[Guest Blog] Key Findings from Ease's 2021 SMB Benefits & Employee Insights Report

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Ease’s 2021 SMB Benefits & Employee Insights Report

Every year, businesses take on the financial risk of encountering unpredictable expenses when insuring employees and their families. They want to encourage a culture of health and wellness to keep employees active and engaged; however, they also are perpetually stuck trying to find ways to lower premiums and control claim costs. How can insurance agencies help their clients build the best benefit packages for their employees while helping them control costs year after year?

With Ease’s second annual SMB Benefits & Employee Insights Report, which pulled data from 75,000 SMBs covering 2.5 million employees nationwide, insurance agencies can see what others have done, benchmark against premium costs, contribution data, or even shifting plan makeup, and discover meaningful insights into where the industry is headed.

In this blog, we share the key findings in medical premiums and contributions, health plans offered and types, voluntary benefits, SMB growth, and the impact COVID-19 has had on employee benefits.

Medical Premiums and Contributions 

Even amidst a pandemic, 2020 saw increases in medical premiums across the board, a continuation of the trend seen in 2019. The average company in Ease saw a nearly 6% increase in individual medical premiums and 3.74% in family medical premiums. This increase compared to the rate of change for other costs in the healthcare industry landscape poses unique challenges to decision-makers as they seek to balance meaningful access and quality care with affordability.

Employers’ contributions to Individual medical premiums declined marginally, from 74.24% in 2019 to 73.97% in 2020, and family medical premiums have remained nearly unchanged; however, the overall premium amount continued to experience growth YoY. This suggests that while premium costs continued to rise, employers costs remained fixed, passing the increase onto their employees.                    

Health Plans Offered and Types 

Over the last three years, the number of medical plans offered per employee has decreased by about 3% on average. This signifies an effort at cost containment by group leaders and business decision makers. By controlling—and more notably—shrinking the number of medical plans available to employees, companies are able to steer their employees to selecting more affordable plan options, such as HDHPs.

Company size plays a significant role in determining the overall employer cost of a group health plan. As we saw in 2020 in Ease, on average, businesses with more employees offered more medical plans than those with fewer employees. Larger groups may have the advantage of risk pooling, enabling higher-cost claimants to be offset by the healthier, lower-cost population within the employer group. 

On average in 2020, employees selected HMOs more than any other plan type for medical insurance, though the rate of selection has actually diminished slightly YoY. In contrast, HDHP selection increased YoY in all segments other than in companies with 1-10 employees. HDHP plans are particularly popular amongst millennial employees, as a lower-cost option that is generally attractive to a younger, healthier workforce.         

Voluntary Benefit Trends and Analysis 

With costs on the rise, and employee health and well-being taking a prominent position due to the pandemic, employers adapted their benefit offerings in order to fill any gaps found in core medical plans and continue to attract top talent. 

Similar to what we saw with medical plans, the larger the company, the more voluntary benefit plans offered per employee. A company with 101-250 employees offered 3.33 more voluntary benefit plans in 2020 than a company with 1-10 employees offered their employees. On average, the number of voluntary benefit plans offered per employee has increased by roughly 3% since 2018. The most popular plans are Dental, Vision, Life AD&D, Short-Term Disability, and Long-Term Disability. 

SMB Growth and Impact of COVID-19

As we explore the insights and trends that shaped 2020, we wanted to offer a glimpse into how COVID-19 impacted the SMB benefits space, as well as shifted the way employees interacted with their benefits. 

As many PCPs closed their offices and physical points of care presented risk of exposure, telemedicine rapidly became a critical necessity in 2020. We saw an explosion in the number of employees enrolled in telemedicine, with a YoY increase of 109%. 

In addition, millions of Americans found themselves furloughed in the wake of the pandemic. However, as the year wore on, the job growth we experienced in the second and third quarters was tied to the return of furloughed workers to their companies. As furloughed employees began to return to work, it was the smallest businesses that rehired at the highest rate. Businesses within Ease with 10 or fewer employees rehired more than 37% of their staff on average, a figure that ranged from 2% to just more than 4% for businesses with 11 to 250 employees.

As we come out of the pandemic and the economy slowly recovers, the challenge for insurance agencies becomes to make informed decisions—backed by data—about the benefits recommendations they are making to their clients. It can be uncomfortable, but succeeding in a volatile environment like today’s post-pandemic landscape comes down to accessing this meaningful data. Download Ease’s 2021 SMB Benefits & Employee Insights Report to unlock the full analysis, see where you stack up in comparison to your peers, and be better prepared to anticipate the road ahead.