How Social Determinants Can Impact Health Benefits

With health care costs continuing to rise, employer-provided insurance and benefits are often one of the most cost-effective ways for consumers to access medical coverage and wellness resources.

That said, Mercer estimates that the cost of health benefits for employers will increase by more than 4% in 2021. To manage rising costs, many large firms have moved away from fully funded traditional plans to self-funded plans. According to Kaiser Family Foundation, 67% of covered workers, including 84% of those in large firms, were enrolled in self-funded plans in 2020.

Nearly one in six firms (61%) offered self-funded health plans in 2019, and that percentage is increasing, Kaiser reported.

Rising costs have pushed employers to take an increased interest in more holistic management of their benefits programs. That management includes plan design, wellness incentives and workers’ long-term health.

Workers’ health and wellness needs are constantly changing, and this can be a result of factors beyond anyone’s control. COVID-19 amplified this reality. If worker well-being is a true point of interest for employers, they will be challenged to create more robust benefit packages that account for socioeconomic factors that impact workers, including the pandemic’s residual impacts.

Factoring In Socioeconomic Disparities When Designing Benefits Plans

The American Journal of Preventive Medicine’s research found that between 80% and 90% of modifiable health-related behaviors affect a person’s health. Those behaviors are impacted by the environment people live in, their income or education levels, and other socioeconomic factors.

Medical care accounts for only 10% to 20% of the controllable contributors to a healthy population. Socioeconomic impacts such as racial disparities, food insecurity, housing instability, utility and transportation needs, and interpersonal violence must be considered when creating benefit packages.

The pandemic magnified the disparities in communities of color. For example, most recently, Kaiser reported disparities in COVID-19 vaccine distribution efforts in minority communities, which have higher rates of infection and death.

This can be attributed to socioeconomic factors including lack of insurance coverage and accessibility to sites administering the vaccine. Especially amid the pandemic, addressing these longstanding disparities will be paramount to the continued health, safety and productivity of the population and labor force, for which communities of color make up a large part.

Disparities related to gender should also be considered. According to a global study by McKinsey, during the pandemic, women are 1.2 times as likely to cite acute difficulties with workload increases, connectivity and belonging in the workplace.

The Case For Mental And Emotional Health

Looking ahead, key issues that must be considered for employee benefit plans include greater support for mental health and employee wellness, decentralized offerings to accommodate remote work, and expanded coverage for telehealth services.

The pandemic has put a significant strain on employee health and wellness — physical and mental. Left untreated, mental and behavioral health issues can severely impact employee productivity and lead to absence or attrition.

Discussion of mental health has become less taboo as well, and many workers may feel more comfortable seeking support through employer programs. In the coming years, benefits for employee wellness, including support services, personal days, etc., will no longer be an added bonus — they will be an expectation.

In 2010, the Affordable Care Act required ACA-compliant plans to include 10 essential benefits — and mental health care was one of them. Amid the pandemic, many major health plans have extended specialized coverage to expand all member cost-sharing waivers for outpatient and mental health counseling services.

Remote Working Conditions And Considerations

The pandemic will also prompt employers to consider specialized programs to ensure a safe return to the office. For example, United Healthcare launched a new project with Microsoft called ProtectWell, a return-to-workplace protocol that enables employers to bring employees back to work in a safer environment.

The program helps employees determine whether they are safe to go to work, ensures all workers have been properly screened, and provides employers with the confidence that their workplace is ready to operate.

As remote work continues, employers also may wish to explore options that decentralize offerings in order to disperse coverage where employees are now living and working. According to research from S&P Global, 67% of companies expect work-from-home policies to remain for the long-term future.

Soon, more companies may offer remote work as a permanent option and hiring incentive. This will mean offering broader health care coverage and benefits will become a priority. Employers also may consider benefits to cover work-from-home equipment, such as monitors and ergonomic office furniture, along with virtual wellness programs, such as meditation and yoga, to help workers maintain their mental and physical energy.

Virtual Medicine Is Here To Stay

Finally, one of the largest trends to come out of the pandemic has been the rising popularity of telemedicine. Due to convenience and efficiency, more health systems will begin to offer telehealth as part of the standard of care.

Many lawmakers have pushed to mandate coverage for telehealth services across the country because of the pandemic. Government and private insurance payers have expanded their benefit plans to include coverage for telehealth.

However, the explosive adoption of telemedicine has highlighted a key disparity in access. The reality of “digital deserts” has hindered rural and minority communities from taking full advantage of this virtual medical service. Nearly 21.3 million Americans — about 6.5% of the population — reside in areas with limited access to broadband internet.

As the pandemic continues, employee benefits that focus on both physical and mental health as well as general wellness should remain at the forefront of employer planning.

Through thoughtful design — keeping important social and economic challenges in mind — and management of benefits programs, employers can work to improve employee well-being and reduce attrition. The result will be a happier and more productive workforce.

Stuart Hanson is head of corporate treasury consulting and health care solutioning with JPMorgan Chase. He may be contacted at [email protected]. Lynette Nelson is executive director, health care industry specialist with JPMorgan Chase. She may be contacted at [email protected].