SHRM: Planning 2021 benefits changes for the COVID-19 era

Executive summary :

Planning employee benefits for the 2021 plan year presents HR with unique challenges, given that the outlook for the COVID-19 pandemic is still unknown. As employers await word on health plan costs for next year, which insurers usually provide in November, they must decide how to allocate benefits budgets, choose which benefits programs to offer and figure out how to communicate changes to employees.

Change is on the cards for employee benefit offerings

Changes on the card

A Mercer has report found that the most common changes that companies are considering, are:

• Expanding virtual or telehealth programs (32%);
• Enhancing mental health support, such as employee assistance programs or additional services (25%);
• Increasing cost-sharing for plan expenses such as deductibles, premiums or co-payments (20%);
• Adding or expanding voluntary benefits (16.5%); and
• Augmenting services for managing high-cost claims, including specialty pharmacy claims (13.5%).

Separately, employers may need to reduce their retirement plan contributions for 2021, both matching and discretionary amounts, depending on how the economy performs through the rest of this year. As plan sponsors and fiduciaries, employers should always explain to employees what’s changing and why these actions are necessary to keep the business afloat.

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