As we enter summer, brokers are beginning their busy season. They are preparing to guide their clients through benefit planning for next year and beyond. But amid unprecedented uncertainty, this benefit planning season is unlike any other. Preparing for pivots with flexible benefits is key.
Despite tomorrow’s unknowns, taking a strategic approach in benefit planning can protect an organization’s workforce and its bottom line. Simply put, it pays to keep employees happy. Turnover costs employers both money and time, and up to a third of employers see an average annual FTE turnover of 15% or more.[i] Voluntary turnover, costs US employers $536 billion a year, according to the Bureau of Labor Statistics.[ii]
Amidst turnover concerns, employers are also confronting the realities of mental health and its effect on the workplace. Stress, uncertainty and social isolation during the COVID-19 crisis have driven up rates of employee stress. Prior to the crisis, 40% of employees struggled with stress and fatigue related to an “always-on” workplace culture, a recent MetLife survey found.[iii] Since the crisis, two-thirds report feeling more stressed amid ongoing uncertainty, work/life struggles and financial concerns.[iv]
Flexible benefits will be brokers’ most important tool and employers’ most valuable asset when facing these serious business challenges. Savvy brokers and employers will be prepared with innovative, supplemental benefits solutions for a diverse workforce to help address the impact of these challenges.
Here are three ways employers can pivot, and how flexible healthcare benefits can help.
Pivot #1: Cutbacks and changes with flexible benefits
The pandemic and its economic impact have forced many employers to consider making difficult choices when it comes to protecting revenue and the bottom line. These choices include making primary healthcare plan changes not previously considered, such as cut-backs, plan consolidation or the elimination of richer plans entirely.
While they offer some cost-savings potential, these changes can introduce harsh realities for employers and employees. New coverage gaps can increase already-elevated out-of-pocket healthcare expenses for employees at a time when benefits continue to be a high priority for them: 80% of employees would prefer a new benefit to a pay raise[v] and 85% consider vision and dental benefits “important” during open enrollment.[vi]
Supplemental health insurance plans can provide the flexibility to fill in gaps left by adjustments to the primary healthcare plan, by restoring or layering on benefits such as vision, dental and well-being. With coverage defined and determined by the employer, these plans can be a strategic way to protect a diverse workforce beyond the executive suite.
Pivot #2: Address workplace stress and mental health
This year’s public health and economic crises have pushed emotional distress and mental health concerns into the spotlight for employers. As research noted earlier suggests, uncertainty and isolation are fueling stress and increasing the risk of degraded mental health in the workplace.
Mental health is fundamental to employee well-being, and employee well-being is closely connected to engagement and the bottom line. However, if we stay on our current trajectory, one in five adults will experience a diagnosable mental illness during any given year. Of these, half won’t receive treatment.[vii]
Supplemental health insurance solutions for a diverse workforce can introduce and/or strengthen existing mental health support services for employees—at all levels. Traditional employer assistance programs (EAPs), often fall short when it comes to effective and accessible mental health solutions. Now, brokers can come prepared with a creative solution that combines coverage and support. Introducing WellPak, a single 360-degree solution combining coverage and access for mental health and well-being. This provides employees with flexible coverage and embedded mental and behavioral health resources.
Pivot #3: Reduce the risk of turnover
The labor market may have changed but retaining the right talent will continue to be a key concern for employers. It is easy to see why: Replacing a key employee can cost a company twice the employee’s annual salary.[viii] Standout performers are especially critical to the bottom line, delivering 400% more in productivity than their average-performing counterparts—so it’s clear that losing even a few high performers can be detrimental.
While employers look to control benefit costs, they also need to focus on the benefits-retention connection. According to recent research, 60% of employees consider health insurance extremely important when deciding whether to stay with a company or take a new job.[ix] And just one in five employees are satisfied with the cost of their current health insurance plan and the expenses it doesn’t cover.[x]
Supplemental insured healthcare solutions can:
- Help balance budget considerations with a benefits strategy
- Mitigate the risk of turnover and its associated costs
- Layer over virtually all primary healthcare plans to offer relief for out-of-pocket healthcare expenses
- Be offered to select employees or employee classes at all levels of the workforce
- Give employers new options to incentivize and reward
- Offer financially efficient* alternatives to boost overall compensation packages for employees
- Replace one-and-done bonuses with lasting reminders of employer appreciation.
Looking to prepare for these anticipated benefit pivots and more? ArmadaCare offers a wide range of supplemental health insurance plans designed to address the limitations of primary healthcare coverage with solutions tailored to the needs of select employee classes at all levels of the workforce. [Learn more] about these solutions and the flexibility they can deliver in benefit planning.
*This is not local, state or federal tax advice as each person and company is unique. It is recommended that you seek the independent counsel of a professional tax adviser.
[i] 2019 Gallagher Benefits Strategy and Benchmarking Survey