A new era of small group benefits

COVID has created a new normal in the employee benefits world for employers of all sizes and types. Small employers and their employees, and the benefits advisors who work with them, have experienced a lot of changes in this arena. They have had to adjust to enrolling and administering benefits for largely remote workforces, leaning heavily on technology platforms to streamline and automate these processes. In my opinion, these changes are for the better, and will help small businesses attract and retain talent while increasing employee morale and financial wellness amidst an uncertain economic climate.

Here are the top three characteristics of this new era of small group benefits:

1) Expanded benefit choices deliver financial and physical wellness

The pandemic led employers of all sizes — including small businesses — to realize how important benefits and choices are to employees. A Care.com study showed that almost all (98%) of the leaders surveyed plan to newly offer or expand at least one employee benefit, prioritizing the ones workers deem most essential, like child and senior care benefits and expanded mental health support. Interest in pet insurance is also spiking, thanks to all those pandemic puppies. A Forbes Advisor survey found that while 50% of pet owners already have insurance, 21% plan to buy pet insurance in 2022.

Historically, small employers have offered only health insurance and a few other benefits, with larger employers offering more choices and robust voluntary benefits packages. Now, many small employers are offering more benefits options, after realizing that mental health and financial wellness matter a lot. A LIMRA study found that in five years, 45% of small employers (those with under 100 employees) plan to offer more benefits than they do now. And 76% of employers of all sizes think their employees will expect a wider variety of benefits options in the future.

There are also more niche benefits options available to support individual employee needs. Offerings like Hinge Health, an online platform for treating musculoskeletal pain, and Ginger, on-demand mental health care, are designed to reduce health care costs for the employer and provide convenient and helpful treatment to the employee.

Amidst continued inflation and headlines warning of an economic downturn, a wider package of benefits is also meaningful as some families find themselves facing reduced resources. In these instances, having benefits that provide financial protection, such as a hospital indemnity plan, can be instrumental in the face of a serious illness or unexpected hospital stay. Removing financial stress also boosts employee morale and productivity. According to a study by PwC, 12% of employees admit missing work due to financial stress.

2) Technology and automation are now in reach 

To deliver a remote enrollment and benefits administration experience, small employers during the pandemic have rushed to adopt modern benefits software like GoCo, Justworks, and Namely. According to a report from Guardian, 7 in 10 employers have digitized their benefits enrollment. Like Zoom calls and flexible work schedules, this technology is here to stay.

Today’s HR and benefits platforms specialize in providing automated, data-driven enrollment and administration experiences and more benefits choices to the small and mid-size market. Historically, these advantages were thought of as “large group” features. They also greatly improve the experience of enrolling in and managing benefits year-round for both the employer and the employee.

It’s no longer a heavy lift to implement a new HR and benefits administration platform for small employers. The same Guardian report shows that the average length of time to implement a platform for companies with less than 50 employees is just two weeks. For employers with 50-99 employees, it’s four weeks.

3) The benefits experience is improving for all

COVID has heightened the digital experience expectations of consumers, whether they’re at home or at work. In turn, people increasingly want instant access to information about their health insurance and benefits.  Enrolling in and managing these products — essential for financial and medical protection — should be just as easy as ordering a latte at Starbucks or depositing a check via mobile phone.

For small employers, the possibilities go far beyond modernizing enrollment. New platforms and innovations to existing ones are creating a more engaging, year-round benefits experience for employees. For example, some platforms use AI and predictive analytics to suggest relevant benefits to employees when they most need them: accident insurance for a skier who suffered a serious injury; or hospital indemnity coverage for someone who incurred unexpected medical bills.

Employers are also increasingly investing in decision support tools which are helping people navigate the complex choices they face involving employee benefits, both during open enrollment and throughout the year. These tools—like Nayya, Jellyvision and Picwell—evaluate the insurance, savings and benefit options available to a user before recommending choices that provide an ideal combination of out-of-pocket costs and financial security.

Now is the time for benefits advisors to help small employers embrace these opportunities, technology innovations and new approaches to benefits spurred by the pandemic. Twenty-seven percent of people have considered leaving their jobs for an improved benefits package, according to MetLife. Small businesses now have the resources and opportunities at their fingertips to offer a great package and experience, helping them attract and retain talent — and support their physical and financial wellbeing in any economic climate.

Meg Collins is Chief Growth Officer at Ideon.