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How Will the COVID-19 Pandemic Impact Your Employee Benefits Program?

Many HR professionals are awaiting key information from insurers on healthcare costs for 2021. Given all the uncertainty surrounding the COVID-19 pandemic and how it will impact healthcare costs for 2021 and beyond, employers may be faced with difficult decisions very soon.

To help employers navigate these uncertain waters, we’ve put together some key considerations that you may useful in light of COVID-19’s impact on the U.S. healthcare system.

In this post, we’ll cover:

  • Avoiding the traps associated with short term gains
  • Understanding key industry trends to keep in mind
  • How to effectively communicate plan decisions to your team

Short-Term Gains are Deceiving

Even with the costs of treating COVID-19, many employers have seen savings in their health plans during 2020. These short-term gains are most likely because many employees have been putting off preventative or elective care due to lockdowns, financial uncertainty, or simply a desire to stay home during the spread of the virus.

Although these decisions have decreased health care costs as a whole during 2020, this trend is unlikely to continue into 2021. Employees will soon return to preventative care regimens, and likely with a much higher demand that usual, and a winter season during the pandemic could lead to an increase in costs to treat COVID-19.  These two factors combined could lead to a substantial increase in healthcare costs, and employers should plan accordingly.

Industry Trends to Keep in Mind

A recent survey performed by Mercer reveals some interesting HR industry trends to be aware of:

  • Nearly 32% of companies are considering, “Adding, expanding or incentivizing virtual care, telemedicine, and/or remote/online digital care.” On a related note, 66% of companies anticipate virtual health and wellbeing offerings becoming permanent fixtures in the workplace.
  • Nearly 20% of companies are likely to change health care plans, or at least change the design of the health care plan, to share more costs with employees.
  • Over 55% of companies are currently conducting, or are planning to conduct, on-site temperature screenings, and 40% are considering on-site symptom questionnaires. Both of these trends are presumably to help employers catch potential infections early on and reduce workplace spread.
  • 16% of companies are planning to add or expand voluntary benefits. Doing so can help fill the gaps with things like hospital indemnity and critical illness coverage.
  • 92% of employers have taken, or are planning to take, steps to provide more, “flexible work options to align to a new way of working.”
  • 20% of employers are considering implementing, “New messaging to help employees consider how the pandemic might affect their usual benefit choices.”

If you are unsure about the potential need to make changes to your 2021 health benefit program due to the pandemic, you are not alone. Nearly 50% of companies surveyed indicated that they are not sure about what changes they’ll make in 2021 and they are currently monitoring the situation.

Of course, many of the trends listed above have associated implementation costs. On the other hand, these benefits are designed to improve employee health, which should drive down costs in the future. Research has shown that employers are extremely concerned with the mental health of employees during the pandemic. By reading the list above, and by reading more closely into the Mercer survey, it’s clear there are significant changes in the industry that are designed to help employees maintain their mental health.

The exact extent to which these industry trends will drive down costs is yet to be determined, but companies should be aware of these trends and consider implementing them if it makes the most sense for their business model and employee population.

Communicating Your Plan Changes with Employees

Regardless of what benefits decisions your company makes for 2021 and beyond, the need to communicate openly and frequently with your employees about their benefits options has never been more important. Employees deserve to be kept in the loop about the challenges that your company is likely facing. Doing so will help company leadership maintain the trust of employees, with is critically important during these difficult times.

Your company should have a designated employee, or team of designated employees, to plan the employee communications that go along with any benefits decisions. They should constantly be asking themselves, “If we change or eliminate X benefit, how will we appropriately communicate that to our employees?” Now, more than ever before, it is critical for employees to understand their benefits. Therefore, it is more important now than ever to master the art of communicating benefits changes to your employees openly and frequently.

Even better yet, working with a proactive benefits broker that takes on the employee communication piece of your plan rollout can be even more impactful. The right benefits broker will be able to help your employees see the true value in the benefits being offered, and can help employees select the plan that’s right for them and their family.

Key Takeaways

Nearly half of companies are unsure about what difficult benefits decisions they will have to make over the next few months. Hopefully, this article has provided useful information to you as an employer or HR professional to help you be better situated to make these tough decisions.

Here are some key takeaways from this post:

  • Business leaders should not get deceived over the fact that their health care costs have been low during 2020. They will most likely increase substantially in 2021.
  • Current industry trends indicate that companies are taking precautions to limit COVID-19 outbreaks at their workplaces. Companies are also taking extra steps to care for the mental health of their employees. Voluntary benefits options are also being expanded to fill in potential gaps that may be created by upcoming plan decisions.
  • Employers should openly and frequently communicate with their employees about the challenging benefits decisions that may be taking place soon. Good communication is critical for maintaining positive relationships with employees, which matters now more than ever before.

U.S. Department of Labor Issues Important FFCRA Regulations

The moment we have all been awaiting over the last several weeks has finally arrived. The U.S. Department of Labor (DOL) has issued important regulations that clarify and revise who can qualify for emergency paid sick leave under the Families First Coronavirus Response Act (FFCRA).

In this urgent update, we’ll cover the following:

  • What is the background behind this important announcement by the DOL
  • What specific clarifications and revisions were made
  • What this means for your business moving forward

What is the background behind this important FFCRA announcement?

In April, U.S. District Judge Paul Oetken issued a ruling that found the DOL had exceeded its authority by blocking workers from FFCRA leave when their employer didn’t have any work for them to perform.

The challenge to this aspect of the FFCRA was originally put forward by New York Attorney General Letitia James, who also challenged the DOL’s interpretation of the FFCRA’s exclusion for healthcare providers, the rule’s limits on intermittent leave, and certain documentation requirements outlined in the language of the act.

Since Judge Oetken’s ruling, many employers have been left without clear guidance when trying to implement the new, but extremely important, FFCRA.

Hopefully the DOL’s clarifying announcement will be a light in the dark for employers who are trying to juggle many aspects of the fallout from the COVID-19 pandemic.

What specific clarifications and revisions were made?

The revisions, which were specifically made to the regulations that implemented the paid sick leave and expanded family and medical leave provisions of the FFCRA, do the following:

  • Reaffirm and provide additional explanation for the requirement that employees may take FFCRA leave only if work would otherwise be available to them.
  • Reaffirm and provide additional explanation for the requirement that an employee have employer approval to take FFCRA leave intermittently.
  • Revise the definition of “healthcare provider” to include only employees who meet the definition of that term under the Family and Medical Leave Act regulations or who are employed to provide diagnostic services, preventative services, treatment services or other services that are integrated with and necessary to the provision of patient care which, if not provided, would adversely impact patient care.
  • Clarify that employees must provide required documentation supporting their need for FFCRA leave to their employers as soon as practicable.
  • Correct an inconsistency regarding when employees may be required to provide notice of a need to take expanded family and medical leave to their employers.

To ensure we communicate this information to our readers accurately, the above bullet points were taken directly from the DOL’s announcement about these important revisions, which can be read in its entirety by clicking here.

What does this mean for your business moving forward?

Friday’s announcement reaffirms the DOL’s stance that leave under the FFCRA can only be taken if the employer actually has work for the employee to do. This is important, especially for businesses who have taken a hit during this pandemic. If an employer legitimately doesn’t have any work for the employee to do, they are allowed to reject the employee’s FFCRA leave request.

The DOL also remained firm in its original interpretation of intermittent, or periodic, leave under the FFCRA. Intermittent leave, according to this now clarified rule, is only allowed when the employee gets permission from their employer.

According to Friday’s announcement, “The Department believes the employer-approval condition for intermittent leave under its FMLA regulation is appropriate in the context of FFCRA intermittent leave for qualifying reasons that do not exacerbate risk of COVID-19 contagion. It is a longstanding principle of FMLA intermittent leave that such leave should, where foreseeable, avoid ‘unduly disrupting’ the employer’s operations.”

In addition to the previous two clarifications, the DOL revised the definition of “Health Care Provider” to mean, “employees who are health care providers…and other employees who are employed to provide diagnostic services, preventive services, treatment services, or other services that are integrated with and necessary to the provision of patient care.” This clarification was necessary because Judge Oetken had found that the agency’s previous definition was too broad and potentially excessively cut off workers from using FFCRA leave.

Employers in the health care industry should understand that this revised definition of “Health Care Provider,” – and the exclusion of health care providers in the first place – was done to, “provide a safety valve to ensure that critical health and safety services would not be understaffed during the pandemic.”

These revisions will officially take effect on Wednesday, September 16th. Keep in mind that the FFCRA will remain in place at least through the end of 2020. Assuming the pandemic has not ended by 2021, expect an expansion of the FFCRA to continue into next year.

Key Takeaways

Employers’ heads might be spinning after reading this announcement. This is important news that will have significant impacts on the workforce of many businesses and industries over the next few months. Employers should now feel that they have more leverage when it comes to dealing with employee FFCRA requests.

Here are the most important takeaways from this announcement:

  • If you legitimately don’t have enough work for your employees to do (which very well might be the case if your business has been suffering during the pandemic), then you can deny employee requests for FFCRA leave under this new clarification from the DOL.
  • Employees can only take intermittent leave if they have permission from their employer.
  • Healthcare workers should understand that they might be excluded from the FFCRA.
  • Employers should be aware that these revisions take effect as of Wednesday, September 16, 2020.

Key Considerations for Business Leaders as Schools Decide to Reopen or Stay Remote

As the COVID-19 situation continues to wear on, every school district in the country has been forced to make difficult decisions, many of which can easily be perceived as “lose-lose” due to the complexity of the ever-changing COVID regulations. Remote learning is certainly not ideal as it can force parents to stay home from work, and in-person learning comes with the obvious risks of exposing children and teachers to the virus.

Employers are caught in the middle of this issue as they try to understand the Families First Coronavirus Response Act (FFCRA or Act) and how it applies to their employees with school age children at home.

This post is designed to provide some guidance to the millions of employers who now face the dilemma of how to best approach this situation.

In this post, we’ll cover:

  • What things CAN you do to better understand the situation that your employees find themselves in.
  • What things you must NOT do while trying to make leave decisions because they violate the FFCRA or other regulations.
  • Things to consider as you weigh the pros and cons of certain FFCRA-related decisions.

Green Light: Things You CAN Do

If you are an employer or HR administrator who is tasked with making FFCRA leave decisions for employees whose children are starting the school year, the first thing you need to do is understand the specific situation of each employee who submits an FFCRA leave request. Fortunately, there are some questions that you are allowed to ask and other pieces of information you are allowed to request from your employee:

  • You are allowed to ask how old the employee’s child or children are. If the child or children are age 15 or older, you can and should require that the employee provide a statement or affirmation that there are special circumstances that cause the older child to need their care. If the employee is unable to make such a statement or affirmation, then you can deny their FFCRA leave if the children are over 15.
  • You are allowed to request from your employee the name of their child or children’s school, place of care, or caregiver that is closed or unavailable due to COVID-19. In the case of a closed school, you can contact the school district to confirm plans that the school has made, whether it’s in-person learning, remote learning, or a hybrid option. Remember, FFCRA leave is not available for the parents of a child whose school is open for in-person attendance. If the child is home not because his or her school is closed, but because the parent has chosen for the child to remain home, the parent is not entitled to FFCRA paid leave.
  • Some employees may ask about the possibility of bringing their children to the office with them. Depending on the nature of your workplace, this is a possibility that you may want to consider. However, you should consult with an attorney or trusted insurance broker that is familiar with the kind of licensing and insurance that would be required to do this.

Most importantly, try to keep an open channel of communication with your employees. If your employees can see that you are there to support them, they will be much more willing to discuss compromise and alternatives such as only requesting a few hours off each day in the morning or afternoon. Alternatives like this can still allow your employees to get significant work done – which can make a world of difference during these uncertain economic times.

Red Light: Things YOU CANNOT Do

Now let’s talk about the things you must NOT do while considering FFCRA leave decisions for your employees:

  • You cannot ask an employee to look for different childcare if their usual provider is unavailable. An employee is entitled to leave if the child’s usual care provider is unavailable due to COVID-19 — they are under no obligation to look for alternatives, and any attempt on your part to require that would be an illegal interference with their right to leave.
  • You cannot request FFCRA documentation from an employee until after the first workday of FFCRA leave.
  • If an employee with children over the age of 15 provides a statement explaining that there are special circumstances that cause the older child to need their care, you are not allowed to dig any deeper into the situation.
  • Independent sleuthing to verify what an employee tells you is not a good idea. Never do anything that might infringe upon your employees’ right to privacy.

Yellow Light: Weighing the Pros and Cons of FFCRA Leave Decisions

When making decisions about approving or denying employee FFCRA requests, always be sure to weight the pros and cons of your decisions.

In some instances, you may be tempted to terminate an employee if they are unable to work and do not qualify for FFCRA leave. Assuming that no other leave laws apply, termination may be an option. However, you may want to instead consider offering the employee an unpaid personal leave of absence or revisiting whether a flexible or part-time work schedule would be better than losing the employee entirely. Recruiting, hiring, and training are all expensive undertakings, so if there’s a way to keep an employee around — even if they need some time off — that is likely better for your bottom line.

Making the determination that a leave request is fraudulent is another situation in which you’ll want to spend considerable time thinking about your next steps. If you feel like you have enough evidence to believe a leave request is fraudulent, you have the option to deny it. However, there is significant risk in denying a request for FFCRA leave if an employee has provided the appropriate documentation. Further, you don’t want to discipline an employee who was acting in good faith and simply misunderstood the leave rules.

Key Takeaways

There are still many gray areas related to the FFCRA. The Department of Labor will be releasing more guidance in the coming days and weeks. Be sure to stop by our blog regularly as we will make future posts that highlight the most important things that employers need to know about the FFCRA.

However, there are things that you CAN do and things that you CANNOT do related to the FFCRA as we’ve discussed in this post.

  • You CAN ask certain questions to ensure that your employees qualify for FFCRA leave.
  • You CANNOT ask an employee to look for different childcare if their usual provider is unavailable. And never do anything that violates an employee’s privacy.
  • As is the case in many aspects of managing your business, take time to weigh the pros and cons of FFCRA decisions. While you may be tempted to try to fight an employee leave request, consider the long-term costs and benefits of doing so.

Actionable Strategies to Combat the Healthcare Cost Problem Created by COVID

The ongoing COVID-19 pandemic has created a new dynamic within the US healthcare system, leading to increased healthcare costs being passed onto employers. During this economically challenging time, it’s more important than ever before that employers are strategically managing and addressing rising healthcare costs.

There are three variable factors directly impacting healthcare costs: unit price of healthcare services, the number of services required, and the number of patients requiring service. In order to impact this equation, there are three strategies employers can deploy.

  1. Change the unit cost of healthcare.
    Even prior to COVID, ineffective and uninformed healthcare decisions were already a leading cause of rising healthcare costs. Now, in a post-COVID world, the impact of poor healthcare decisions is having an even more significant impact on employers. This issue typically arises when employees lack the guidance, resources, and other information they need to make smart healthcare choices. This results in employees incurring higher costs of care and leveraging lower quality providers. These costs are then passed onto their employer. In order to combat this, employers must work with a hands-on broker that provides their employees with guidance during the benefits selection process. Additionally, the correct broker should provide employees support in selecting the best healthcare providers for their unique situation and life stage. By making more informed decisions, patients receive better healthcare outcomes and less costs are passed onto the employer.
  2. Impact the number of services used.
    As the demand for routine and preventive healthcare services skyrockets in a post-COVID world, the ability for patients to receive the care they need, how and where they need it, has become increasingly important. Employees are more commonly demanding personalized guidance in managing their health. As an employer, implementing solutions that cater to employees’ unique situations or communication preferences can ensure they receive correct, accurate information that is relevant to them. Providing personalized content in easy-to-access channels helps employees proactively find care and identify other programs offered to them, such as telemedicine. As an employer, consider solutions that remove barriers to care as an important component of your overall cost-control strategy.
  3. Manage the demand for care.
    The last recommended strategy is to proactively manage the number of people on your employer-sponsored healthcare plans. Each year, employers unknowingly spend millions on dependents that do not meet eligibility requirements for the benefits the company offers. By leveraging effective processes and strategies to eliminate ineligible users from their plans, companies can reduce healthcare costs. A key recommendation is to conduct a regular ineligibility audit to ensure your employee population and plans are managed in a consistent and fair manner to ensure equal treatment of employees to manage employer costs.

Are you interested in implementing these strategies at your business? Launchways can help, get in touch with us today.

Four Reasons Employers Should be Concerned About COVID Impacting Healthcare Costs

This post continues our ongoing series of articles on how COVID will impact employer healthcare costs. In today’s blog, we’ll discuss four ways that COVID will likely lead to increased costs for employers.

  1. As healthcare providers begin to reopen and quarantines are lifted, routine treatments will be significantly more expensive in a post-COVID world. During the COVID pandemic, hundreds of thousands of routine visits and procedures were delayed. As healthcare providers reopen, there will be a large surge in demand for simple procedures and medical imaging. Under normal circumstances, dedicated imaging centers and surgery centers would be the most cost-effective locations for individuals to receive the care they need. However, the large surge in demand will push many people into hospital settings to receive the testing and treatment they need. Unfortunately, in hospital settings, healthcare costs can double, triple, or even potential quadruple depending on the nature of the procedures.
  2. During COVID, access to prescriptions has impacted the healthcare outcomes of those with chronic conditions. Under normal circumstances, individuals on long-term maintenance medications typically have access to 30-day supplies. During the COVID outbreak, many individuals with pre-existing conditions felt uncomfortable leaving their homes to refill prescriptions, leading to lower adherence rates to prescription regimens. In fact, recent research indicates that as much as one third of Americans avoided receiving necessary care due to fear of contracting COVID. When individuals with chronic conditions aren’t connected to care, this can mean substantial costs being passed onto employers. Non-adhering diabetics can cost an extra $5,000 per year. And individuals who forego mental health medications can cost an extra $10,000-$15,000.
  3. Delays in treatments for those with chronic pain may lead to substantial treatment costs for opioid addictions. Every day, thousands of individuals undergo musculoskeletal treatments for elective procedures to reduce or eliminate chronic pain. However, due to COVID, all of those procedures were delayed. In non-COVID times, these individuals would be able to seek other forms of care, such as physical therapy, to help manage that pain while waiting for corrective surgery. However, during COVID individuals were also unable to access these treatment options. Many frustrated patients turned to their doctors for pain medication to help manage pain during surgery delays. These unfortunate circumstances may very well likely lead to future costs due to opioid dependency. Generally speaking, the ongoing opioid crisis costs the U.S. roughly $78.5 billion each year. And research estimates that opioid addiction costs $14,000 in direct claims costs per patient per year.
  4. Delayed preventative care creates future risks for more serious conditions and costly treatment plans. In many cases, preventative screenings and treatments are crucial for limiting the amount of critical care individuals need. During non-COVID times, cancer screenings were rising in frequency and are generally recommended by providers. In the case of most treatable cancers, such as breast cancer or colon cancer, early detection is the best strategy to limit complications and ensure positive patient outcomes. Unfortunately, during COVID-19, preventative care and screenings were halted for several months. These delays are likely to lead to substantially more serious diagnoses that are harder to treat and more expensive to provide care for.