Do one-size-fits-all benefits plans serve workers' needs?

The COVID-19 pandemic has highlighted different ways that employers can offer benefits that help employees at different stages of their lives. One-size-fits-all benefits plans may not serve the needs of diverse workforces anymore.

“You don’t necessarily have to tie employees into demographic bands based on when they were born,” said Rick Fuerman, head of defined contribution marketing at Hartford Funds. “It’s more about offering benefits around life events that aren’t defined by a generational tag.”

Student loan repayment benefits

Student loan repayment assistance is a prime example, said Fuerman. This emerging benefit option can help employers address the specific needs of a wide variety of employees. According to a recent study by Alight Solutions, many employers are interested in helping employees pay for education. About one-quarter of employers offer student loan consolidation tools, while 11 percent offer student loan repayment assistance and 7 percent allow for payroll contributions to 529 plans, according to the report.

These programs help not only young adults just joining the workforce out of college, but also people into middle age who either are still paying off undergraduate loans or may have opted to pursue a graduate degree, said Fuerman. Even older workers who may be preparing to send a child or other family member to college could benefit from such programs.

Benefits that provide assistance with student loans got a major boost last year via the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which allowed employers to contribute up to $5,250 tax free to their employees’ student loans. The provision was set to expire at the end of 2020 but was extended through the end of 2025.

Caregiving assistance

Another benefit that is seeing increasing momentum is assistance with caregiving, a challenge that many employees are facing with increasing urgency due to the pandemic. Many employees in their mid to late careers may be faced with challenges around providing care for their aging parents, and navigating this challenge can translate into absenteeism and mental health concerns at work.

“We have especially seen a significant increase in the recognition of the impact elder caregiving is having on women in the workforce,” said Dave Jacobs, co-founder and co-CEO of Homethrive, which provides caregiver coordination benefits that employers can offer. “Our internal research shows that Chief Human Resources Officers are twice as concerned as a year ago about employees, especially women, feeling the need to take an extended leave of absence or leave the workforce entirely.”

Jacobs said demand for Homethrive’s caregiver coordinator benefit has increased 350 percent during the pandemic, which reflects the depth of the caregiving challenge across the country. About 19 percent of Americans serve as an unpaid caregiver for another adult, an increase of 8 million from just five years ago, according to AARP/National Caregiving Alliance. Of these unpaid caregivers to an aging loved one, 61 percent are employed and only half of these working caregivers report that their supervisors are aware of their caregiving responsibilities.

Employees facing this challenge are often part of what’s known as the Sandwich Generation, or those who are primarily responsible for the care of both an aging parent and college-aged or younger kids.

“These working caregivers stretch their focus and mental bandwidth across the responsibilities of their jobs and caregiving responsibilities, ultimately decreasing the employee’s productivity and increasing absenteeism,” said Jacobs.”In addition, many working caregivers have decided to take their aging parent out of senior living communities due to fears of COVID and have moved them back home. Companies have realized this could have a tremendous impact on employee productivity. Needs such as medication, groceries, and medical care don’t just happen during off-work hours.”

Jacobs also noted that employees in this demographic frequently hold more senior roles at companies and are among the most difficult and costly to replace should they choose to reduce hours or leave the workforce to perform caregiving duties at home.

“It’s in a company’s best interest to offer not only childcare benefits but also elder caregiving benefits to help them retain and acquire the best talent,” said Jacobs. “We have countless examples of employees who confided in us that they planned to leave their job if they couldn’t get help with their parents.”

Among the services Homethrive provides that takes logistical caregiving burdens off of employees is helping members determine COVID-19 vaccine eligibility and finding vaccine appointments. Many working caregivers have had to interrupt work to hunt for vaccine appointments and stand in virtual lines for their parents, Jacobs noted.

Fuerman also reiterated the value of providing resources for employees faced with caregiving challenges. Employers, he said, can gather and provide information about local resources such as meal delivery services or other nonprofit programs that can help relieve some of the burdens employees are dealing with at home.

“Especially in 2021, I think what employers are looking for are things that can help lower the stress their employees are going through,” said Fuerman, who noted such benefits pay employers back in their recruitment and retention efforts. “If there is something available that helps lower an employee’s stress and increases their production, I think employers are definitely interested in that.”

Flexible benefits

Flexibility is also key to providing the benefits employees value, said Fuerman. He noted employers might want to consider expanding beyond traditional medical and retirement benefits to provide a menu of benefit options and a bucket of benefits dollars with which to choose among those options. For instance, an employee with a large amount of accrued paid time off could “buy” less vacation time and use those dollars for student loan repayment or another benefit instead.

Fuerman recommended employers interested in expanding benefits choices first survey employees to see what they want and then consult with their financial professional to discuss strategies for implementing them.

Kristen Beckman is a freelance writer based in Colorado. She previously was a writer and editor for ALM’s Retirement Advisor magazine and LifeHealthPro online channel. She also was a reporter for Business Insurance magazine covering workers compensation topics.