Workplace Insurance: What You Need to Know
Impact on Cultural Trends
Workplace culture trends such as the Great Resignation, quiet quitting, and remote/hybrid work have significantly impacted employee benefits and plans, particularly regarding premiums.
“When a large number of employees leave an organization at once, such as during the Great Resignation, the cost of workplace insurance premiums spike as the pool of participants in the organization’s benefit plans decreases,” said Luke Williams, an insurance specialist with Clearsurance.com.
Remote or hybrid work can also lead to more complex benefits structures as employers struggle to decide what type of coverage to provide for their distributed workforce.
“With the rise of remote and hybrid work, many companies, including and especially small businesses, are adjusting their health insurance and retirement benefits to accommodate employees working from home,” Williams noted. “Small businesses (those with under 50 employees) aren’t required to have health insurance, but 56% of them do so now.”
“Quiet quitting” has also caused companies to rethink how they design and administer their employee benefit plans, such as flexible spending accounts, retirement savings, and health insurance.
“Many companies are now being forced to be more proactive in ensuring their employee benefits are competitive in order to retain current and potential employees,” William added.
Impact of Economic Trends
Economic issues, many of which fall into the average company’s “negative” ledger – should weigh heavily on company officers throughout 2023.
“There’s a lot on the table this year,” said is Mike White, an account executive with Torgersen Causey Insurance & Benefits in Pensacola, Fla. “Health insurance rates are leaning more toward the higher side for 2023. Aas demand for these services increase, claims increase, as do premiums.”
Burgeoning economic trends, such as inflation, recession, and labor shortage, should continue to have a significant impact on employee benefits, plans, premiums, and the outlook for the year ahead.
“Inflation can increase the cost of providing benefits and drive up the cost of insurance premiums,” said Jon Morgan, CEO at Venture Smarter consulting firm that works with startups and small business. “This can result in employers having to make difficult decisions about the types and level of benefits they can offer their employees.”
Historically, recessions often result in budget cuts and a reduction in spending, which can lead to a decrease in the number and level of benefits offered by companies. “Additionally, during a recession, unemployment rates may increase, leading to a decrease in the number of employees enrolled in benefits plans and a decrease in the amount of premiums paid,” Morgan noted.
An ongoing U.S. labor shortage (three million fewer Americans are in the labor force than in February, 2020) is also impacting employee benefits and insurance premiums.
“With a smaller pool of available workers, companies may have to compete for top talent by offering competitive benefits packages and insurance coverage,” Morgan said. “This can drive up the cost of insurance premiums, as well as the cost of providing benefits to employees.”
How Workplace Insurance Looks Different in 2023
Structurally and economically, workplace insurance plans are starting to look substantially different than what the industry offered a decade ago.
“Some employers, for example, are leaning toward high deductible health plans that are HSA eligible, and instead of contributing more toward employee premiums, they help contribute to the employees HSA account, giving them more money for medical expenses,” White said.
Another alternate route businesses are taking this year is with health reimbursement arrangement plans.
“This allows companies of all sizes more flexibility in how they contribute to employee premiums, but also allows the employees to go out to the individual market and obtain a plan that’s right for them,” White added.
The workplace insurance market is also expanding its overall product lineup, primarily to keep staffers happy with their benefits in a changing workplace.
“Many employers are starting to offer free EAP programs (employee assistance programs),” White said. These give employees access to free will prep and legal advice, free counseling, and other benefits.”
Investment in EAP’s can translate into positive returns in terms of business cost savings from reduced sickness absence and reduced insurance claims.
“More managers are making use of referral support to help them better manage staff issues,” said John Everton, technical director at U.K.-based Bravo Benefits, an employee benefits services firm. “EAP’s not only help to manage problems but they can also be used to head off issues that are arising in the workplace. For example, we’ve introduced health screenings as part of a preventative package along with menopause support for women employees.” Insurance experts say there’ll be more innovation taking place in 2023.
“This means add-ons being attached to policies such as preventative care such as health screenings, more occupational health support and specific gender-based services such as menopause support,” Everton said. “Half the population goes through menopause and one in 10 women experience symptoms for up to 12 years. “We’ll also see more emotional support for men around mental health awareness.”
Family lifestyle issues are also impacting workplace employee benefit packages.
“Some employers are also realizing that younger generations are slowing down on having children and focusing more on pets, so pet insurance has become another interesting feature in employee benefits packages,” White added.
Employer Tips to Navigate a Shifting Workplace Insurance Market.
For employers, the challenge is to ensure the insurances and support services match the make-up of their company’s workforce.
“Additionally, workplace benefits need to be age-appropriate and can be adapted for specific groups of employees,” Everton said.
Company leaders also need to communicate with employees clearly and transparently, as they will likely have questions and concerns.
“Additionally, remember to work with a professional who is knowledgeable about the legal implications of the policies you want to offer,” Williams said. “Employers also need to stay current on industry developments and new regulations, as they may affect critical decisions and work closely with your insurance providers to identify any gaps in coverage and develop solutions.”
Situational awareness is also key going forward.
“The rise of teleworking and other alternative employment arrangements is putting pressure on employers to ensure they have appropriate policies in place that can provide adequate protection for their workers, regardless of the type of arrangement,” Williams noted. “Plus, the emergence of more advanced technology and the increasing use of automation are pressuring employers to ensure that they have the right insurance policies in place to cover any potential liabilities associated with these new technologies and processes.”
Employers should also consider offering new and innovative types of insurance that better meet the shifting needs of their employees.
“For example, employers can offer usage-based insurance plans which provide discounts to those who maintain healthier lifestyles or adhere to safety protocols,” Chavez said. “Additionally, employers
can also offer supplemental benefits such as employer-provided life insurance, disability insurance, long-term care insurance, or critical illness insurance.”
Other new types of insurance that employers should consider offering include mental health coverage, reproductive health coverage, and virtual visits for telemedicine.
“Physical therapy and wellness programs can also be beneficial for employees in terms
of overall well-being and productivity,” Chavez noted. “Ultimately, employers should tailor
their offerings to meet the needs of their workers while also taking into account economic trends and the potential impact of such changes on their budgets.”
Insurance Tips for Employees
U.S. career professionals are actually in an advantageous position when it comes to workplace insurance – if, that is, they do their homework.
Covering these three areas is a good place to start.
Know what’s covered. Before choosing an insurance plan, make sure you understand what it covers and what it doesn’t. “Pay attention to deductibles, copays, and coinsurance to get a clear picture of your out-of-pocket costs,” Morgan said.
Compare plans. If your employer offers multiple insurance plan options, compare the costs and coverage of each one to find the best option for your needs. “Consider working with a benefits consultant or using online resources to help you compare plans (your employee benefits/HR office is a good place to get help.)”
Utilize preventative care. Taking advantage of preventative care services, such as annual check-ups and screenings, can “help you stay healthy and minimize your out-of-pocket costs over time,” Morgan added.
Employees should also take advantage of favorable legislation coming out of Washington, D.C.
“The Biden Administration recently fixed the family glitch rule in the Inflation Reduction Act, so now family members of employees that are offered health insurance by their employer can still qualify for tax credits on the U.S. health care insurance marketplace,” White said. “This is a great piece of legislation to take advantage of, and one that’ll save employers a significant amount on premiums.”
What to Look for During the Rest of 2023
By and large, the state of workplace insurance in 2023 will likely be influenced by a combination of factors such as government regulations, technology advancements, changing workforce demographics, economic factors, and remote and hybrid work.
“The abundance of front burner issues makes it difficult to predict exactly how the workplace landscape will change,” Morgan said. “However, by staying informed and proactively addressing these challenges, employers and employees can work together to ensure that everyone has access to the insurance benefits they need to stay healthy and financially secure.”
In 2023, employers are also likely to continue looking for innovative solutions that provide comprehensive coverage at a reasonable cost.
“With an increased focus on telemedicine and mental health services, employers may offer plans
with coverage for virtual visits and mental health resources in order to better meet the needs of their employees,” Chavez said. “Additionally, there should be an increased emphasis on incentivizing employees to maintain healthier lifestyles and adhere to safety protocols in order to receive premium discounts.”
Employers are also likely to continue assessing economic trends and the potential impact of such changes on their budgets when deciding which workplace insurance plans to offer. “All of these factors will be essential in providing comprehensive coverage at a reasonable cost
for employers in 2023,” Chavez noted.
