Pandemic, shutdowns, global economic crisis and more: These times have no modern precedent and are full of uncertainty. As businesses emerge from closures and cutbacks, it will be to a new normal. Work must continue, and that includes benefit planning. As a broker, what’s your most important tool?
This is because much about business has changed, from the economy to the state of the hiring market and the way we’re working (remotely, in staggered shifts and more). The crisis has changed the course of 2020, and many employers must make pivots and changes they had not previously considered.
Now is the time to prepare to support them—even as (or before) business fully opens up. Let’s look at how the flexibility you can offer in benefit planning can be key.
Benefit planning amid business disruption
First, because there isn’t going to be a single “all clear” signal, the economic restart is expected to be halting. Economic and policy experts point to a phased approach with piecemeal reopenings in mid- to late May with mid-sized and large gatherings more delayed, pending a resurgence in COVID-19 cases.
Of course, there will be some industries that feel less of this economic shock. These include
industries with an already-robust online presence, essential businesses such as supermarket chains, pharmaceutical companies working toward a cure and technology enterprises (think Zoom).
But for the vast majority of businesses and industries, the new normal is going to be challenging to navigate. This is where, as a forward-thinking broker, you can be prepared to help.
Reasons for pivots in benefit planning
By and large, clients under the pressures of the new normal will be looking to cut costs, safeguard their strategic leaders and key talent, and build greater business flexibility into their benefit strategies for 2020 and beyond.
Faced with the economic downturn, some clients may be forced to make changes to their primary medical plans—maybe even drastic ones. This can be seen as an option for controlling costs, but it can introduce new problems. Changes in the primary plan can come as a shock for employees, quickly driving up out-of-pocket healthcare spend and contributing to dissatisfaction. After all, healthcare is valued most highly when it comes to employee benefits. In addition, years of cost-shifting has resulted in already-high out-of-pocket expense burdens, and key employees who may have options elsewhere may be more receptive to offers as their benefit packages thin.
There are other considerations when it comes to business flexibility and benefit planning. Cost control is certain to be a high priority, but so will be the adverse effects of the crisis on employee well-being. Employee burnout was already an issue before the pandemic; in fact, a recent Gallup survey found that more than two-thirds of employees report feeling on-the-job burnout regularly or frequently. The self-isolation and uncertainty of this period, though, will likely have far-reaching effects for employees and employers. These effects may include increased rates of absenteeism and presenteeism, diminished productivity and the impact on bottom lines.
Introducing employer-paid supplemental solutions
The last weeks of the shutdown and the first weeks of the reopening present an ideal time to add new tools to your toolbox, so you can meet employers where they are now. Employer-paid supplemental insurance plans can give you new ways to strategize with clients, adjust benefit planning and create more business flexibility.
These plans are paid for by the employer, and they are designed to cover medical expenses that a primary medical plan does not. Depending on the type of plan and the employer’s needs, the coverage can be for broad or specific expenses. There are two main types of plans: expense reimbursed insurance plans, which offer reimbursement; and fixed indemnity plans, which pay benefits on a fixed schedule. These plans cover everyday and unexpected healthcare expenses and require no triggering condition or event.
Because ArmadaCare’s products are excepted benefits not subject to ACA non-discrimination rules, employers can choose which employees to enroll. This means the plans can be an ideal way to enhance or shore up coverage for select employees or roles.
Being ready with benefit flexibility
The flexibility in these benefit plans can give you effective tools to help your clients pivot or sharpen their benefits strategy. Employers that are forced (or choose) to make changes to their primary plans can layer insured supplemental benefits solutions over the primary plan for select employees, tailoring the total benefit package in ways that shore up coverage for their strategic leaders or meet the varying needs of their workforce populations.
With your help, employers most concerned about cost control will find these supplemental plans a financially efficient* alternative to compensation. When you show employers how to leverage tax-efficiency*, they can spend less but give more. The cost of these benefits can be equivalent to a bonus or pay raise, but they deliver more because of the tax savings.
Prioritizing employee well-being and countering the real and pervasive effects of burnout is something these plans can help with, too. With coverage for mental health and wellness care, these plans can offer support that helps employees cope during and after the stresses of this time.
True benefit planning flexibility
Be ready for the changes your clients need to make, when they need to make them. Employer-paid supplemental plans offer various coverage options, price points to fit a range of employer budgets and flexibility in timing. There are options that can work whether clients have no primary medical plan to layered coverage or need HSA-compatible products. And because they qualify as excepted benefits, they can be carved out for specific populations or offered to all, as determined by the employer.
Check out this overview for a closer look at creating benefit planning flexibility in a new normal.