- Posted by Chris Elvidge
- On May 22, 2020
As employers focus on return to work plans and determining the important steps necessary to keeping their workers safe and healthy, they should also anticipate rising health care costs — as a result of both the contraction of individuals with coronavirus and the cost for their health plans to cover testing and related costs for COVID-19.
On both self-funded (employer assumes financial risk for employees health care claims under cost sharing terms) and fully insured (employer and employee pay premium and carrier assumes health care claim risk) funding contracts, all test-related costs to detect coronavirus, as well as health care provider visits, including telehealth, urgent care and emergency room visits that result in a test to detect coronavirus, are mandated to be covered by the health plan without any cost-sharing requirements or prior authorization by the employee. This is the result of the legislative Families First Coronavirus Response Act (FFCRA) and then the subsequent Coronavirus Aid, Relief and Economic Security (CARES) Act.
Preliminary projections from Willis Towers Watson predict that employers will see a bigger premium rise than they have seen over last couple of years but the size of that increase will likely depend on three key elements:
- Effectiveness of policies to mitigate the spread of the virus
- Potential new waves of COVID-19 infection
- Costs of new treatments or emerging vaccines
In addition, the true spike of the coronavirus costs could be masked due to the fact that elective or unnecessary surgeries and procedures have been delayed until further notice, causing a dip in claims utilization and spend. As those procedures come back ‘online’, there will be an uptick in costs that will eventually normalize.
The overall health impact (and related claims utilization) of your particular organization as it pertains to coronavirus is unique in that it may very well be a reflection of your own demographics as this disease tends to be more severe on the older workers and more health vulnerable population who have underlying conditions. Workplaces with more smokers will also see higher health care costs as well, such as more hospitalizations, due to the virus.
In the end, continuing to encourage careful measures of social distancing, hand washing, and remaining home/quarantined if ill are all basic measures we will need to continue in the near future to control and mitigate the spread and ultimately financial risk of the coronavirus pandemic.
As your benefits partner, our job is to not only help you manage your Health and Welfare benefit responsibilities, but to support your needs at this uncertain time. We hope you consider us as an extension of your organization and a true strategic partner.