2021 Plan Design Survey: Employer Perspectives on the Health Care Landscape

COVID-19 had a significant impact on employers’ perspectives on health, helping to strengthen the link between health care strategy and workforce strategy. It also affected planning for 2021.

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August 18, 2020

The 2021 Large Employers' Health Care Strategy and Plan Design Survey solicited information about employer approaches to health care and benefits in the midst of the COVID-19 pandemic, providing a window into leading ways that employers are addressing COVID through their benefit plans, programs and overall workforce strategy outlook.

The effects of COVID-19 continue to hover over the workplace. A silver lining, however, is that the pandemic has expanded and accelerated the use of telehealth and virtual
health. Employers also have a heightened awareness of the need for accessible mental health services, which has led to additional benefits. Among these new benefits are more virtual health options to address mental health and emotional well-being gaps. On the other hand, employers expect increased health care costs in the coming years because of missed and delayed care during the pandemic.

Key Takeaways

  • The COVID-19 pandemic has had mixed effects on employer plans. From a positive perspective, it has accelerated the use of virtual health – a trend that is likely here to stay. It has also raised awareness of the importance of mental health services across a number of dimensions.
  • Negative impacts, including delays in care and missed screening opportunities, have given rise to late-stage diagnoses due to pent-up demand for and partial resumption of in-person services. As a result, employers expect health care costs to rebound or even rise.
  • Many benefits that employers put in place during the pandemic will become permanent. These include expanded telehealth or virtual health offerings (76%), better access to virtual health (68%) and new mental health benefits (62%).

The effects of COVID-19 continue to hover over the workplace. A silver lining, however, is that the pandemic has expanded and accelerated the use of telehealth and virtual health. Employers also have a heightened awareness of the need for accessible mental health services, which has led to additional benefits. Among these new benefits are more virtual health options to address mental health and emotional well-being gaps. On the other hand, employers expect increased health care costs in the coming years because of missed and delayed care during the pandemic.

COVID-19 Accelerated Virtual Health Offerings

In response to the pandemic, employers increased virtual health offerings across the board in 2021. Eighty-four percent expanded their virtual health services (Figure 1.1). This is even more than did so in 2020, when 76% of employers made changes to allow for more virtual services and 71% accelerated telehealth and virtual health options.

Impact of COVID-19 on Large Employers’ Health and Well-being Priorities, 2021 
Figure 1.1: Impact of COVID-19 on Large Employers’ Health and Well-being Priorities, 2021
Employers’ Actions to Ease the Burden of COVID-19, 2021 
Figure 1.2: Employers’ Actions to Ease the Burden of COVID-19, 2021

Employers also view many of the changes they made in response to COVID-19 as permanent. For example, 76% of employers that accelerated telehealth or virtual health are planning to keep these changes in place, as are the 68% that provided better access to virtual health and the 62% that added new mental health benefits. However, 61% of employers that offered additional pandemic-related paid leave to employees expect to scale back on this benefit once the pandemic ends (Figure 1.2).

We had always promoted virtual medicine, but during the pandemic, it really took hold. We saw a 49% increase in virtual visits on the medical side and a 124% increase on the behavioral health side.


Leslie Melton, Northrop Grumman Corporation

Overall, 85% of employers believe that virtual care will have a significant impact on how health care is delivered in the future, a 5-point increase from last year (Figure 1.3).

Large Employer Views of Virtual Care, 2020-2021 
Figure 1.3: Large Employer Views of Virtual Care, 2020-2021

Given the acute focus on employee health and well-being during the pandemic, it is surprising that this year, those who viewed health care and well-being strategy as integral to workforce strategy declined slightly. Whereas there was a 9-point increase in employers’ views on this issue between 2019 and 2020 (36% vs. 45%), there was a 3-point decline between 2020 and 2021 (Figure 1.4).

Virtual care has so much potential. You can do medical exams like examining a child’s ear or have a session with a therapist. The opportunity for more holistic care is there with virtual, but it needs to be more widely available, with the pricing and structure clearly laid out.


Katy Maclaga, Carter's

Although the reasons for this are not completely clear, it could be that the emphasis on health and well-being strategy was redirected to the immediacy of the pandemic and keeping employees safe, healthy and productive. In any case, there is an expectation that the topline number will return to past levels of increase in the coming years.

The Role of Health and Well-being in Large Employers’ Workforce Strategy, 2019-
2021 
Figure 1.4: The Role of Health and Well-being in Large Employers’ Workforce Strategy, 2019-2021

Employers' Approach to Delivery Reform

Virtual health has been important in providing physical and mental health care services during the pandemic. It also has been a complement to the traditional health care delivery system. Survey responses bear this out: 61% of employers are augmenting their efforts to transform the delivery system by accelerating virtual health to address challenges within the more traditional delivery system. Employers’ willingness to do so has increased steadily since 2019, moving from 31% (2019) to 55% (2020) to 61% (2021) (Figure 1.5).

Delivery Reform Approaches, 2019-2021 
Figure 1.5: Delivery Reform Approaches, 2019-2021

Impact of COVID-19 on Overall Health and Well-being

Although the COVID-19 pandemic has had some silver linings, it has had many negative impacts. Staying at home during numerous lockdowns meant that doctor visits and preventive screenings were delayed or missed altogether. Social isolation and uncertainty due to the fluid nature of the pandemic proved to be an impetus for depression, anxiety and substance use disorders. As a result, employers anticipate seeing an increase in medical services, late-stage cancer diagnoses, greater numbers of people with long-term mental health and substance use issues and other adverse effects. These could last well into the future (Figure 1.6).

Addressing mental health needs is a priority for us. We’re pushing our vendors to help us meet the increased demand for care among our employees.


Melinda Morimoto, Genentech, Inc.

Employer Views on the Impact of COVID-19 on Health and Well-being, 2021 
Figure 1.6: Employer Views on the Impact of COVID-19 on Health and Well-being, 2021

It’s still unclear the impact COVID-19 will have on our budget due to delayed care, but we suspect it will lead to some severe diagnoses, such as late-stage cancer. We have launched a campaign aimed to encourage employees to seek out any preventive care they missed during the pandemic.


Kate Maclaga, Carter's

Evolving Views on Point Solutions and Pharmacy Benefit Manager and Health Plan Consolidation

As employers expand their focus to other areas involving cost and quality of care, they are shifting their attention to the impact of consolidation on these two variables. For the first time, this year’s survey asked about point solutions consolidation. More than half of employers said that it could lead to better integration of patient data and improve the consumer’s experience and utilization. However, only 30% thought that consolidation would reduce the cost of programs (Figure 1.7).

Employer Views on Point Solution Consolidation, 2021 
Figure 1.7: Employer Views on Point Solution Consolidation, 2021
Employer Views on Health Plan and PBM Consolidation, 2021 
Figure 1.8: Employer Views on Health Plan and PBM Consolidation, 2021

Similarly, employers see some potentially positive outcomes from pharmacy benefit manager (PBM) and health plan consolidation. Forty-three percent of employers think that consolidation may reduce the total cost of care and support value-based care models.

Employers do, however, have some concerns about PBM and health plan consolidation. Only 22% think that it will improve the consumer experience and an even lower number—18%—think that it will improve the quality of care (Figure 1.8).

Policy Perspectives

On the policy front, employers are focused on the big picture surrounding health care reform: cost, quality and increased access to affordable options. Lowering overall health care costs tops the list at 69%, followed closely by increasing quality (65%). Increasing affordable coverage is third, at 52% (Figure 1.9).

Top Objectives for Health Reform, 2021 
Figure 1.9: Top Objectives for Health Reform, 2021

Employers continue to support improvements to health savings accounts (HSAs). In line with an increased emphasis on telehealth, 80% of employers support permanently allowing telehealth to be covered before the deductible is met. Flexibility to cover high-value services such as primary care and chronic care management also received strong support (78%), as did allowing people over the age of 65 to continue contributing to their HSAs (70%) (Figure 1.10).

Support for HSA Improvements, 2021 
Figure 1.10: Support for HSA Improvements, 2021
Employer Views on Health Plan Price Transparency Regulations, 2021 
Figure 1.11: Employer Views on Health Plan Price Transparency Regulations, 2021

While employers support transparency and have long invested in tools and navigation services that provide cost information to employees and their families, the employer obligations in the recent transparency rules are challenging. While many employers embrace greater transparency and increasing patient visibility of cost, employers have indicated that these new regulations will increase their compliance burden (Figure 1.11). Employers will need effective collaboration with their partners to bring the transparency regulations to complete fruition, as these third-party partners maintain most of this data on behalf of employers.

As a strategy to increase access to affordable health insurance, employers favor lowering the eligibility age for Medicare (51%). Their second choice, offering a public option on the exchanges, lagged at 35%, followed by allowing employees to use the exchanges to find health insurance (34%) (Figure 1.12).

Preferred Policy Strategies to Increase Health Insurance Coverage, 2021 
Figure 1.12: Preferred Policy Strategies to Increase Health Insurance Coverage, 2021
Employer Views on the Importance of Health Legislation, 2021 
Figure 1.13: Employer Views on the Importance of Health Legislation, 2021

In a few areas, it appears that employer appetite for Congressional involvement and support is growing. In efforts to reduce costs, employers have focused on the price of prescription drugs among other efforts. This year, telehealth is almost of equal concern. This change becomes evident when looking at which areas employers would like to see activity from Congress. While implementing price controls for prescription drugs is still their top concern, at 48%, eliminating barriers for telehealth (e.g., licensing) is a close second, at 41%.

As employers continue to address these pressing issues, they are also looking 5 and 10 years out and considering whether they will still be offering employer-sponsored coverage for their workforce. Ninety-seven percent believe that they will still be providing health insurance 5 years from now, with 82% confident that they will still be providing health insurance in 10 years. Despite discussions of a public option as well as potential workforce demographic shifts (e.g., gig workers), employers anticipate no significant changes in their willingness or need to provide employer-sponsored health coverage in the future (Figure 1.14).

Employer Confidence That They Will Be Offering Health Insurance in the Future, 2021 
Figure 1.14: Employer Confidence That They Will Be Offering Health Insurance in the Future, 2021

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TABLE OF CONTENTS

  1. Connection Between Health Care Strategy and Workforce Strategy Continues to Grow
  2. Impact of COVID-19 on Virtual Care
  3. Changes Driven by COVID-19
  4. Role of Virtual Care in Health Care Delivery
  5. Views on Pharmacy Costs
  6. Policy Perspectives