Employers consider eliminating certain worker benefits before open enrollment begins

It’s nearly open enrollment season and this will be the first opportunity for many workers to reassess their health and other benefits since the coronavirus pandemic began. But they may find fewer offerings than before.

Businesses are watching their costs go up, according to a new survey of decision makers at companies across the country, and eliminating certain benefits may be one way to reduce them. Six percent say that they have already seen costs increase "significantly" this year per employee and over 60% expect an increase in the years ahead.

With budgets stretched, "employers are really looking at which benefits are really going to help them with their goals” like employee health and morale, said Craig Copeland of the Employee Benefit Research Institute.

His group conducted the survey of 250 business leaders — those managing human resource, compensation, or finance departments at their company — at companies with 500 or more employees who exercise "at least moderate influence on their company’s employee benefits program and selection of financial wellness offerings."

The ‘main benefits’

The reassessment comes when workers themselves are set to “take more deliberate action on their benefit options” when the choices open up next month, according to a recently published MetLife study.

When it comes to health insurance and retirement plans, employees should find that "the main benefits are still going to be there at least in some form" Copeland said.

Copeland — who appeared as part of Yahoo Finance’s ongoing partnership with the Funding our Future campaign, a group of organizations advocating for increased retirement security for Americans — said "those plans are pretty much staying intact."

The findings echo another study from Fidelity, which found that a “vast majority of employers” have continued offering existing 401(k) match programs — at least for now.

What ‘employees are really focusing on’

Benefits that help establish emergency funds, offer short-term loans, and access payroll advances remain popular among employers.

“Those are the things that employees are really focusing on because that is the thing that's absolutely critical right now," Copeland said, noting that more employees may use these benefits now, driving up costs.

But that means other benefits are going under the microscope. Some “financial wellness” benefits — such as employee discount programs, tuition reimbursements, or bank-at-work partnerships — are already less likely to be offered.

Tuition reimbursement is the benefit that Copeland said is most likely “going to go away,” because employees are more likely to focus on their current finances and companies are likely to shift to other priorities.

Student loan assistance is another benefit that employers have discussed adding since the survey began but by and large they haven’t pulled the trigger and seem unlikely to do so now.

Don’t expect any new offerings, either, according to the survey.

Companies are unlikely to add any new benefits while the pandemic and recession drag on. While 58% of respondents said their company is communicating to employees about existing resources, less than 0.5% said they have enhanced or "added new financial well-being benefits" this year.

Ben Werschkul is a producer for Yahoo Finance in Washington, DC.

Read more:

• ‘Over half’ of older workers don’t have jobs that can be done remotely

• American savings accounts are now ‘steadily declining’ as coronavirus effects linger

• Why a ‘vast majority’ of Americans are not getting the most out of Social Security

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