Will COVID-19 lead to permanent changes in the way businesses think about employee health benefits, or is it a short-term disruption?

Source : https://www.benefitspro.com/2020/09/02/re-thinking-health-benefits-packages-following-a-global-pandemic/

It is no secret that COVID-19 has caused significant disruptions to the way we live and the way we do business now and moving into the future. The pandemic has forced business leaders across many industries to pursue aggressive cost reductions, well beyond the scope of their regular cost management initiatives.

After the obvious but painful cost-reductions and cuts have taken place, what happens when that is not enough? Many leaders are forced to shift focus to core expense categories, including compensation. Beyond hiring freezes and headcount reductions, health benefits offer the next logical target, given that they typically account for over 30% of companies’ overall compensation spend according to the U.S. Bureau of Labor Statistics. However, health benefits remain more necessary than ever for retaining and attracting talent. In the midst of the COVID-19 pandemic, employees are becoming much more aware of how important it is to have benefits that provide affordable access to routine care as well as emergency care.

The question now is, will COVID-19 lead to permanent changes in the way businesses think about their employee health benefits, or is it a short-term disruption after which things will go back to normal?

Although it may be too soon to tell and, to some extent, the answer will depend on the eventual duration and severity of the pandemic, there are a few trends that were already emerging prior to COVID-19 that are likely to become even more prominent and permanent. The most obvious being the adoption of telemedicine with video visits and expansion of mental health support services included in plans – both have garnered attention and are certain to remain critical in both the near and long term.

However, although not widely mentioned, there are two additional critical areas to consider.

Cost control

The first is the desire for stronger cost control and predictability. Employers are increasingly unwilling to accept and finance the disparity between the rate of growth in the cost of medical services and the general growth rate of the economy. While your business is growing at 5%, it might still be possible to absorb a 7% increase in the cost of employee health coverage, but when your revenues have contracted by 20%, it’s next to impossible.

What many businesses are looking at instead is the defined-contribution model that sets a fixed amount of health benefits dollars that are offered to each employee and can then be applied to a variety of health plan options, each with a different premium cost, and often offered by a different insurance carrier. Employees choose an option that best fits their needs and budget, and the employer knows exactly how much they will spend. It’s a win-win for everyone. With this model, the company’s benefits budget is highly predictable, as it does not depend on employees’ enrollment choices. As business goals and budget needs evolve, employers can adjust their contributions without switching insurance carriers or disrupting their employees’ experience.

No one saw COVID-19 coming or knew the impact it would have on the way we live our daily lives, run our businesses and take care of ourselves and there are surely more unforeseen adjustments still ahead of us. Employers need a health plan structure that can roll with the punches and adjust as the world continues navigating this COVID-19 rollercoaster.

Reduced cost-sharing

Another trend that is likely to persist is the movement away from high levels of cost-sharing (e.g. deductibles, coinsurance or copays). Throughout the last decade, high-deductible plans have become more prevalent as the primary plan design among employers, promising the flattening of the medical cost curve by creating a “skin in the game” effect. This promise has largely remained unfulfilled, while deductibles associated with employer-sponsored health benefits have risen rapidly to the current average of over $1,600, according to Kaiser Family Foundation, which is often well beyond what a typical worker has available in emergency funds. The economic devastation related to the pandemic has further exacerbated this situation, leading many employees to question the value they get from paying for their health coverage.

Beyond the financial stress that high-deductible plans impose, they also reinforce a dangerous perception that you should only go to the doctor (either in person, or virtually) if you’re REALLY sick. Not only might this prevent employees from seeking care early enough to diagnose a potential COVID-19 infection, but many serious conditions unrelated to COVID-19 start out with non-acute symptoms, or often with no symptoms at all. Avoiding care, not identifying symptoms and not seeking early diagnosis and treatment become much more harmful, and in turn, more expensive to care for in the long run. No one should have to choose between paying the utilities or groceries or seeking medical care.

CDC data tells us that chronic diseases that can be managed through preventive care account for 75% of the nation’s health care spending and lower economic output in the US by $260 billion dollars per year. As a result, many businesses are turning away from high-deductible plan designs, and looking at options that expand, lower or eliminates cost-sharing.

Innovative product offerings by new market entrants are gaining traction — bringing zero-copay, zero-deductible plan options, at a cost that is comparable to typical high-deductible plan designs and proving to be financially viable. Not only can eliminating employee cost-sharing help businesses save money in the long-run, it can also help increase employees’ perceived value when it comes to their health benefits and compensation package.

As we move forward and navigate the continued challenges and changes COVID-19 presents, where and how companies pivot will be crucial for both employers and employees when it comes to health benefits and compensation packages. Like many things prior to COVID-19, processes and systems that once worked, may not survive our “new normal.” Now is the time to be diligent, proactive and steadfast in looking at innovative solutions for health benefits.

Tags: , , , , ,

This Post Has 69 Comments

  2. Jamesglype 15 Jan 2021

    nose congested when taking cialis cheap cialis tuwrcxmj viagra vs cialis

  4. Jamesglype 15 Jan 2021

    generic viagra online for sale kejooyzp buy cheap viagra viagra prices

  5. Jamesglype 15 Jan 2021

    medicine erectile dysfunction qsjlxdua order levitra how to help ed

  6. Jamesglype 15 Jan 2021

    viagra prescription crvuqkzb buy sildenafil viagra pills

  7. Jamesglype 16 Jan 2021

    cost of cialis cialis online bfucqfwu lowest cialis prices

  8. Jamesglype 16 Jan 2021

    cialis 30 day trial voucher cheap cialis ijgnzxtn cialis tolerance

  11. LesterRob 19 Jan 2021

    how long does 20mg cialis keep in system lfdgvmmr http://tadedmedz.com/ coupons for cialis

  12. LesterRob 19 Jan 2021

    side effects of cialis pzralxew http://tadedmedz.com/ how often to take 10mg cialis

  16. Lbgboive 24 Jan 2021

    best viagra alternatives generic viagra viagra online 365 [url=http://genqpviag.com/]viagra online\\[/url] ’

  27. JoshuaBap 30 Jan 2021

    buy generic viagra viagra

  29. LouisFup 4 Feb 2021

    cheap erectile dysfunction pills ed pill
    treatments for ed

  30. LouisFup 4 Feb 2021

    medicine for impotence otc ed pills
    cheap ed pills

  32. LouisFup 5 Feb 2021

    cheap ed pills generic ed drugs
    pills erectile dysfunction

  48. Glenndiesy 12 Feb 2021

    generic stromectol keftab capsules
    nitrofurantoin for sale

  58. Richardtog 17 Feb 2021

    how often to take 10mg cialis coffee with cialis
    how to get cialis samples

  60. Richardtog 17 Feb 2021

    cialis 5mg coupon cialis price
    generic cialis black 800mg

  61. Richardtog 17 Feb 2021

    coupon for cialis by manufacturer canadian viagra cialis
    free cialis medication for providers

  62. Richardtog 18 Feb 2021

    does cialis make you bigger $200 cialis coupon
    cialis generic availability

  63. Richardtog 18 Feb 2021

    prices of cialis cialis vs levitra
    high blood pressure and cialis

  67. Richardtog 20 Feb 2021

    cialis professional online cialis
    herbal replacement for viagra/cialis/levitra…

Leave a Reply