The health concerns posed by the COVID-19 outbreak are serious, and could continue for some time. The need of the hour is to prepare for the next wave of this pandemic, if one occurs, and the accompanying debt crises and related woes. There is no doubt that the health system must be made more efficient to effectively treat the infection. Employers have to ensure that the workplace is safe for their employees, and take appropriate measures to contain the infection if there is an outbreak. They are faced with the challenge of managing the increased healthcare costs including workers’ compensation. Workers’ compensation attorneys, and the medical review companies that assist these attorneys understand the gravity of the situation and how the current healthcare emergency could be detrimental to businesses. Even amid the uncertainty, employers have to be level-headed enough to take the right steps to control their healthcare costs and premiums.
It is estimated that health insurance premiums for employers will increase in 2021. Covered California found in their study that premiums will increase between 4% and 40%, maybe more, on a national level. Willis Towers Watson analysts found that employers’ healthcare costs could increase by 7% in 2020. That would depend on how deadly the pandemic will be, and how far it spreads. The study says that if the outbreak infects just 10% of the population and proves to have low morbidity, healthcare costs will rise between 1% and 3%. If the virus infects 30% of the population with high morbidity, the costs could increase between 4% and 7%. A 50% infection level would be a very severe scenario and costs could increase from 5% to 7%.
The important treatments for coronavirus are as follows, as Terry Reams, president of west region employee benefits at insurance brokerage Hub International.
- Diagnosis test for COVID-19
- Test administration; cost would vary based on the place of administration
- Additional care provided outside of an in-patient facility
- Admission and treatment in a hospital
The premium increases would depend on the following factors.
- How effective policies are to lessen the virus spread
- Cost of vaccine or therapeutic agents
- Chances of another round of COVID-19 infection
Meanwhile, the FFCRA (Families First Coronavirus Response Act) enacted on March 18 and the CARES (Coronavirus Aid, Relief and Economic Security) Act passed on March 27 expand coverage requirements for all health plans including employer-sponsored group plans (fully insured or self-insured). Under FFCRA, health plans must provide coverage without any cost-sharing requirements, whether co-payments, deductibles, co-insurance, or pre-authorization, for coronavirus-related services. The CARES Act extended the cost-sharing waiver to all services or items provided during a patient visit, whether in-person or via telehealth services.
To ensure the financial viability of self-funded health plans, employers can take the following steps, according to Hub International employee benefits financial analytics and actuarial team.
- Make necessary amendments in the plan document: Employers planning to cover the associated cost of testing for COVID-19 need to do this quickly. This is because most stop loss insurers are agreeing to such plan changes without any impact on their contracted premiums or attachment factors.
- Consider including telemedicine: This will help reduce the virus transmission risk and drive cost savings.
- Do not stop amassing funds: There could be a sudden increase in healthcare costs when the demand for care increases.
- Do not reduce your Claims Reserve or use it for capital expenditures if possible: Any cost savings gained due to prioritization of treating the virus over routine/non-emergency care will ultimately be paid by the plan (and this could cost more when it does).
Other strategies experts suggest are:
- Make the best use of technology: This will help workers seek, manage, and receive healthcare via the internet. Telehealth, which is witnessing increasing demand as a practical healthcare solution, is especially beneficial for workers with chronic conditions that need continuous monitoring. Employers could work with their payers to ensure continued coverage of telehealth for their employees. Employers should also choose healthcare solutions that can ensure better health and improve productivity, attendance and quality of life for their employees and are cost-effective.
- Partner more closely with doctors and hospitals: Employers can offer their industry-specific expertise to enable hospitals and other healthcare facilities to practice safer, more efficient, patient-friendly and cost-effective care. Employers can choose to serve on community advisories or governance boards of health systems and thereby better understand and improve the care their employees and their families receive.
With the prevailing uncertainty about the future, it is the onus of employers to act decisively. This is a great opportunity to educate employees regarding the value of preventative care – in other words, the long-term savings and value ensured by preventative care as a result of reduced healthcare costs and increasing peace of mind. The pandemic has taught everyone the need to plan for the unexpected. As a company providing chart review for workers’ compensation attorneys, we fully understand that there is always the chance for things to go completely out of control. However, employers can consider educating and empowering their employees to save for healthcare costs for now and beyond. Employers can partner with healthcare providers putting across their thoughts on high quality and low-cost care. They can leverage telehealth and virtual care solutions to achieve the objectives of superior quality healthcare at low-cost, and thereby enable their employees to better face the challenges posed by crises such as COVID-19.