American workers are looking for ways to bring health care costs under control as the economy slowly rebounds from the pandemic. Employers are looking for ways to strengthen recruitment and retention during the continuing labor shortage. Expanding health benefits can help achieve both goals.
Nearly half of all U.S. employees have purchased at least one new health benefit in response to the pandemic, according to the Aflac Workforce Report 2021. Half of them added life insurance, and about a third of respondents said they purchased critical illness insurance, hospital allowance, telehealth services or mental health resources.
“Last year’s report showed the pandemic was a wake-up call for workers to consider spending more time and effort finding health care benefits during the open enrollment period.” said Matthew Owenby, director of human resources at Aflac. âThis year’s survey demonstrates the heavy impact COVID-19 has had on American consumers. Now we are seeing that awakening turn into action, opinions and actions regarding their health insurance and financial security, which was even stronger for those who actually had a positive diagnosis of COVID-19. “
The survey found that respondents who tested positive for COVID-19 were more likely than other respondents to purchase at least one new health benefit:
- 38% bought life insurance compared to 16% without a COVID-19 diagnosis.
- 29% bought a hospital versus 9% without a COVID-19 diagnosis.
- 26% bought a critical illness versus 12% without a COVID-19 diagnosis.
- 24% purchased mental health services compared to 10% without a COVID-19 diagnosis.
Even though they plan to invest more in their workforce over the next 12 months, companies are struggling to deliver solid benefits within their budgets. Employers have made a number of tough decisions over the past year to reduce or maintain their operating costs, such as reducing hiring, eliminating or postponing increases, and reducing or eliminating bonuses.
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However, as the economy continues to rebound, employers plan to change course slightly and invest more in their workforce by increasing the hiring of full-time and part-time employees, as well as by offering larger increases.
However, the cost of benefits can put a small brake on these plans. Other finance related challenges are as follows:
Delivering strong benefits while on budget is the number one challenge employers face. Most employers, 60 percent, say they have observed an increase in benefit costs over the past year. These increased costs will negatively affect their operating plans, including improving the quality of their benefit programs, offering bonuses and increases.
Cost is also cited as the main barrier for employers who are not currently offering benefits to their workforce. Despite these rising costs, employers plan to keep their current coverage. In fact, employers are 70 percent more likely to offer more benefit options than they are to say they will reduce the options available to their employees.
Employers have a slightly inflated sense of employee satisfaction with their overall benefits. Three-quarters of employers say their employees are very satisfied with their benefits, compared to only 62% of employees who express high satisfaction.
Employers may also mistakenly believe that their employees can afford health care costs. An overwhelming majority of employers (81 percent) believe their workforce can financially meet their healthcare obligations, but nearly half of employees say they couldn’t pay more than 1,000 $ for medical expenses to be borne, and a similar proportion could not go for more than a month without pay.
âCOVID-19 is always a priority for employees, and they are looking for ways to help offset financial burdens they have suffered or feared over the past 17 months,â Owenby said. “Financial vulnerability will continue to be a concern during this year’s open registration season, as rising health care spending continues to affect Americans in these uncertain times.”