How have employee benefits changed in the past year?

We’ve come across both difficulties and opportunities in the employee benefits space, which we've discussed in detail in our Global Employee Benefits Trends Report. The short answer to this question is: demand for employee benefits will continue to grow, as employers all over the world are more cognisant of its importance in retaining and attracting talent now and in the post-Covid-19 era. As preferences and circumstances (remote working, employee healthcare behaviour) have shifted dramatically, however, the type and nature of benefits that are sought after by clients have changed to some extent.

The future of employee benefits will be a digitalised and flexible one. While health insurance will continue to be the most coveted perk, our definition of what constitutes a health benefit will be more holistic (encompassing physical, mental, spiritual, and financial health). Social distancing and remote working have exacerbated mental health issues, especially in areas most hard-hit by the pandemic (e.g. the US, the UK) and fast-paced cities where psychological conditions have already been relatively prevalent pre-Covid (e.g. Hong Kong, Dubai). As a result, we’ve seen a marked increase in the utilisation of mental health services across the major employee benefit markets. In locations with expensive healthcare, such as Hong Kong and Singapore, the increase in mental health-related claims is expected to have a knock-on effect for insurers’ loss ratios.

The silver lining is that organisations around the world are offering a wider range of mental health benefits in the wake of the pandemic, such as virtual wellness services and Employee Assistance Programs (EAPs). Psychiatry benefits, mental health services, EAPs, and initiatives to support work-life balance have become more relevant in recent times. In China and Dubai, for example, we've helped many of our clients set up online counselling, life coaching, mindfulness training, stress reduction sessions, etc. for their staff. These initiatives were all positively received by our clients' employees.

Are costs more important to employers now?

Many businesses have had to cope with the financial impact of Covid-19. As such, we are seeing an increased incidence of employers finding more cost-effective employee benefit solutions amid continued health insurance inflation, such as switching health insurance providers, cutting down on benefits with low utilisation, switching from global to regional/local cover, etc.

We’ve also witnessed a trend towards employers offering flex benefits. Most popular in the US, flex benefits allow employees to personalise perks to suit their lifestyles. One of the main advantages of flex benefits is that it allows employers to share some of the cost with employees; we believe that clients based in regions with higher medical and health insurance inflation, such as China, Hong Kong, and Singapore, will increasingly see flex benefits as a key solution for mitigating ever-rising premiums.

Are telehealth benefits here to stay?

Driven by lockdowns, social distancing measures, and fear of contracting Covid-19 when seeking in-person care, telehealth benefits will also be more popular in the post-pandemic era than it was prepandemic. Its popularity has skyrocketed in recent times; one of our insurer partners reported a 600-per-cent increase in their members’ use of telehealth services in the past year.

Telemedicine presents a cost-effective and desirable alternative to in-person care and, as such, employers all over the world are expanding or introducing their telehealth benefits to ensure their employees have easier access to healthcare.

That said, clients based in Asia have been relatively slow in adopting telehealth benefits; the main reason being that regulations around the prescription of drugs remain relatively strict in many Asian markets. Another reason is that many such markets (e.g. Hong Kong, China) have been relatively successful in suppressing the Covid-19 pandemic and, thus, consumer healthcare behaviour in these locations has been largely unaffected.