The 4 Biggest Employee Benefits Challenges Facing Employers Today
Managing a health benefits program means managing change – perhaps now more than ever as a result of the COVID-19 pandemic. Health care benefits must serve the evolving needs of employees and their families, support the organization’s short- and long-term objectives, and adapt to the rapid-fire change – even paradigm shifts – occurring in the health care market and health care policy.
Several factors are shaping the current benefits landscape that employers must navigate; however, the following four are proving to be the most challenging.
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- Managing the Workplace in Response to a Pandemic
Business disruptions, such as COVID-19, cause turmoil for employees and work operations. Pandemics put disaster plans top of mind for all business leaders, none more so than HR. Large-scale outbreaks of such dangerous diseases threaten employees directly, as individuals and cumulatively as a workforce.
The top priority for HR – Put people first. Whenever any widespread virus, bacterium or other biological threat is presented, employers should take all measures necessary to protect their human resources and their future business operations, including:
- Prepare for the threat through business continuity planning, preparing for health-related emergencies and reviewing labor relations considerations
- Implement preventive measures such as screening programs and employee education on health and wellness tactics
- Minimize the impact by keeping employees healthy, handling paid leave benefits and compensation considerations, making decisions regarding attendance policies, and keeping the business running
- Manage business recovery post-pandemic by developing a plan to ensure a seamless recovery from emergency operations to normal operations
- Employees Are Under Financial Stress
A survey by the Federal Reserve Board found that 44% of Americans could not cover an emergency expense of $400 or more. That has important implications for health care benefit design. Employee Benefit Research Institute’s most recent survey of workers with access to employer coverage found that only 30% are confident they are able to afford health care without financial hardship. This information came out before the COVID-19 pandemic. Needless to say, people are struggling much more now that, despite some re-openings, many are still out of work or have reduced hours.
Given that financial problems are the leading cause of stress and that stress takes a toll on employee health, wellbeing and productivity, employers must question strategies that involve shifting more health care costs to employees.
- Multi-Generational Workforce
Baby Boomers, Gen X and Millennials form the majority of the workforce, but most organizations include the older Traditionalists and younger Gen Zs as well. Employees in different life stages may want and need different benefits. While employers cannot afford to offer the best of every benefit, they can ill afford to underinvest in the benefits that are most important to their employees.
The wide variety of available benefits shows that organizations understand they must be creative in allocating resources toward those benefits that have the greatest impact on a diverse workforce, as well as complementing high-cost benefits with low-cost offerings that appeal to employees with a variety of needs.
- Health Care in Flux
- Health plan consolidation and vertical integration of health-related entities continue. In many markets this has reduced choice and raised cost. It may also offer some advantages.
- New entrants into the market create uncertainty, along with new opportunities to explore.
- Washington’s focus on undoing the ACA continues. The tax law repealed the individual mandate penalty, which is likely to mean more uninsured and more cost-shifting to employer plans from uncompensated care.
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