Given the way 2020 has played out, it is hard to even attempt to figure out what 2021 will look like. However, as we look back over the past nine months, we see how significant disruptions brought on by COVID-19 have changed the way we live, work, and take care of ourselves. And so as we enter open enrollment season, it’s worth taking a look at how COVID-19 is shaping trends in benefits planning for the year ahead.
1. Zero Copays, Zero Deductibles
Responding to the wave of employee discontent caused by ever-rising deductibles and cost-sharing, many employers are taking a radically different approach and are offering coverage that does away with most deductibles and copays.
Sound too good to be true? It’s happening, gaining traction in the market, and proving to be financially viable.
Throughout the last decade, high-deductible plans were seen as the primary plan design among employers, promising the flattening of the medical-cost curve by creating a “skin in the game” effect. This promise has largely remained unfulfilled, while deductibles associated with employer-sponsored health benefits have risen rapidly to the current average of over $1,600 This is often well beyond what a typical worker has available in emergency funds.
As a result, many employees have become disillusioned with the true benefit they get out of their employers’ health coverage. Not only can eliminating employee cost-sharing help businesses save money in the long-run, it can also help increase employees’ perceived value when it comes to their health benefits and compensation package.
Fed up with annual increases in the cost of traditional health coverage, many businesses are beginning to look at the defined-contribution model that sets a fixed amount of health benefits dollars offered to each employee. Money can then be applied to a variety of health-plan options, each with a different premium cost, and often offered by a different insurance carrier. Employees choose an option that best fits their needs and budget, and the employer knows exactly how much they will spend. It’s a win-win for everyone.
With this model, the company’s benefits budget is highly predictable, as it does not depend on employees’ enrollment choices or their health spending. And as business goals and budget needs evolve, employers can adjust their contributions without switching insurance carriers or disrupting their employees’ experience.
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As more individuals stay home — willingly or out of necessity — the healthcare industry has responded with rapid advancement of telemedicine and virtual services. Digital experiences are becoming not just a differentiator but a means to survive and thrive in this age and in the future. Even after the pandemic is over, we’ll have crossed over chasm of adoption, and we won’t be turning back.
4. Mental Health
The healthcare industry has come a long way in understanding and recognizing the importance of mental health and addressing the needs of the whole person rather than just acute physical ailments. The global pandemic, with the seemingly endless restrictions and limitations it has put on our “normal” lives, has sent a traumatic shock through our society that leaves none unaffected by threats to mental health.
A recent CDC study showed that the national rate of anxiety in the United States tripled in the second quarter compared to the same period in 2019, (from 8.1% to 25%), and depression almost quadrupled (from 6.5% to 24.3%). Comprehensive mental health coverage and a rich set of resources (both traditional and virtual) that employees can use to take care of their mental wellbeing is not just a nice-to-have but something you can’t afford not to offer.
As we move forward and navigate the continued challenges and changes COVID-19 presents, where and how companies pivot will be crucial for both employers and employees when it comes to health benefits. While in years past it may have been simpler just to stick with the status quo health benefits plan, this is the year to look for innovators and leaders that will bring us into this new era of healthcare, shedding unnecessary expenses and antiquated service models to put the needs of the individual first.