2021 Employee Benefits Market Trends
From administration changes and evolving legislation to various other shifting circumstances, it is clear; employers across all industries must constantly learn and adapt to handle their benefit offerings effectively. While the COVID-19 pandemic added an extra layer of complexity, the ability to gain a solid understanding of what other companies are doing has and will continue to be critically important.
Assurex Global periodically conducts polls throughout the year with thousands of employers to better understand various employee benefits, human resources, and healthcare topics. In 2021, the focus has keyed in on pandemic-related legislation regarding the workforce and employee benefits.
Vaccines & Proposed Legislation
As the pandemic continues to impact employers, Congress continues to mull different strategies to combat these adverse effects. Additionally, as vaccine rollout continues, employers are contemplating how they will facilitate employees returning to their offices.
Of the 252 employer respondents, 50 percent said they would not require proof of receiving the COVID-19 vaccine to return to the worksite. On the flipside, 4.4 percent said they would need proof of vaccination, and 2.4 percent said they would only require proof of vaccination for specific categories of employees. About 43 percent of respondents remain undecided.
While employers are certainly allowed to mandate vaccinations before authorizing a return to the worksite, several considerations must be reviewed. These include exceptions for those with disabilities and religious beliefs, business needs, collective bargaining issues, state laws and more. Consulting with counsel is always advised before putting a mandate into effect. Many employers who won’t require proof of vaccination are studying ways to encourage workers to receive the vaccine. This encouragement may include financial incentives, additional time off, or bringing the vaccine onsite when the appropriate time comes.
Employer Actions as a Result of the American Rescue Plan Act (ARPA)
In March 2021, Congress passed the American Rescue Plan Act (ARPA), designed to provide widespread COVID-19 relief. Included within the bill were several provisions that impact employers and the employee benefits they offer. Two of the most prominent measures include:
- A federal subsidy to cover 100 percent of the cost of COBRA coverage for up to six months for employees that experienced an involuntary termination of employment or reduction in hours.
- An increase in what employees can contribute to their Dependent Care Assistance Plans (DCAP) from $5,000 to $10,500.
Because the COBRA subsidy is only for employees that experience an involuntary termination of employment or reduction of hours, employers not tracking this type of termination will have some additional legwork, either on their own or in conjunction with their COBRA administrator. For employers administering COBRA internally, it will also be essential to watch out for important deadlines related to the subsidy and any further changes that may arise.
Employers who haven’t decided on the DCAP increase – about 44 percent of the 495 employer respondents – should strongly consider it. However, this potentially welcome change will come with some caveats. It will require additional administration and communication, as well as the potential for more challenging the DCAP non-discrimination tests.
Want More Insights?
The 2021 Employee Benefits Market Trend Report is an excellent tool to help guide your organization through the difficult decisions that come with employee benefit offerings. Talk to your trusted RCM&D advisor for more on these trends and how to approach your operations moving forward. To receive a full copy of the report, fill out the form below.