COVID-19: Eight Considerations for Managing People Risks Through Employee Benefit Plans

Nothing is more critical to the health of a business than the health of its people, a fact the COVID-19 pandemic has made clear as it threatens workers physically, emotionally, and financially. The pandemic highlights the many ways that poor management of people risks can lead to business disruptions, but also presents an opportunity to turn vulnerabilities into strengths.

Some of the obvious outcomes from poor people risk management include lower output from higher absenteeism and slower productivity owing to a disengaged workforce. Less obvious risks include reputational damage; negative impacts on recruitment; and increases in safety incidents and data privacy violations, which can lead to regulatory penalties.

Following are eight ways that employers can use their employee health and benefit plans to reduce people risks during times of crisis while also supporting firm-wide goals for community and social responsibility.

1. Support your workforce to keep them healthy, engaged, and productive. Identify the benefits most important to employees — for example, virtual care, management of chronic conditions, and mental health. Confirm with leaders that they support the business strategy, then conduct a gap analysis to develop a roadmap to reach your vision.

2. Choose insurers carefully. Pick proven and stable providers with robust information security protocols. Many insurers now offer extra support in response to COVID-19, including virtual care options and extra cash lump sums to ease hospital stays. Consider not just insurers’ actions during times of crisis, but their positions on delicate claims and their procedural flexibility in areas such as missed renewal and premium payment deadlines.

3. Communicate effectively to employees. The best benefit program is only as good as its level of employee engagement. Benefits can be complicated, and misunderstandings can cause unpleasant surprises for employees — and harm your brand.

4. Centralize decision-making. Assigning responsibility for key decisions related to the design, delivery, and financing of programs can make them more visible to stakeholders. Consider setting up a committee of stakeholders from across the business to review programs and make joint recommendations that fit your organization’s risk tolerance.

5. Build an employee benefits risk registry to see essential data related to your benefit offerings quickly, including financing, cost, utilization, and regulation. It’s particularly important to understand the scope of exclusions, such as those relating to catastrophic events.

6. Review your benefits regularly. Periodic reviews by independent specialists can help companies eliminate blind spots, ensure compliance, and avoid regulatory penalties, particularly in rapidly changing areas like digital and mental health.

7. Use risk finance optimization to maximize the value of benefits while protecting against unexpected exposure. This includes evaluating whether to insure or self-insure. Consider, for example, whether a defined contribution health plan is the right approach to protect against rising healthcare costs.

8. Secure transmission of private data. Online benefits platforms like DarwinTM can provide a safe way of sending eligibility information between payroll and benefit providers to minimize the risk of breaching data privacy laws.

Organizations should be proactive as they identify and manage people risks, and should evaluate and adapt health and benefit programs regularly, allowing them to better protect employees and improve business performance.