Voluntary Benefits Trends and COVID-19 Impact on Benefits

voluntary benefits trends and COVID impact on benefits

Part 2 – 2021 SMB Benefits & Employee Insights Report

The pandemic has exposed many of the cracks in the existing healthcare system. Identifying the transformational changes that have occurred and making wise decisions about benefits is challenging for any business. As a result, there is unique pressure on you as a health insurance broker to help your clients navigate these uncharted waters. Last week, we introduced Ease’s 2021 SMB Benefits & Employee Insights Report and the key findings in medical premiums and contributions and health plans offered and types. In this week’s Broker Tool Belt, we focus on the key findings in voluntary benefits trends, SMB growth, and the impact COVID-19 has had on employee benefits. 

Voluntary Benefit Trends and Analysis 

At the end of 2019, as many companies across the country were concluding their renewal period, the United States had an unemployment rate of 3.5%—the lowest it had been since 1969. It was in this environment that employers found themselves at war for the best talent and in need of total rewards packages to help differentiate their talent brand. Voluntary benefits help supplement the gaps found in core medical plans, and are a smart way for companies to attract top talent. 

Similar to what we saw with medical plans, the larger the company, the more voluntary benefit plans offered per employee. A company with 101-250 employees offered 3.33 more voluntary benefit plans in 2020 than a company with 1-10 employees offered their employees. On average, the number of voluntary benefit plans offered per employee has increased by roughly 3% since 2018. The most popular plans are Dental, Vision, Life AD&D, Short-Term Disability, and Long-Term Disability. 

Table for voluntary benefits plans offered per employee

SMB Growth

Since 2018, smaller businesses have slightly decreased the number of employees they employ, while larger businesses have slightly increased their headcount. As we saw during the pandemic throughout 2020, the key to small businesses survival is anticipation and adaptation. Small businesses forced to do more with less are in greater need of the right tools and technology to supplement tasks and activities previously conducted by employees. 

In summary:

      • Businesses with 1-10 employees, the average size has decreased slightly to 4.79 employees (-1.02%)
      • Businesses with 11-50 employees, the average size has seen a nominal dip to 24.78 employees (-0.05%)
      • Businesses with 51-100 employees, the average size has grown from 69.37 to 70.08 employees (+1.02%)
      • Businesses with 101-250 employees, the average size has grown from 144.15 to 146.28 employees (+1.47%) 

Table with average SMB size data

Despite the spike in national unemployment and overall market volatility seen by employers in 2020 as a result of COVID-19, groups in Ease demonstrated overall stability. Perhaps the biggest contributor for employer groups in Ease still experiencing growth in the face of a turbulent job market can be found by looking at the makeup of these employers relative to those in the hardest hit industries. Of the businesses in Ease that have experienced growth since 2018, it has looked like the following:

Table with 2020 SMB growth data

Special Report: Impact of COVID-19

Over the course of the last year, we have found ourselves in the midst of the worst global pandemic in more than a century. In an instant, COVID-19 upended our sense of normalcy, including the way we live and do business. As we explore the insights and trends that shaped 2020, we wanted to offer a glimpse into how COVID-19 impacted the SMB benefits space, as well as shifted the way employees interacted with their benefits. 

In 2020, brokers we surveyed indicated they had to help their groups with the following activities: 

Activities brokers indicated they had to help their groups with

As many PCPs closed their offices and physical points of care presented risk of exposure, telemedicine rapidly became a critical necessity in 2020. We saw an explosion in the number of employees enrolled in telemedicine, with a YoY increase of 109%. 

In addition, millions of Americans found themselves furloughed in the wake of the pandemic. However, as the year wore on, the job growth we experienced in the second and third quarters was tied to the return of furloughed workers to their companies. In Ease, we saw the following rehiring of employees furloughed due to the pandemic:

      • 37.09% of employees who worked for companies with 1-10 employees were rehired.
      • 2.21% of employees who worked for companies with 11-50 employees were rehired.
      • 3.29% of employees who worked for companies with 51-100 employees were rehired.
      • 4.24% of employees who worked for companies with 101-250 employees were rehired.

Final Thoughts About Voluntary Benefits Trends and COVID-19 Impact on Employee Benefits

COVID-19 is still impacting most of the country, and many SMBs still find themselves in a vastly different situation than they were this time last year. We understand the challenge today for you is the speed at which these changes are happening, forcing you to oftentimes make recommendations to their clients without the time—or data—to make informed decisions. It can be uncomfortable, but succeeding in a volatile environment like today’s post-pandemic landscape comes down to accessing meaningful data. Download the full 2021 SMB Benefits & Employee Insights Report to arm yourself with high-quality information and return your agency’s growth rate to 2019 levels.