As we learned in 2020, unexpected events—in this case, a global pandemic—can create unplanned and even dire consequences. COVID-19 cut the economy off at its knees, sending millions of people into un- or under-employment and associated significant financial hardship. Benefits have come into sharper view as the health, financial and emotional toll of COVID-19 are increasingly pronounced.

In the fall of 2020, we had been living with COVID-19 and its impact for the better part of a year. It was in this context that the American workforce made its benefits decisions for 2021, indicating that overall saving habits had improved while tolerance for risk around health care spending dipped.

This annual white paper specifically analyzes the impact of COVID-19 on employees’ benefits literacy, financial preparedness and risk tolerance, and offers insights for employers on:

• Strategies to raise benefits understanding across all demographic groups and support more informed decision-making.
• Plan design changes to capitalize on a surge in employee savings.
• Benefit additions to address employees’ twin desires for increased personalization and decreased financial pressure.