COVID-19 will reshape health benefits: How employers can prepare
The coming months will bring a surge in health complications among plan members and increased costs for health care.
Anyone engaged in employee benefits design, sales, planning, or administration has most likely spent the last couple of months focused on supporting their own organization to respond to the impacts of COVID-19. What about the road that lies ahead for employee benefits? It will be rocky and uncertain. But with the right health care data, you can navigate the journey much more easily and with greater success, regardless of what area of the benefits world you work in.
Current trends in employee health and employee use of benefits plans will likely bring changes not previously considered. Looking at health intelligence, it’s clear that the coming months will bring a surge in health complications among plan members and increased costs for health care. Now’s the time to start planning to meet those challenges.
Related: COVID-19 could cut health care costs by up to $575B
It’s an understatement to say 2020 has been far different from any year, and no one knows for sure what lies ahead. But benefits professionals can start now to be well positioned to optimize plan management and make accurate midyear adjustments. How? By getting the full picture of the impact of COVID-19 on health care and benefits. That includes an accurate view of what we’ve seen so far and reliable visibility into the ways COVID-19 could influence member health and the use of benefits for the rest of 2020 and into next year.
Here are four key benefit trends resulting from COVID-19 we can expect to see:
1. Your covered population is likely to change
Unemployment has risen by the tens of millions. The numbers may continue to increase as companies slowly return to the level of production and revenue they knew months ago. And, sadly, many won’t return. These sweeping shifts in the employment landscape could affect organizations and their member demographics because of:
- Layoffs (requiring mass offboarding and decreasing plan members)
- Furloughs
- Reduced hours (which may affect benefits enrollment, depending on the policy)
- New dependents (when employee spouses and children are laid off)
That last point — new dependents joining your plans — may be the most surprising among the four. As people get laid off, furloughed, or have their work hours reduced, they may choose to join the health plans of their spouses or parents.
These four changes in the employment landscape will combine to present talent leaders with costs they didn’t plan for in 2019 — in the pre-COVID-19 days when they were designing this year’s benefits plans.
2. Health care costs have likely eased, but that won’t last
Overall health care costs for employers might be down now a result of social distancing and shelter-in-place orders. Obviously, that’s not a trend you can expect to continue through the rest of the year.
The current decrease will turn into a rise in costs because of a confluence of two trends. First is an increase in health complications (more about that in a moment). The other is employees and their family members will begin — if not rush! — to receive previously postponed preventive and elective procedures. As workforces and their families come out of isolation, this one-two punch will likely cause large increases in costs for the back half of 2020.
3. You may see a jump in health complications
The U.S. has witnessed a significant drop in health claims this spring for two reasons. People have postponed or been forced to cancel preventive and routine care. Health providers have, meanwhile, delayed appointments for those types of visits and elective procedures. You can expect two simultaneous outcomes:
- Some plan members could very likely develop chronic conditions.
- For the 60% of Americans who already have a chronic illness, the gap in routine care may well bring increased complications and even comorbidities.
For example, a recent survey by the American Cancer Society found that 27% of people getting treatment for cancer have suffered a delay in getting care as a result of COVID-19 restrictions — and 13% of those said they don’t know when their appointments will be rescheduled.
When employers and their employees start to achieve a sort of new normal — as stay-at-home orders are pulled back and members return to their scheduled health care visits — you can expect a double hit: an increase in health complications and an uptick in new diagnoses.
4. Expect an increase in mental health costs
Even before COVID-19, 1 in 5 Americans had a mental illness. These individuals could see their conditions worsen as social distancing and quarantining limited their access to health management resources. People with no previous diagnosis could, meanwhile, begin experiencing symptoms that will soon become more acute. After all, even before the pandemic, some of the most common causes of heightened fear, anxiety, and stress included the threat of infection, the worry over economic instability, the possibility of losing one’s job, the fear of deep financial hardship, and continuous social isolation.
These micro-trends deliver another one-two punch. Mental health conditions — and especially the high rate of people who have mental health AND chronic physical conditions — cause extremely high costs for employers. Now that many organizations and individuals are already feeling the weight of the economic downturn, these additional costs could be especially burdensome.
In addition to the potential increase in health benefits to meet mental health challenges, employees and their dependents might also seek help from mental health professionals and well-being services. If your company doesn’t already have an EAP, now may be the time to consider one.
The takeaway in a nutshell is that benefits leaders can expect to see a significant increase in claims and employee requests for support and services moving forward — while you probably already have your plates incredibly full with communications, midyear plan changes, and other crisis responses.
That set of circumstances probably won’t change until well after things return to “normal” and, in fact, is likely to get worse. Employees and members will also have plenty of questions and requests for support, even as the year goes on. During continued high levels of economic uncertainty and fear, they may even feel dissatisfied or nervous about your organization’s decisions — even about the company’s future. Finally, benefits professionals will need to manage what are sure to be an increase in claims; the need to swiftly onboard and offboard employees as things pick up; the possibility of new offerings, like an EAP or telehealth solutions — all while starting to focus on plan designs and changes for 2021.
All of this will make clear communication and strong support for employees more critical than ever before.
5 best practices for collecting health data
It might be daunting to look too far down the road while you’re struggling through the current situation. But with the right planning and accurate, meaningful insights, you can be better prepared to help your organization effectively overcome the changes that lie ahead. These five best practices for collecting health data will help you effectively understand the trends shaping health benefits now and how your organization can best respond.
1. Identify gaps in care. Evaluate your organization’s population data to identify which segments are not currently getting the care they need. Consider applying targeted communication strategies, telehealth opportunities, and even disease-management solutions to help your members stay or get back on track.
2. Consider plan changes. Monitor your claims data to see how these trends are affecting your population. Consider if midyear plan changes might be necessary to account for cost changes throughout 2020.
3. Prepare for population changes. Don’t wait until later to start monitoring your data to forecast costs and administrative needs that will stem from changes in enrollment (and to accurately prepare for your 2021 plan design).
4. Support mental health. Communicate consistently with your members to help them feel connected, supported, and aware of any resources available to them — an EAP or well-being service, for example.
5. Equip your entire HR and talent teams. Start preparing now for increased workloads or added responsibilities. Set up any tools and processes your teams may need to work even faster, more nimbly, and more efficiently.
Now is the time for benefit professionals to be proactive and take defensible, preventive steps to protect the health of their employees and the financial well-being of their companies. By accurately assessing not only the current difficulties but also the trends that lie ahead, benefits leaders can improve their plans for supporting employees and maximize their organization’s investment.
Rod Reasen is the co-founder and CEO of Springbuk, a health intelligence platform determined to prevent disease with data. This industry-leading platform allows employers to maximize the investment they’re making in their most valuable resource — people.
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