LIMRA: Carriers Adapt Workplace Benefits to Help Employees Affected by COVID-19

The coronavirus pandemic and state-mandated social distancing measures have upended many businesses. Many companies have reduced employees’ hours, or laid off or furloughed their employees to mitigate the loss of income. This not only impacts employees’ paychecks but also affects their insurance benefits. LIMRA surveyed insurance carriers to determine what steps they have taken to help ease the challenges for employers and their staff.

According to the LIMRA survey, a large majority of carriers are making exceptions to their usual method of determining benefit eligibility in order to extend coverage for employees affected by COVID-19. Many (42%) are choosing to automatically continue coverage for all employees for a specified period of time, and another 22% are extending eligibility on a case-by-case basis to employees whose status has changed.

According to LIMRA research, more than 7 in 10 U.S. workers rely on workplace benefits to cover their insurance needs. To date, over 17 million Americans have lost their jobs — either temporarily or permanently — due to this pandemic. For many, this could disrupt critical insurance coverage they need.

Many carriers are adjusting their business practices to help workers during this crisis. More than one third of workplace benefit carriers are also adjusting their benefit reinstatement rules to make it easier for employees impacted by COVID-19 to regain coverage. Similarly, more than one third of carriers are extending the timeframe in which employees are allowed to elect and/or pay to continue their coverage if they have separated from their employer.

Almost all participating companies are offering premium grace periods of, on average, 60 days to workers who are unable to pay their premiums due to COVID-19. Carriers also say they plan to reassess and/or extend these timeframes if needed as the pandemic unfolds. Forty percent of carriers indicate they intend to collect the back premium through payroll deduction at a later time.

At a time of great uncertainty for most Americans, LIMRA research shows workplace benefits providers are working with employers and their workers to manage the disruption the pandemic has caused.