What brokers should have on their radar this year
by Mike WilbertMr. Wilbert is chief revenue officer at Purchasing Power, a voluntary benefit provider. He has 30 years of experience in the insurance and voluntary benefits industry
It’s that time again. Open enrollment is on the horizon. But it will be a bit different this year.
COVID-19 has disrupted our world in ways we never would have imagined. Open enrollment is just one of those ways.
Clients look to their benefits brokers for advice each year as they start their open enrollment planning. This year, though, they will need their benefits brokers’ assistance more than ever. Employees are now paying closer attention to their workplace benefits during these uncertain times. Likewise, they can be expected to take a more active role in their benefits choices.
A year ago, the COVID-19 pandemic was disrupting our lives and our workplaces. Today, the pandemic is winding down, well more than half of Americans have received the COVID-19 vaccine, and more workers have returned to their offices. But much of what changed in our world this past year will not go back to ‘normal’ – to the way that it was. Rather, it is our “new normal.” Likewise, employee needs have changed dramatically and employers should have benefits in place that can help them.
In the employee benefits space, voluntary benefits previously thought of as “nice to have” are now a “must have” in benefits packages. This shift means benefits brokers are being called upon to help employers navigate the new world. Most likely, that means adding voluntary benefits such as financial well-being options to their offerings.
Focusing on Benefits for the New Normal
Benefits that work today are different from those of a year ago. This year benefits brokers are not only helping their clients ensure that telemedicine and expanded mental health services are included in healthcare offerings, but also are focusing on holistic employee well-being that includes financial health, along with the physical and mental considerations. Employers need to be advised about the myriad of benefit options available to meet their workers’ needs.
Dialing Up Voluntary Benefit Options
Because they can address many of the specific needs that employees have as they continue to struggle with and overcome pandemic challenges, voluntary benefits will take on a significantly more important role during this open enrollment season.
Adding voluntary benefits which have no budget impact for employers but allow employees to choose what is important to them is an easy way to expand workplace benefits offerings. Policies that benefits brokers are recommending this year likely include hospital indemnity and critical illness that can be beneficial if the employee is hospitalized or diagnosed with certain critical illnesses. These two benefits came into the spotlight more this year due to COVID-19. Due to the huge spike in identity theft and fraudulent unemployment insurance claims during the pandemic, identity theft protection is another voluntary benefit likely to be highlighted.
Addressing Employees’ Financial Stress with Financial Well-Being Benefits
The financial pain from COVID was certainly worse than anyone might have expected. NPR reported last September that in America’s four largest cities, at least half of the population said they had experienced the loss of a job or a reduction in wages or work hours in their household since the start of the coronavirus outbreak.
Once the shutdown hit last year, many employees found themselves laid off or out of work. What had already been a struggle living paycheck to paycheck or just getting by, suddenly got worse. How were monthly bills – even basic rent or mortgage and utilities – going to get paid? Some had to worry about paying for groceries and how to feed their kids. Credit cards got maxed out. Savings were depleted. There were withdrawals from 401Ks. As a result, financial stress was prevalent for employees.
Around the same time as the NPR data was reported, Purchasing Power surveyed HR professionals. When asked how the pandemic financial stress was impacting their employees, 87% said they saw higher levels of employee stress; 66% reported reduced productivity; 60% said decreased morale; 49% saw more absenteeism and 42% reported increased healthcare claims.
For many employees, COVID-19 certainly drew attention to their fragile financial condition. In a September Harris Poll for the National Endowment for Financial Education, 84% of Americans reported that the COVID-19 outbreak was causing stress on their personal finances. And 39% said they will feel “very/somewhat worried” about their financial situation 12 months from now.
A SoFi Survey last year found that as a result of the impact the pandemic is having on their finances, 50% of people feel it is more important now that employers offer financial wellness benefits. And when asked what their employer could do to have the most significant impact on their personal financial situation, they said, “make a contribution to my rainy-day fund/emergency savings account.”
Breaking the paycheck-to-paycheck cycle is now more important than ever. Benefits brokers should encourage employers to offer benefits that address different aspects of financial well-being. These can include financial counseling, bill payment programs, medical deductible financing, low interest installment loans, employee purchase programs, student loan repayment benefit programs and automatic savings programs.
Realizing That Benefits Communication Is King
No matter what channel employers use to manage open enrollment, from paper-based to the most elaborate web-based systems, there has to be a communications strategy that will engage employees. Employee satisfaction with benefits has never been more important. At the same time, benefit plans have never been more complicated.
Benefits brokers have an increased role to play in assisting employers with communicating financial well-being benefits to their employees. A February 2021 Arizton report revealed that 35% of workers at large companies have “no clue” their employer offers benefits that include financial wellness. The message is clear for employers to communicate, communicate and communicate! The more employers can communicate about these benefits and how they can be used, the higher likelihood it is they’ll be leveraged by the employees who need them.
The impact of COVID-19 on employees’ lives and their finances really shined a spotlight on the value of voluntary benefits, which have given employers a way to meet the shifting needs and priorities of their workforce in this new normal. Benefits brokers can work with employers to identify benefits that work for their employee base as well as look financial well-being voluntary benefit offerings to provide more customized options to meet their workforce’s needs.