Rethinking Employee Benefits Packages in 2021 and Beyond

The effects of the COVID-19 pandemic posed an unprecedented challenge to employee benefits in 2020. The disruption to daily life caused by the pandemic has, to varying degrees, affected the ways that employee benefits, compensation, and wellness have been perceived and valued by current and potential employees.

As the new year begins but the pandemic continues to present a real threat to employee health, the focus on employer-provided health benefits has intensified. With remote work becoming a mainstream, accepted option for workers, employers have an emerging opportunity to compete for the best talent in their field regardless of their location- and the attractiveness of your employee benefits package is more important than ever.

In order to keep your organization relevant, stay competitive for top tier talent, and retain your current key players, organizations would do well to consider reevaluating and redesigning their current healthcare plan and benefits programs for modern employee needs.

In this post, we’ll cover:

• Which benefits employees care about most
• Why now is a good time to rethink your benefits program
• Meaningful ways your organization can improve your benefits program in 2021

What Do Employees Want in 2021?

While it’s true that many organizations suffered financial or workforce losses last year, now is a great time to revisit your organization’s employee benefit offerings and start the new year off from a position of strength. In 2021, new talent will likely be taking a critical eye to your employer-provided healthcare plan, and your current employees may be considering opportunities with other employers that offer more alluring benefit plans. By capitalizing on a health plan redesign now, your organization can get ahead of the curve and set itself apart from other organizations competing for top talent.

So what kinds of benefits are most enticing to your workers? Employees want healthcare plans and benefits packages that give them flexibility, adequately address their needs, and make their lives easier. As out-of-pocket healthcare expenses steadily increase and time continues to be a commodity ever in short supply, workers want a variety of options to choose from that help to cover healthcare costs without presenting a lot of hoops to jump through.

Flexible options like telemedicine and tax-advantaged health savings accounts offer employees convenient and affordable ways to access and provide for their own care. According to a Market Watch survey conducted late last year, 25% of employees increased their HSA contributions in 2020. In addition, just under half of respondents surveyed view telemedicine favorably, indicating that virtual doctor visits may continue to be normalized in favor of convenience, comfort, and expediency. These flexible options may be particularly enticing to remote workers, especially if your workforce is not localized to a particular region.

Employees want to know that their organization cares about them as people and have plans in place to address their needs. This means organizations should offer programs targeted at the many different facets of a person’s life, which include physical, mental, emotional, and financial wellness.

Offering wellness programs that incentivize employees to make healthier lifestyle choices is a strategic and cost-effective way to help your employees (and your organization) avoid costly health issues down the road. Chronic yet preventable diseases like heart disease and diabetes are among the most common health problems in the U.S., costing employers tens of millions of dollars a year in healthcare costs. By promoting programs that offer fun incentives and encourage healthy physical lifestyle changes like increased physical exercise and a healthier diet, organizations can reduce healthcare costs year over year for themselves and their individual employees.

Providing employees with ways to address their mental health is also becoming increasingly important to employees. Rates of diagnosed depression and anxiety disorders have sharply increased over the past decade, and these mental health issues can affect job performance if not properly addressed. Other mental and emotional issues, including problems stemming from important relationships with parents, children, and spouses, can also have debilitating effects on job performance. Providing accessible resources for employees to seek help not only helps to increase productivity and decrease turnover, but fosters a relationship of trust and respect between employees and your organization.

Financial issues are another common and often intense stressor, which can negatively manifest itself through an employee’s mental and physical health. Offering resources to help your employees reach financial wellness helps to reduce daily stress in your workforce and reinforces the trust and loyalty between your employees and your organization.

Seize the Opportunity to Enact Impactful Changes

Implementing a recalibration of your health plan and benefits package right now is not only good for your organization’s talent acquisition and retention- it’s also a cost-effective solution for your business. Thanks to the pandemic, medical insurers didn’t meet the Affordable Care Act’s required medical loss ratios last year and are therefore providing premium returns or holiday programs. While furloughs and layoffs may have been painful to carry out, this reduced headcount (and associated lower health plan costs) gives employers some additional financial flexibility. With mental health issues on the rise and a lot of unknowns surrounding chronic health issues that may have been impacted by effects of the pandemic, now is an ideal time to enact changes to your healthcare plans.

Offering flexible options and wholistic programs that target overall employee wellness can reduce annual costs, employee turnover, and increase productivity. By moving away from a traditional and less effective ‘one-size-fits-all’ approach to healthcare, employers can provide their team with cost-effective plan options best fit their needs.

For instance, a young and healthy person may choose a straightforward and cost-effective HDHP, while a parent of multiple children may choose to contribute to a tax-advantaged HSA in conjunction with their PPO to reduce healthcare costs down the road. Consider offering an annual or quarterly HSA employer match- these employer contributions are deductible as a business expense and are not subject to an employee’s federal income tax, making this a cost-effective option for all.

Telemedicine, a flexible and time-saving option, is free of cost-sharing under the CARES act for high deductible health plans. These terms are currently set to expire before January 1, 2022, but that deadline may potentially move farther back under the current administration.

Remember the growing trend and popularity of wellness programs as well. Offering incentives like swag, sporting tickets, PTO, or even financial rewards to employees who complete a wellness exam with their doctor, eat consistently health lunches, or log more physical exercise can save organizations money in the long run while creating a more inclusive and encouraging workplace culture.

Get started on your redesign by assembling a diverse team of senior and administrative leaders within your organization to focus on quality improvement efforts, review data that will help inform changes to benefit plans and determine methods of improvement. Once data has been gathered and reviewed, your team can offer ideas for improvement and evaluate the effects of proposed changes. During this process, it’s crucial to work with an experienced, hands-on benefits broker that can guide your organization in the right direction.

Key Takeaways

Organizations that aren’t focusing on bolstering and enhancing their health plans in the wake of COVID are going to be left behind as workers seek out employers that can offer flexible, comprehensive benefits packages. In order to serve the long-term interests of your organization and its employees, your HR team should begin considering recalibrations to its health and benefits offerings. By offering plans driven by employee insights and reliably sourced data, organizations can make employees’ lives easier and less stressful while reducing their own annual costs.

• The battle for top talent is becoming increasingly competitive; your benefits package should be packaged to entice new workers and retain current talent.
• Employees are looking for benefits plans that offer flexibility, adequately address their needs, and make their lives easier. Leverage avenues like telemedicine, employer-matched HSAs and wellness programs to save money in the short and long term.
• Gather data and subject authorities both within house and outside your organization to restructure your benefits plans to cut costs and expand options offered to employees.

Ready to make some changes? Contact Advantage Benefit Solutions today to learn how you can redesign your health plan to meet the challenges presented by today’s working landscape.