The coronavirus pandemic could reduce employer health-care costs by as much as four per cent in 2020 as medical care for non-infected patients has declined, according to a new analysis by Willis Towers Watson.

The analysis of large, self-funded U.S.-based employers is an update to a similar study conducted in March that projected employer costs could rise by as much as seven per cent due to coronavirus-related costs.

Read: U.S. employer health-care costs could rise 7% with coronavirus testing, treatment

“With treatment for COVID-19 top of mind, people have been putting off non-emergency medical care, including routine office visits and elective procedures at hospitals,” said Trevis Parson, chief actuary at Willis Towers Watson, in a press release. “Given this reduction in use of medical services, we expect cost reductions due to care deferral to more than offset projected cost increases associated with COVID-19 infections.”

According to the analysis, at a one per cent infection level (i.e., rural areas), employer costs could decline between one and four per cent, depending on how much medical care is deferred. At a 15  per cent infection level (i.e., metro areas), employer costs could rise or fall by roughly one per cent depending on care deferral. In the most severe scenario — a 20 per cent infection level — costs could rise between one and three per cent, still below projections from the earlier analysis.

“While continued adherence to social distancing and other public mitigation efforts are likely to reduce costs associated with COVID-19, these initiatives may also help to reduce exposure to other communicable diseases such as the flu and significantly lower the rate of certain injuries, such as those caused by sports accidents,” said Parson. “The ultimate financial impact of COVID-19 on employer health-care plan costs in 2020 will depend on other factors, including the rate at which the virus spreads and the severity of illness of those infected.”

Read: Canadian health benefits costs expected to grow 6% in 2020: report

The report notes the estimates reflect increases to 2020 employer medical and pharmacy claim costs only. Willis Towers Watson expects other health-care plan costs, such as dental and vision, will see lower costs in 2020, since employees are likely to eliminate some discretionary care.

Copyright © 2020 Transcontinental Media G.P. Originally published on

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