The coronavirus is a challenge unlike most employers have faced. These challenges are even more unique in the multiemployer trust fund world. The pandemic has brought major changes to both retirement and health care benefits, including defined benefit and contribution plans, prescription drug benefits, mental health offerings and short-term disability benefits.
A new International Foundation report, Employee Benefits in a COVID-19 World, examines what employers are doing as their organization adapts to the new world. The following findings are based on the 125 responses by multiemployer trust fund respondents.
Defined Benefit (DB) Pension Plans
- More than three in four (78%) responding multiemployer funds offer a defined benefit pension plan. While responding organizations are not taking significant actions with their DB plans due to COVID-19 implications, smaller proportions are reviewing their actuarial assumptions/pension plan designs (14%) and updating their investment policies (9%), with larger proportions considering doing so in the future.
Defined Contribution (DC) Retirement Plans
- The Coronavirus Aid, Relief, and Economic Security (CARES) Act has several provisions aimed at easing participant financial burdens during the pandemic by allowing greater access to DC retirement accounts. Of those that offer DC plans, more than two in five (44%) are allowing participants to take new special early distributions from DC accounts (up to $100,000 without the 10% early withdrawal penalty or 20% mandatory withholding through 2020). In addition, 38% are allowing workers to pay back special early distributions during the next three years, as allowed by the new law. Also, three in ten (30%) are giving participants an extra year to pay back outstanding DC loans that are due in 2020 (now payable in 2021). In addition, 19% of plans are temporarily allowing greater loan amounts from DC accounts, up to a maximum of 100% of a participant’s vested balance or $100,000, whichever is less (up from the previous maximum of 50% or $50,000). Going forward, additional organizations that have not implemented these features are considering doing so in the future.
- About 9% of responding fund respondents are noticing a greater share of their participants making changes to their DC contribution/deferral levels compared with pre-COVID-19 levels, while the same amount are noticing a smaller share.
- In addition, 35% of respondents said more participants are taking hardship withdrawals from their DC accounts due to the COVID-19 pandemic, while 14% have noted no change.
- About 13% of respondents stated that more participants are taking loans from DC accounts as a result of the COVID-19 pandemic, while 25% noted no change.
- Few responding multiemployer funds are making changes to matching contributions as a result of the COVID-19 pandemic, although 23% are considering making changes in the future.
[Upcoming Webcast: Pension Trustees and Effective Governance of Climate-Related Risks | May 14, 2020]
Health Care Benefits
- Responding multiemployer funds were asked about changes made to their health care offerings due to the implications of the COVID-19 pandemic. Three in five funds (60%) already offer telehealth/telemedicine services (for physical ailments), while an additional 31% have implemented these services due to COVID-19 implications. More than two in five (41%) respondents have reduced/eliminated cost sharing for telehealth /telemedicine services due to COVID-19 implications.
- More than two in five (43%) responding multiemployer funds offer coverage for nurse advice lines. In addition, about 9% of responding funds are reducing/eliminating cost sharing for nurse advice lines due to the implications of COVID-19.
- Few responding multiemployer funds are reducing/eliminating experimental medical procedure exclusions due to COVID-19 pandemic implications.
Mental/Behavioral Health Benefits
- Multiemployer funds were asked about changes made to specific mental health care offerings due to the implications of COVID-19. Currently, three in ten (30%) responding funds offer telepsychiatry services (access to mental health services via telephone or virtual meeting). More than one five (21%) funds have implemented these services due to the pandemic. Respondents were unlikely to relax/eliminate eligibility requirements (6%), or reduce/eliminate cost sharing (12%) for their mental health benefits. However, about one in four (23%) have added additional services or components to their programs, with the same proportion considering doing so in the future.
[Upcoming Webcast: Capping Medical Plan Costs and Improving Care in the Aftermath of COVID-19 | May 21, 2020]
Prescription Drug Benefits
- The COVID-19 pandemic has had implications on responding multiemployer funds’ prescription drug benefit offerings. About one-half (47%) have extended the time allowed under prior authorization periods for prescription drugs and increased quantity limits (31%). Smaller proportions have waived prior authorization requirements for prescription drugs (22%).
Short-Term Disability Benefits
- Those multiemployer funds that offer short-term disability benefits were asked whether they were making plan changes due to the implications of COVID-19. Small proportions of responding funds with a service period requirement have (10%) or are considering (11%) reducing or eliminating those service periods to access short-term disability benefits. A similar proportion have (8%) or are considering (8%) relaxing or removing elimination/waiting periods for short-term disability benefits due to the implications of the COVID-19 pandemic.
Labor Assistance Programs
- Similarly, responding multiemployer funds that offer labor assistance programs (LAPs) were asked whether they were adding services to their plans due to the implications of COVID-19. About one in seven (15%) are adding services due to COVID-19 implications, with an additional 4% considering adding services in the future.
[Related Reading: COVID-19: Emerging Collection Issues for Multiemployer Plans]
Download the full report: Employee Benefits in a COVID-19 World: April 2020 Survey Report. The report is available free to International Foundation and ISCEBS members.
Learn more about how other employer types are reacting:
Find more coronavirus-related resources for employers on the Foundation’s Coronavirus (COVID-19) Resources page.
Justin Held, CEBS
Senior Research Analyst at the International Foundation
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