Coronavirus Influencing Future Health Benefit Plan Design

Large employers will expand mental and emotional well-being services and access to virtual care, and the pandemic is making it hard to predict future health care costs.

More employers are linking health care with workforce strategy, according to the Business Group on Health’s 2021 Large Employers’ Health Care Strategy and Plan Design Survey. 

The number of employers that view their health care strategy as an integral part of their workforce strategy increased from 36% in 2019 to 45% this year. “You can look no further than a pandemic to see how health and well-being directly affect employee productivity,” said Ellen Kelsay, president and chief executive officer of Business Group on Health, during a press call about the survey. She noted that 38% of survey respondents indicated the pandemic had a significant or very significant impact on health care strategy; 40% reported it had some impact.

Kelsay pointed out that employers surveyed indicated the top ways they have taken action during the COVID-19 pandemic are making changes to allow better access to virtual care (76%) and adding mental health benefits offerings and support (43%).

The survey shows the coronavirus pandemic is shaping health care benefit focus and plan design. In 2021, employers plan to expand access to virtual mental health and emotional well-being services to address provider shortages, minimize wait times and reduce the stigma associated with seeking care. More than two-thirds of respondents (69%) provide access to online mental health support resources such as apps, videos and articles, and that number will jump to 88% in 2021.

Nearly half (47%) of employers surveyed provide manager training to help recognize mental and behavioral health issues and direct employees to services. Another 18% plan to do so in 2021. Half of respondents (50%) will conduct anti-stigma campaigns in 2021.

Brenna Shebel, vice president at the Business Group on Health, said in the press briefing that among the ways employers have or plan to reduce the cost of mental health services to employees is through providing no or low-cost virtual counseling (54% in 2021). Shebel pointed out that this is new this year. One-third of employers indicated they offered no or low-cost on-site services this year, and 27% will next year. “I’m surprised that even 27% will offer on-site services as many offices are closed,” she said.

“Employers were already prioritizing mental health and emotional well-being before the pandemic hit. Now it’s a significant crisis,” Kelsay said. “In addition to those individuals with pre-existing mental health needs, many more employees and family members are now dealing with anxiety, stress or loneliness. We expect employers will boost their investment in programs that support employees’ mental health and emotional well-being.”

Growth in Virtual Care

Kelsay said 78% of employers saw an increase in the use of virtual care, as they increased virtual access for employees to both primary and specialty care.

An exponential growth in virtual care is one of the major trends identified in the survey. Eight in ten respondents (80%) said they believe virtual health will play a significant role in how care is delivered in the future, up from 64% last year and 52% in 2018. Additionally, more than half (52%) will offer more virtual care options next year. Nearly all employers surveyed will offer telehealth services for minor, acute services while 91% will offer telemental health, and that could grow to 96% by 2023.

“Virtual care is here to stay. While employers have been implementing more virtual solutions in recent years, the pandemic caused the pace to accelerate at an astronomical rate. And virtual care is now garnering growing interest and receptivity from both employees and providers who increasingly see its benefit,” Kelsay said.

Shebel pointed out that some delivery reform efforts were put on hold by the pandemic. Many employers were pursuing the use of accountable care organizations, centers of excellence, high performance networks and advanced primary care strategies. Forty-two percent of large employers said the pandemic had a very significant impact on delivery reform, and 20% said it had a significant impact. As an example of the pandemic’s effect, Shebel noted that a center of excellence for an employee to seek care for a condition may have been across state lines, but that travel was put on hold by the pandemic. “We expect once the pandemic wanes, a lot of these efforts will pick back up,” she said.

The survey reveals a growing interest in advanced primary care strategies, sometimes call direct primary care (DPC). More than half of respondents (51%) will have at least one advanced primary care strategy next year up from 46% in 2020. These primary care arrangements often focus on patient-centered population health management emphasizing prevention, chronic disease management, mental health and whole person care. The idea behind them is that employees who don’t get good primary care can drive up their own and their employers’ health costs.

Projected Costs Unpredictable

Large employers surveyed by the Business Group on Health say the total cost of health benefits is expected to rise 5.3% in 2021, taking cost management initiatives into account. The increase is slightly higher than the 5% increases employers projected in each of the past five years.

Including premiums and out-of-pocket costs for employees and dependents, the total cost of health care is estimated to be $14,769 per employee this year, an increase of $197 from last year. The total cost is projected to rise to an average of just over $15,500 in 2021. In line with recent years, employers will cover nearly 70% of costs while employees will bear about 30%, or nearly $4,500.

However, Kelsay noted that pandemic-triggered delays in both preventive and elective care make health care costs “a moving target and one that employers continue to keep a close eye on.” She explained, “If care returns to normal levels in 2021, the projected trend for next year may prove to be too low. It’s difficult to know where cost increases will land.”

The 2021 Large Employers’ Health Care Strategy and Plan Design Survey was conducted between May and June. A total of 122 large employers participated. Collectively, respondents represent a wide range of industry sectors and offer coverage to more than 9.2 million employees and their dependents.