Post-COVID Workforce and Insurance: What Does the Future Hold?
September 25, 2020
It is probably safe to say that the world is never going to be the same again. Changes brought about by the COVID-19 pandemic have been too far-reaching and systemic. For example, imagine how a post-COVID economy will impact workforce and insurance issues. We can only begin to imagine what the future will look like.
In some respects, our economy will continue on as it always has. Entrepreneurs willing to take risks will start businesses and hire employees. Engineers will invent new products and service professionals will come up with better services. Yet in other respects, things will be different. Some things will be drastically different.
For most of us who work in office environments, the most profound impact COVID-19 has been remote work. COVID-19 has forced us all to stay home. As a result, we have gotten used to working entirely online. We have gotten used to videoconferencing and chatroom collaboration.
At the same time, our employers have become used to spending less money on overhead. Their utility bills have been lower. The amount of money they spend to maintain offices has fallen considerably. The savings have been so profound in some cases, the companies are not making plans to bring employees back for quite a while – if at all.
According to NPR, Morgan Stanley plans to have a smaller office footprint moving forward. They are not the only ones. Some of the biggest names in tech – including Facebook and Google – are now encouraging employees who can continue working from home to do so.
COVID-19 has had a profound impact in the size of the workforce as well. For better or worse, having to lay people off has demonstrated to some employers that there were too many people on the payroll. They have learned to get by with a smaller workforce and will continue to do so even as the economy recovers.
This might mean that everyone who lost a job during the pandemic will not be getting it back. Some will have to look for new jobs while others will take a leap of faith and start their own businesses. It's not unreasonable to expect a spike in freelance and gig economy work as a result of lost jobs.
Changes in the workforce will undoubtedly have an impact on insurance benefits too. Most visibly, companies that do not bring back the entire workforce will ultimately pay less for insurance benefits. Fewer covered employees mean lower spend. The realized savings will likely be enhanced for the 2021 calendar year by insurance company rebates and premium reductions.
On the flip side, freelancers and contractors will be forced to obtain health insurance from the individual marketplace. No longer covered by employer-sponsored plans, their costs are likely to go up significantly unless they elect to obtain coverage through a federal exchange.
We also expect to see companies modifying their insurance benefits. There is a big emphasis on mental health right now, and we believe companies will be adding and expanding mental health benefits for 2021. They might also think about adding benefits that facilitate a better work-at-home environment. For example, subsidizing the cost of maintaining a home office seems unavoidable at this point.
Most of us will work differently in the post COVID-19 economy. We will have to. As such, benefits packages will be modified to accommodate the new environment. As a general agency, all we can suggest is that our brokers hold on to their hats. The next 12 to 18 months are going to be rather interesting.