The voluntary benefits industry has changed

As we look around at the effects COVID-19 has had on various industries, it is clear that many of these changes will be permanent– even when things go back to “normal.” How many of us went grocery shopping online before the pandemic? How often did we meet virtually or connect via Zoom calls, personal or professional? When we go back to “normal,” these scenarios will become less common, but it’s fair to say they’ll remain far more relevant than they were pre-pandemic.

The voluntary benefits industry is no exception to this change. According to Gallagher’s Work Force Trends Series report, “Pandemic stress brought employee wellbeing to the forefront, and voluntary benefits is in a position to address this. These adaptable resources allow employers to achieve their benefit objectives at a minimal expense, while providing their employees with an added measure of financial protection, cost savings and great peace of mind. In an extended period of economic uncertainty, many consumers are inclined to spend disposable income more cautiously.”

Prior to COVID-19, there was a gradual, steady evolution taking place in the voluntary benefits marketplace. We saw richer benefits, lower rates, a trend towards integrated communications and advancements in administration. When COVID-19 hit, we were pushed out of our comfort zone. We had to react and pivot quickly. In all aspects of our business, we had to find new, creative solutions to meet our clients where they were – at home!

In the past, particularly with legacy solutions developed pre-2000, solutions evolved slowly due to comfort, ease and the investment required for new systems. It was a paradigm shift with the arrival of COVID-19.

It wasn’t just those of us in the industry who were forced to react. Our employer clients were feeling the impact of COVID-19 as well. They realized that they needed to adapt if they wanted to attract, retain and engage top talent in the new environment created by the pandemic. In many cases, this meant focusing on enhancing employee communications and offering greater work flexibility. But, implementing and executing those tactics presented an even greater challenge with a more decentralized workforce.

Finally, voluntary carriers had their own unique set of challenges. Many of them suddenly had to provide benefits protection for COVID-19, or accommodate the many workers who had their income disrupted. They were also impacted by the growing need for mental health solutions. And, much like their clients, carriers themselves were facing a changing situation with the added difficulty of reaching a dispersed workforce in their own organizations.

In a matter of months, we went from status quo to unparalleled transformation, much of which we expect to see stick around for the long-haul.

Brokers and consultants will continue to embrace new solutions and the need for enhanced call center capabilities. Additionally, we’ll look to our carrier partners to provide richer benefit plans and simplified administrative solutions for our clients.

Employers will be tasked with developing more complex and meaningful employee communications. This isn’t just a matter of increasing enrollment in the benefits, though it includes that as well. It’s also about education and driving benefit utilization. With heightened awareness around health, employees need to understand their benefits if they’re going to use them to the fullest. And, employers will have to strike a delicate balance as they seek to control costs, but also want employees who use those benefits to see maximum return. Higher utilization means more security for their employees, which leads to greater benefits appreciation, which in turn supports recruitment and retention efforts for the employer. Employers must keep the total wellbeing of their employees’ top of mind.

Carriers, in turn, will need to understand the importance of providing online/virtual tools and services. They need to better understand the consumer’s high utilization of technology or apps for basic lifestyle functions, especially for utilization of benefits.

Employees have been impacted too, and we would expect to see improved consumerism along with higher utilization and appreciation of benefits from a more health-conscious general public.

With COVID-19, we’ve had an opportunity to re-focus on the necessities, rather than the niceties. That has led to greater clarity in decisions and benefit strategies. It’s also led to a lot of changes. With the arrival of vaccines and booster shots, some things may revert to prior solutions, but truly, when it comes to voluntary benefits, things will never be the same.

Richard “RAE” Egleston is Area President, U.S. Voluntary Benefits, Gallagher.