A new survey from employee benefit and investment advisory firm Conrad Siegel shows how employers have adjusted their retirement plan and health care benefits during the COVID-19 pandemic.
Of the 100 plan sponsors who were surveyed, 57% said the biggest change to their total benefits packages last year was the increased opportunity for staff to work remotely. Additionally, 40% of employers reported that they made changes to accommodate flexible work schedules. Only 9% of employers in the survey made changes to the retirement plan, 7% made changes to health care benefit and 6% made changes to parent and child care benefits. Forty percent of employers reported zero changes to their total benefits packages.
The survey reports there were few changes made to most retirement plan benefits. Only 2% of plan sponsors eliminated employer contributions and 4% reduced employer contributions. In fact, 94% of employers reported no changes to retirement plan employer contributions. Instead, more than half (52%) of employers added an in-service withdrawal provision from the Coronavirus Aid, Relief and Economic Security (CARES) Act, and 25% increased retirement plan loan limits in line with what was permitted by the act. Nineteen percent of organizations included retirement plan employer contributions on Paycheck Protection Program (PPP) loan forgiveness applications.
The coronavirus pandemic underscored a massive demand for quality health care benefits and led many to question weaknesses in the health care industry. Forty-nine percent of employers reported their biggest challenge in employer-sponsored health plans was standard and ongoing health costs not related to COVID-19, and 31% reported additional cost increases due to COVID-19 as their greatest test.
However, most employers do not anticipate that the pandemic will have a large impact on projected health care costs in the immediate future. Fifty-four percent expect the pandemic will not materially increase or decrease estimated health care costs. Ten percent expect a decrease in overall estimated costs and 34% predict an increase.
Other challenges included providing adequate mental health services for members (22%) and the availability of maintenance care or preventative care services for members (15%). Because of these challenges, more employers are expecting to make well-being services more widely available, and others are expanding benefits. Fifty-four percent of employers anticipate an increase in mental health/substance abuse services in 2021 due to COVID-19. Twenty-five percent of employer-sponsored health plans have extended cost-free virtual visits for members because of the pandemic, and 17% of employers extended additional paid time off due because of pandemic.
« 403(b) Plan Investment Lineups Have Changed