Making Plan Amendments to Your Employee Benefits Plan During a Crisis
By: Benefits by Design | Tuesday March 24, 2020Updated : Wednesday January 20, 2021
As a result of the coronavirus (COVID-19) outbreak, businesses and stores are closing temporarily. Consumers are encouraged to stay at home and practice social and physical distancing, and many Canadians have transitioned to working from home entirely.
Many organizations know the value an employee benefits plan brings to a business and its employees. However, these are extraordinary circumstances, have organziations contemplating what to do with their group insurance plan.
We want to take this opportunity to highlight some creative solutions for business owners to maintain essential benefits coverage through this time of crisis while potentially reducing the costs to their business.
The first thing to consider is making plan amendments. Your insurer can work with you and your Advisor to make cost-savings adjustments while still maintaining crucial coverage.
Restructuring Your Benefits
It may be possible to restructure your benefits plan to maintain crucial coverage while reducing or possibly removing other coverage you may not be prioritizing at the moment.
One thing to consider as you go through this exercise is the importance of mental health services. When restructuring your benefits, it’s worth taking a close look at your mental health resources and whether you feel you have the right coverage. Consider adding resources like an Employee Assistance Program (EAP) to your benefits package if your plan does not already have one (more on those below).
Add a Health Care Spending Account (HCSA)
A Health Care Spending Account (HCSA) allows employers to contain the costs of eligible health expenses by defining a specific dollar amount per employee to use on these expenses.
Many paramedical practitioners are closed, and employees unable to use their services. However, HCSAs also include options for mental health services, and employers can create a specific plan design through a Standalone® HCSA to allow for only those services to be eligible.
Switch to a Low-Cost Health Plan
BBD’s Benaccount is a lower-cost, high deductible solution that covers catastrophic expenses that might otherwise leave employees financially at risk. It focuses on protecting them from costly, unexpected costs, and less on ancillary insurance, such as Dental Insurance, massage, or chiropractors. Benaccount is also paired with an HCSA to provide employees with some flexibility and choice.
Due to the nature of the coverage, Benaccount premiums are lower in cost than most other fully insured benefits plans and focus on the most crucial coverages.
Temporary Employee Layoffs
We know this isn’t an easy thing to do, but it may be necessary in some cases. Employee benefits coverage can continue during a layoff, provided employees continue to pay their portion of the premiums, if applicable.
If this is something you’re considering, we recommend speaking to an employment lawyer to help you through the process.
Embrace Telemedicine and Telehealth
In a time of a worldwide pandemic, employees are less inclined to visit in-person clinics and, with social and physical distancing as a guideline, shouldn’t be going to those places anyway.
Telemedicine (sometimes known as telehealth) is a technology that allows the remote delivery of healthcare services. There are options for doctors, where you can speak with a real practitioner and get prescriptions, mental health services, and more.
These technologies allow employees to remain safe at home while still getting the healthcare and support they need to get through these uncertain times.
Add an Employee Assistance Plan (EAP)
Experts are already warning of the mental health impacts of extended isolation and the unprecedented changes to everyday life that COVID-19 is already having.
An Employee Assistance Program (EAP) offers help and support to employees through difficult times. Mental health support is available through professional counselling, and for any employees struggling to adapt to these new circumstances, an EAP is one tool employers have available to help employees cope.
Consider Individual Insurance
If you find yourself without a group benefits plan, employees can pursue individual health insurance solutions such as Green Shield Canada (GSC) ‘s Health Assist. There are various plan design options for employees to choose from, and employers looking to help out can offer to pay the premiums for employees.
There’s a lot to consider as Canada, and the rest of the world adjusts to the new normal. People and businesses of every kind will need to make adjustments and work together to do everything we can to limit the spread and help keep healthcare systems from being overwhelmed.
Infographic: Weathering the Storm — Adjusting Your Employee Benefits Plan During a Crisis
Canada and the rest of the world are seeking to adapt to ever-changing circumstances in the wake of the coronavirus (COVID-19) outbreak, causing business owners to have to make some very tough decisions.
This infographic illustrates some of the options available to employers to maintain their benefits plan and potentially reduce their costs, as well as answer some frequently asked questions.
Jane owns a small yoga studio in the downtown area. She has six yoga trainers under her employ, and she has chosen to keep them healthy and well over the last five years through a benefits plan.
She and her team have worked hard to build a loyal community and as a result, her revenues are steady and growing and she is even considering purchasing a larger space down the street as her business continues to expand.
Then the coronavirus (COVID-19) starts making headlines and she is faced with the temporary closure of her business, losing revenue and costing employees income in very uncertain times. She wants to continue employing her staff through online means and offering them employee benefits, but how?
Let’s follow Jane through the process to see what changes she can make to ease the burden on everyone.
The first thing Jane does is announce the temporary closure of her business to her staff. They brainstorm ideas to keep lessons going through online classes and let the public know.
Jane then turns to her benefits plan. She wants to continue to offer essential coverage for herself and her employees, but with revenues uncertain, she is unsure if she can.
She speaks with her Advisor, Dave, and asks if she will be able to suspend premium payments on the benefits plan. Dave informs her that she has options to reduce costs.
He suggests some amendments to the plan design to maintain coverage but bring the cost down, including replacing paramedical coverage, such as massage and chiropractor services, as most, if not all, are closed anyway.
Both Jane and her Advisor agree that health coverage should remain in place, and so they determine they will switch to a health plan that covers only major catastrophic expenses and combine it with a Health Care Spending Account (HCSA) for some flexibility and choice.
Jane takes this opportunity to ask her Advisor about potential employee layoffs. Although she wants to avoid this as much as possible, she wants to know if she can still offer those employees benefits coverage.
Dave tells her that she is able to continue benefits for employees in
the event of a layoff, provided that the employee continues to pay their portion of premiums. In Jane’s case, employees pay 50% of the premiums for most benefits.
Dave suggests that, in the event of an employee layoff, Jane should consider covering the employee’s premiums in full. Collecting premiums from an employee when they are not deducting payroll will be difficult, and there are potential liabilities for Jane with an employee choosing not to pay their premiums and potentially losing eligibility when they return to work.
However, Jane is still a little concerned for her employees, particularly their mental health. She knows that the mental health impacts of a pandemic, in addition to their new working situation, isolation, and the stress from all of that, can be significant.
Dave reminds her about one aspect of her coverage: an Employee Assistance Program (EAP), which offers support and assistance to employees struggling with a variety of issues. They make a communications plan to remind her staff about this program and encourage them to use it.
Dave also reminds her about telemedicine options through her benefits plan and the provincial government, which will allow herself and her employees access to essential health services from home, removing the necessity to visit an in-person clinic. Additionally, her Insurer has a mental health and mindfulness app that she and her employees can take advantage of.
Over the next several weeks, Jane and her employees adjust to their new normal. Online classes are going well and although Jane’s revenues have taken a hit, things are beginning to look up. Her employees are safe and working from home, and thanks to the continuation of their employee benefits plan, they have access to the resources they need to stay happy and healthy. They continue business as usual and look forward to the day when they can reopen their doors.