Recently, the International Foundation of Employee Benefit Plans (IFEBP) published the results of an employer survey that sheds light on how COVID-19 has been affecting employee benefits. The Employee Benefits in a COVID-19 World: April 2020 Survey Report revealed some interesting findings which can help plan sponsors better prepare for the year ahead.
- Employers Are Reducing or Suspending Matching Contributions to Employees’ Defined Contribution Retirement Plans – It’s not surprising given the financial burdens the pandemic has placed on many employers that 8% of those surveyed had suspended their matching contributions and 2% indicated had reduced them. The survey also found that 19% were considering a change to their matching contributions policy.
- The CARES Act Is Driving Plan Sponsors Defined Contribution Plans – Many employers are basing their plan changes based on stipulations in the CARES Act and in an effort to help their employees withstand the financial difficulties imposed the pandemic.
- Telehealth Is in Wide Use – While in the pre-pandemic period, 88% of employers had a telehealth service component in place, COVID-19 increased that percentage to 98%. Further, to promote its use, 49% of employers surveyed indicated they had reduced or suspended cost-sharing for telehealth as a result of the pandemic.
- Employers Are Increasing Their Mental Health Benefits – There has been widespread news reports of increasing incidences of anxiety, depression and stress stemming from the pandemic. In response, 12% of employers are now offering telepsychiatry services through which their employees can access mental health services virtually. To further support their employees’ mental well-being, 9% of employers reduced or eliminated cost-sharing for their mental health benefits, while 6% have either eased or eliminated their eligibility requirements.
- Plan Sponsors Are Modifying Their Prescription Drug Plans – COVID-19 has caused 35% of employers to extend the time allowed under prior authorization periods for their members’ prescription drugs, 30% have introduced higher quantity limits and 12% have waived prior authorization requirements.
- Furloughed and Laid-Off Employees Increasing – Based on the pandemic, 31% of employers have temporarily furloughed workers, 29% have reduced their workers’ hours, and 21% have laid off workers or implemented a reduction in their workforce.
- Furloughed and Laid-Off Workers’ Health Care Benefit Policies Vary – There are many ways employers are handling their furloughed and/or laid-off workers’ health care benefits ranging from COBRA to cost-sharing adjustments.
What is clear from the IFEBP survey is that employers have responded to the pandemic both to accommodate the needs and well-being of their employees, as well as to address their organizations’ fiscal and operational needs. It will be interesting to see how policies are changed and/or revert back to what they were prior to the pandemic when the pandemic period is over.