- U.S. employers could see healthcare costs increase between 4% and 7% in 2020 due to COVID-19 treatment and testing costs, according to the results of a Willis Towers Watson actuarial analysis of self-funded employers released March 26.
- The results assume a 30% infection level of COVID-19, but Willis Towers Watson noted that the actual cost increase depends on how sick those infected with the disease become. Costs may increase further should the pandemic's U.S. impact be more severe: a 50% infection rate would translate to a cost-increase range of 5% to 7%, the firm said.
- Costs per infected person were estimated at $250 for mild cases, $2,500 for moderate cases, $30,000 for severe cases and close to $100,000 for catastrophic cases. Those costs include claims for medical and prescription drugs only, Willis Towers Watson said. The firm added, however, that employers' other healthcare costs, like dental and vision care, may actually decline this year because employees will likely eliminate some discretionary care.
The costs for COVID-19 care and testing are in addition to existing cost-increase predictions for 2020, Willis Towers Watson said. Prior to the start of the epidemic, industry observers like Mercer projected cost increases of about 4% for 2020.
Some employers that remain open due to their essential status have expanded benefits to protect employees. Walmart began offering emergency leave for workers who are either unable to come to work or who don't feel comfortable doing so.
J.B. Hunt gave out a one-time bonus of $500 for 23,000 drivers and personnel at field operations and customer facilities supporting the drivers. And UPS and the Teamsters reached an agreement to provide paid leave for any worker required to quarantine.
Yet other employers, particularly in industries facing low demand, have laid off staff and reduced hours. The pandemic has led to a skyrocketing level of unemployment claims in the U.S., and one estimate by the Federal Reserve Bank of St. Louis puts the nation's unemployment rate as high as 32% for the second quarter of 2020.
Another potential response could be increased access to telehealth services.
Steering plan members to telehealth and virtual care options could reduce strain on the healthcare system as well as manage employees' non-COVID-19 health concerns, experts told sister publication HR Dive. Fleet vendors offering telemedicine services have observed an uptick in interest during the pandemic.
Federal lawmakers passed three emergency bills aimed at addressing aspects of the pandemic with more than a few provisions that impact employers directly. The Families First Coronavirus Response Act (FFCRA) established federally mandated paid leave for private sector workers in the U.S. for the first time, but only among employers with fewer than 500 employees and only for limited circumstances related to COVID-19's impact.
Subsequent updates by the U.S. Department of Labor and the IRS spelled out enforcement of the FFCRA as well as tax credits available to employers that provide the law's emergency leave. Self-funded employers tend to be larger in size, although some small businesses impacted by the FFCRA are self-funded, according to 2018 data from the U.S. Department of Health and Human Services.
Finally, the third emergency bill allows for high-deductible health plans (HDHPs) with a health savings account to cover telehealth services prior to a patient reaching the deductible.