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.