Small businesses show dedication, agility in responding to COVID-19

COVID-19 has hit the small business segment especially hard, with companies building plans to stay viable, retain their employees and navigate the pandemic’s effects.

How are small businesses changing their strategies and priorities in response to COVID-19? How can they work to retain top talent now, and in the future — and how can offering health care benefits play a role? Three UnitedHealthcare small business experts gathered to discuss possible challenges facing small businesses — and how they might be overcoming them.

• John Prior, Regional Vice President of Small Business and Specialty Benefits, UnitedHealthcare Northeast Region
• Robert Horton, Regional Vice President of Small Business Sales and Account Management, UnitedHealthcare Southeast Region
• Josh Willson, Regional Vice President of Specialty Benefits and Small Business Medical, UnitedHealthcare Central Region

Q: What are the biggest challenges small businesses may be facing due to COVID-19?

Willson: Small businesses usually don't have big HR departments like large employers might have. So, one big challenge might be how to navigate the HR issues that are inherent with the pandemic. For example, how do they stay in compliance with possible furloughs or reductions in force?

Prior: The ability to continue to pay and provide benefits to their staff may be a challenge. They also might consider what the impact of return to work will be. When the country does fully reopen, what's their business model going to look like? Will they be able to operate at the same capacity? What kind of rules are going to have to be put in place? There are a lot of different challenges there. 

Horton: Outside of just keeping the doors open, small businesses are adapting to what a new, post-COVID world may look like. Many of them are going to have to adjust how they do business moving forward. They’ll need to make sure their customers feel safe coming back into their businesses. These businesses may have to build a level of trust that they’re keeping both their employees’ and customers’ safety a priority.

Q: How are small businesses responding to these challenges?

Prior:  Employers respond differently, but they may need to look at their staffing model and their revenue streams and consider all options to do what’s right for their business. We've seen furloughs, and some of those furloughs may eventually become layoffs. We've also seen groups reach out for premium deferrals or payment plans that help ensure they can continue providing benefits to their employees.

Willson: The Paycheck Protection Program has helped some small employers keep their employees employed, which ultimately has allowed them to keep their health care benefits. And this situation has really opened the opportunity for small employers to look at their benefits strategy. They need to protect their bottom line, so they're looking at changes they may make to their benefits or deductibles to better fit their budget.

Horton: I believe small employers are extremely resilient. From the very beginning of COVID-19, we’ve seen restaurants and other businesses moving to delivery and curbside pickups. We’ve seen physicians embracing telehealth, churches moving to virtual services and microbreweries producing hand sanitizer. Some employers are willing to meet their customers in their homes. And some are looking for premium relief or premium holidays in lieu of a benefit design change. That position might change at their next renewal, though — they might be willing to look at different benefit designs, given the COVID-19 impact.

Q: How are small businesses evolving their strategies and priorities in response to COVID-19?

Horton: In April, we surveyed both small and large groups. Almost half of the small employers made adjustments around their employees’ schedules, whether it was staggering their hours or giving them the ability to work from home. We've also seen them furlough some employees, as well as reduce staff and delay or cancel some non-critical purchases. Twelve percent of small businesses have implemented some benefits reductions. That’s not just health insurance — it might be things like not continuing to contribute to 401k plans. Benefit reduction tends to be one of the last steps businesses take because, from their perspective, employee health is paramount.¹

Willson: I continue to be amazed at how nimble and innovative small businesses are. As they think about return to work and a return to normalcy, many are indicating they can be successful by adapting. Some in the restaurant industry, for example, will continue with curbside pickup and delivery longer term, and others will ensure their services are available virtually versus in-person only.

Q: What are small businesses doing to support the physical and mental well-being of their employees?

Willson: As they develop their return-to-work strategies, we hear that many small businesses are thinking about how they can ensure the safety of their employees as much as their customers. UnitedHealthcare is providing a Return to Worksite Toolkit, which includes helpful resources like up-to-date information around COVID-19 testing and a website for state-specific guidelines.

Prior: Employees may be under a lot of stress, whether it's balancing childcare and work at the same time or working in isolation for a long period of time. And our small group employer clients have a protective attitude toward their employees. One of the tools that we've made available is SanvelloTM, a digital tool for stress, anxiety and depression. While not available in all markets, it provides mindfulness, meditation, peer support, mood trackers and other coping tools that may be very useful. 

Q: How can small businesses work to retain their talent, both short and long term?

Prior: It may be a challenge, because we don't really know how long COVID-19’s effects will last. But an important aspect of retaining talent always comes down to your benefits portfolio. I think we might see employers start to look at different options; they still need to have competitive benefits to retain talent, but at the same time, they may need to balance that with cost-saving initiatives. Enterprise Health Care Value (EHCV) initiatives, gatekeeper plans and tiered networks may help build flexibility into our small business portfolios, while aiming to reduce the overall price point. 

Horton: From a short-term perspective, small businesses may need to find a way to keep their critical staff on the payroll, whether it’s full-time or if they might have to cut back on hours. In the long term, small businesses will still need to attract talent — and they're still going to need some employee benefits strategies to compete for that talent, just like they have in the past.

Willson: And when it comes to retaining employees through benefits packages, the other piece of it is your specialty benefits — your dental, your vision, your financial protection. By bundling these with their medical plan, not only may small businesses save money, but they may save on their resources compared to trying to administer all the programs themselves, individually.

Q: How are these companies’ benefits strategies changing in response to COVID-19 — and do you think this change will be long term?

Willson: With change, the market adapts and creates solutions. And today’s environment is no exception. To respond to COVID-19’s effects, in the Central region we've developed new health plans — UnitedHealthcare Assured Plans —- which are designed to offer quality coverage at a lower price point. The beauty of these plans is that they may help employers who are thinking about reducing their benefits or dropping coverage altogether, another choice they may consider as they evaluate their benefits strategy. These plans have similar premiums to high deductible health plans, without the significant exposure to out-of-pocket expenses.

Horton: Our April survey showed that the desire for health coverage is going to remain the same or potentially grow in 2021. About 85% of the small business employers we surveyed said that they were going to offer similar or richer benefits.²

On the flip side, we also see that when cost becomes an issue, businesses may be more willing to look at alternative plan designs that might offer some savings. For example, we've seen an increase in employers looking at All Savers® Alternate Funding, which is a level-funded offering, because it allows employers to potentially save premium dollars under certain conditions.

Q: How can small business owners continue to help laid-off or terminated employees?

Prior: Losing employer-sponsored health care may be scary and sorting out the complicated health care exchanges might be overwhelming. One way we may be able to help our members is through Operation Get Covered. The goal of the program is to help counsel employees who have lost their employer-sponsored health benefits and connect them to the information and support they may need to learn about their options. We want to help employees know what is available so they might be able to continue coverage, whether it’s through ACA Exchange Plans, Medicare, Medicaid or Short-Term Limited Duration options.

Horton: Small employers work tirelessly to take care of their employees. In addition to the options from the Operation Get Covered program, COBRA is an option for firms that have a certain number of employees. So, the employer may decide to work with their carrier to make sure the employee might be able to get an extension. They may also work with their employee benefits brokers to help them find options for their former employees.