Should plan sponsors shift their benefits plan spend during coronavirus?
With the coronavirus pandemic affecting many businesses, employers are considering their options for shifting their benefits plan spend.
Usage rates for benefits such as dental and paramedical services, which generally have high uptake among plan members, are currently in decline, since non-essential business are shuttered for the foreseeable future and Canadians are staying at home.
“Specifically in the short term, I think there are a lot of aspects of benefits spend that aren’t being utilized today — probably no one has gone to the dentist in March and probably won’t in April or May,” says Nigel Branker, executive vice-president and president of health and productivity solutions at Morneau Shepell Ltd.
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“So there are dollars in benefits plans that would represent savings, but I think the question for plan sponsors is, how much do they recognize those savings given what’s going on in other parts of their business, versus how much do they reinvest a sliver of it to provide more virtual care and mental-health support to their people?”
Indeed, virtual options for accessing health care are of paramount importance right now, as Canadians deal with the anxiety and stress brought on by the pandemic, whether it be job losses, the isolation of working remotely, health issues or larger mental-health concerns.
“Our position when it comes to mental-health support and, certainly, digital care is that, at the best of times we think employers should have been rethinking their total rewards program and their allocated spend to these types of programs,” says Branker. “A lot of our benefits programs were developed in a construct before it was mainstream to provide digital support and before it was mainstream to think about mental health. Certainly, I think the question is, is a plan sponsor ready to rethink their overall program design at this time, or whether that’s best suited for future state new normal?”
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He notes that every organization is facing a different reality, so it’s difficult to provide overarching guidance on shifting the benefits plan spend. “But I would say that most benefits plans for covered employees probably have savings in place, or are probably seeing a decline in usage in various aspects of the benefits programs, which does free up more dollars.”
He urges plan sponsors to consider how they feel about redirecting some of those dollars, whether it’s for the next six or 12 months, to provide additional support and care for employees until the pandemic winds down. “At that point, I think it makes sense to learn from the lessons and look at the broad rewards framework and figure out where you want to best align dollars to support your HR and business priorities.”
However, when it comes to making changes and communicating them with employees, is this the wrong time to do it, even if it’s a favourable adjustment to plan design?
Depending on how a change is positioned, Branker thinks it would be seen positively. “Before the pandemic, we heard all the time, ‘Our people are our assets,’ ‘We care about our people,’ ‘We are our people’ — and I think there’s a limited window now.
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“Employers that do well by their people will really reap the rewards in years to come. People will remember how they were treated and/or supported by their employer during this period. And when we do get to the new normal and we’re back to winning the war on talent and being an employer of choice, I think the decisions made in the next couple of months will go a long way.”