Another Coronavirus Ripple: New Ramifications for Employee Health Benefits

Article main image
May 27, 2020
This article is part of a series called COVID-19 Coverage.

If you’re a talent management or HR leader nearly anywhere in the world, for probably any type of organization, you’ve most likely been keenly focused on the operations and performance aspects of your business as you respond to the impacts of COVID-19. What about the obstacles that lie ahead — different areas of your business with challenges lurking under the surface? What about the very immediate ramifications for employee health benefits?

Here’s what lies ahead: Current trends in employee health and their use of plan benefits are likely to cause unanticipated changes. Health intelligence shows that, at the very least, you can expect an increase in health complications among your workforce and heightened costs for healthcare in the coming months. You should start planning for those changes now.

It’s obvious that 2020 has been far different from any year before — and that the rest of the year will be equally challenging for talent and HR leaders. No one knows for sure what lies ahead. But talent leaders can be prepared to optimize plan management and make accurate midyear adjustments — if they have the full picture of the impact of COVID-19 on healthcare and benefits, and get a more accurate view of how it could influence those areas the rest of the year — and beyond.

To lay the groundwork, here are four healthcare and benefit waves of COVID-19:

1. An uptick in health complications

Because of social distancing and shelter-in-place orders, employers will likely see a significant drop this spring in the number of health claims. People are postponing — or being forced to postpone — preventive care and routine checkups. Health providers have delayed appointments for those visits and elective procedures.

As a result, some individuals could likely develop chronic conditions, like diabetes, hypertension, COPD, or asthma. For the 6 in 10 Americans who already have a chronic illness, the gap in routine care could cause increased complications and comorbidities.

We know that 11% of all members at companies that are on the Springbuk Health Intelligence platform have a gap in care. They’re not adhering to their normal routine of medications, physician visits, or regular tests and screenings.

A recent survey by the American Cancer Society found that among people in active treatment, 27% reported a delay in getting care as a result of COVID-19 restrictions — and 13% said they don’t know when it will be rescheduled.

As stay-at-home orders are pulled back and people return to their regular healthcare visits, you will very likely see an increase in health complications and new diagnoses.

2. For costs, a potential calm before the storm

Despite anticipated increases in health costs directly as a result of COVID-19, it’s likely that overall costs for employers are currently down. Don’t expect that trend to hold through the rest of the year.

As we mentioned above, the current lull in costs will be more than offset by the uptick in health complications among your employees and a rise (if not a rush!) for previously postponed preventive and elective procedures — eye exams, wellness checks, and more. This confluence of health trends as people come out of isolation is likely to bring with it large increases in costs for the last two quarters of 2020.

3. Population changes: The result of layoffs you don’t yet know about

Unemployment has risen by tens of millions. The numbers may continue going up as companies respond to ongoing decreases in revenue. These are huge shifts in the employment landscape that could affect organizations in any of four ways:

  • Layoffs (requiring mass offboarding and decreasing plan members)
  • Furloughs
  • Reduced hours (which may affect benefits enrollment, depending on the policy)
  • New dependents (due to employee spouses and children experiencing layoffs)

That last point — new dependents joining your plans — may be the most surprising among the four. As people get laid off, furloughed, or have their work hours reduced, they may choose to join the health plans of their spouses or parents. Are those your health plans? Could be.

These four trends in the employment landscape will present talent leaders with costs they didn’t plan for in 2019 — in the pre-COVID-19 days when they were designing this year’s benefits plans.

4. Expect mental health costs to mushroom

The CDC reports that even before the pandemic, 1 in 5 Americans had a mental illness. For these individuals, social distancing and quarantining are likely to limit their access to health management resources. As a result, their conditions could worsen. In addition, people with no previous diagnosis could suffer from symptoms that become more acute.  After all, even without COVID-19, heightened fear, anxiety, and stress were commonly caused by the threat of infection, the worry over economic instability, the possibility of losing one’s job, the fear of deep financial hardship, and being continuously socially isolated.

In addition to the potential increase in health benefits to meet mental health challenges, employees might also seek help from mental health professionals or well-being services. If your company doesn’t already have an EAP, now may be the time to consider one. As we explored in our Employee Health Trends study, mental health conditions — and especially the high rate of people who have mental health and chronic physical conditions — cause extremely high costs for employers and members. Now that many organizations and individuals are already feeling the weight of the economic downturn, these additional costs could be especially burdensome.

All of these interwoven and complex trends add up to an influx of claims and employee requests for talent leaders.

Talent and HR leaders already have their plates incredibly full with communications, midyear plan changes, and other crisis responses — a situation that isn’t likely to abate until well after things return to “normal.” Employees will also have plenty of questions and requests for support, even as the year goes on. Due to a high level of economic uncertainty and fear, they may even feel dissatisfied or nervous about the organization’s decisions — even about the company’s future. On top of that, you can now add a heaping helping of managing what is sure to be an increase in claims, the burdens of quickly onboarding and offboarding employees as you gear back up, and implementing new offerings, like an EAP or telehealth solutions. Wait, you’ll also start tackling plan changes and designs for 2021.

All of this will make clear communication and strong support for employees more critical than ever before.

Five pivotal actions to start preparing now

If you feel lost in a blizzard now, it could be tough to see the continued changes out on the horizon and begin planning for the next year. But don’t overlook all the challenges you’ve already overcome. With the right planning and meaningful insights, talent, and HR leaders can be more prepared to help organizations effectively overcome these challenges.

Here are five steps that talent and HR leaders can start taking now to prepare for the road ahead:

  • Identify gaps in care. Evaluate your organization’s population data to identify which segments are not currently getting the care they need. Consider applying targeted communication strategies, telehealth opportunities, and even disease-management solutions to help your members stay or get back on track.
  • Consider plan changes. Monitor your claims data to see how these trends are affecting your population. Consider if midyear plan changes might be necessary to account for cost changes throughout 2020.
  • Prepare for population changes. Don’t wait until later to start monitoring your data to forecast costs and administrative needs that will stem from changes in enrollment (and to accurately prepare for your 2021 plan design).
  • Support mental health. Communicate consistently with your members to help them feel connected, supported, and aware of any resources available to them — an EAP or well-being service, for example.
  • Equip your entire HR and talent teams. Start preparing now for increased workloads or added responsibilities. Set up any tools and processes your teams may need to work even faster, more nimbly, and more efficiently.

Now, like never before, employees and organizations need talent and HR leaders who can take proactive, preventive steps to protect their health and financial well-being. When you look not only at the current difficulties, but also consider the ripple effects further ahead, talent and HR leaders can improve their plans for supporting employees and maximize their organization’s investment.

This article is part of a series called COVID-19 Coverage.