There’s nothing more critical to the health of a business than the health of its people.  At Mercer Marsh Benefits, we firmly believe it’s essential to understand and address people risks, including the threats posed to a business if the physical, emotional and financial health of its workforce is compromised. Employee benefit plans can be a critical component of risk strategies while supporting firm-wide goals for community and social responsibility.

 

The COVID-19 pandemic has highlighted the many ways that poor management of people risks can lead to business disruptions. Some of risks have been clear for decades, such as lower output from higher absenteeism or slower productivity owing to a disengaged workforce. But there are less obvious ones, too: a business’s reputation is more fragile than ever. Being seen as disorganized or indifferent can impede a firm’s ability to recruit long after the worst is over. Likewise, the risks of safety incidents and data privacy violations increase during periods of crisis, which can lead to regulatory penalties.

 

However, these areas of vulnerability can also be made into positions of strength, allowing proactive firms to gain a competitive advantage over slower-moving rivals. We’ve identified crucial ways that employers can use their employee health and benefit plans to reduce people risks at times of crisis.

 

  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) and confirm with leaders that they support the business strategy. Then conduct a gap analysis to develop the roadmap to reach your vision.

  2. Choose suppliers carefully. Pick proven and stable providers with robust information security protocols who can offer valued support. Many insurers are offering extra support in response to COVID-19, including virtual care options and extra cash lump sums to ease hospitalization stays. Consider not just the actions offered by insurers during times of crisis, but also their positions on delicate claims and the level of procedural flexibility in areas such as missed renewal and premium payment deadlines.

  3. Communicate effectively to employees. Even the best benefit program is only as good as its level of employee engagement. Benefits can be complicated, and misunderstandings can not only cause unpleasant surprises for employees, but also harm your brand.

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

  5. Build a risk registry for employee benefits to see all essential data related to your benefit offerings quickly, including financing, cost, utilization and regulation. Particularly important to understand are 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. Be most aware of areas like digital and mental health, where advice and strategies are changing rapidly.

  7. Use risk finance optimization to maximize the value of benefits while protecting against unexpected exposure. This includes evaluation of whether to insure or self-insure. Through this process, you can consider, for example, whether a defined contribution health plan is the right approach to protect your firm from rising healthcare costs.

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

Employer-sponsored benefit plans are playing a vital role in helping individuals and companies cope with the COVID-19 crisis. However, we believe that improvements can still be made. We encourage organizations to be proactive in their approach to identifying and managing people risks, and to evaluate and adapt their health and benefit programs regularly. By adopting this approach, organizations can better protect their employees and improve business performance.

Amy Laverock
Amy Laverock

Partner, Global EH&B Strategic Solutions Leader

Partner, Mercer Marsh Benefits