While we’re all adapting to our new personal and professional lives one day at a time, there’s some longer-term questions surfacing about COVID-19 and how that will impact health benefits down the road, especially for the next open enrollment season. Although we can’t know how things will continue to develop exactly, of course, we can make some educated predictions based on past experiences. The Gravie team sat down with co-founder and CEO Marek Ciolko for his thoughts on these questions. Marek has 13 years of leadership in the health insurance industry and two industry changing startups to his name, and he offers his depth of knowledge about health insurance trends, regulations, and opportunities.
How will COVID-19 affect the open enrollment process for 2021?
Tactically speaking, we expect the process of open enrollment to be largely “business as usual,” with a few exceptions. Since many companies follow a late fall/early winter open enrollment season, we don’t anticipate seeing companies shift open enrollment periods – most will be able to stick to the regular schedule. That said, depending on how long factors such as shelter in place orders extend, expect more virtual meetings to take place than ever before between insurance carriers and employers. As more business is conducted online and virtually in the weeks and months to come, it will become more important to employers to work with partners that have good virtual communication, online user experiences for shopping, selecting, administering plans, and more.
Will premiums increase for 2021 because of COVID-19?
Today, companies bear the majority of health insurance costs through employer-sponsored coverage, and with the current economic outlook, there will certainly be an effect on health benefits and how plans are designed, including the out-of-pocket costs for the individual. The impact on next year’s premiums will depend on a variety of factors, but it will generally be driven by whether health insurers believe that the increased medical spend due to COVID-19 will continue into next year, and whether the elective procedures that were canceled/delayed this year will end up increasing healthcare spending next year, which is a concern.
What options should businesses consider as it relates to plan selections this year?
With 2020 bringing so much of the unexpected, employers will head into 2021 with new considerations and safeguards they would like to put in place when it comes to their employees’ health benefits. Gravie offers one way to ease the burden of the unknown through a defined contribution model. In this model, employers set a health benefits budget and, similar to salaries and 401ks, they determine a fixed amount to give each employee that can be used to purchase health coverage.
Gravie works with employers to determine their defined contribution strategy and to identify which benefits approach will best meet the needs of their group based on their budget, coverage goals, and employees’ needs. For many small to midsized businesses, a level-funded insurance approach (like Gravie’s Private Marketplace) is the best route to take – to control costs and be rewarded for a relatively healthy employee population.
If flexibility is what employers need, Gravie also offers solutions for employers to offer plans through the Individual Market. This is typically the route Gravie recommends for higher-risk populations. For employers who do experience the unfortunate event of needing to lay off employees, employees with plans from the Individual Market will be able to take that coverage with them when they leave – a valuable piece of stability when facing unemployment.
What do individuals need to keep in mind for COVID-19 as it relates to coverage?
Some good news for insured members is that COVID-19 treatment is considered an essential benefit; tests and treatments are currently covered by most plans and future vaccines will likely be included as well. What’s for certain is that the world will change as a result of this pandemic and systems and stakeholders across the industry – from providers to payers to government agencies – will be strategically considering what changes in our industry may be necessary to prevent and prepare for catastrophic circumstances in the future.
We hope this provides some helpful insights as we all continue to adapt and respond to the COVID-19 pandemic.