Six months ago, companies in Rhode Island that were worried about keeping talented employees were talking about salary increases and benefits enhancements. The job market was so competitive that employers often felt they needed to polish their benefits just to keep their workforce.
Times have changed.
Companies now operating in the midst of a public health crisis, with perhaps a smaller cadre of critical employees, are not trimming benefits, but they want to keep costs and overhead as lean as possible, given the unpredictability of the economy.
Company leaders are making those decisions now for 2021, said insurance brokers and employee benefit administrators.
What are companies asking for? They want to see a continuation of virtual or telehealth options, which gained in popularity in the pandemic, and they are looking for more options for wellness packages.
Mental health care has parity with physical health benefits in insurance plans, but the additions that a wellness plan offers – incentives for keeping physically fit, financially secure and even add-ons for child care or elder care – are in top demand, said James Raiola, principal of Warwick-based James Raiola CFP and Associates.
The COVID-19 pandemic, which put a stranglehold on Rhode Island starting in March, has spurred companies to think about how to encourage their employees to make better use of existing benefits, including incentives for losing weight, eating healthier and boosting the immune system.
More companies are asking about these programs, he said. Some, such as the Wellness Premium Reward, offered by Blue Cross & Blue Shield of Rhode Island, provide an incentive of up to $300 a year for employees who participate and reach certain wellness goals, and earn the employer the same amount.
“They are looking to enhance their menu of options, keep their population healthy,” Raiola said. “And you will get a reduction in your health premium as a result.”
‘They are looking to enhance their menu of options, keep their population healthy.’
JAMES RAIOLA, James Raiola CFP and Associates principal
William Delmage, the CEO and president of WD & Associates Inc., in East Providence, said the pandemic alerted many people to the need for mental health services, bringing to the forefront issues including depression and people who are working from home and feeling isolated.
The wellness packages, under the Affordable Care Act, are part of smaller plans for no fee. Larger companies can add additional options, as well, from third-party providers. Companies all have asked more questions about the options, he said.
“I think it woke people up,” he said of the coronavirus. “Is there something else I can do?”
Patrick Canavan, New England regional employee benefits practice leader for USI Insurance Services LLC, said about 40% of companies are now renewing policies for Jan. 1.
In reviewing mental health benefits, many employers are taking a fresh look at the employee assistance plans, which traditionally have had low utilization.
The plans, which describe assistance that is available for child care and stress release, are resources that may already be in place for employees under strain due to the pandemic and its economic impacts.
“It’s not just stress-related but also elder care, financial stress, child care,” Canavan said.
Although nonemergency claims were reduced for insurers in 2020 due to the cancellation of elective procedures, some of those deferred costs presumably will be included in the 2021 rates.
In benefits, Canavan is seeing most employers focus more intently on keeping cost increases to a minimum, whereas in the recent past, to retain employees, they were interested in enhanced benefits.
Raiola hasn’t seen many requests from companies to trim benefits, given economic uncertainty. Most are taking a measured approach to bringing back employees they may have had to furlough or lay off, and in dealing with their insurance and benefits.
“How fast their business picks back up is the same pace at which they’re looking to rehire,” he said. “It’s not a case where, OK, the economy opened and everyone is coming back to work.”
In May, after the businesses reopened, Raiola saw an influx of new employees. But as the summer has waned, that has slowed.
“Companies … want to be as lean as they can and as measured as they can before they take the next step and hire ... [more] employees,” he said.
In terms of benefits, the state-regulated insurance costs are expected to rise, but not as fast as they did in 2020, he said.
On Aug. 28, the R.I. Office of the Health Insurance Commissioner announced that 2021 rates for small-group plans would generally increase, with the exception of UnitedHealthcare of New England Inc., which will drop by 0.5%. The increases for other small-group plans would range from 1.8% to 2.9%.
Large-group rates in 2021 will have changes ranging from a decline of 0.3% to an increase of 9.6%.
Companies that have already decided on packages for 2021 are being told to expect average increases of 5% to 7% if they are in the small-group rates, and 3% to 6% for large groups, which would be companies with more than 50 employees, Raiola said.
“Because the workforce has somewhat been trimmed, I really don’t find where companies are looking to reduce the level of the benefit.”
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
