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» Five Employee Benefits Trends for 2021

March 1, 2021

Behavioral Health, Digital Health, Healthcare Innovation, Healthcare Spending, Prescription Drugs, Self-Funding

Today, we’re sharing with you five employee benefits trends for employers in 2021!

The general theme for employee benefits in 2021 is the increasing interplay between technology and data. This interplay impacts everything in healthcare and employee benefits, such as utilization, spending, behavioral health, and beyond.


With the disruption caused by the COVID pandemic in 2020, it should be no surprise that telemedicine or telehealth has received significantly greater attention in 2021.

Utilization data for telemedicine went through the roof in 2020, with one analysis finding a 2980% rise in telemedicine claims from September 2019 to September 2020.

Patients want the flexibility and comfort allowed by telemedicine. On top of this trend in consumer behavior, is the changing paradigm of healthcare delivery.

Like most industries, healthcare has mostly been a local industry, with the majority of healthcare consumed near someone’s home. But why is it that your dermatologist has to be within 5-10 miles of where you live? Why not work with a physical therapist the next state over if they are the best fit for you?

The rise of telemedicine is a key driver in the overall consumerization of healthcare, a shift from the provider-centric model of the 20th century to one centered around the patient.

It’s critical that employee benefits plans in 2021 not only incorporate but communicate and emphasize virtual health options, from 1-800 phone numbers to apps and personalized primary care and acute care such as Folx Health, Hinge Health, and more.

Many virtual health providers are already in-network with various carriers, employers and consultants need to communicate these offerings to employees.

Pharmacy Spending

Pharmaceutical spending has become one of the most over-inflated areas of healthcare-related costs, and one that has become so complex that many people, even experts in healthcare, admit they can’t understand.

Drug prices have gotten bipartisan attention in Washington, D.C., and lawmakers in multiple states are considering legislation to combat increasing prices from drugmakers.

Pharmaceutical companies aren’t the only player in the market to blame, we need to also address middlemen such as Pharmacy Benefit Managers (PBMs). For example, one doctor went viral last year for calling out PBMs keeping generic drugs off list formularies. If you don’t know what that means, it’s further proof that complexity in drug pricing and supply chains raises costs to employers and employees.

Employers looking to address rising drug prices can turn to transparent Pharmacy Benefit Managers to help contain costs, find patient advocacy programs, coupon programs from manufacturers, and other strategies to bring down the cost of drugs.

Data is King

While data has been an advantage for businesses up to now, it is now practically required to compete in a given market. In employee benefits and healthcare, things are no different: data is king.

More and more employers today are pushing for increased data and transparency from their health insurance carriers. Without data on spending, utilization, and other measures of the healthcare consumption of their employees, employers have few ways to bring costs down and raise the value of benefits plans.

According to SHRM, 53 percent of best-performing companies– and just 34 percent of others- are using data to analyze benefits results. By evaluating their own data, companies get feedback on new initiatives and information on trends to help the company evolve it’s benefits from year to year.

Behavioral and Mental Health

One of the most often discussed soft costs of the pandemic and ensuing lockdown is the effect on our nation’s already poor state of behavioral and mental health.

According to a CDC survey, 41 percent of Americans reported struggling with mental health issues related to the pandemic. Not only that, the CDC also found that rates of anxiety and depression tripled and quadrupled, respectively, in the second quarter of 2020 compared to the same period in 2019.

Employers have the opportunity to act on this issue with resources, support, and benefits to improve the behavioral and mental health of their employees.

Strategies include offering an EAP with licensed clinicians available, communication around provider networks through employer-sponsored health insurance, and an overall corporate emphasis on behavioral and mental wellness. Mental health is increasingly seen as a primary care issue to prevent by treating mild anxiety and stress. This, rather than waiting to treat depression and other symptomatic episodes, can lead to meaningful change and quality of life for employees.

Self-Funding and Captive Insurance

Health insurance costs are rising year after year alongside reductions in benefits and narrow networks, leading many employers to ask: What else can we do?

The final trend for employee benefits in 2021 and beyond is for groups to move to self-funding and captive insurance from the traditional insurance market.

Given the stresses and increased demands on every business function this past year, it should be no surprise that the self-funded captive model is a popular choice for employers. It is flexible, transparent, and designed to contain costs and increase control. Not only can it save groups money, but it can also provide a customized health and benefits plan that better meets the needs of employees.

Each of the preceding four trends highlights the need for transparency, control, and flexibility, all qualities very well delivered by the self-funded captive model.

If you’re interested in acting on these five employee benefits trends in your organization, schedule time with one of our consultants below!

Complementary consultation for innovative employee benefits

Posted by in Behavioral Health, Digital Health, Healthcare Innovation, Healthcare Spending, Prescription Drugs, Self-Funding