benefitexpress April 22, 2021 15 min read

The Future of Benefits: Employee Needs Evolve, Challenges Accelerate in 2021 and Beyond

The future of employee benefits: A four part series

The ongoing pandemic is undoubtedly the number one factor driving changes in what your employees want and need from benefits programs.

Effects of the crisis are extending beyond lifestyle adjustments necessitated by the shift to working from home, virtual schooling, and the complexities of caring for loved ones outside the home while protecting everyone’s health.

In many households, at least one family member has been laid off, furloughed, or had hours reduced. And even where those challenges are blessedly absent, ongoing economic uncertainty makes planning for the future harder than ever before.

The shift to remote working has many workers struggling to deal with the impact of isolation on their mental and emotional well-being. Those struggles will not suddenly disappear even after we emerge from our homes and return to workplaces and social gatherings.

Consider the impact on organizations’ paid and unpaid leave policies over the last year as captured in the Employee Benefits in a COVID-19 World—Six-Month Update report from the International Foundation of Employee Benefit Plans, summarized below.

changes-made-to-paid-unpaid-leave-benefits-due-to-the-covid-19-pandemic

Indeed, even after the worst of the COVID-19 challenge are behind us, many impacts are clearly going to linger for a long time — or be permanent.

For younger workers, especially, this isn’t the dawn of a “new normal” in terms of what they need and want from benefits programs. It is going to be the only normal they’ll experience for much of their working lives.

That means that many of the emergency benefits put in place over the last 12 months are going to become permanent and HR and benefits professionals need to understand how benefits must evolve to meet employees’ demands for flexibility and support.

2021 employee benefits trends to watch

Business Group on Health (BGH), the premier non-profit organization representing large employers’ perspectives on health, well-being and workforce strategy issues, has identified a number of critical trends that will persist in the health care space in 2021.

“The pandemic has accelerated dramatic changes in health care and well-being in 2020 and will continue to do so in 2021,” said Ellen Kelsay, president and CEO of Business Group on Health. “Virtual care will proliferate, companies will increasingly focus on employee mental health and emotional well-being, and the healthcare ecosystem will examine and address issues of health equity."

To help your organization anticipate and get ahead of these huge challenges, we’re introducing a new series, “The Future of Benefits." Each week, we will do a deep dive on the benefits trends identified by BHG that are expected to accelerate through 2021 and beyond.

To kick things off, we begin with an overview, examining how employers must adapt and expand employee benefits programs to meet the needs of a workforce seeking help as they deal with the ongoing disruption caused by the pandemic.

Where things stand

We are all unfortunately well-acquainted with changing how we access and use healthcare and other benefits since the pandemic wave broke over the world.

We’ve re-thought our families’ doctor’s visits, whether to continue in-person physical and mental health therapy, and how we get prescriptions written and filled.

Many employers who were quick to add or expand free virtual care options may now be asking whether to make those changes permanent. We’d say the answer is a definitive yes.

Telehealth/virtual care has proven effective and convenient and is now standard for most folks. And on the flip side, medical practices have been able to continue seeing patients and managing their treatment remotely and even expand their practices and revenues.

change-in-number-of-health-care-claims-2019-2020

At the same time, with COVID filling up hospital beds and emergency rooms, employees who need in-person treatment for injuries and less severe illnesses have seen non-hospital options explode in many areas. And with familiarity, more employees will continue to choose urgent care over hospital care whenever it makes sense.

Sadly, mental health issues have also exploded as the pandemic and social isolation has dragged on. But this dark cloud definitely has a silver lining.

Increased attention to employees’ emotional and mental wellbeing has help lift the veil of shame and silence around mental health. At the same time, technology has made virtual care a viable substitute for in-person psychological counseling and psychiatric consultations.

That’s reflected in better-focused and more effective employee assistance plans (EAPs) and the tighter integration of mental health benefits with broader benefits programs and platforms.

Where we’re headed

Telehealth. Employee acceptance and use of telehealth offerings exploded in 2020 and that momentum carried over into this year, will continue to grow in 2021. Employees, especially the younger workers who make up a rapidly increasing percentage of the workforce, will expect more and better virtual options that improve access to telehealth platforms and providers

Looking forward, organizations will further expand virtual care options to include physical therapy; weight management; chronic care management for diabetes, cardiovascular disease, and more; and prenatal care. As options expand, organizations will need to devote more resources to managing outcomes and cost of virtual care programs. More attention will have to be paid, as well, to measuring the effectiveness of and patient experience with telehealth and to balancing virtual vs. in-person care.

Mental health and emotional well-being. The impact on employees of the enforced isolation required to keep themselves and their families healthy over the last year-plus will not magically go away as workplaces reopen. Experts are clear that they can’t yet predict just how long the surge in employee stress and anxiety will continue.

But employers must be prepared to help employees deal with loneliness, addiction, depression, and other serious mental and emotional health issues exacerbated by their recent experiences. And they must recognize that younger workers have been particularly hard hit, due to factors including lower incomes, higher likelihoods of layoffs and furloughs, and greater impacts on their lifestyles, including finding it harder to start and nurture family and social relationships.

Looking at just one measure of mental health, the percentage of U.S. residents who reported symptoms of depression, paints a clear picture of the challenge. According to data from Statista, more than a quarter of adults over 18 responding to a survey reported dealing with depression during the period from April 2020 to January 2021.

percentage-of-respondants-in-us-who-reported-symptoms-of-depressive-disorder-in-the-last-seven-days-from-april-2020-to-may-2021

Mental and emotional wellbeing are no longer viewed as separate from other medical challenges and restricted to a minority of employees. From now on, plan designs and benefit administration strategies must place mental health on par with other medical conditions. Specifically, employers and their benefits administration partners will need to maintain and expand access to virtual counseling and more closely integrate Employee Assistance Programs and mental health benefits into their total wellness strategies.

Continuing the transition to alternative care delivery models. The cost and quality benefits of moving non-emergency care out of the hospitals have been highlighted by changes forced by the pandemic and that shift appears likely to be permanent. And the layoffs and furloughs that came with those changes have highlighted the need to move beyond traditional paycheck deductions in paying for covered services.

As organizations reimagine how healthcare is delivered and paid for, employers and insurance plans will continue to explore innovative alternative payment and delivery models to further improve quality and cost-effectiveness, and to offer employees more flexibility.

Adapting to the needs of a changing workforce

Multiple interrelated factors are already driving a seismic and permanent shift in employees’ well-being needs and expectations. They include the pandemic, an uncertain economic outlook and the expectations of younger workers (including, especially, the fast-rising wave of Gen Z workers).

Employers who get ahead of those changes will position their organizations to leverage their benefits programs to attract and retain the great employees who form the true basis of competitive advantage in every sector and industry.

But these changes also add an additional level of complexity to already complex benefits design, implementation, and administration challenges. Getting it wrong is not an option for any organization that hopes to emerge from the pandemic with a team of employees that is ready and able to help them thrive in the new normal.

Employers’ benefits leadership must find partners who have dedicated themselves to anticipating and responding to ongoing changes. Working closely with those partners is critical to understanding and meeting the challenges faced by an ever-more-rapidly changing workforce.

Up next: Telehealth has entered the mainstream but there's still rough water ahead

The next article in this series takes a close look at how telehealth has exploded to meet the needs of a dispersed and locked-down workforce. But telehealth must do much more than just providing employees with a number to call for a prescription refill.

We’ll explore how progressive employer benefits teams are working with partners to use telehealth in augmenting and improving their total benefits strategies.

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