Has Your Employee Benefit Plan Kept Up With the Changing Times?

Regarding employee benefit plans in the 1970s and 1980s, healthcare was the only employer-sponsored benefit that companies routinely extended to their employees’ families. Even as family-related benefits expanded, the belief persisted that work life and home life were—and ought to remain—separate.

That attitude began changing in 1993, when Congress passed the Family and Medical Leave Act, which required certain employers to provide unpaid but job-protected leave for mothers giving birth, employees caring for a seriously ill family member, and, in some states, attendance at a child’s school or educational activity and taking relatives to medical appointments. Other benefits, like employer-sponsored academic scholarships for the children of employees and onsite daycare, were also introduced. But the need for family-oriented benefits outpaced the growth of those benefits. Women entered the workforce in increasing numbers, many while also caring for children. At the time the pandemic hit, both parents were employed in more than 60% of American families, but only 6% of American companies offered child care benefits.¹ And fewer than one in five of the 43.5 million unpaid caregivers in the United States had access to paid family leave benefits.²

When COVID-19 sent millions of employees from the corporate office to their improvised home offices, the line between work life and home life disappeared. The challenges that have come with that new normal are forcing companies to grapple with the need to support both employees and their families, and to redefine the meaning of work-life balance.

Health Coverage and Illness-Related Benefits

Healthcare for themselves and their family members remains for many employees a primary concern. Two-thirds of bankruptcy filings are connected to debt related to medical expenses.³ In some cases, the gap between the level of coverage for the employee and that available to family members can play a role. A poll of full-time employees found that 25% were worried about out-of-pocket health care costs.⁴ Medical care necessitated by COVID-19 only increased those concerns. Unfortunately, the pandemic also increased the need for time off to care for ill family members and for bereavement.

The good news is that statistics show that employers are responding with increased interest in critical illness insurance, paid parental leave for caregiving, and bereavement leave in their employee benefit plans.⁵

Childcare

Childcare assistance has evolved dramatically. According to one study, 18% of companies have reimbursed childcare expenses during the pandemic.⁶ About a quarter of all companies have given employees paid time off (PTO) for childcare.⁷ Other companies offered a stipend to assist with the expense of childcare and tutoring, and provided resources for emergency back-up childcare along with help paying for it.

Eldercare

The pandemic has also highlighted the importance of elder care benefits in employee benefit plans. Today, about 17% of workers care for senior relatives and loved ones; and during the pandemic, 83% of adult children were in need of new care options.⁸ Nearly half of all those who care for elders also care for children under age 18.⁹ As that statistic suggests, about one quarter of unpaid elder caregivers are Millennials, the largest segment of the workforce.¹⁰ In one study, 70% of employees who care for an elderly family member said they were forced to cut back on their working hours in order to provide that care.¹¹ This is a challenge that hadn’t received much attention before the pandemic started. However, during the pandemic, approximately 21% of companies gave employees PTO for eldercare.¹²

Flexible Work Schedules

Flexible work schedules, which had been gaining acceptance slowly in prior years, became the norm, with 87% of businesses permitting employees to adjust their hours around the demands of children and pets.¹³

Bringing Women Back Into the Workforce

Family benefits are particularly important to working mothers. Women are most often the primary caregivers; and the conflicting demands of parenting and working are often hardest on them. The added challenges created by the pandemic resulted in nearly 3 million women leaving the workforce, and brought into sharp focus the need for companies to offer benefits that help women succeed at home as well as on the job.¹⁴

Other Benefits for The Company

More than ever, workers cite “family benefits” as the reason they take jobs and stay in them. In one survey, 68% of companies that employed more than 2000 workers said better caregiving benefits also benefited the mental health of their employees.¹⁵ And 83% of employees say family friendly benefits are a primary definition of a socially responsible company, outstripping even sustainability programs.¹⁶

The Future of Family Benefits

An amazing 98% of business leaders said they are planning to revise their benefit offerings to put the emphasis on childcare, senior care, flexible work schedules and wellness to help employees manage the stress of balancing work and family obligations.¹⁷ Among companies who currently offer child care benefits, 63% said they planned to increase those benefits.¹⁸ Sixty-six percent of surveyed companies say they plan to offer increased work flexibility.¹⁹ It’s clear the pandemic has ushered in a new era of employee benefits, with family benefits leading the way.

Editor’s Note: BASIC offers a variety of ‘family benefits’ from Dependent (Child) Care FSA and Back-Up (Eldering parent) Care Reimbursement Account to a Child Adoption Assistance Account from more than 50 employee benefit plan offerings that can be instantly configured to create custom plans that meet employee needs, wherever they are in life.