The COVID-19 pandemic has put everyone in a tight spot, health-wise and economically. Employees have had a hard time while attending to their family needs, staying engaged and productive, and holding onto their sanity. With the financial crisis stressing out the employees, it is obvious that they look up to their employers for support with an increase in pay or other employee benefits and perks.
Employers are also reviewing their employee benefits strategies for managing costs. Most employers could focus on reductions in benefits plans contributions of HSAs or 401(K). Although employers may manage their costs with such deductions, employees may have to face significant consequences. At such times, employees who haven’t saved enough may have a tough time facing unexpected financial hurdles.
This trend of reduced savings is not just for 2020, but it has already started impacting employee enrollment and coverage for 2021. Studies show that the FSA healthcare contributions have dropped by almost 25% as only 70% of employers were planning to continue with the health plans coverage into the next year. Also, the total dependent care FSA contributions fell by 55% as only 43% of employers were renewing their coverage in 2021.
An employee financial wellness study by MetLife revealed the top causes of financial stress for employees were –
To overcome these trending issues, employers must look into new financial programs that can help them expand their current offerings. Studies show 4 best ways for employers to optimize their employee benefits for financial wellness.
Expanding Health Savings Accounts
Although HSAs have been a preferred choice by employees, the downside of it is that they get to access these accumulated funds through pay cycles to date. Seeding HSAs with options where employees can access their contributions whenever they want removes the barriers, and also gives them better control of their finances. They can use the funds for receiving timely healthcare, which may get deferred and complicated due to the lack of funds. Also, it encourages employees to enroll in HDHPs, reducing the risk of first-dollar insurance policies.
More Flexible FSAs
Although many employers were ready to offer help with the onset of the COVID-19 pandemic, few had declined to offer any optional relief. This could either be due to the administrative pressures or the budget constraints to support. Allowing mid-year election changes offers significant financial relief to the employees as they are looking for ways to maximize their benefits in the economy. Additionally, considering other less-chosen options like dependent care FSAs and halting contributions could be of help, especially when the benefits cannot be maximized fully.
Coming to the FSAs and HSAs, the pandemic has only deepened the concerning issues. Although they have existed for quite some time, the lack of knowledge and awareness of the advantages have aggravated the concerns. Employers can integrate their benefits plans administration and current accounts into a common system, where employees can easily learn and access their benefits plans offerings and other related enrollment resources. Personalized communications modes like calls-to-action, SMS notifications, or email reminders can be sent to the employees as per schedule to make any changes or to raise their contributions.
Fine Tuning Return-to-Work Strategies
The COVID-19 pandemic has changed the nature of work and the employer’s perspective towards employee health and wellbeing. Although spending on employee benefits and perks has always been a priority for most employers, the focus has currently shifted to align the return-to-work (RTW) strategy with the employee health and safety factors. Considering the impact of the pandemic on employee productivity, employers are looking to apply suitable resources for workplace wellness. Such strategies could be of great help for working parents who could utilize the FSAs for new purposes like online learning support and likewise.
Despite the fear and safety concerns, 2020 has provided employers with opportunities to reset their workplace policies to be prepared for unexpected events and rework their employee health and wellbeing strategies. A lack of employee engagement or productivity reflects a distracted and unproductive workplace. And so, 2021 must be the time for employers to endorse better employee benefits and services and other support policies.