COVID-19 will have long-term impact on employee health benefits
Emma Greedy, November 05, 2020
Disruption to healthcare caused by the COVID-19 pandemic will reportedly have an impact on the cost and design of employer-provided health benefits for years to come.
According to the new report by employer benefits network Mercer Marsh Benefits (MMB), Health Trends: 2020 Insurer perspective, 68% of insurers expect increased medical claims.
The claims will reportedly be driven by COVID-19 diagnostics, care and treatment.
Speaking to HR magazin, Chris Bailey, partner and UK head of corporate consulting, MMB, said: “Employers and HR should take stock of benefits that have been disrupted during the pandemic, to see if they can be redesigned and recommunicated in order to remain relevant to employees accessing them remotely.
“Employers also need to carefully plan the budgetary impact of health trends which have created an artificially negative cost impact during the crisis that is likely to witness a rebound in 2021.”
In 2019, insurers reported cost increases of 9.7%, just under three times the rate of inflation. In 2020, they said they expect a rise in medical costs of 9.5%, which is roughly 3.5 times the inflation rate.
For 2021, 90% of insurers told MMB they expect the trend to sustain or increase.
Hervé Balzano, president, health at MMB said: “With an expected rebound in non-compulsory treatments deferred during lockdown, a rise in negative health issues related to remote working and sedentary lifestyle, including musculoskeletal and mental health issues, and ongoing concerns about the long-term physical and mental health implications of COVID-19, we expect medical costs to continue to increase.
“In order to meet the new challenges posed by remote working and contain expanding costs, companies need to radically rethink the range of benefits they offer their employees and the way in which they deliver them.”
The report also discovered an increase in the number of insurers offering virtual health consultations, or 'telemedicine', with 59% saying it was an active part of their current approach to plan management, up from 38% in 2019.
Bailey added that the report showed health benefits are more important to employees now more than ever.
He said: “Employers without future-ready digital solutions will find it increasingly difficult to cope with the demands of a modern workforce.”
“By focusing on delivering services digitally the disruption in services can be managed, treatment accessed, and health and wellbeing enhanced even as the pandemic continues.”