Three Trends Shaping Employee Benefits in 2020 and Beyond
2019 was a busy year in human resources and employee benefits. Several states passed legislation impacting everything from parental perks and gig workers while several movements brought pressing topic like #MeToo and mental health front and center.
With 2019 coming to a close, it’s important to take a step back and get a pulse on what’s ahead for the upcoming year. Check out these three trends shaping employee benefits in 2020 and beyond.
On June 21, 2018, U.S. Department of Labor expanded access to affordable health coverage options for America's small businesses and their employees through Association Health Plans. Though association health plans have been around since the early ‘90s, this latest legislative action loosens restrictions on what can be considered an ‘association.’
Under DOL’s new regulations, an AHP could pass as a ‘single employer plan’ if it meets the following criteria:
- It serves at least one substantial business purpose other than providing health coverage, even though its primary purpose is offering health coverage
- Its member employers are either in the same trade or business or in the same geographic area, which could span several states
- The employer members in some sense control the AHP and health plan
Association Health Plans have leveled the playing field by providing small businesses and self-employed individuals more access to affordable health care. Associations are popping up across the U.S. to meet current voids in particular groups and industries.
From a provider perspective, there will be more opportunity for benefits brokers, advisers, consultants and tech providers to step in and fill the gap left by this unique new opportunity, which will require creative thinking and complex configuration to manage appropriately.
Newly formed Associations will also need to ensure they are fully compliant with other HR directives, including nondiscriminatory policies, ACA requirements and other federal and state regulations, which will require expert assistance and enterprise technology solutions with flexible configurations to avoid potential penalties for non-compliance.
The gig economy is buzzing as more than 35% of U.S. workers are now involved with part-time “gigs.” However, with growth often comes growing pains. Until recently, there were very few—if any—regulations to protect or rein in use of gig workers.
On Sept. 18, 2019, the state of California signed a sweeping new regulation that requires employers to provide full wages and benefits to gig workers. Under the new provision, workers in California could only be considered a “contractor” if the work they do is outside of the usual course of the company’s business.
Transitioning a “contractor” to an “employee” triggers the following additional requirements:
- Federal and state tax withholding
- Anti-discrimination protections
- Health care
- Worker’s compensation
- Unemployment insurance
However, few are aware that the state of Massachusetts passed a similar law in 2004, and little has actually changed since. And some companies (notably, Uber) have already come forward stating that they will not change the way they classify contractors.
Additionally, other cases (notably, FedEx) have proven that, at the end of the day, the substance of the working relationship will trump labels.
Despite pending legislation that puts the future of how companies classify contractors in limbo, one thing is clear—the gig economy is thriving and isn’t going anywhere anytime soon.
Attracting and managing gig workers presents a few unique challenges and opportunities for human resources. Managing the scheduling for contractors has always been a challenge, thought solutions like Snag and Upwork have emerged to help fill this void and make gig management much easier for both employers and employees. Payroll is another common HR pain point with gig workers and another area where tech is stepping up to the plate. Instant pay apps, which offer immediate access to earned wages, are revolutionizing the traditional mindset of weekly or bi-weekly pay periods and providing more financial freedom to workers.
From a benefits perspective, not much is likely to change within the next year—but the California legislation heeds a close watch for any additional changes.
Have you ever unexpectedly seen and purchased something on Amazon because it was just so timely and easy?
Retail has come a long way from the antiquated experience that existed 10+ years ago, and the data shows that consumers love a convenient and personalized shopping experience. In fact, consumers spent over $125 billion online during Cyber Weekend alone in 2018!
What if your employee benefits mimicked this easy, convenient and personalized experience that we’ve all come to know and love?
Many organizations are beginning to embrace this flexible, personalized approach to employee benefits and now offer a myriad of voluntary perks and products for employees to design their own benefits package. And we’re not talking about the short- and long-term disability or life insurance, which are almost considered “standard” nowadays.
Reddit, one of the largest social platforms in the United States, is a prime example of how HR is evolving and finding creative avenues to meet the demands of a competitive workforce. VP of People and Culture, Katelin Holloway, was recently featured in an HR Dive interview where she shared her journey of transforming how Reddit approached employee benefits.
Through creative communication and investments in non-traditional benefits, Huffman and Holloway designed Reddit's employee benefits to support growth and retention. A few specific areas where Reddit completely transformed their benefits program include a revamp of their leave program and the rollout of truly flexible development programs, divided into two distinct categories: personal and professional. Before, the company paid for specific perks, like a gym stipend or conferences. Now, the program is more flexible and allows employees to put funds towards a qualifying activity of their choice within each bucket.
How do your benefits plans compare? And how can you work towards making benefits more personalized and customizable for each individual employee?
What’s on your radar for 2020? What changes are you going to be making to address some of these trends and changes?