How COVID-19 Is Likely To Affect The Benefits Industry Long Term

covid 19

The need to protect public health against the coronavirus pandemic is forcing systemic changes throughout the healthcare sector. Many of those changes will be permanent. As the health aspects of this crisis began to subside, we will learn how COVID-19 has impacted many areas of everyday life. We firmly believe it will have a long-lasting impact on the benefits industry.

Employee benefits are inseparable from jobs. As such, they are also inseparable from economics. There is no reason to believe that the way benefits are administered and sold will remain unchanged as a result of COVID-19. They will change like many other things. The question is, “What will those changes actually look like?”

From our point of view, most of the long-term effects on the benefits industry will relate to technology. Group Benefits is an industry that still operates on a mixture of new technologies and legacy solutions. That is already changing as a result of the COVID-19 pandemic. We expect the impact to transform the way the benefits industry operates significantly for years to come.

Greater Adoption of Technology
Technology has become the new workhorse of the U.S. economy. Even as nonessential businesses have closed the doors to their physical premises, anyone who can work from home is doing so. What is facilitating this new work-from-home model? Computers, software, and the internet.

That entire range of technology solutions we previously took for granted is keeping the economy going, albeit at a diminished capacity. Everything from meeting software to industry-specific cloud applications are playing the vital role of intermediary between workers, clients, carriers, brokers, etc.

We expect this to continue in the benefits industry long after the pandemic is over. It does not make sense to introduce brokers and employers to online benefits platforms only to pull those platforms away. The same is true for brokers and agents. They have all been forced to manage benefits programs in the cloud; there is no reason to suspect they would go back to the old way of doing things once they have moved into a technology-based solution.

All of this should lead to a significant reduction in paper documents. That means fewer paper applications. It means more tip sheets and educational materials published digitally. It means employees going online for answers to their questions rather than consulting printed manuals.

Refocused Customer Service and Support
Turning everyone from brokers to employees on to technology will force a shift in the way customer service and support are offered. Prior to COVID-19, customer service and support were focused mainly on explaining benefits packages, answering administration questions, quoting prices, and so forth. That is about to change.

Technology allows us to put massive amounts of information online and make it easily accessible to anyone who needs it. As we introduce people to new technologies in the benefits industry, their need for support will be less about information and more about the technology itself. This is a monumental change.

Customer service and support will have to be more focused on how to use technology to solve the task at hand. Brokers are going to need help navigating benefits portals. Employers are going to need help learning how to administer benefits systems through cloud platforms. Employees will need guidance in using their personal accounts to manage their benefits.
This suggests that customer service and support will have to refocus with an IT perspective. That could mean an influx of new IT workers who specialize in help desk support. This further suggests that there will be a greater emphasis on providing customer service and support through online means. Think live chat, chat bots, and video conferencing here.

Ongoing Technological Development
With technology now playing an ever-increasing role in the benefits industry leads to yet another adjustment: We are about to see a significant increase in the number of companies specializing in technological development. They will be ramping up their efforts to come up with new software solutions specific to the benefits industry.

As more brokers establish virtual work policies, the role of the broker will change drastically. This adjustment increases heightened risks that impact their clients, market fluctuations and product offerings. To help with this adjustment businesses will continue to develop new technology and services to help support the changing work environment for brokers.

The adjustment for new technology to emerge will help brokers and their business evolve quite significantly. The advancement of technology now empowers those in the benefits industry to operate in developed markets more efficiently as well as emerging economies.

The utilization of next generation technology can have a lasting impact on a broker’s business. This will only complement, enable and support many of the core processes their business resides on. This further emphasizes the time savings which can then be directed towards discovering and building new opportunities with clients.

In the coming years it is highly probable that tech companies will continue to focus on developing the next generation of technology solutions that will streamline benefits administration in every aspect. This entails entire cloud environments that are specialized for the benefits sector.

Get on Board Now
There are a couple of other long-lasting impacts we expect COVID-19 to have on the benefits industry, but there is one other thing to discuss before we get to them. That is the necessity of those in the benefits insurance industry to get on board with technology now. The technology train will speed up, and not jumping on now will make it extremely difficult for brokers to continue to grow in the long run.

Technology development has a way of leaving companies behind. Those left behind are the same companies that did not have the foresight to get on board in the early stages. Much of this technology relates to the digitalization of documents, security of client and personal data as well as establishing process efficiency.

Those adopting this new era of technology supporting brokers and their business will learn that the digitalization of broker tools will not only help establish new growth, but will also discover significant efficiency in their day-to-day operations. However, it is important to note that technology will not replace personal relationships and relationship building.

More than ever, paper is becoming a thing of the past. With many businesses now working virtually, the importance of digital documents and platforms has become quite significant. The time to learn and adopt new technology may be a hurdle now but in the long run businesses as well as brokers themselves will prosper.

Other Long-Term Impacts
The COVID-19 crisis will have other impacts on the benefits industry, some of which go beyond the technology arena. At the top of the list is a rethinking of health insurance policies. Something will have to be done to accommodate the millions of employees who have been laid off and have subsequently lost their health insurance.

COBRA and other programs are designed to help in such situations, but none of them are capable of adequately addressing so many layoffs in such a short amount of time. Something will have to change so that we are more prepared should a similar crisis arise in the future.
We might also see some insurers include specific language relating to Coronavirus coverage, or pandemics in general. Depending on how all this plays out, we might run into a pre-existing condition wording or pandemic wording. It is likely to be addressed.

Expanded Benefits Are Possible
The long-term impacts of COVID-19 could lead to expanded and new benefits as well. For example:

  • Debt Reduction—Just as companies are embracing student loan reduction benefits, a general debt reduction benefit could be on the horizon. Struggling employees may need help to recover financially once this is all over.
  • Flexible Work Options—If nothing else, lots of employers are now discovering their workers can be productive at home. Will this lead to more flexible work from home options?
  • Expanded PTO—With more flexible work options could come a greater emphasis on expanding paid time off (PTO) options. Companies might be more willing to look at general PTO rather than separating vacation time from sick days and personal days. Some states might mandate more comprehensive family leave.
  • Technology Benefits—There are undoubtedly many employees using their own devices to work from home. Expect some companies to invest in technology by helping workers cover the costs of their devices and service plans. There may also be an explosion in Bring Your Own Device (BYOD) policies in the workplace.

While pandemics have occurred throughout world history, there isn’t a single pandemic from years past that has led to the nearly global shutdown that we are witnessing today. The response to COVID-19 is truly unprecedented. Its long-term impacts will be felt in nearly every area of life for the foreseeable future.

When it comes to the benefits industry, the long-term effects will touch everything from technology solutions to the way brokers and businesses communicate and operate as well as the service aspects of the insurance industry. There is no better time than now to learn, adapt and grow during this global pandemic.

BenefitMall | 469-791-3300

Bob Love joined BenefitMall in 2018 as the president of the Benefits Division, bringing with him more than 30 years of experience to the BenefitMall team.

A graduate of the University of Iowa, Love brings experience leading sales and operations teams in all sized market segments on a national level. Love’s background includes leading group sales and service and group distribution on a national level for MetLife and Guardian. Most recently, he led renewed growth for Prudential National Accounts. At Prudential, he was charged with reinvigorating the sales and service teams while returning sales to a competitive level and restoring financial health to the group insurance segment.

Love can be reached at BenefitMall, 12404 Park Central Drive, Suite 400S, Dallas, TX 75251.