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The Future Of The Employee/employer Relationship

They say the best-laid plans of mice and men often go awry. Perhaps nowhere in our industry’s history is this more evident than in the passing and subsequent implementation of the 1942 Stabilization Act, which authorized and directed the president to issue an order stabilizing prices, wages and salaries. A piece of legislation that continues to affect our lives today. The act was passed when there was an acute shortage in the labor force and extraordinary demand for goods and services and with hopes to avoid further economic depredation.  
This left employers in a pickle. How could you retain your workforce if you couldn’t incentivize them by raising their wages? For that matter, how would you attract new talent without an appealing employee value proposition that could draw candidates in? These questions might sound familiar given that many of us are still wrestling with them today. 
Employers in the 40’s found a solution though: The Stabilization Act exempted health benefits from the wage freeze and employer-sponsored insurance was off to the races. Tax-exempt premiums, increased enrollment and interest, and tax subsidies for third-party insurance further reinforced the new system and laid the foundation for employer-sponsored insurance today.
Most of these benefits were intertwined with full-time work. And since there was plenty of full-time work to go around, Americans happily endorsed and embraced the idea of health coverage tied to full-time employment.   

​​​​​However, employer-sponsored insurance was never intended to be the panacea for healthcare in America. It just sort of appeared from the passing and subsequent implementation of the 1942 Stabilization Act and favorable circumstances allowed it to quickly evolve into the system we have now, albeit helped by a series of subsequent legislative actions. Those actions wound up creating bifurcated coverage in the U.S., a system where employers and the Federal Government are the primary payers. To a lesser extent, we could also include non-group covered individuals and the uninsured to round out the whole picture of access to American healthcare.     
Because the vast majority of households in America still rely on employer-sponsored coverage, what happens to our ability to promote and maintain the health of our employees, retirees, and families when an event like COVID-19 sweeps through the country? Well, as we all now know, it is severely hampered. 
This rings especially true for our laid-off employees. By one estimate, as many as six million workers have lost access to the coverage they previously received through their employer since March 2020. As can be easily imagined, when one of our employees loses their coverage, the health of their family members is affected as well, compounding the problem. Although it is estimated that approximately 85 percent of workers retained some form of health insurance, it is clear that millions have been forced to enroll in Medicaid or some other government program to sustain coverage. 
Although full-time jobs are slowly returning and the benefits that accompany them, the recovery from the staggering unemployment caused by the coronavirus has been predominately driven by part-time work and the gig economy. For example, although there have been severe declines in demand for ride-sharing companies like Lyft and Uber, delivery services for groceries and restaurants have been booming. Walk into a Whole Foods today and you’ll notice entire sections transformed to accommodate the constant in and out of hurried Prime Now workers. Sadly, you may also notice the conspicuously absent presence of the leisurely grocery shopper. Either way, it’s yet another reminder of how the world has significantly changed in the last six months. 
The position we find ourselves in today raises significant questions about the future of the employee/employer relationship. As we re-evaluate how our businesses are staffed, it’s becoming clear that our old workforce policies may no longer serve us effectively. Over the last several months, many of us were forced to layoff or furlough employees. In some cases, our employees needed to be reclassified or reassigned on a part-time basis. The notion that we must focus our efforts solely on the hiring and retaining of traditional, full-time employees with benefits may be waning. Contracted, part-time and project-specific employees may be cheaper and more efficient for employers. Even pre-COVID, the modern workforce consisted of a growing blend of gig workers while part-timers and traditional full-time staff remained somewhat steady. In this labor market, gig workers and part-time job seekers are literally everywhere. And these numbers will grow as unemployment benefits expire. 
The conditions of this labor environment will force us to reimagine the employee value proposition. Think about it, how do you impact the health of an employee population when you have a blend of full-time, part-time and contract workers? How do you create a culture of health and wellbeing that includes a team member who may only be there for three months? How do you keep someone who works 25 hours a week motivated to stay healthy? And what happens if one of our gig employees or part-timers gets sick or gets injured? How is their care accessed or financed?  
These are the kinds of questions we need to start asking. There is a need to look at the bigger whole and recognize the impact that the employee/employer relationship has on an individual’s ability to access care, especially as it’s been so heavily tied to full-time employment. As this relationship evolves, we still have to incentivize people to stay at our organizations, we still have to attract top talent, and we still need a healthy and happy workforce. Although doing so may require a reimagining of our benefits offering, it is perhaps the innovation employers need today to be ready set for success tomorrow.  

Patty Starr bio image

About the author

Patty Starr

Patty Starr is president and CEO of Health Action Council and is responsible for driving the strategic direction of the organization--build stronger, healthier communities where business can thrive. 

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