Recently, employee benefits experts Charles (Chuck) Newman and Ilana Arbeit of Charles Newman Co. and marketing and sales expert Dean Steinman from Presentation Multimedia sat down to talk about COVID-19. (You can listen to the podcast at the end of this article.)

In a climate of chaos caused by the pandemic, it’s a challenge to keep up with fast changes to employee benefits. In response to the virus, new laws and regulations, impacting businesses are coming left and right. So, for business owners, it’s essential to understand how employee benefits have changed.

Struggling Businesses Face Tough Choices

First, Newman notes that all 200 businesses and practices he insures are struggling.

“All day, it’s accelerating, where employers are making decisions about laying off employees, furloughing employees, closing their doors, in some instances,” said Newman.

Ilana Arbeit weighs in:

“It’s tough out there. It’s tough for everyone. It doesn’t matter what kind of business you have or how many employees you have. Everybody is really suffering right now and making some tough choices,” said Arbeit.

How Should Employers Respond?

Small business owner, Dean Steinman, asks the question, “What’s the first thing somebody should do? So, as a business owner, what’s the first thing they should be looking at?”

Newman responds:

“Really difficult decisions need to be made now to protect the organization,” as businesses must weigh whether to retain employees and risk closing their doors for good. Each practice must make these decisions on their own.

Steinham notes that many small businesses like dentists’ offices are mandated to be closed for some time. If they remain closed for as long as a month, can employers afford to pay their employees who aren’t working?

The Case for Temporary Furloughs 

Arbeit responds, discussing the options of temporary furloughs versus permanent termination.

“What a lot of employers are choosing to do, even though they can’t necessarily pay their people their salary and the withholdings and all of those things; They still want to make sure that their families are protected, so they’re maintaining the level of benefits coverage, knowing that in another month or two months they’re going to come back to work; And, everything will hopefully be back to normal.”

What Happens to Employee Benefits?

For employers paying for employee benefits, what happens during a furlough?

“Say the employer covers insurance for their people. So, within a furlough, the employer would still cover their premiums?” asks Steinham.

“In a furlough situation, you’re still as the employers, you’re still covering the benefits that you were covering before,” says Arbeit, noting first that employers may choose to collect employee contributions at a later date.

As Newman notes, the case for employers to choose to give their employees a period of furlough is strong, even though it may not have historically been used extensively in private practices.

A Light at the End of the Tunnel

Unlike in past recessions, today, there is hope that the pandemic will subside in the relative near future. Unlike long-term recessions of the past, there could be a light at the end of the tunnel.

“The reason I think that [furloughs] have come up so much right now is that during the recessions that we’ve gone through, there was really no clear endpoint to them. The hope is that there is an endpoint to this crisis,” he continued. “I think that’s why employers – since it came on us so suddenly – are thinking more in terms of a temporary displacement of their workers rather than a termination.”

What Happens to Terminated Employees?

Unfortunately, business owners will be faced with tough choices, which will get worse if the crisis drags on. Next, the group discusses what happens to employee benefits if employers are forced to let them go.

Listen to the podcast as they navigate these issues:

  • Expanded enrollment for health insurance
  • Rehiring employees at a later date
  • Waiting periods to get re-insured
  • Getting behind on premium payments, mortgage, and loans
  • How do you determine who to let go?
  • How long will your cash last?
  • Making tough decisions

We’re All in the Same Boat

Finally, Ilana Arbeit offers some hopeful advice, suggesting that there is an overwhelming sense of goodwill and helping others out there. We’re all going through this crisis together, and we’ll pull through it.

“We are literally all in the same boat. Every single person in the world right now is dealing with this situation,” said Arbeit. “What I found is that people are genuinely looking to help; Even the big bad corporations in some instances.”

If you are struggling, don’t be afraid to ask for help if you need it.

If you need help, Arbeit says, “If you don’t ask, you don’t get. So if you need something, ask for help. Ask for assistance, and people really do want to help you right now,” she continued.

For a list of helpful resources and updates about COVID-19 compiled by Charles Newman Co., check out our recent blog post.

To reach out for more information, call 914-345-1000 for Charles (Chuck) Newman and Ilana Arbeit of Charles Newman Co.

You can reach Dein Steinman of Presentation Multimedia at 914-788-1555.

Listen to “PM Episode 68: Employee-Benefits-and-Covid19-What-Are-Your-Options” on Spreaker.