Self-funded employers don’t have to cut health coverage due to coronavirus

Businesses across the country are facing difficult decisions as a result of the coronavirus outbreak.  COVID-19 quarantining, new rules and regulations, and the economic and business impact of stay-at-home orders are prompting hour reductions, furloughs, layoffs and other measures aimed at reducing costs so companies can continue operations until the pandemic subsides.

Your clients with self-funded health plans may be caught between a rock and a hard place – not wanting to leave employees without coverage, but also trying to ensure the business survives this existential crisis. The issue may be particularly acute if your members are concentrated near so-called “hot spots,” like the New York City metro area, and are accessing COVID-related care.

Related: COVID-19 and self-funded plans: understanding the financial impact

However, your employer clients may have more options than they think to continue serving members’ health care needs, even with the uncertainty and unparalleled strain the pandemic is placing on their business and the work their members do. Consider these strategies:

Benefit changes

Changes in health plan design can help lower costs. Care redirection, for example, can reduce costs for members and the health plan by recommending the most appropriate health care providers and care settings for the individual’s health needs. This might include the choice between an ER or urgent care visit, for example, or helping a member who requires infusion services access home infusions instead of visiting a specialty hospital.

Stay-at-home orders have also prompted many plans to explore adding telehealth benefits to their plans, giving members a convenient and safe way to access care for non-emergent medical issues without potential exposure to the virus. While many health care providers bill for telehealth visits at the same rate as an in-person visit, research shows these virtual visits generate cost savings over time by diverting patients from costlier sites of care.

The broker and employer can work with the third party administrator (TPA) to review the company’s health plans and explore these and other savings strategies.

Tiered benefits

Tiered benefit designs can also reduce health care costs by directing members to preferred, high-quality, lower-cost providers. This approach should provide members with access to all the providers in their existing network, but it will allow for lower copays and other preferred cost sharing if they choose lower cost providers. Savings for organizations can be anywhere from 5% to 20%, depending on geography, utilization and plan design.

Low-cost limited benefit plans

Minimum essential coverage (MEC) plans are low-cost plans that give organizations an affordable path to providing health care coverage. These plans are not one-size-fits-all. A basic plan might offer preventive coverage, such as well visits and screenings. Enhanced plan options would cover preventive care plus other services, such as primary care and specialist visits, urgent care visits, x-rays and labs. Mini-med plans, which are designed to help with the cost of routine medical expenses, may include emergency room, outpatient and some inpatient benefits, as well. Such plans may also offer options to add on telemedicine, dental and vision benefits.

These limited-benefit, lower cost, alternative coverage plans can be offered to some members in conjunction with their current plan options, or they can replace an organization’s current health benefits.

During this unprecedented time, businesses are doing everything they can to survive while still supporting their workers. Adjusting health benefits may be one way to help organizations cut costs, even temporarily, while we all weather the storm.

Michelle Zettergren is the President of MagnaCare, a division of New York-based Brighton Health Plan Solutions, which partners with self-funded health plan sponsors to build health care solutions.