New Normal in Employee Benefits Management

I suspect we are all growing rather weary of living in the midst of a pandemic. There are so many questions and sadly, politics and lack of confidence in our government institutions has created an atmosphere that has actually resulted in politicizing our chosen response to the events. I confess that this complicated state of affairs makes me extremely sad on many levels.

However, there is also much that has inspired me. I am proud to be able to serve our clients during this difficult time. A good part of the month of April was assisting our employer clients with understanding and preparing to apply for different programs that allow them to pay their employees, as well as continue to fund their benefits.

Several CEO’s told me that they would do anything they could to be sure their employees did not lose their health benefits during this crisis. They worked diligently to find ways to keep staff at work whether remotely or with appropriate distancing in the essential industries.

Not surprising was the fact that these employers were also the ones who clearly put a premium on the value of their workforce, understanding that brick and mortar means little compared to the value of their staff. These are the employers who cut their personal profit to be able to provide benefits to their employees.

I understand that there a multiple tax benefits to employers that provide health benefits to employees. The fact that premiums are tax deductible and benefits are tax free to employees, is a valuable incentive to motivate employers to provide those protections. The ability to attract and retain good employees continues to be paramount.

The employers that most inspired me, said things like, “I am not going to leave my employees exposed during a pandemic”. Or “I know they have to put food on the table and pay their bills, I am going to try everything I can to keep their paychecks coming to them”.

These employers worked to try to access stimulus funds to help them keep both their business and employees afloat. Those that banked with the few local banks left in town, were fortunate to get their applications in and funds in a short time. Unfortunately, that was not the experience of our smaller employers who banked with the bigger banks. But nonetheless, they tried.

The insurance industry has been considered “essential”, so we have found ways to continue to serve our employer groups. As early adopters (2015) of an electronic benefits platform, we saw little disruption to our open enrollments. Providing this service at no cost to our clients has proved to be even more valuable now that we are experiencing the disruptions of a pandemic.

The reality is that online benefits portals are not just for Fortune 500 companies anymore. Small employer with less than 10 employees can provide this type of platform for their employees. This allows the employee to enroll and manage benefits online. It allows them to store benefit elections and documents for multiple employer sponsored plans all in one place.

Further, it allows the employer to efficiently produce a “total compensation” statement that shows the employee the total cost value of their compensation. In many firms the cost the employer pays for benefits can be as much as 50% above the cost of the wages paid to the employee. This information can be “lost in the shuffle” of day to day work. How nice for an employer or manager to be able to add this report to the employees’ annual review to show the true total compensation that is earned working in the firm.

Clearly, this pandemic is going to create a “new normal” on a lot of fronts. As employers learn about “zoom” meetings and do more working from home, they will be looking to new efficiencies to better manage employee benefits. Brokers who serve as partners to their employer groups will provide these efficiencies at no additional cost to their clients. They will also assist them in managing these challenging times as they arrive.

Margaret R. Beck

Margaret Beck CLU, ChFC, CEBS started her insurance practice in Redding in 1978. She is the founder of Affiliated Benefit Services where businesses and individuals are assisted in choosing proper products, compliance with complex benefit laws and claims issues once coverage is placed.

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