The insurance industry voluntarily waived most COVID co-pays and cost-sharing obligations during the pandemic, but the recent announcement that Michigan private insurers are eliminating the waivers, regardless of vaccination status, puts the focus on insured benefits in general — already heightened by the current open enrollment season and the call for benefits packages that reflect new societal realities.
According to employee benefits and ERISA attorney J.J. Conway, of J.J. Conway Law in Royal Oak, nearly 50 percent of employees and their families receive their healthcare through employee benefit plans.
“Employee benefits account for around one-third of an employee’s wages or salary, so their value in real dollars is significant,” Conway said. “As employees experience a pandemic-influenced increase in power, with the labor shortage, the Great Resignation, and calls for more flexible scheduling as determined by the employee and not the employer, the workplace is responding in part by looking at their benefit plans.
“Regardless of what insurers may be saying, employees have grown to expect full coverage for telehealth visits, on demand testing for COVID-19, and walk-in vaccination programs, so it will be difficult for employers to try to cut back on any these benefits right now.”
It’s all part of the next generation of employee benefits programs, according to Conway.
“There’s been a slowly building evolution of employee benefits where voluntary free or low-cost programs, such as smoking cessation, on-site wellness programs and 1-800 numbers for employee assistance are being replaced by programs available within the insured benefit plan design,” Conway said.
At the same time, employer sponsored health insurance plans are seeking to influence health choices, as witnessed through Delta’s recent decision to charge an additional $200 per month to employees who do not qualify for an exemption yet choose not to obtain a COVID-19 vaccine.
“Delta’s approach is working. The company’s vaccination rates are eclipsing many private employers,” he said. “Delta used its employee benefit plan to change behavior. It didn’t fire anyone, it just said to its workforce, ‘it’s your decision, but it comes with a price tag.’ $2,400 per year in increased cost-sharing is a lot of money.
“Insured benefits are being used as a tool to influence behavior and implement change. Whether it’s to reduce COVID cases or enhance mental health and well-being, insured benefits have a tremendous amount of power in the workplace.”
What’s next on the menu of change for employee benefits?
Conway anticipates fertility coverages and egg retrieval and freezing may gain more attention in the next few years. Currently, 14 states require infertility coverage in fully insured healthcare plans.
“The pandemic, the Great Resignation, and the housing shortage have hit people of childbearing age in a significant way,” Conway said. “For those who delay having children until a greater sense of security sets in and then have difficulty conceiving, they will turn to their employer’s insured benefit plans for comprehensive fertility treatment coverage. If it’s not there, they will demand it, just has they’ve done with mental health insurance.”
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