In the midst of the most significant socio-economic and health crisis since WWII — and maybe even longer — virtually every aspect of modern society has been affected in some way, and employee benefits programs are no exception.
Before the coronavirus pandemic was in full swing in Canada, employers were focused on ensuring employees diagnosed with the virus would have adequate short-term disability benefits, as well as emergency medical coverage if they were travelling outside of the country. In the ensuing weeks, as many businesses were forced to close their doors to the public, employers’ attention has shifted to the implications of maintaining benefits for employees with reduced work hours and extending benefits to employees who are temporarily laid off.
So far, some of the obvious impacts of the pandemic are increases in short-term disability and life claims, as well as temporary reductions in claims for dental, vision care and paramedical services. While it’s still too early to forecast how long the pandemic will last and what impact it will have on employee benefits plans, here are five predictions for the remainder of 2020.
1. An increase in dependant health and dental claims
Many workers have lost or will lose their jobs and benefits coverage. If an employee’s spouse has been terminated and no longer has benefits, their health and dental claims will start hitting their spouse’s plan from first dollar.
Additionally, if the spouse’s plan was the first payer for their dependant children’s claims, the plan will also now be picking up these costs. It’s a bit like squeezing a balloon — as the workforce shrinks and businesses close, the number of individuals claiming under the remaining plans will increase, resulting in higher per-employee costs.
2. A spike in health and dental claims
While claims for dental, vision care and most paramedical services have reduced significantly, employers should expect to see claims spike upward once social distancing restrictions are eased. This may still be several months away, and employees may be reluctant to receive any hands-on treatment until the coronavirus risk has significantly diminished, but there will be pent up demand eventually.
3. An increase in the demand for virtual health care
Over the past few years, more health providers have gone online and to their mobile phones. About three years ago, several telemedicine providers burst onto the scene, making it easier for Canadians to seek treatment and advice from primary care providers like physicians and nurse practitioners about a range of medical issues all from the comfort of their home or office.
Other heath practitioners, from psychologists to naturopaths, also now offer services virtually in addition to in-person. While interest in this area is growing, some employers and employees have yet to fully embrace virtual health care. But the coronavirus pandemic will undoubtedly help increase the real and perceived value of these services.
4. Mental health will take centre stage
Even those that aren’t infected with the coronavirus will be impacted by mental-health issues to varying degrees. While we’re all dealing with fear, uncertainty and social isolation, the number of Canadians also dealing with the loss of a loved one, financial stress, burnout, sleep deprivation, anxiety, depression, etc., has never been greater.
The demand for mental-health support now and in the near future will likely be greater than the supply of traditional in-person counselling available. Internet-based programs including cognitive behavioural therapy can help to fill that gap. Although many of these programs are supported by accredited mental-health professionals, they can be delivered to a far greater number of people with fewer staff resources.
5. An increase in long-term disability claims and costs
No one really knows what the long-term health prognosis will be for those stricken with the coronavirus, especially those with underlying medical conditions. Recovery may take months or longer for some affected employees, which could lead to higher long-term disability claims.
Additionally, workloads for many employees in essential industries have increased, which can lead to burnout and other health conditions. Prolonged periods of stress are likely to result in increased long-term disability claims once the peak of the pandemic subsides. We saw evidence of this during the last economic downturn.
While there are glimmers of hope on the horizon, our world and sense of normalcy and security has forever changed. Employers may want to use this as an opportunity to take stock of their benefits programs to determine what existing and new plan design features will deliver the highest value for employees in the future and what lower value elements can be reduced or removed to keep costs within budget.