COVID-19’s Impact on Employee Benefits

Hospital indemnity, critical illness and major medical plans are the most likely to have seen a boost in perceived importance.

By LIMRA

The COVID-19 pandemic has brought many operational changes to U.S. businesses. It has also drawn attention to the importance of many types of financial protection, which may increase employers’ interest in offering certain benefits. A LIMRA survey provides insights into recent changes to employers’ business practices, their interest in modifying benefits packages, their enrollment strategies and their relationships with carriers.

About 25% of employers say COVID-19 has made them more interested in making changes to their insurance benefit programs within the next 18 months, according to the survey. While approximately 4% of employers have already dropped an insurance benefit as a result of COVID19 and 16% are considering doing so, 40% of employers say the coronavirus outbreak has affected their views of the importance of benefits, and these are almost universally shifted toward viewing benefits as more important now than they were before. Large companies and those most concerned about COVID-19 are the most likely to say their opinions have changed.

Benefits that are directly related to healthcare, such as hospital indemnity, critical illness and major medical plans, are the most likely to have experienced a boost in perceived importance.

“We’ve also seen increased interest in some supplemental non-insurance benefits — particularly telehealth services, mental health benefits and employee assistance programs,” said Kimberly Landry, Assistant Research Director, Workplace Benefits research at LIMRA.

Some employers that do not already offer supplemental benefits say they have become interested in adding them because of the pandemic.

Changes Brought On By Remote Work

The pandemic not only changed employers’ perceptions about the importance of benefits, it also shifted their stance on remote working. Almost 4 in 5 employers say they currently have at least some of their staff working remotely. More than two-thirds of these employers think a portion of their workforce will continue to work remotely at least some of the time after the pandemic has ended.

As companies re-evaluate their remote-working policies, they may have an increased need for electronic enrollment platforms and other services that make it easier to offer benefits to remote workers.

Overall, the study finds the majority of employers are highly satisfied with the support they have received from their insurance benefit carriers during the COVID-19 outbreak.

It also revealed the most important types of support employers want from their insurance carriers:

1. Helping them communicate with employees about the pandemic

2. Keeping them informed about relevant legislative changes

3. Offering more online self-service options for employees.

LIMRA is a worldwide research, consulting and professional development organization that connects people to data, thought leadership, solutions, and each other. For more information, visit www.limra.com.