2021 Benefits Planning and COVID-19

As the COVID-19 pandemic continues to wage on, its effects on benefits planning for next year are being felt—especially as open enrollment season approaches. According to Mercer's Global Survey #5, 20% of employers surveyed said updating benefits programs to better meet employee needs was an HR area in which companies are seeing an increased need for support.

In addition to considering plan design changes, employers are having to evaluate and adjust their benefits packages for 2021. Some of the most common changes being made for the 2021 enrollment season are outlined in this article.

Potential Cost Increases and Plan Designs

Employers and benefits experts are bracing for cost increases headed into 2021. Health care premium costs have increased at a steady rate over the past few years, with the most recent average increase being around 6%. Actuaries at Willis Towers Watson predict up to a 7% increase in health care premiums in 2021 for both self-funded and fully insured employers.

5 Strategies for Reducing Health Benefits Costs in 2021

Health benefits costs are almost certainly going to rise in 2021. They’ve been trending upward for years—over 50% in the last decade, according to the Kaiser Family Foundation— and the current state of economic uncertainty over COVID-19 won’t slow things down. Realistically, after enduring months of business closures and managing exhausted workforces, many employers will be lucky to maintain uninterrupted operations.

That’s why it’s critical for employers to think about reducing health costs right now—figure out cost-effective benefits first so money can be shuffled as needed later. Having a solid plan going into 2021 will better position organizations facing limited budgets.

Here are five cost-reduction strategies employers should explore:

The impact of student loan debt

Student loan debt affects the financial lives of millions of American workers. Employers feel the burden as well, and have the opportunity to help reduce it. 

The impact of student loan debt on employees

According to a recent Forbes article:

• 44.7 million Americans have student loan debt;
• student loan debt is second only to mortgages in consumer debt, at a staggering $1.56 trillion;
• the average student debt is $32,731 with an average monthly payment of $393;
• 2.8 million borrowers are in forbearance;
• 5.5 million borrowers are in default.

Cobleskill Regional Hospital named 2020 Plan Sponsor of the Year

Congratulations to Cobleskill Regional Hospital on being named PLANSONSOR’s 2020 Plan Sponsor of the Year in the nonprofit defined contribution <$500 million category!

Cobleskill's 403(b) plan focused on employees’ wellness. This goes beyond physical wellness and influences the 403(b) plan’s design and approach to educating employees. “Retirement readiness and financial wellness are woven into the fabric of our culture,” says Christine Pirri, vice president, nonclinical operations.

As their plan adviser, HANYS Benefit Services meets often with Pirri and Cobleskill employees for a financial wellness check-up and to explain how a defined contribution plan gives an employee the ultimate responsibility for his own retirement outcome “Once people get that message, they’re much more interested in understanding, ‘How can I make this work?’” says Carol Idone, vice president, consulting, HBS.

The Plan Sponsor of the Year annual award program recognizes retirement plan sponsors that show a commitment to their participants’ financial health and retirement success.

HBS is proud to have worked with Christine Pirri and Cobleskill Regional Hospital to help develop a plan focused on the employee's overall financial well-being!

Preparing for an Unprecedented Open Enrollment Period

Open Enrollment Trends to Watch

Expect major disruptions to open enrollment this year. From an operational standpoint, COVID-19 might surge in the fall and force states to reclose businesses. From a personnel standpoint, employees may not be comfortable returning if they feel unsafe in the workplace. These are two worst-case scenarios, but they exemplify the multitude of potential disruptors stemming from COVID-19 this enrollment period.

For Your Benefit video series: Episode 2-The monkey on our backs pt.2

Thank you for joining for another episode in our video series: For Your Benefit with HANYS Benefit Services.

Hear from leading experts as we share insight on the employee benefit topics and trends that matter most.

In episode 2, we’re expanding on the student loan debt conversation we started in part one, taking a look at some creative solutions companies are using to tackle this major issue.

Tune in to each episode as we discuss regulations, investments, compliance and all things benefits.

If you have any questions on content from our video or would like to begin talking to a retirement plan advisor, please get in touch by email or by calling (800) 388-1963.