The COVID-19 pandemic has sped up the transformation of employer-sponsored health care benefits. Observations on what's changing were recently shared with SHRM Online by two top health benefits experts.
Ellen Kelsay is the president and CEO of the Business Group on Health, a nonprofit organization that represents large employers on health policy issues. Before becoming the group's chief executive in May, she served as the organization's chief strategy officer. Previously, Kelsay was a senior partner at Mercer.
Jeff Levin-Scherz, M.D., is national co-leader of the health management practice of consultancy Willis Towers Watson and an assistant professor of health policy and management at Harvard University's School of Public Health. Among other leadership positions he's held at health care organizations, he served as chief medical officer of One Medical Group, a nationwide network of primary care practices that pioneered a personalized "concierge" model of health care.
How will the coronavirus pandemic change employer-provided group health coverage?
Kelsay: We are certainly hopeful that the gains in telehealth will be lasting. Virtual options have greatly increased due to the pandemic, employee use is up, and plans can expect higher use to continue after the pandemic is behind us.
On a broader scale, employers are definitely factoring in the impact of the pandemic as they plan their strategy and benefits for 2021. In addition to telehealth, we are likely to see more focus on behavioral health needs and access, strengthening of management of chronic conditions post-COVID-19, and increased interest in advanced primary care and prevention.
Business Group on Health is advocating the temporary relaxation of government rules around telehealth, particularly for health savings account [HSA] plans, [and we hope the changes] will become permanent, helping to cover needed, more-convenient and less-costly services prior to [patients' meeting] the deductible, including telehealth and other services.
Levin-Scherz: Telemedicine has become much more common, as has tele-behavioral health. I expect that many health plan members will demand continued access to virtual visits. Many employers will continue to offer expanded coverage, even under high-deductible health plans, assuming the rules post-pandemic allow this.
Have high-deductible/high-cost-sharing plans reached a plateau?
Kelsay: Even though more employers reintroduced a choice of plans [for employees to select from] in recent years, HSA-qualified high-deductible health plans [HDHPs] are still very common. The advantage of these plans is that employers can and do contribute to HSA accounts to help offset the deductible, and employees can build up balances in their accounts to help pay for health care expenses in subsequent years.
Communicating to employees the importance of doing their part to keep plan premiums down and that their efforts can make a difference is also key. Employers can encourage consumerism by offering more easy-to-use tools that provide employees and their families the price information they need—their out-of-pocket costs and the price to the plan—coupled with quality information to help them with their health care decisions.
Levin-Scherz: We have not seen dramatic growth in HDHPs in the last two years, and we've seen some companies moving to reinstate lower-deductible plans prior to the pandemic. There are two competing priorities here: Employers will be under enormous financial pressure to lower costs, but employees will be more risk-averse. The lower costs we are now predicting [for 2021, due to reduced claims in 2020 from non-COVID-19 procedures] could diminish the pressure to move more members to HDHPs next year.
[SHRM members-only toolkit: Managing Health Care Costs]
How successful are online tools that help employees shop for health care?
Kelsay: Consumerism tools have come a long way in 10 years. They have gone from simple tools displaying ranges or averages to dynamic instruments that provide personalized, relevant information to each individual, often in real time. But given how complicated health care can be, employers have recognized that these tools are often more successful when paired with a concierge-like service that can help employees navigate through their treatment choices and support them as they make health care decisions that are best for them.
The use of concierge services increased significantly this year—to 60 percent in 2020 versus 39 percent in 2019—according to our 2020 Large Employers' Health Care Strategy and Plan Design Survey, reflecting the need to simplify the consumer experience and help employees navigate the health care system.
The use of concierge services increased significantly this year.
Levin-Scherz: Shoppable services—those that are not emergencies, where there is good information about quality and cost, and where there is effective competition—represents a minority of total medical costs. Consumers still deserve to have more information on quality, cost and patient experience, but we should not expect this to dramatically lower the total cost of health care.
More government coverage—a public option, or Medicare for people ages 55 and older—could be coming. What might that imply for employer-sponsored coverage?
Kelsay: It depends on the details, for example whether it will be open to people [who are] offered employer coverage or limited to those who do not have employer coverage. Some proposals only permit a public option tied to Medicare with a lower eligibility age if a person does not have an offer of employer or other group coverage. Other proposals would open the option to all.
Levin-Scherz: The impact of any expansion of government health care programs depends on how they are designed. For instance, a program that allows members to buy in to Medicare could decrease the average age of those in employer-sponsored health insurance, which could lower costs. The program could be designed, though, to discourage employees from moving from existing employer-sponsored plans.
The impact of any expansion of government health care programs depends on how they are designed.
It seems clear that it will take some time for employment to return to previous levels, so there will be much more need for other programs to provide health care coverage to Americans.
Going forward, what can employers do to control prescription drug costs?
Kelsay: Employers of all sizes are concerned about high and rising prescription drug prices and the supply chain model rife with misaligned incentives that also contributes to higher prices. Whether an employer is large or small, they can implement plan designs or work with their insurers and pharmacy benefit managers to ensure that employees and their families are getting the right medications at the best price possible. For example, specialty medicines are some of the most expensive medications. It is critical to ensure that these medications are administered in the lowest-cost setting possible [such as a doctor's office or even at home when appropriate, rather than at a hospital].
Levin-Scherz: Smaller employers can encourage generic medication use and mail order, and use formularies and other programs to decrease use of low-value drugs.
What's happening with employee wellness programs?
Kelsay: Research has mainly focused on programs designed to reduce medical claims by improving lifestyle behaviors—eliminate tobacco, reduce the prevalence of obesity and increase physical activity. Employees and sometimes spouses are often incented to participate in health assessments, biometric screening and health coaching.
To the extent these strategies are still in play at large self-insured employers, they have typically become the physical-health component of a broader, holistic well-being strategy that encompasses mental and emotional health, financial security, social connectedness and work satisfaction, in addition to physical health.
Emotional and mental health and financial well-being are priority areas, and overall investment is up. Financial incentives, used primarily for physical-health programs, are still prevalent but have trended slightly down since 2018.
Levin-Scherz: Traditional well-being programs, focused only on physical well-being, have not lowered total medical costs. Well-being programs that focus on physical, financial, emotional and social well-being can provide value to employees and employers, although this might not include decreasing medical claims costs.
Related SHRM Articles:
Forecasters Revise Outlook for Higher Health Plan Costs, SHRM Online, May 2020
IRS Announces 2021 Limits for HSAs and High-Deductible Health Plans, SHRM Online, May 2020