When COVID-19 was declared a pandemic in March 2020, few areas within the HR function saw such an immediate impact as employee benefits. Workers needed access to paid time off to care for themselves or loved ones, support with childcare as schools closed, resources for financial education in the uncertain economy. Perhaps most visibly, benefits teams around the country scrambled to connect employees with mental health resources as the global health event skyrocketed an already-growing mental health crisis.

While the specific benefits offerings that employees expect, and employers are investing in, have certainly shifted, the overarching strategy, delivery and administration of benefits today also looks wholly different than it did five years ago, says Kristina Welke, vice president and head of strategy, solutions, and marketing for New York Life Group Benefits Solutions.

“The pandemic significantly shifted the benefits landscape,” Welke says.

Benefits after COVID: a focus on mental health

Investment in employee mental health was one of the earliest benefits transformations during COVID—and one that has dramatically changed how Americans talk about mental health five years later.

“The topic of workforce mental health and this type of benefit rose in importance and became destigmatized during the pandemic,” says Cindy Ryan, head of HR at MassMutual.

Her organization, which employs 6,200 workers in the U.S., had offered mental health and wellness benefits before COVID, but these became “incredibly important” for the workforce during the pandemic, and it’s something we’ve continued to evolve and augment since,” she says.

For good reason—according to the World Health Organization, the global prevalence of anxiety and depression soared by 25% in just the first year of the pandemic.

While some organizations expanded specific mental health offerings—such as increasing EAP access or rolling out stress- and burnout-reduction programs—the pandemic also heightened leadership awareness about the myriad drivers of wellness and the role of benefits in addressing them.

A collision of talent needs and benefits

This was reinforced as labor trends like the Great Resignation took hold, adds Welke.

“When there was this fight for talent, I think employers realized how much employees are really valuing their benefits,” she says. “To have productive employees at work, they saw they had to bring forward the right programs for them.”

This led many to increase investments in tangential benefits that could strengthen employee wellness, says Mark Stelzner, founder and managing principal of advisory firm IA. This included financial wellbeing offerings like student loan repayment, on-demand pay, telehealth and reproductive care.

As offerings diversified, it became increasingly critical that benefits teams understood the specific needs of their employees. For instance, Ryan says, MassMutual has recognized the high importance younger workers place on mental health benefits: Last year, nearly half of the workforce utilized the company’s mental health benefit to book an appointment with a provider, with Gen Z and millennial employees being the most common users.

“Although much has certainly changed since the pandemic,” Stelzner says, “this focus on the individual and their unique needs came into sharp relief during a time of shared trauma and deeply personal impacts.”

Design and delivery changes

As employee benefits diversified with an underpinning of wellness, it prompted some HR and benefits leaders to rebrand or expand benefits with low utilization, such as employee assistance programs. In other cases, Stelzner says, “it meant a wholesale reinvention of what an employer can and should provide to truly embrace each individual’s unique circumstances.”

The focus on the individual has also modernized how benefits are communicated and delivered. Previously, the strategy was “Here are our programs. Use them if and when needed,” Stelzner says. The pandemic “significantly” shifted that mindset to “We are personalizing our offerings with contextual focus driven by your specific preferences and attested circumstances.”

In many organizations, that has caused the breadth of benefits to jump—some benefits teams are supporting double the number of programs they did compared to just a few years ago, Welke says. That’s driving the need for streamlined work.

At New York Life, APIs have “blown up” for clients, enabling benefits teams to reduce manual work and have more seamless access to data, she says.

‘Meeting people where they are’

“New York Life and other carriers are investing heavily in tech and capabilities to remove that work and streamline processes for clients,” she says. “We call our approach smart connectivity: using tech to help clients be smart with their time and remove things that aren’t value-added.”

The shift in design and delivery of benefits after COVID has also led to a “drastic” uptick in the usage of portals, she says—for everything from filing claims to educating employees on their benefits. The firm saw a 106% increase in the number of people filing claims online through its myNYLGBS portal over the last year, with 87% of portal users reporting they are satisfied or very satisfied with the tech offering.

“It’s about meeting people where they are,” she says, noting the organization’s myLeaveGuide can help employers deliver comprehensive leave-planning information to employees with just a few clicks, while myBenefitsAssistant answers in-the-moment employee questions and offers support and resources.

Tech is enabling better “connectivity for clients and education for employees,” Welke says, as “employers are really leaning more into their broader strategy and vision, thinking about, ‘How do we add value here?’ ”

A look ahead at COVID’s long-lasting impact on employee benefits

Welke predicts that as the environment for benefits after COVID evolves in the coming years, benefits carriers and vendors will continue to “simplify processes” and lean into ease of use for a competitive edge.

“It’s going to be about embracing the right capabilities, smart connectivity and being data-driven to drive efficiencies and experience,” she says.

AI will play a critical role in those efforts, Stelzner adds.

“We can’t look ahead without mentioning AI, and benefits teams are on the precipice of a material leap forward in hyperpersonalization,” he says. This will be enabled by benefits professionals leveraging employee data—in a way that prioritizes permission and privacy—and queries from large-language models populated by “authoritative” benefits content, and threading together previously disassociated programs into “endless permutations of guided processes and engaging experiences.”

It’s work that will be increasingly necessary, as employees continue to have high expectations for their benefits experience—which employers have largely been living up to, Welke says. For instance, a New York Life survey found that 75% of employees surveyed said the pandemic brought needed changes to the employee benefits landscape.

It was a hard-fought transformation for many HR and benefits leaders, but one that has better-prepared employers for how to evolve their employee benefits in a changing world.

“COVID opened all of our eyes to the need to keep our finger on the pulse of what’s happening in the employee population, making sure we’re offering the right programs, investing in the right places, prioritizing our time right,” Welke says. “Things will continue to evolve, but I think we’re in a much better spot today as a result of the last five years to weather that next storm.”

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