How Employer Health Benefits Are Changing Due to Coronavirus

July 13, 2021 - As the country emerges from the coronavirus pandemic, employer health benefits will be more focused on investing in mental healthcare needs and will reduce the prominence of physical wellness programs, according to Brenna Shebel, vice president at Business Group on Health.

“Employees may have to undo some of the things that they have learned to do during the pandemic, whether it is their actual work setting or maybe just getting on a different schedule, how they are managing their wellbeing, mental health, social connectedness,” Shebel told HealthPayerIntelligence. 

“For employers, it is about trying to support employees to make that transition back to the workplace. Work is likely to be and look a little bit different than it did before the pandemic, as so many of our members have moved employees to remote or hybrid work.”

Employees may face stressors such as starting to commute to work again or helping their children transition back to in-person school five days a week. Providing health benefits and services to support employees’ mental health is the top priority for employers at this stage of the return to pre-pandemic activities.

Over nine in ten employers said that they were increasing their mental health and wellness programming in 2021, including pediatric mental health programs, according to a survey from Fidelity and Business Group on Health. Almost 75 percent reported that they were extending work-life balance support and nearly 70 percent were expanding their paid leave policies.

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Employers had to make major changes to their mental healthcare approach when the coronavirus pandemic began. Those that had not yet started offering telehealth and virtual care offerings were forced to do so.

Shebel did not anticipate that the transition out of the coronavirus pandemic would demand as much change from employers. 

Instead, she anticipated that, just as the workplace would evolve into a hybrid of in-person and virtual or remote work, employer-sponsored healthcare benefits would embrace both the pre-coronavirus, in-person wellness strategies as well as pandemic-era telehealth and virtual care offerings.

“There were a certain number of wellbeing programs that were put on hold for employees because they were taking place at their worksite,” said Shebel. 

“We expect that, when employees do come back to the worksite and these different offices or locations are fully functioning, employers will bring back some of those on-site opportunities, whether it was a fitness class hosting on-site, bringing back counselors on site.”

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While some of the employers’ responses were predictable given the circumstances, there was one finding in particular amid the survey results that Shebel found interesting: the trends around financial incentives for wellness program participation.

Employers have often used financial incentives to boost wellness programming participation in the past. According to a previous survey conducted by UnitedHealth Group, nearly seven in ten of the employees who replied to the survey stated that a financial incentive would increase their likelihood of participating in wellness programs.

Heading into 2021, fewer employers plan to offer financial incentives to employees and their partners or spouses. Whereas over three-quarters of employers offered financial incentives for wellness program participation in 2020, the share of employers who would extend these offerings dropped to 68 percent in 2021.

However, employers that intend to continue offering them are not lowering their incentive amount.

Even as employers step away from using financial incentives to boost wellness programming participation, employees gravitated towards these programs in 2020. 

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Shebel and the team at Business Group on Health found that during the coronavirus pandemic employees and their spouses or partners redirected the trajectory of wellness program engagement and incentives earned.

The survey did not specifically address the reason behind the employer trend toward less wellness programming and the employee trend toward more participation in those programs. But Shebel suggested that the cause may lie in changing priorities for employers.

Historically, financial incentives have centered around wellness programs that focused on physical wellbeing, Shebel pointed out. If employers are shifting their attention toward mental healthcare as the survey indicated, then investments in wellness programming may give way to investments in mental health benefits and services. 

Additionally, employers have not been seeing strong results from wellness programs when it comes to cost savings.

“I would see the reduction of financial incentives to be an act of redirecting investments back into the programs and the staffing and the communications that are necessary to run wellbeing programs,” Shebel explained. 

“For some employers, we are hearing that they are not seeing the level of return or they are not able to make the connection between the investment or financial incentives and engagement or improved outcomes.”

For employers gauging how best to leverage their resources in order to support employees transitioning back to the workplace or to a hybrid model, Shebel recommended partnering with employees. Surveying employees to discover their health benefit priorities, connecting with employee resource groups, and conducting focus groups can help clarify employees’ needs.

While it may be impossible to provide the ideal benefits for every employee, particularly for employers with a large number of employees spread out across the nation, wellness programs should address a diverse array of healthcare needs.