As U.S. employers look to keep their workers safe and healthy in the face of the global pandemic, they could see their health-care benefits costs jump by as much as seven per cent this year as a result of coronavirus-related testing and treatment, according to an actuarial analysis of self-funded employers by Willis Towers Watson.
Any increase attributed to the virus will be on top of the five per cent cost increases that employers had previously projected for 2020, it noted.
“Despite employers and employees taking the right precautions at this perilous time, the coronavirus continues to spread and place enormous pressure on our nation’s health-care system,” said Trevis Parson, chief actuary at Willis Towers Watson, in a press release. “This spike in the demand for care is likely to lead to a significant jump in employer health-care costs beyond previous expectations. However, the ultimate financial impact will depend on many factors, including the portion of the population infected and the severity of their illness.”
The analysis found, at a 30 per cent infection level, total costs could increase between four per cent and seven per cent, depending on how sick these patients become. The total costs include claims for medical and prescription drugs only, while other health-care costs, such as those for dental and vision care, may actually decline in 2020 as employees will likely eliminate some discretionary care, noted the analysis.
It also found, at a 10 per cent infection level, costs could rise between one per cent and three per cent. In a more severe scenario — a 50 per cent infection level — costs could rise from five per cent to seven per cent.
“The effectiveness of our containment strategy will determine what portion of the U.S. population will become infected,” said Parson. “And that will have an impact on additional costs, which employers will need to consider as they design and finalize their benefits strategy and plan for 2021.”