How Covid is Driving Healthcare Benefits, and How Group Insurers Can Respond
It’s a sobering thought for the start of 2022, as well as this blog, that we’re entering the third year of the pandemic. As Covid continues to disrupt normal life, it has resulted in significant changes to healthcare and healthcare benefits usage. Members have been forced to delay nonessential procedures, telemedicine has become the name of the game,1 and 70% of employers indicate they have seen an increase in the use of healthcare benefits’ employee assistance programs in the past year.2 In this new world, Covid has become a driving force behind healthcare benefits and group insurers must respond appropriately. By doing so, group insurers can reinforce their own value proposition not just for the immediate future, but also for when the global community ultimately emerges from the pandemic.
The New Normal of Healthcare Benefits
In simpler times, the main objective of healthcare benefits programs was about attracting and retaining talent.3 Today’s healthcare is more about a renewed focus on benefits that keep employees healthy and productive.4 Although employees have expressed more pronounced appreciation for their healthcare benefits due to the pandemic,5 group insurers still require efficient administrative solutions that offer digital accessibility and transparency as well as benefits education to prove their worth. Group insurers can also take advantage of existing needs, like member engagement, as well as new ones addressed below, that have emerged due to the pandemic to further justify their long-term value.
Exceptional, Ongoing Engagement
Even under normal circumstances, healthcare benefits, including supplemental health benefits, can be confusing. By providing regular, detailed guidance (long after open enrollment concludes) and more customized engagement for employees, group insurers can make core and supplemental healthcare benefits more transparent and educate on the value and necessity of these benefits, especially in the current, uncertain environment. In The Hartford’s 2021 Future of Benefits Study, 58% of surveyed workers noted that they would like a personalized recommendation on what benefits they should select,6 to help them understand their options and maximize their benefits.
The Power of Portability
The ongoing pandemic and resulting churn in the U.S. labor market contributed to the explosive growth of the gig economy, where employees serve as independent contractors (either in part-time or full-time work) and require portable health and supplemental health benefits to cover their healthcare needs. Gig workers, either as independent contractors, online platform workers, or contract firm workers, now total roughly 40 million according to a recent LIMRA study,7 and often turn to portable and supplemental plans that were first established by the American Care Act and further subsidized by the American Rescue Plan of 2021.8 These plans have been able to help ease the healthcare-related financial strain exacerbated by the pandemic and have prevented many gig workers from opting out of insurance coverage altogether. However, portability options for group life, disability, and supplemental health products need to expand further.
More Granular Pricing for Mortality and Morbidity
As mortality and morbidity increase due to the ongoing pandemic, group insurers need to consider more granular pricing when calculating premiums to be competitive while protecting their profitability. More granular pricing approaches will distinguish between the higher mortality and morbidity risks of certain employee types, versus others. State-by-state, more geographically focused pricing and underwriting approaches should become more common for group insurers to remain competitive.
Easy Employee Benefits Integration
The complexity of the current healthcare benefits ecosystem is well known, with a multitude of enrollment providers, administrators, data providers, and various employers requiring different combinations of the above. Add a pandemic that results in rampant employee churn, an increased need for a wider range of enrollment options, and less-predictable claims volumes, and you risk inefficient processing that results in a poor user experience for all constituents. Now more than ever, group insurers need flexible core platforms that can successfully integrate into the healthcare benefits’ enrollment and overall, intricate environment for streamlined, operational effectiveness.
As Albert Einstein said, “in the midst of every crisis, lies great opportunity.” For today’s group insurers, the pandemic provides an opportunity to demonstrate and promote the value of their services and offerings. To respond most effectively, group insurers need modern core administrative platforms to enable seamless engagement, portability, more granular pricing for mortality and morbidity, and easy integration into the complex healthcare benefits ecosystem. With these capabilities, group insurers can protect employees, increase operational resiliency, and prepare for a future, Covid-free competitive landscape.
1 “9 Ways Covid-19 May Forever Upend the U.S. Health Care Industry,” Stat News, May 19, 2020
2 “2021 Future of Benefits Study: Employee Benefits Trends and Silver Linings of the Pandemic,” The Hartford, April 2021
7 “All About Gig Workers,” Scott R. Kallenbach, FLMI, LIMRA, 2020
8 “The $1.9 Trillion American Rescue Plan Offers Great News On Health Insurance; Here Are The Provisions That Cut Insurance Costs,” Forbes, March 2021.