As the U.S. starts to return to work and the new “normal,” there are four factors risk management expert Pete Edgmon says employers “need to be mindful of.” They are:
- Employee demographics: Firms have to consider the nature of the company when evaluating health plan costs. For example, do employees do strenuous labor or do they work in a luxury office, or is the facility in an area where there’s a lot of illness, or lean or abundant benefits? Age and gender mix of employees also has to be taken into consideration. That’s why cost analysis has to start with demographics. And company’s have to segment the data sets and subsets because accurate data analysis is critical to understanding the current and next year’s employee pool.
- Medical elective deferrals: You can expect healthcare claims to rise over the next year because people put off medical procedures due to COVID-19. Now that many are vaccinated, they’ll be scheduling those procedures they put off. So what firms need to do is assess the amount of claims they had in 2020 to those in 2019, if they didn’t go down a lot, they shouldn’t rise a lot. But if they dropped, expect a jump. Firm’s can expect a rise in musculoskeletal treatments due to the year of working from home.
- Medical cost trends: Edgmon said, “Carriers have widely divergent forecasts on cost expectations, in part due to unclear data, but also because of unique issues with what part of the country the risk resides.” It’s predicted that firms can expect costs to increase between 6% to 8% over the next year. Catalysts for medical costs trends include employee utilization and the macroeconomic inflation occurring in the U.S.
- Competitive benefits: Be careful about cutting benefits to save costs, warned Edgmon. To attract talent firms need to stay competitive, but they also need to keep spending in check. Firms may want to put more toward pharmaceutical costs since it’s on the rise.