REBA's inside track: Why boring benefits are back

Looking back at the themes emerging from a raft of video calls I had with key players in the employee benefits market last week, something that really jumped out was how many people mentioned the surprise rise in interest in health and group insurances. It appears that it takes a global pandemic for employees and directors to realise how important ‘boring benefits’ are.

While the upsurge in new interest in insurance is mostly at the smaller employer end of the market as directors face up to their own mortality and vulnerability, it is notable that medium and larger employers are asking questions of their established group insurances too.

Here the activity seems to be very much around reviewing what they have and asking “is our budget spend correctly targeted?”, especially in the face of rising medical costs and unpredictable claims levels in the coming months and years (will we see a sudden upsurge or a slow climb in claims is the question).

For a few months now (we saw these same discussions come up during our month-long Employee Wellbeing Congress in September), an increasing number of employers are also questioning the equality of benefits offerings across their whole workforce. There is a growing discomfort that senior, better-paid workers are more protected with regards to health and life than those less well paid (often, working on the front line of the pandemic).

Large group insurers and advisers tell me they are seeing more enquiries from employers looking for affordable offerings that will help the whole workforce. How these will play out, we’ve yet to see though.

Alongside this, both suppliers and employers are picking their way through their offerings trying to find a way to order them so employees can access what they want, when they need them. This is not a new challenge, but it seems to have been exacerbated by new working practices due to the pandemic.

Two different types of solutions (or variations along these lines) are being tried:

Looking for a consumer-grade App that truly has everything in one place. The need is more urgent now so many workforces are dispersed and classic communications such as the poster on the toilet door is of little use, and managers are unable to spot problems with individuals as easily through a screen. Digital solutions to triage needs (especially health and mental wellbeing) is urgently required.
Wellbeing funds are becoming the new flex pots, with employees able to buy what they need. Of course, if this is done as a free-for-all, then this doesn’t benefit from bulk discounts or tax breaks (if appliable) but is an interesting road towards true personalisation. I suspect most employers will stick with a list for now, but put the emphasis on benefits to support wellbeing.

I’m sure we’ll all be watching how these different delivery mechanisms develop (plus as more new developments get added to the list). But I do get the feeling we’re going to see significant changes during 2021.

There’s nothing like a global crisis to fast track change.

The author is Debi O’Donovan, co-founder and director at REBA.