Most Employers Intend to Offer Same Health Care Coverage in 2021

But many said they might be looking to cut costs in other ways.

Gallagher’s 2020 Benefits Strategy & Benchmarking Survey revealed that 86% of employers did not reduce their health plan benefits this year, and 79% expect to offer the same coverage in 2021.

Since the start of the pandemic, more than eight in 10 employers (83%) say they have more strongly emphasized the role of specific benefits, including emotional well-being benefits (65%), leave policies (47%), medical benefits (39%) and physical well-being benefits (36%).

Employers’ top concerns about health care costs are the high costs of medical services (67%) and specialty drugs (41%). Gallagher says that these challenges—along with COVID-19-related concerns about increased operating costs and lower revenues—may force many organizations to adjust their 2021 benefits and compensation offerings. Employers may raise employees’ premiums and/or turn to high-deductible health plans (HDHPs), according to Gallagher.

Employers also said they might re-evaluate less common health care tactics in an effort to reduce unnecessary costs, including audits of plan eligibility (18%) and claims (15%), and those that deliver greater value, such as narrow provider networks (14%), designated centers of excellence (10%) and integrated health and disability management programs (9%).

Even before the onset of the pandemic, telemedicine was rated the top health care cost-control tactic this year, with 59% of employers providing employees with the ability to connect with health care providers virtually. COVID-19 has accelerated telemedicine adoption rates, providing employees with a socially distanced care option that is on-demand and less costly than standard office visits or trips to emergency rooms and urgent care facilities.

Gallagher says unlimited paid time off (PTO) can be a creative way to support organizational well-being by cutting costs and motivating employees, particularly those who work from home and may be struggling to strike the right work-life balance. Unlimited PTO eliminates employers’ need to cash out any balance remaining within the PTO period or upon retirement.

To compensate for benefits that are being removed, 45% of employers said they enhanced voluntary benefit offerings this year, such as critical illness insurance (58%) and hospital indemnity insurance (42%).

The survey report can be found at