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.
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.
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.
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.
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.
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.
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.
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.
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.
Prior to the COVID-19 crisis unfolding, most US employers were anticipating healthcare cost increases in the range of 4-7%, based on trends in 2018 and 2019. However, COVID-19 has drastically altered the healthcare space and thus dismantled most employers’ previous predictions. While some are now anticipating decreased healthcare costs for 2020, this does not mean good news for employers. In fact, the monumental impact COVID-19 has had on the healthcare space could mean employers will be facing unprecedented cost increases in 2021 and 2022. These impacts are something employers must be preparing for now, rather than later.
In this post, we’ll explore the major ways COVID-19 has impacted the healthcare landscape. We’ll delve into what this means for businesses in the near-term (the duration of 2020), as well as crucial action steps employers must be taking now to prepare their businesses for 2021 and beyond.
How has COVID impacted healthcare costs?
Due to the COVID crisis, by late March 2020, many American businesses had temporarily ceased operations and closed their physical offices. The immediate impact of the virus was a significant surge in the demand for hospital space in markets with significant virus spread, such as New York. However, the most significant shift across the country was a stark decline in elective care.
For the most part, over the past few months no procedures or surgeries deemed as “nonessential” have been conducted, in order to preserve hospital space and supplies for those with COVID. The shutdown of nonessential medical services and procedures lead to the furloughs of tens of thousands of healthcare workers.
As a result of all these challenges, in the second financial quarter, Americans are receiving substantially less care than anyone could have ever predicted. This impact will result in an unprecedented $140B to $375B decrease in care costs (and this figure includes the costs of COVID-19 treatments).
However, this short-term cost decrease will do little to offset substantial future increases. Models predict that in 2021 and 2022, the trend of rising healthcare costs will reset at a higher lever with a higher slope indefinitely. Employers must be planning and preparing for these changes now by working hand-in-hand with their benefits broker to enact effective cost-control strategies.
What’s the bottom-line?
As an employer, it’s important to realize that COVID-19 has substantially altered the extent to which employees have been able to receive the care they need. Although this shift will result in short-term healthcare cost decreases, the long-term impact is grim. Employees will be driven to more expensive care settings as healthcare becomes available again, resulting in substantial costs increases in 2021 and 2022. Employers must begin preparing for these costs now, by working proactively with their broker on impactful cost-control methods.
Many businesses are preparing to transition to return to work in a continuously COVID-impacted world. Many states are starting to loosen COVID-19 related restrictions and open back up, and others are sure to follow suit.
Whether you already have a start-date in mind or do not know when it will be safe to bring employees back into the workplace, it is important to develop a return to work plan now to prepare your business for the inevitable reopening.
To help our clients and our community get back to work safely and effectively, Launchways held a comprehensive webinar on May 15, “Everything You Need to Know to Build a Return to Work Plan”. Our panel included experts in commercial real estate, human resources, executive management, and labor laws. They spoke for over an hour, addressing a staggering range of topics that employers will need to address to get back to work.
Luckily, we recorded the webinar and it is available to stream on-demand. We’ll share the link at the end of the article, but in the meantime, let’s take a look at each topic that our panelists addressed to get you started down the path to business as usual during the new normal.
Meet the Panel
Each of our panelists brought decades of valuable industry experience to the presentation. We were extremely lucky to field such an experienced panel, which included:
Bill Sheehy, Executive Vice President, CBRE: Bill is an experienced Executive Vice President at CBRE with a demonstrated history of being a top producing broker for almost two decades. Bill specializes in helping his clients through acquisitions, dispositions, lease negotiations, and more.
Heather Bailey, Partner and COVID-19 Task Force Member at SmithAmundsen’s: Heather Bailey is a partner in SmithAmundsen’s Labor & Employment Practice Group. For 18 years, Heather has concentrated her practice in employment and labor counseling and litigation, including discrimination and trade secret/non-compete lawsuits, FLSA class actions, labor negotiations and arbitrations, affirmative action, OFCCP/DOL audits and FINRA issues. She counsels on day-to-day operations, human resources, and management decisions regarding employees, practices, and policies.
Jim Taylor, Founder and President, Launchways: Jim is the CEO and Founder of Launchways. At Launchways, Jim focuses on bridging the gap between Finance and HR. He helps Finance leaders take a data-driven approach to Human Resources and Employee Benefits, allowing them to have more productive relationships with their HR team members. Jim is passionate about helping fast-growing businesses approach the people side of their business strategically.
Building a Return to Work Plan
Create a Cross-Functioning Steering Committee
The first step in building your return to work plan is to assemble your team. That means putting together a cross-functioning steering committee headed by a program lead who will engage the individual players and keep the ball rolling. While the whole leadership team needs to be involved in the decision-making process, giving one member ownership over the project will help keep your efforts focused and productive.
Next, get everyone involved in your organization: business leadership, finance, HR, IT, operations, and management. Not only will their voices be useful in developing an effective plan, but you will need their involvement to implement that plan.
Finally, engage your key partners including your corporate real estate partner, third-party providers for any outsource functions, as well as HR and benefits partners. Your property manager or building owner is a very most important partner to engage in your planning process as facility readiness is a key part of the reopening process.
Once you have everyone at the table, it’s time to put together your plan.
Before you bring your team members back into the workplace, you have to make sure that it is a safe environment free of the risk of infection. Jim and Bill explored how you can get your facilities ready for your team to return to work.
Your facility readiness responsibilities begin as soon as your employees walk through the front door. Work with your commercial real estate partner to establish shared policies for common areas of your building including elevators and entrances to the building and your offices. Elevators are going to be a particular pain point that you will have to figure out before opening.
Next, assess the cleaning requirements for different spaces in your office. Some may need more, or different, attention than others. Consider which areas are high-traffic or high-touch. These areas may need daytime cleaning, which you will have to work into your budget.
Finally, establish a space configuration plan that meets enterprise distancing standards. This plan should include:
Conference room policies
Gathering space policies (break rooms, kitchens, etc)
Access and traffic flow policies
Allowing Employees to Return to Work
After the space is ready to receive them, it’s time to start bringing employees back into the workplace. As part of your Return to Work Plan, you will need to determine who will come back into work and when. This depends partially on the state’s phase of reopening as well as federal guidelines.
When establishing this plan, employers need to differentiate between essential and non-essential workers, particularly when it comes to in-person work at a non-essential business. For example, in Illinois, non-essential businesses are required to maintain a remote work policy for everyone except for “Minimum Basic Operations” staff. You should also consider protective measures for those at higher risk, including telework and tasks that minimize contact.
Heather also explored the legal issues around requiring employees to return to work. The short version is that businesses that have been authorized to reopen and are implementing proper safety precautions can require their employees to return to the workplace. She also reminded employers that employees who choose not to risk losing their unemployment benefits. If employers are struggling with employees resisting returning to work rather than collecting unemployment, they can report those employees to the unemployment office. However, you must maintain a safe workplace to assert these rights.
That is why it is important to train your employees on proper distancing, cleaning, and safety best practices. You must also provide employees who will not be able to maintain 6-foot distancing with appropriate PPE, at your cost. And be ready to make accommodations for individual employees or customers who will not or cannot use PPE because of a disability or religious belief. There may not be a reasonable accommodation that you can make but you have to go through the process to protect your legal interests.
Heather also explored additional concerns including transportation and childcare. While employers are not responsible for employee’s transportation to and from work, they should do what they can to minimize the risk and assuage fears through proper education and scheduling. Employers also need to be prepared to respond to requests for remote work or time off to take care of children, including extending remote work or offering flexible scheduling or a leave of absence. Bearing in mind that employees who refuse to return to work because of childcare requirements may be eligible for benefits under the federal CARES Act, including unemployment.
The bottom line was that employers should try to be creative and think of possible solutions to each of these issues before they open up because these issues will come up.
Employee Health Screenings
Heather explored the legal and practical aspects of employee health screenings, a key area of concern for many employers considering their return to work plan.
She started by laying out the legal protections for employee health screenings. The EEOC has issued guidance on temperature and symptom checks before letting employees return to work. In the era of COVID-19, temperature checks also fall under “job related and consistent with business necessity” mandatory employee medical testing as allowed under the Americans with Disabilities Act.
That being said, it is important to notify your employees of temperature and symptom screening measures in advance. It’s also important to emphasize that the purpose of the screenings is solely to protect employees from exposure to COVID-19 and not to detect any other illness, impairment, or disability. Finally, make it clear that it is not meant to be, nor is it, a substitute for a medical diagnosis.
Keep in mind that the laws and guidelines around testing may change over time, so plan to keep up-to-date and revise your policies as necessary. And as always, be prepared for requests to be exempted from screening due to medical or faith-based reasons. You may also have to compensate employees for time spent getting screened or waiting to be screened. While federal law likely does not require compensation, state laws may and employees are already filing lawsuits against their employers seeking compensation for time spent on screening.
Lastly, make sure that you have the equipment, personnel, and protocols in place before you start opening up. You should equip your team members who will be conducting the screenings with proper training and protective equipment. They are going to be on the front lines, protecting your workplace and team from exposure and risking exposure themselves in return, and should be treated as such. And you should minimize the risk of spreading the virus through screening. Meaning that touch-free thermometers and other safety measures are a must.
Establish a Timeline
Once you know how you are going to ensure that your employees return to work safely, it’s time to set a timeline for the transition back to work. This should be a week-to-week plan starting when the criteria for reopening are met. Bill presented a sample 90-day timeline based on CBRE’s 55-page reopening playbook:
Opening Criteria Met: the clock starts as soon as the community readiness criteria are met and reopening plans are in place
Week 1: “Readiness Teams” return to make final preparations
Week 2: Employees who can work remotely continue to do so, while those who cannot start to return to the workplace
Weeks 3-4: Select teams/employees return to the office, continued guidance to work from home if possible, return to the office is not mandatory
Week 5: Refine approach based on employee return levels and ability to maintain safe distancing and other safety practices
Recurring Status Review: Recurring 30-45 day status review process, updating guidance and processes as necessary
Our panel explored a range of further topics that employers will have to consider when allowing their employees to return to work. These topics included:
Potential discrimination concerns when it comes to implementing and enforcing new policies. Policies tend to be framed relatively loosely which leaves room for often-unintentional discriminatory enforcement. Furthermore, remind employees that it is illegal to harass or discriminate against coworkers based on race, national origin, color, sex, religion, age, disability, or genetic information. There continues to be xenophobia and discrimination directed towards Asian Americans due to COVID-19 and it is your responsibility to advise supervisors and managers of their role in watching for, stopping, and reporting any harassment.
Issues around hiring including your rights to delay the start date or withdraw the job offer for a new hire who tests positive for the virus and cannot safely enter the workplace. However, being a high-risk individual is not grounds for postponing the start date or withdrawing a job offer.
Potential lawsuits and the current state of workers compensation, particularly recent developments in the Illinois Workers’ Compensation Commission rules. Industry associations successfully got the Commission to withdraw its emergency rule that allowed any employee who tested positive to receive worker’s compensation. But employees can still receive worker’s compensation if they show that they were exposed to the virus through their work. Luckily, Heather outlined a Worker’s Compensation Questionnaire that will help employers protect themselves from fraudulent claims.
Stream the Webinar
Believe it or not, but we have barely scratched the surface of the wealth of information that our panelists shared during the webinar. That’s why we recorded the webinar and made it available to stream anytime you want. Stream the webinar on-demand now.
As many businesses begin to officially reopen, it’s more clear than ever that COVID-19 has changed the reality of our workspace. The constant but piecemeal flow of new guidance related to COVID-19 has become a business challenge unto itself – maybe the most important one of our time, and as businesses work to reopen, it’s easy to feel like we simply don’t have enough information to do the best possible job.
In this post we’ll explore:
Why it’s so easy for the best and most well-meaning business & HR leaders to feel overwhelmed right now
The variety of areas in which COVID-19 has created new responsibilities for employers
How businesses can connect with resources to ease this transition into the new normal
The Growing Challenge of Staying Up to Date on Compliance
The federal government’s official response to COVID-19 began just two months ago on March 18 with the passing of the Families First Coronavirus Response Act (FFCRA), mandating the expansion of paid sick leave and FMLA leave.
Since then, a variety of government agencies, from the CDC and Department of Labor to OSHA and Homeland Security have published temporary policies, interim guidance, and regulatory FAQ sheets with an eye toward helping businesses and individual American employees weather this storm.
Unfortunately, the flood of guidance during a time where many organizations were maintaining skeletal operations teams has led to information overload across much of business. Everybody wants to comply with the new regulations and follow best practices to protect employees, defeat coronavirus, and restore the economy, but staying up to date on COVID-19 has become a major job unto itself.
Clarifying the Picture: What Businesses Need to Focus On
The current situation presents three specific needs businesses must address:
Staying up to date on guidance as it is released
Implementing guidance and best practices in a well-organized way
Maintaining great documentation to ensure compliance and qualify for tax credits as applicable
If your business’ COVID-19 response and reopening strategy doesn’t have a comprehensive approach for those needs articulated, it’s a recipe for falling behind.
Staying up to Date on Guidance
An incredible variety of government agencies have published guidance or temporary policies to address the COVID-19 pandemic and economic reopening. It’s essential to know about the guidance currently on the books as well as each new piece of legislation or regulation as soon as it’s published.
This means monitoring the websites of relevant government agencies or signing up for alerts to get news about updates as soon as possible.
Knowing COVID-19 guidance and policy is only the first part of the battle. You also have to bring those instructions and expectations to life in your workplace and among the members of your team.
You need to have specific plans in place to address all sorts of best practice implementation needs, including:
Reconfiguring your workspace
Providing & training employees on PPE
Smooth internal processes for transitioning employees on and off of leave
Temporary hiring procedures for team members who may have expired I-9 documentation
Federal payroll tax credits will be key to most businesses fully recovering from the financial effects of COVID-19. Thankfully, the CARES Act provides that relief, but ensuring your business gets that credits it deserves requires a strong approach to documentation.
In order to get the relief you deserve for providing your employees with paid leave, you need to provide specific documentation, and some of those requirements are only now being clarified. That means proactive recordkeeping and attention to detail are more important than ever for HR and payroll professionals.
Providing Powerful External Support to Core Business Function
Given all the new responsibilities we’ve discussed related to COVID-19, it’s easy to see why many business, finance, compliance, and HR leaders are feeling overwhelmed. One way to take pressure off your core team while also ensuring compliance is to start a relationship with a dedicated HR support partner.
With an outside specialist taking the lead on reviewing evolving guidance and breaking it down into executive summaries and actionable policy/procedural checklists for your leadership team, you can carry out a powerful reopening that’s backed by best practices without that effort subtracting from your ability to do business.
If you’re feeling overwhelmed from a business perspective because of the steady but disconnected flow of new guidance from various government agencies, you’re not alone! Remember:
Keeping up to date with COVID-19 policies and legislation has grown into a job unto itself and is likely to stay that way for the foreseeable future
It’s crucial that all businesses stay current on guidance, implement identified best practices in thoughtful ways, and maintain strong documentation in order to maximize tax credit opportunities
A designated HR partner (like Launchways!) can pick up the slack on COVID-19 regulatory concerns, enabling your business to get back to doing what you do best
How to Learn More
At Launchways, we specialize in providing HR, payroll, business insurance, and employee benefit support to organizations so their leadership can make the most of their own time and expertise. We are proud to partner with some Chicago’s most innovative and forward-thinking businesses to strengthen the local business community and connect organizations with the knowledge, tools, and human support they need to do their jobs better than ever.
As more states begin their official economic reopenings in the wake of COVID-19, many organizations feel like resuming the work itself isn’t the biggest challenge. For many of us, reengaging and rebuilding our teams of talented professionals and getting them motivated and bought-in to the new way of work is an extremely daunting task.
Many people are scared, distrustful, and depressed right now, and that is the exact opposite of the recipe for a successful team. Whether they know it or not, professionals are hungry for their employers to help them feel normal and plugged-in again. That means employee culture and engagement should be points of emphasis for every business in the coming weeks and months.
Identifying the Best Aspects of Your “Pre-COVID” Culture
It may seem like a long time ago now, but less than three months ago, you had a thriving community sharing a physical space and working towards common goals – some of your team members might even have compared it to being part of a family!
The realities of COVID-19 mean that workplace culture and team atmosphere can’t resume with perfect continuity. With that said, there is the potential to create a new, even stronger community by porting what worked about your previous approach onto new methodologies and emerging best practices in light of COVID-19.
How Do We Figure Out the Best Parts of Our Culture?
Your team members are the best source of information when it comes to which parts of your workplace culture, employee wellness initiatives, and daily perks really make a difference for them. You can get that information through employee culture surveys, which can be blasted out team-wide via email as you plan your return to the office.
If possible, you should do this work in the weeks ahead of your reopen to give your new initiatives the most possible planning time. However, if getting people back into the building is the main priority, you can use the opening weeks of the return to work to gather this data to inform your employee engagement strategy.
What About Employee Mental Health?
Workplace culture and collegiality are crucial to creating a positive work environment that drives work people can be proud about while robustly supporting people’s humanistic and mental health needs to prevent tension, frustration, and burnout.
One of your culture survey’s main goals should be determining what services you were providing that people found really valuable pre-COVID. Did they value seeing their colleagues in contexts other than work? Did they appreciate making time for serious conversations during the work week? What made them go home feeling good about themselves at the end of the day?
What Strengthened the Team?
As the old axiom goes, “teamwork makes the dream work.” While it may sound trite at first, bringing your employees together to create a true team is the difference between having a great approach to human capital management and just being a “job” where people work.
Another main concern of your employee surveys should be to identify what aspects of your pre-COVID-19 approach brought people together to create a more functional, vivacious unit. What made people feel like true colleagues and not just people who worked in the same space? How did you help team members discover, appreciate, and celebrate each other’s strengths? How did you foster an environment where people understood and were not judgmental about their colleagues’ areas of need or weakness?
What Gave People a Sense of Shared Purpose?
If you’ve got people feeling positive about themselves and their work and functioning as part of a thriving team, there’s only one real component left to a great culture: shared goals and purpose.
In order to get your employees reintegrated into the work and making up for lost time, you need to figure out what messages, incentives, and motivational tactics really worked for them. What about your organization or leadership did they find inspirational? What about the nature of your work makes team members feel good about what they’re doing? What approaches to shared success and shared failure spoke to them?
Leveraging Technology to Modify & Modernize
Once you’ve drawn out the aspects of your workplace and employee culture that really worked and inspired excellence, you’ll likely have a long list of activities and approaches that feel like a real challenge to recreate in the context of social distancing.
At first, this can feel discouraging, but luckily, the last few months have seen an explosion of remote communication and interaction platforms that enable us to continue positive community interactions without the risk of viral transmission.
Migrating Physical Interactions Online
Video conferencing and project management platforms have picked up much of the slack during our time away from the office, and they also offer opportunities for employee culture reengagement.
Think of ways you can allow people to “take a walk” to visit friends in other departments for a quick chat like they used to. Provide people with document sharing and collaboration tools that make it just as easy to work together as if you were sitting at the same table. Consider meeting in a text-based chatroom where people have time to think about their responses and process other people’s ideas at their own pace.
All of these are different ways we can use emerging work tools as culture tools as well!
Embracing an Opportunity to Grow & Redefine the Work
It’s important to understand that there will not be a cut and dry way to completely recreate our previous approach to office life and employee culture post-COVID-19. We will need to stay open-minded and identify employee needs in order to find solutions and approaches that support them.
With that in mind, this is an opportunity to grow and redefine what it even means to be a business, a team, and a professional. The new work will be finding ways to continue and extend intellectual and communal closeness without the benefit of physical proximity.
If we stay open minded, remain grounded in what we know works and what employees need, and keep our ears to the ground for the best emerging tools and solutions, we’ll be able to reopen the business space in a powerful way that makes all of us better.
How to Learn More
If you’re an HR professional or business leader looking to guide a successful reopening as COVID-19 continues, be sure to download Launchways’ Complete Return to Work Toolkit. The toolkit provides a variety of checklists and other resources that help you consider reopening from every conceivable angle, including:
Recalling furloughed or laid off employees
Modifying your physical workspace
Best practices for employee safety
Personal protective equipment (PPE)
New policies for meeting, communication, shared space, etc.