COVID-19: Understanding Changes to the Cost of Employee Benefits
By Newfront | Published June 22, 2020
Our Return to Workplace webinar series has centered on successfully navigating the changes that COVID-19 has brought to the lives of employees and organizations as a whole, and we know that the costs of these changes can present real concerns for employers.
Our latest webinar brought together leaders from the Employee Benefits industry to discuss the cost of COVID-19. The panel included our own Darren Brown, Executive Vice President and Chief Revenue Officer of Newfront’s Employee Benefits Practice, Paul Martinez, Senior Vice President – Newfront Employee Benefits Practice, Jon Caniglia, Business Development Manager at Milliman, and Shea Willems, Financial Analyst and Benefits Consultant at Milliman.
Here are some of their key insights for understanding the costs of benefits during this time:
With deferred care during shelter in place directives, medical carriers are going to have lower costs by at least 5B and as much as 75B.
Lower claims translate to a lower MLR (Medical Loss Ratio) and if that MLR is below 85%, the overage needs to be returned to policy owners.
We have still not seen the impact of the claim deferral as there is usually a 2-3-month lag.
Important elements for employers to focus on:
As there is more innovation in and use of telemedicine**, it is important to know the difference between direct primary care telehealth and other options such as Teladoc**.
Think about deploying a care coordination model. Those that have, had a CAGR in costs of 2.6% over multiple years vs a CAGR of 8.8% for those that didn’t
Now is the time to go through the process of understanding claims and alternative funding options, you will either arm your broker with necessary insight to negotiate a fully insured renewal or take you on a path for a multi-year strategy of cost containment.
For those who were not able to join us, or if you would like to revisit, click here for the webinar audio.
Visit the Newfront's Event page to register for upcoming webinars in our Moving Forward Together: Return to Workplace Series.
COVID-19: Top 10 Considerations for your Employee Benefits Plans
Newfront is a modern brokerage transforming the risk management, business insurance, total rewards, and retirement services space through the combination of elite expertise and cutting-edge technology. Specializing in more than 20 industries and headquartered in San Francisco, Newfront has offices nationwide and is home to more than 800 employees serving organizations across the United State and globally.