For Immediate Release

February 10, 2021

Organizations Face New Health and Retirement Benefit Implications

Brookfield, Wisconsin
—How has the COVID-19 pandemic impacted employee benefits? The International Foundation of Employee Benefit Plans has been tracking implications for workplaces across the country, providing a snapshot of the difficult decisions employers and their workers are making regarding their retirement and health care benefits. The latest survey report, Employee Benefits in a COVID-19 World—Six-Month Update, is a follow-up to a similar report released in April 2020.

Retirement Benefits

The pandemic shook the financial stability of many Americans, from reduced work hours to unexpected early retirement to job loss. The Coronavirus Aid, Relief, and Economic Security (CARES) Act included several provisions aimed at easing participant financial burdens during the pandemic by allowing greater access to defined contribution (DC) retirement accounts such as 401(k) plans.

Employers have reacted by making several changes to their plan.


  • 57% allowed coronavirus-related distributions (CRDs) from DC accounts through the end of 2020.
  • 42% are allowing workers to pay back CRDs during the next three years.
  • 36% are temporarily increasing loan amounts from DC accounts up to a maximum of 100% or $100,000 (up from the previous maximum of 50% or $50,000).
  • 42% are giving participants an extra year to pay outstanding DC loans due in 2020, now payable in 2021.

About 15% of organizations that offer DC plans are noticing a greater share of their participants making changes to their contribution (deferral) levels compared with pre-COVID-19 levels. About one in four (24%) respondents said more participants are taking hardship withdrawals from their DC accounts due to the COVID-19 pandemic. Similarly, 25% of respondents stated that more participants are taking loans from DC accounts, a substantial increase from the April version of this study.

"It remains critical for employers and plan sponsors to prioritize financial education and retirement security," said Julie Stich, CEBS, Vice President of Content at the International Foundation. "Workers may have experienced job insecurity and were unable to set money aside. Others remain employed but may be reluctant to save for retirement, as they feel anxious about their more immediate future. Employers can educate employees about the importance of saving for retirement and the options available. During this financially challenging time, it is even more important that employers and employees work together to ensure retirement security."

Health Benefits
On the health benefits side, organizations were asked about changes in the number of claims filed by workers during the pandemic. State and local lockdowns, clinics and hospitals filled to capacity, and fears about catching the virus led to workers skipping, avoiding and delaying routine health care. Compared with 2019, organizations are seeing a decrease in claims for the following:

  • Emergency room visits—43%
  • Vision care—49%
  • Primary care—62%
  • Preventive care—67%
  • Dental care—68%
  • Elective procedures—75%.

Organizations are noticing increases in the number of claims for telehealth (87% noted an increase), mental health (63%) and prescription drugs (36%). Looking forward to 2021, organizations are preparing for increases in the number of claims for telehealth, mental health, primary care and elective procedures.

"Organizations having been tracking their claims trends," said Stich. "Encouraging employees to stay current with their preventive care, including dental and vision, will hopefully eliminate or lessen the need to treat more costly conditions in the future."

Employers have made changes to their mental health benefit offerings like relaxing/eliminating eligibility requirements (4%), reducing/eliminating cost sharing (11%) and adding telepsychiatry (26%). Employee assistance program (EAP) utilization has only slightly increased due to the pandemic—Average utilization rate of EAP services before the pandemic was about 6% and it has increased to 9%. 

Noting interrupted access to pharmacies and primary care doctors, employers are also making changes to prescription drug benefits. About one in four (23%) organizations extended the time allowed under prior authorization periods, and 20% have increased quantity limits.

About the Report

Employee Benefits in a COVID-19 World—Six-Month Update provides a look at the changes workplaces have made to retirement plans, health care offerings, paid leave and flexible work arrangements in response to COVID-19.

Find the full report online at


The International Foundation of Employee Benefit Plans is the premier educational organization dedicated to providing the diverse employee benefits community with objective, solution-oriented education, research and information to ensure the health and financial security of plan beneficiaries worldwide. The Foundation has more than 31,500 multiemployer, corporate and public sector members representing over 25 million lives. For additional information, visit

Members of the media can contact to obtain a copy of the report.