The coronavirus disease 2019 (COVID-19) pandemic has led to healthcare cost increases of as much as 7% for employers, based on recent study results, stressing the essential need for organizations to have a plan that supports employees and potential revenue loss.
As coronavirus disease 2019 (COVID-19) forces the closure of nonessential businesses nationwide, employers have had to develop plans to deal with potential revenue loss not only from these requirements, but also from rises in healthcare benefit costs. In an actuarial analysis of self-funded employers by Willis Towers Watson, researchers noted that these benefits could increase by as much as 7% this year from testing and treatment costs related to COVID-19.
These projections depend on the portion of the population infected and the severity of the illness, with a 30% infection level equating to an increase of 4% to 7% and a 10% infection level linked with a rise between 1% and 3%. “The effectiveness of our containment strategy will determine what portion of the US population will become infected. And that will have an impact on additional costs, which employers will need to consider as they design and finalize their benefit strategy and plan for 2021,” said Trevis Parson, chief actuary of Willis Towers Watson.
Although these benefit increases may be miniscule if efforts to curb infection prove successful, these estimates add to the 5% cost increase already projected for this year. Add in the transition to working from home (WFH), and there are numerous factors that require consideration, notes Carlos Delucca, chief operating officer for Precision Value & Health (Precision) and co-president of its subsidiary Precision for Value, in an interview with The American Journal of Managed Care® (AJMC®).
“Moving a global organization of almost 2000 [full-time employees] to a voluntary WFH [setup], and in some cases mandatory WFH for all employees who can perform their job remotely, can be a challenge because of schools and daycare closings, multiple people needing to work from home in a small space (think NYC apartment with roommates!), as well as other challenges that tend to disrupt the normal work day,” said Delucca.
As Delucca notes, collaboration has proved key for how Precision has successfully transitioned to most of its employees working remotely. Precision has developed several strategies, including its Coronavirus Preparedness Team that responds to employee needs and maintains a safe working environment; a COVID-19 micro-site that promotes credible information and provides a centralized source for company communications, policies, and helpful internal and external resources; and a dedicated COVID-19 email address for employees to send any questions, inquiries, or concerns or provide feedback to the business continuity plans and make suggestions for how Precision can better support them.
“While this seems like a no-brainer, we learned that some healthcare plans weren’t actually covering COVID-19 testing and visits for their employees, so Precision ensured that these are fully covered by insurance at no cost to employees,” said Delucca.
All businesses have taken their own unique approach to optimizing employee coverage during the crisis, with 7 in 10 large employers indicating in a survey by the Business Group on Health that they have a firm plan in place to address the pandemic. The survey, “Large Employer Response to Coronavirus (COVID-19) — Part II,” included input from 95 large employer members, who detailed what policies are being implemented to support employees and their families amid the pandemic.
For employees exposed to COVID-19, 34% of surveyed employers stated they will continue to pay affected employees unable to work, with another 25% considering doing so if the situation continues to escalate. For those seeking treatment, 68% of surveyed employers are encouraging employees to use telemedicine and 35% either have or will reduce or waive out-of-pocket cost for mail order prescription drugs.
In an interview with AJMC®, Kathleen O’Driscoll, vice president of the Business Group on Health, noted the importance of telehealth, which can relieve the burden on hospitals, physicians, and other acute care facilities, as well as eliminate the risk of transmission of the virus to both patients and providers.
“To encourage the use of telehealth, some companies are not only promoting the use of existing telehealth vendors, but also encouraging virtual visits with their existing [primary care physicians] where possible. Many [employee assistance program] vendors offer digital solutions, including telephonic support and online chat, which employees can use at this time,” said O’Driscoll.
O’Driscoll highlights that 13% of surveyed employers are currently in negotiations with insurers outside the United States to waive COVID-19 related exclusions, a move that would add to the 8% who have already done so.
“Employers and their health plan partners have relaxed rules, including suspending prior authorization requirements, eliminating fill limits on prescription drugs, waiving cost-sharing to promote virtual care, and other rules as needed to assure access to care during the disruption caused by COVID-19,” said O’Driscoll.