will likely become more popular, especially given a recent IRS ruling that employers can allow employees to make changes in their contributions mid-year with no associated “life event.” Employers not already steering employees toward HDHPs (supported by a health savings account) are more likely to do so. In the most difficult financial situations, employers may opt to reduce employees’ hours to part-time status to eliminate the need to offer benefits.
Support for remote workers. The work-from-home situation may continue for a while—and for some, become permanent. In response, employers recognize the importance of employee engagement tools and decision support technology for benefits enrollment. bswift’s built-in decision support tool, Ask Emma, guides employees through enrollment from start to finish. Decision support and employee engagement solutions are not new, but while once viewed as “nice-to-have” technologies, both are increasingly a “must-have”—especially in a remote work environment. Also stemming from COVID-19 is increased interest and usage of EAP (Employee Assistance Program) services. Employees experience heightened stress during these times—whether out of concern for their health or the health of loved ones, financial insecurity due to reduced hours or fear of layoffs, or because of the loss of a face-to-face workplace community. Employers are ramping up communications regarding mental health awareness and the availability of EAP services.
Work-from-home impact on technology. Among the key trends associated with a remote workforce is increased interest in HR technology outsourcing or, alternatively, having a true benefits administration platform (versus a benefits administration module as part of an all-in-one HCM system). Jamie Hawkins noted that BTR clients who had purchased an HCM benefits module prior to COVID, quickly discovered its limitations. This trend is also supported by the fact that, while unrelated to the pandemic, more and more HR decision makers “grew up” with technology and expect the robust functionality associated with a dedicated benefit administration platform. Other panelists agreed, noting that HR teams already stretched with administering state leave programs and other new challenges expect technology to handle basic matters as Evidence of Insurability data.
Carrier response to COVID. While employers are largely leaving their medical plan offerings as is, insurance carriers are taking a conservative approach to their business given the uncertainty of how fast or big the bounce back will be. We applaud those among the fully insured groups that returned premiums because of low utilization during periods of lock-down. This act of good will comes at a critical time for many employees. We’re also pleased to see a healthy level of interest from many carriers in employing a strong technology strategy—especially related to voluntary benefits. While a solid tech strategy is especially important in times of crisis, there’s real value under any circumstance.
Telehealth gets a big boost. Perhaps the biggest (and most likely permanent) beneficiary of the pandemic is telehealth (clinical and non-clinical services) due to the widening acceptance of a virtual healthcare model. While COVID-19 may have created an imperative need to change the model, providers and patients alike recognize the benefits of virtual healthcare, notably, affordability, accessibility and efficiency. In response to a call for increased flexibility and broadened access to telehealth, some federal privacy regulations (HIPAA) have been relaxed and payment policies expanded. Beyond helping to keep patients (and their medical providers) safe from exposure to the virus, telehealth can help cut healthcare costs. Industry observers suggest that COVID sped up the acceptance of telehealth by urgent care facilities by years. Look for more concierge-type services associated with telehealth offerings.
Meaningful public policy will come from states. The continuing partisan nature of the federal government limits the likelihood of any significant legislation related to healthcare, despite the unresolved issue of what to do with the 40+ million uninsured Americans during a pandemic. While some call for an expansion of the Affordable Care Act to help unemployed get coverage, others call for its repeal. Most actions taken to date (on both sides) have been largely symbolic. Any meaningful movement is more likely to come at the state level, especially given the financial pressure on states due to budget shortfalls resulting from reduced/delayed tax revenues coinciding with an increase in Medicaid enrollment. Organizations directly engaged in or affected by public policy should enlist in-house counsel for guidance.
As with other workforce challenges, employers look to their benefit adviser for help in identifying solutions to manage the impact of COVID-19 on their people strategy. As independent HR technology consultants, the Benefit Technology Resources team can work with you and your clients to determine the best tools to meet specific needs. To learn more, contact us at 1-877-299-8155 or visit bentechre.com.