Survey: How COVID-19 is Transforming Small Business Health Insurance Needs. | hioscar Blog | Oscar
Survey: How COVID-19 is Transforming Small Business Health Insurance Needs.
Part 1: National trends in the impact of the COVID-19 pandemic on small businesses and their employees.
Employee Health BenefitsTips for Small Businesses
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The COVID-19 pandemic has impacted the U.S. economy significantly, costing more than 23 million people (opens in new tab) their jobs at the height of the outbreak. There’s no question that businesses in this country—especially small businesses—will be forever changed as a result of the pandemic. In New York City alone, when the pandemic eventually subsides, about one-third of the city’s 240,000 (opens in new tab) small businesses may never reopen. (And those businesses have already shed 520,000 jobs.)
Clearly, more than ever, it is critical to meet the health insurance needs of small businesses nationwide. Cigna and Oscar have partnered to offer differentiated health solutions through the Cigna + Oscar (opens in new tab) small group health insurance product. Our goal is to provide health insurance that understands business decision makers, their employees, and their unique business needs over time.
Recently we conducted a survey of more than 1,000 small business owners across the U.S. to find out how the COVID-19 pandemic has impacted the health of their businesses, and how they’re thinking about the health of their employees.
In part one of this analysis, we take a look at key trends in how the COVID-19 pandemic is transforming small business health insurance and employee health benefits.
of highlights from the survey, and continue reading below for detailed insights.
Taking a closer look at COVID-19’s impact on the small business sector.
We can’t truly understand the health insurance needs of small business decision makers and employees without first understanding how COVID-19 has impacted the financial health and operations of small businesses themselves.
Small businesses have been hurt by the COVID-19 pandemic, which has created poor economic conditions across the nation. The Cigna + Oscar survey found that 70% of small businesses have seen a decline in their revenue, and 52% have laid off or furloughed employees. Of respondents indicating layoffs or furloughs, 42% indicate that more than a quarter of their workforce has been affected.
Half of small business benefits decision makers have continued to offer at least some in-person services during this time (47%), with 20% continuing “with most employees working on-site/in-office” and 27% continuing to “offer some in-person services, with some employees working remotely and others working on-site/in-office.”
Meanwhile, 22% have transitioned to majority remote work, and 26% have transitioned to entirely remote work. Making up the 26% that have transitioned to entirely remote work are 15% of respondents who plan to fully return to the office in the future; 8% who plan a scaled back return; and 3% who are considering a permanent transition to remote work.
"70% of small businesses have seen a decline in their revenue since the COVID-19 outbreak."
As businesses fight to stay open, changes to the workplace environment reflect growing concerns for employee health. 95% of respondents have made changes to their business as a result of COVID-19. The majority report having “implemented more frequent sanitizing” (65%), “moved more communications and meetings online” (62%), “restricted interactions with clients/customers” (59%), and “restricted interactions between employees” (51%) to keep employees as safe as possible. 37% also say they have changed their physical layout.
When asked how COVID-19 has impacted the importance of various elements of business management, some of the top answers given by benefits decision-makers at small businesses include operational and financial concerns: 84% indicated that “the financial health of their business” has become more important as a result of COVID-19, while 72% say that “new resources needed for operation,” and 67% say that “how and where their business operates” have become more important.
So what is the top priority for small businesses coming out of the pandemic?
Small businesses are prioritizing employee health and wellbeing.
As a result of COVID-19, 88% of small business owners say that employee health and wellbeing is more important to them, according to our survey data.
While many small businesses have been hurt financially in 2020, one in 10 have hired new employees during the pandemic (10%), and a similar number report that revenue has grown as a result of COVID-19 (9%). More than half indicated that they anticipate rehiring over a quarter of laid off or furloughed employees (55%).
As small businesses reopen and rehire employees, managing expenses will be top of mind. When it comes to health insurance, small businesses will need a partner that understands and cares about the unique financial needs of both employers and employees.
"88% of small business owners say that employee health and wellbeing is more important as a result of COVID-19."
Concern for employee health is reflected in respondents’ prioritization of benefits, which now center on health and wellbeing. When asked to consider the benefits going forward that will be most important to offer employees, small business decision makers most frequently rated wellness benefits as “most important” (26%), followed by health insurance (19%), flexible or remote work options (18%), dental and vision insurance (12%), financial planning (14%), and paid time-off (11%).
Many small businesses are planning to re-allocate their budget in consideration of increased health concerns. 66% of respondents report that COVID-19 has made health insurance more important in their overall business budget.
Delivering on small business health insurance priorities.
Nearly half (48%) of respondents indicated that COVID-19 has increased demand for health insurance, and only 4% indicated that COVID-19 has decreased demand.
Small businesses are thinking more critically about what’s most important in their health insurance provider. Traditional concerns in health insurance decision-making (such as premium cost) remain relevant, yet respondents indicate other priorities that would influence health insurance selection.
"Less than half of small businesses are likely to keep their current health insurance carrier."
75% of small businesses think it’s important for their insurer to offer flexible options to support their business's recovery from COVID-19 and to help their business and employees get the most out of their plan. Over 70% said they look to their insurer for communications and resources to stay informed about COVID-19, and to provide broad access to digital tools—including telemedicine, online search and scheduling, and cost estimates and billing questions.
This trend was also evident in how small businesses are thinking about potentially switching to a different health insurance company. The number is significant: 24% are actively considering changing their organization’s health insurance, and another 29% are undecided. That means less than half are likely to keep their current insurance carrier.
As small businesses think about the health insurance selection process, we see similar trends in what they’re expecting from their current insurer. Traditional factors still top the list: 37% of small businesses want an insurance carrier that provides immediate savings to employees through a lower monthly premium; 32% prioritize a larger network of top doctors, hospitals and specialists. 38% said that the top factor in switching to a new health insurance company is one that offers more affordable copays for commonly prescribed medications.
27% of respondents said that a top influencing factor in changing their health insurance carrier is finding one that better understands and cares about their business and employees. When looking for a new health insurance company, 24% of respondents said they’d prioritize 24/7 telemedicine services (opens in new tab) integrated into the plans.
Small businesses are thinking more broadly about how their insurance company can address a broader scope of employees’ needs. Regarding medical specialties, 87% of respondents rated internal medicine as the most important area when evaluating the importance of affordable coverage after the pandemic.
However, a high percentage (78%) of small businesses are also thinking about coverage for psychiatric and behavioral health specialists. As we consider the broad, long-term impact of COVID-19 beyond the economy, mental health and wellbeing (opens in new tab) has been a key theme.
Thanks to more open (and destigmatized) conversations around behavioral health and work-life balance these days, there’s an opportunity to prioritize employee mental wellbeing. Small group health insurance products such as Cigna + Oscar make this easier and more affordable, with behavioral coaching and other benefits to keep employees happy, healthy, and productive.
About the Study
This survey was conducted online within the United States by The Harris Poll on behalf of Cigna + Oscar from May 14 to 26, 2020, among 1,032 U.S. health insurance decision makers at small businesses across a nationally-representative variety of industries with 11 to 50 employees (decision makers for purposes of this survey include a mix of business owners and administrators). The panel of respondents included more than 500 individuals nationally, and an oversample of more than 150 individuals each of the following areas: Atlanta, GA, Nashville, TN, and San Francisco, CA. This online survey is not based on a probability sample, and therefore no estimate of theoretical sampling error can be calculated.
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Ready to learn more about our plans? Visit cignaoscar.com (opens in new tab), call our team directly at 1-855-672-2784, or talk to your broker about us.
Cigna + Oscar coverage is insured by Cigna Health and Life Insurance Company.
Product availability may vary by location and plan type, and is subject to change. All group health insurance policies and health benefit plans contain exclusions and limitations. For costs and complete details of coverage, contact an Oscar representative. Coverage is subject to plan deductibles, copayments and coinsurance. For details, see your plan documents.
Cigna + Oscar coverage is insured by Cigna Health and Life Insurance Company. Benefits are administered by Oscar Management Corporation, an affiliate of Oscar Insurance Company. Pharmacy benefit management services are provided by Express Scripts, Inc. “Cigna” is a brand name and refers to operating subsidiaries of Cigna Corporation, including Cigna Health and Life Insurance Company and Express Scripts, Inc.
