Employer-sponsored Benefits: What to Expect in 2021Jan 17, 2021 01:17PM ● By Kara Schweiss
There are numerous incentives for employers to offer a comprehensive benefits package to their workforce. It’s an effective tool for them to attract and retain the best possible employees, said Rob Broomfield, CEO for UnitedHealthcare of Iowa, Kansas, Nebraska, and Central Illinois.
Choice and partial subsidy appeal to potential hires when “it has gotten very difficult in the majority of the states across the country to buy individual coverage, especially at an affordable cost,” said Grant Matthies, chief sales officer with Silverstone Group, a HUB International Company. He also pointed out that the security afforded by employer-sponsored benefits ultimately enhances employee productivity.
Megan Holland, vice president of distribution and marketing at Mutual of Omaha, cited employee engagement and a sense of loyalty as part of the upside for employers who provide a robust benefits package. Mike Nelson, executive vice president of sales and account management at Blue Cross and Blue Shield of Nebraska, said business leaders may also offer benefits simply because they feel their employees are “almost like family.”
“They want to do it because they recognize it’s a good thing for people in general,” he explained.
Whatever the motivation, comprehensive benefits provided through employers are a hallmark of the American workplace.
“When you think about employer-sponsored health care coverage, I would say it’s the basis of coverage in the U.S. Other countries have socialized benefits that are government-sponsored programs. In the United States, 170 million people are covered by employer-sponsored plans, roughly half the population,” Broomfield said. “I think people are missing out on opportunities if they only look at their employer-sponsored plan as insurance coverage. Almost every plan out there—ours does as well—offers wellness benefits.”
Matthies said it’s likely many employers will not be eager to overhaul benefits packages this year. Even in times of smooth sailing, the process of introducing new programs can be complex, especially for large companies. Communication could be especially challenging, at least in the first months of the year, if alternatives to traditional group presentations and face-to-face counseling must be found to accommodate a remote workforce or social distancing practices. And economic uncertainty means employers may be wary to invest in elective changes to their employee benefits packages.
“One message we’ve heard from employers is, ‘We don’t want to make any changes unless we absolutely have to,’” Matthies explained. “They’d rather keep people employed than add additional benefits that that company is going to have to pay for. So, the overall message I’ve been hearing from employers is ‘status quo.’”
Holland agreed that companies like Mutual of Omaha aren’t expecting a big demand for major benefits changes. “That’s a big undertaking, especially with everything going on with this pandemic and whatnot. It’s just not something that we’re seeing employers wanting to take on in addition to how do they operate in this
Enrollment in employer-provided plans has remained fairly stable, Nelson said, even through the year of upheaval that was 2020.
“The overall trend in the last five to eight years is that employer-sponsored health insurance has been steady to a slight decline,” he explained. “Some people point that to the Affordable Care Act market. But overall enrollment has been pretty steady and ACA across the country added several million to the rolls, so I would say it’s been steady.”
He added, “Of course I don’t have a crystal ball and I can’t see what the economy will do in the next six to 12 months.”
Matthies agreed that the course of the market this year is difficult to predict.
“That is a hard thing to answer right now. There is obviously a lot going on from a political standpoint,” he said.
However, Matthies said, now is a good time for employers to start thinking ahead.
“Where I think employers need to be careful as you move into ’21 is looking beyond only price and looking at more value,” he said. “Value attributes to many more things than just the bottom dollar; it’s looking toward those providers that have high service, pay claims expeditiously, have good contracts—finding value as opposed to looking just at cost.”
Holland speculated that the experience of 2020 may influence change in how people value benefits going forward, especially supplemental benefits such as voluntary life insurance and short-term and long-term disability insurance.
“We’ve seen, as the result of the pandemic, a pretty significant uptick in the utilization of our EAP, or employee assistance program…And what are some of those benefits employees are asking for? Especially as we look at mental health and well-being type of benefits,” she said. “[Employees] may start looking at those value-adds a little differently…this can be a driving force when looking at benefits packages.”
Employers should be prepared to respond to legislation that may impact coverage this year, Nelson said, although it’s too soon to predict specifics.
“The legislators in our state are always interested in accessibility and affordability. If the Unicameral is going to address anything, I would say it would be things along those lines,” he said. “Nationally, it’s a bit more uncertain with the change in administration…Generally speaking, people probably would imagine it would shift back to being an environment more favorable to [ACA] than it has in the last four years. But it’s hard to say.”
“Something employers may want to keep an eye on in 2021 is that there is some talk around possibly lowering the Medicare age to age 60. So, one thing that employers would need to be able to react to is educating their employees on the advantages or disadvantages—or at least comparing their plans—to possibly going on Medicare,” Matthies said. “We do a lot of education now with employers with people working past 65 on that, but that pool is going to expand exponentially if the age drops to 60. And there are some benefits on both sides, for the employer and employee, to make sure that those employees who are continuing to work are educated around that and know what their options are.”
Employers considering new benefit offerings this year may now have new factors to consider, Broomfield said, especially after the COVID-19 pandemic changed how people accessed care in 2020; for instance, telehealth has emerged as a more acceptable channel for primary care.
“They have to make sure that they are doing what they can to provide the appropriate care in the appropriate setting at the appropriate time,” he said. “There are a lot of different ways to do that.”
This letter was in the February/March 2021 issue of B2B.