Small and Medium Sized Employers: 3 Key Factors to Consider When Building Your Benefits’ Strategy 

A Necessary Change of Perspectives on Healthcare, Post-Pandemic

 

As industry experts are now assessing the effects of the COVID pandemic on employer benefits programs, key concepts have emerged, changing best-practices from a “wellness” approach, to a “well-being” approach. A key Willis Towers Watson survey, along with others, demonstrate that mental and emotional well-being is now top-of-mind for both employers and employees. Also, gaining traction is a focus on “equity,” as opposed to “equality” in benefits; and insurance that addresses specific employee demographic profiles. So how do employers with limited resources address these new paradigms?
 
It is critical for Small and Medium Sized Employers (SME) to evaluate the over-all costs and sustainability of a total-care solution that includes required major medical healthcare insurance (ACA-compliance) along with the most cost-effective benefits that contribute to an employee’s sense of well-being. While larger enterprises can scale benefits, SMEs do not have the same flexibility. Giving your workforce unlimited vacation, for example, is much more difficult, as smaller organizations don’t have an adequate workforce to spread the workload. In addition, SMEs are also less likely to have the necessary resources for benefits administration. That is why their benefits’ strategies must be mission-critical, focusing on the most important benefits that lead to a sense of overall well-being (or stress reduction) in a total care solution.
 
What Are the Most Significant Stressors for Employees Today?
 
  1. Industry experts have identified financial limitations as one key contributor to employee stress in light of the COVID pandemic, especially among low-wage workers.
  2. Remote workforce strategies are here to stay, and social isolation is a key contributor to employees’ stress-levels and need for mental health services.
  3. While lower-wage workers have been more likely to forego primary healthcare during the pandemic, leading to lower utilization rates in the past year, utilization is expected to increase, as health concerns have led to increased stress for employees.
 
Addressing these key stressors must be the baseline for building equitable benefits’ solutions for employers in the SME sector. Experts in the industry, including Willis Towers Watson, identify voluntary benefits as critical to building your benefits program. Voluntary benefits include supplemental fixed Indemnity medical insurance, as well as ancillary benefits such as vision, dental, disability and term-life insurance as the most important. Without these key benefits, attempts to build programs in a shotgun approach that can appeal to a wide range of “lifestyles” or demographics is completely ineffective, and can even lead to increased employee stress levels. With all of the above in mind, employers need to consider the following:
 
Best Practices Solutions for SME Employers
 
  1. Employers must first assess their own resources as it relates to benefits’ administration. This is often overlooked as brokers present multiple voluntary benefits’ solutions from multiple Carriers. Disconnected systems lead to poor benefits’ administration and can backfire, creating employee stress and even negative perceptions of the employer benefits’ offerings.  The best strategy is to have one integrated solution for both your major medical and voluntary insurance. Digitized, integrated systems that take the administrative burdens off of your organization are critical in today’s healthcare environment. While there are many HRMS (Human Resources Management Software) solutions on the market, the capital investment can be cost-prohibitive and disruptive. There are also aggregators of HR solutions, who may provide benefits under one umbrella, but system integration and administration can be a problem without the proper technology platform that fits your existing systems. Employers must carefully evaluate providers to ensure that not only are they providing the most important benefits for their employee’s well-being, but they are also providing the most cost-effective and needed administrative solutions.
  2. Secondly, voluntary benefits plan design is also mission-critical, as we move from wellness, to well-being as the guiding principle for benefits’ programs in a post-pandemic world. The best voluntary benefits plan can cover the majority of lower-wage workers’ out-of-pocket expenses, not covered due to high-deductible ACA-compliant plans. This means coverage for everyday healthcare, like doctors’ office visits, out-patient surgeries and tests, not accessible under the ACA plans, that still have an average of $6,000 in deductibles and copays. The WTW survey showed that hospitalization and critical care insurance has also become of primary importance to offset expenses that could otherwise bankrupt lower-wage workers. The right plan design, that is affordable to your employees, will alleviate financial stress related to both everyday healthcare needs and unexpected healthcare events, providing peace of mind that contributes to the “well-being” of employees. Such plan designs require sophisticated technological modeling and data-driven analysis for the most cost-effective coverage. The reputation and longevity of insurance carriers matters in your decision analysis.
  3. Thirdly, and closely related to plan design is the need for virtual care options, made apparent through the pandemic. Multiple studies show that mental healthcare through virtual digital experiences is as effective as in-person visits. In a Harvard Business Review article entitled “Digital Tools Are Revolutionizing Mental Health Care in the US,” the summary is:

The U.S. has long suffered from a severe shortage of mental health care services. The pandemic has put a spotlight on the effectiveness and wide availability of digital and virtual mental health care, and by doing so might have thrown a lifeline to our mental health system.

As many as 67% of the workforce has reported mental anxiety conditions in the last year. It is without question that mental health counseling is paramount to helping employees achieve a sense of well-being; and virtual care options are quickly being assimilated into the mental healthcare system.
In conjunction, virtual, digital primary care is also changing the face of primary care models in the US. For the employer, primary care that is overlooked can lead to higher insurance costs. Employers can avert these outcomes by providing an easy, cost-effective virtual primary care benefit. For the employee, a virtual care benefit relieves problems with access and time constraints, as well as protecting vulnerable patients from exposure to contagious diseases.
The bottom-line conclusions are fairly simple. While SME employers may not be able to provide all the perks of change-makers like Google, the pandemic served to clarify that affordable primary care benefits are a baseline for employee well-being and that the future of healthcare will be changed by those who provide the best digital tech solutions, in both healthcare and administration. Voluntary fixed indemnity medical and ancillary insurance that is affordable and addresses the biggest employee stressors, with easy and effective administration, is critical to the SME sector benefits’ strategy.
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