Employers who pay for health care often purchase stop loss insurance as a means of securing income to protect against any unforeseen events – whether it’s a single accident or a total loss that exceeds the expected value of their number. This is a huge market, and one that has attracted a lot of attention through the COVID-19 pandemic in which employers who offer self-financing programs may be affected by the COVID-19 claims.
In August, QBE North America – a leading term life insurance provider – released its 2022 Risk & Health Market Reportwhich uses extensive insurance databases to display industry trends and product details to help employers better manage their self-financing plans.
The report states that the number of hospitalizations due to COVID-19 doubled (+108%) from 2020 to 2021. In addition, the increase was common across age groups, with the youngest (0-29) five times higher. . Through April 2022, the youth population, 0-29 and 30-39, has already reached the same levels as in 2021.
Read the following: Revealed – The 10 largest insurance providers in the US
Tara Krauss (pictured), head of Accident & Health at QBE North America, said: “The diversity of the causes of COVID-19 and the number of comorbidities have reduced the median age from 54 in 2020 to 49 in 2021, and the average cost of reported for COVID increased 87% year-over-year.”
QBE North America also saw multi-million dollar claims, including one case in which a COVID patient was in an intensive care unit for more than five months, which settled at $4.6 million. Krauss said the claims of this danger were “not expected” at the beginning of the epidemic.
For claims over $200,000, QBE found that the frequency rose 17% from 2020 to 2021, with jumps especially in respiratory disorders (nearly 100%) and neoplasms (21%). Krauss said the increase “is not possible because of claims related to COVID, and related to delays in care,” during the pandemic.
Given the growing number of claims and their severity, Krauss said now is a “good time” for employers to consider offering self-funding programs, and the protection of health insurance coverage. He said that if claims for sick leave are increasing, so are claims for fully insured health care — and many insurance carriers that offer fully insured health care plans want premiums to be increased to handle those claims.
“With self-funded programs, employers have more control over what their plans offer,” Krauss told Insurance Business. “They can drive care to the best providers with the best discounts, and they can take action on results to improve, and focus on improving the member experience.”
Employers that offer private health care programs have a lot of control over their co-pays, which are often high because they include specialty drugs and services for rare or complex medical conditions. With the right language, cost-effectiveness strategies, and vendors, employers can have a direct say in how unique solutions are created, and where employees can receive care.
Read more: Tracking the post-pandemic labor market
“It’s about finding better ways to manage the money that people spend about 5% of their health care costs,” said Krauss, who admitted he’s thinking of doing it himself, creating plans that offer the best. Defining and cost-cutting strategies can be “overwhelming” for HR managers, which is why they rely heavily on consultants and consultants.
“When choosing a consultant, employers want to know how to use it when choosing a low-cost vendor and especially a strong PBM (pharmacy benefit management),” added Krauss. “Are they simply choosing to see a health care provider? This can reduce system control over prescriptions, preferred drug lists and contract terms. Who will benefit from the discounts manufacturers are offering?”
Krauss also said it’s important for employers to work with businesses that are trying to meet their pre-existing needs by providing vendors with investments and solutions that are driving lifestyle and behavioral change. QBE’s 2022 Accident & Health Market Report revealed that 90% of claimants who paid more than $100,000 from 2019 had comorbidities (more than one disease).
“Finding ways to structure their self-funding plans to encourage behaviors and lifestyle changes that will reduce the risk of an individual’s exposure can help prevent excessive spillovers,” Krauss said. “It’s about finding ways to get down to member health, using the right managers and vendors and choosing an insurance carrier that can join you on your journey of saving money to take care of claims.”