How COVID-19 Could Change Benefits Plans
COVID-19 has presented a unique, unforeseen crisis that most professionals could not have anticipated in their HR careers. It has been a while since the world saw a crisis that presents a new challenge across multiple dimensions almost every few days. It is not known how the pandemic will further unfold in the future, which makes it difficult to put good benefits programs in place.
Why are benefits a tough matter?
The end of the year is when employers typically make their benefits plans. For this, they depend on insurance and health care providers, who too face the same uncertainties. It is a tough task to create the right budget, pick the best benefits program, and communicate the changes to employees.
How are employers reacting to the changes?
In the short term, employers may even see gains for themselves in healthcare plans. This is because, given the uncertain time that 2020 was, many people postponed their less-critical or elective healthcare procedures. Often, this lowering was large enough to offset any additional costs employers faced on account of COVID-19 testing, treatment, hygiene, and safety measures. However, the same is unlikely to be the case in 2021, when healthcare costs could well be higher.
This has pushed changes in benefits plans to the top of critical measures HR professionals take in their HR careers. A survey of employers conducted by Mercer in June 2020 unveiled the following:
- 37 percent: no changes to benefits plans in 2021
- 48 percent: unsure, still monitoring the situation
- 12 percent: expect moderate cost-saving measures
- 3 percent: expect significant cost-saving measures
What changes could be made in benefits plans?
Retirement plans, a benefit commonly offered by employers, could see lower contributions in 2021 depending on how economies perform across the globe. What is important is to communicate and fully explain the changes and the reasons behind the same. Specific enhancements under consideration include:
- High-cost claim management: 13.5 percent
- Voluntary benefits: 16.5 percent
- Cost-sharing: 20 percent
- Mental health support: 25 percent
- Telehealth or virtual health: 32 percent
What are the important focus areas for benefits plans?
The changed scenario requires a reorientation of benefits plans. The following are the important focus areas:
- The mental health of employees: This is a critical aspect to account for in the course of an HR career. This is a particularly stressful time that pulls down mental and physical health, and more or new access to telehealth and mental health would be welcome for employees. Often, existing plans do cover such provisions, but employees are not aware of the same; hence, it is important to communicate properly and explain the requisite details. They should know the extent of coverage and the resources available to employees.
- Voluntary benefits: These are a useful way to boost healthcare coverage for employees through group rates from insurance providers. Targeted coverage plans however must be explained clearly in terms of their coverage and what employees stand to gain. Plans are often not in sync with modern times – for instance, critical care may not cover COVID-19. It is important to engage with healthcare and insurance providers to adjust plans and coverage to meet the realities of the present situation.
- Core health insurance: Often the most significant aspect, employers may need to change health insurance plans to bare basics, with the option to take on more coverage at additional cost. As with other measures, open communication eases the understanding about increased costs and the need to make changes.
How can HR employees learn more about benefits restructuring?
A good way to boost skills and know-how in diverse aspects of HR, including benefits programs, is to choose one of the best HR certifications from a reputed institution or certifying body. Certification in HR is a testament to the person possessing up-to-date knowledge in the HR field, and being prepared for higher roles and responsibilities.
