Pandemic prompts insurers to change employee benefits eligibility rules

• Most insurance carriers are making changes to the way they determine benefits eligibility to extend coverage to employees affected by the COVID-19 pandemic, according to an April 16 survey by LIMRA, an international life insurance and financial services research association.
• For example, 42% of carriers surveyed are choosing to automatically continue coverage for all employees for a specified period of time, and an additional 22% are extending eligibility on a case-by-case basis to employees whose employment status has changed. More than one-third of respondents have adjusted reinstatement rules to make it easier for those impacted by COVID-19 to regain coverage, and a similar number are extending the timeframe in which employees may elect to pay or continue coverage if separated from their employer.
• Nearly 7 in 10 U.S. employees rely on their employee benefits to cover insurance needs, LIMRA said. Nearly all carriers in the survey said they’re offering premium grace periods of 60 days on average to workers unable to pay their premiums due to COVID-19, while others said they plan to reassess or extend those timelines if needed.

Preliminary estimates indicate the pandemic could take a considerable toll on employee benefit plans, particularly for self-funded employers.
A report earlier this month from the Integrated Benefits Institute found that that cost could exceed $23 billion, provided that the U.S. endures a “high range” outcome in which more than 15 million are infected. Self-funded employers could experience healthcare plan cost increases of between 4% to 7% in 2020 as a result of COVID-19 treatment and testing alone, according to a separate analysis by Willis Towers Watson. In both reports, a higher infection rate would lead to higher overall costs.
At the same time, higher unemployment numbers mean that a considerable percentage of workers have lost their employer-provided benefits, leading to criticism of the industry from worker advocates. Employers might note, however, that an employee’s employer-provided health coverage may continue in the event of a furlough, and the employee may be able to continue their coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) if they have lost eligibility.
Employers are looking into a number of ways to reduce plan costs while maintaining access to care during the pandemic. In many cases, that means shifting in-person visits to telehealth. An April 10 survey by Willis Towers Watson found that 86% of employers said they were promoting the use of telemedicine solutions, and more than two-fifths said they would waive out-of-pocket costs for employees who contract the virus.
Companies that can afford to do so might also look into helping employees who need to provide childcare due to caregiver unavailability or school closures. This may continue a trend that began even before the pandemic. Microsoft announced in recent weeks that it would offer up to 12 weeks of paid leave to all of its global employees who are impacted by extended school closures caused by COVID-19.
https://www.healthcaredive.com/news/pandemic-prompts-insurance-carriers-to-change-employee-benefits-eligibility/577020/