Our Perspective: Portable Benefits Likely To Be Part of the New Normal

By Americans for a Modern Economy

April 8, 2020

It goes without saying that it will take years to fully assess the impact of the COVID-19 crisis. Outside of the obvious current and future impacts to our healthcare system and to public health itself, there will be wholesale changes to our economy, the workforce and nearly every aspect of American life. Nowhere is that more the case than in the world of employee benefits. In an effort to try to provide immediate relief to as many Americans as possible, our elected leaders in Washington have significantly altered the rules of the road with regard to paid sick leave, paid family and medical leave, and the inclusion – at least temporarily – of independent contractors in those benefit programs. Whenever we do return to “normal” or adjust to our “new normal”, not all, if any, of those genies are going to go back in the bottle.

If you accept the premise that world that the benefits space will be turned vastly different – either that going forward businesses are going to pick up more of the tab of those costs, or that government will pick it up more of it and then tax businesses accordingly, or a new benefits regime altogether will emerge – employers will have significantly increased liability one way or the other. Additionally, there is another premise that needs accepting as well. That this crisis has sped up of the formalization of the gig economy and we aren’t going back. In fact, a significant cross-section of “essential workers” as currently defined during the pandemic are gig workers. Not that it should have ever been in any doubt, but that reality is truly here to stay.

Couple those together and it is impossible to avoid a conversation around portable benefits. And if employers are smart, they would find a way to drive it because if such a program were implemented properly, they could protect their workers and their bottom lines at the same time. Instead of business reacting to this defensively and viewing it through the old lens of a labor community priority, they should see it either as an opportunity to be a different kind of employer post-crisis or at a minimum cut their losses financially. Either way, the post-COVID workplace is going to look very different and employers need to switch sides of the field and play offense in that conversation.