COVID-19 has created an incredibly challenging and complex environment for businesses and American workers, with unemployment claims skyrocketing and 11% of CEOs saying they fear their companies won’t survive the pandemic, according to a YPO survey.
As with all disruption, however, we now have the opportunity to adjust our structures, mindsets and ways of working to emerge from the crisis stronger than ever before. At a time when it has never been more important for employers to keep a close eye on the health of their employees and support them in every way possible, there will be plenty of challenges regarding healthcare benefits in the year ahead, including a rise in COBRA eligibility. But there are a few positives for our industry to consider, too.
1. The individual coverage HRA will take off.
Benefits plans are likely to change dramatically in the coming year, especially in the industries hit hardest by the pandemic. If and when more employers find themselves unable to cover the cost of group healthcare for their workers, the new individual coverage health reimbursement arrangement (ICHRA) becomes a nice option.
Established Jan. 1, 2020, the ICHRA allows employers to reduce and stabilize their healthcare expenses while also enjoying flexibility in plan design. Employees get a greater degree of control in their healthcare spending, some tax advantages, and the opportunity to receive healthcare benefits even as a part-time or seasonal worker if employers choose to make them available. With the rapid changes occurring in the economy, demand for this new product could soon become three to five times higher than it was just a few months ago.
2. New benefits will make HSAs and FSAs more popular.
Lawmakers in Washington, D.C., have been busy working to help consumers through this crisis and have made a number of changes that impact our industry, many through the CARES Act, a coronavirus-targeted legislation passed in March.
Among the changes that will support healthcare consumers, the HSA contribution deadline was pushed out to July 15. Safe harbors were put in place protecting reimbursements for COVID-19 testing and treatment, as well as for telemedicine appointments, allowing coverage before plan deductibles are met. Election and payment periods for COBRA participants were extended. Over-the-counter drugs were made eligible for HSA and FSA reimbursement without a prescription, along with feminine hygiene products.
These positive adjustments make consumer-directed plans even more valuable, and it’s a great time to invest in education to teach employees about how these plans can help them achieve better financial health — both during the crisis and for the long term.
3. Employers will need more help than ever with consumer-directed plan offerings.
With many employees making the switch to working from home, and the needs of workers on the front lines rapidly changing as well, HR departments have been challenged to quickly accommodate new working arrangements. This is an opportunity for benefits administrators and consultants to play a leading role in helping employers to navigate this new benefits landscape.
So many organizations have already come together to help in the past few months, whether that’s through providing education and tools, assisting employers and employees with complex legislative changes, or continuing to advocate for additional important legislation—in particular, a COBRA subsidy to make transitional healthcare affordable for the growing number of unemployed workers.
This is a time for leaders in the benefits industry to step up, leveraging our expertise to help employers and employees get the guidance and support they need to make their way through this crisis—and emerge from it with better tools at their disposal and a stronger understanding of how to use them.
