Experience and Expectations Show the Need for More Flexible Benefits

The effect of the COVID-19 pandemic on employees creates a need for more flexible leave and PTO policies, caregiving support, and health and well-being benefits, according to Mercer research.

In a series of surveys, Mercer took a look at how employers adjusted their leave and paid time off (PTO) policies, caregiving support, and health and well-being benefits during the COVID-19 pandemic, and it shared suggestions for these benefits going forward.

Mercer says in its “Leading Through the Pandemic” report that employers need flexible leave and PTO policies that can handle the evolving needs of workers and their families. In the coming year, employers should also shift their attention to offering behavioral health and telemedicine strategies, the consultancy says.

At the onset of the pandemic, only 19% of respondents to Mercer’s April survey had an existing emergency leave policy in place that they believed would be adequate for the COVID-19 crisis. By July, however, 22% of employers required employees to use vacation or PTO for a quarantine, or, if unavailable to go unpaid. Fifteen percent offered paid leave for one quarantine period, 21% offered paid leave for multiple quarantines, and 10% paid leave for unlimited quarantines. Thirty-two percent were considering revising their emergency leave policies to address the need for multiple quarantines.

Mercer says working parents need flexibility at work and from employers, as well as practical caregiving support. In April, only about 10% of respondents offered back-up child care solutions and only 4% said they would add the benefit in response to the COVID-19 pandemic. By September, this had changed dramatically, with 51% of employers allowing parents to change their schedules. Thirty-seven percent said employees who typically work on-site can continue to work remotely until dependent care coverage issues are resolved, and 29% said they would allow parents to conduct work outside of normal business hours. Twenty-four percent said they had started to allow parents to switch to part-time status on a temporary or limited basis, and 14% had created weekend, evening and/or overnight shifts to provide more flexibility for parents.

As a result of the school closures, 40% of employees have requested a leave of absence, and 35% of full-time employees have requested part-time schedules. Twenty-four percent of employers say productivity has gone down, and 23% say employees have left the company.

While health care cost predictions vary widely depending on the assumptions used, early results from Mercer’s “National Survey of Employer-Sponsored Health Plans 2020” show that, on average, employers expect health benefits cost to grow 4.4% in 2021, which would be in line with cost growth in recent years. The survey also found that only 18% of employers say that they will take cost-saving measures that shift more health care expense to employees, such as raising deductibles or co-pays. The majority of survey respondents (57%) will make no changes whatsoever to reduce cost in their medical plans in 2021 (compared with 47% making no changes last year, and just 44% in 2018). “Employers know that their employees have a lot to deal with, and the majority have chosen to spare them a major change in their health plans,” Mercer says in its report.

Employers are focusing on two areas of health care that have been in the spotlight during the pandemic: support for employee well-being, particularly in the area of behavioral health, and telemedicine, which has experienced phenomenal growth during a time when in-person visits to health care facilities would increase the risk of disease transmission.

Areas for health and welfare benefits that employers are focusing on for 2021 include well-being programs (i.e. mental, physical, financial and social) (71%), digital health (i.e. telemedicine and smartphone apps) (59%), cost management (i.e. higher deductibles, employee contributions, reduced limits and premiums) (38%) and inclusive benefits (i.e. women’s health and equity for minority groups (30%).

Mercer’s Behavioral Health Consulting Leader Sandra Kuhn recommends employers examine their existing behavioral health programs to identify any gaps that can be improved to meet the needs and desired experience for employees.

In conclusion, Mercer says, “As the year draws to a close, nothing seems certain but continued uncertainty. The challenge for employers is to be both proactive—using hard-won knowledge gained over the past seven months—and flexible. [Employers need to be] ready to change course as conditions demand.”