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Research Article

Private Health Insurance

Health Benefits In 2020: Premiums In Employer-Sponsored Plans Grow 4 Percent; Employers Consider Responses To Pandemic

Affiliations
  1. Gary Claxton is the senior vice president and director of the Program on the Health Care Marketplace, Kaiser Family Foundation, in Washington, D.C.
  2. Anthony Damico is an independent consultant for the Kaiser Family Foundation.
  3. Matthew Rae ([email protected]) is associate director of the Program on the Health Care Marketplace, Kaiser Family Foundation.
  4. Gregory Young is a policy analyst in the Program on the Health Care Marketplace, Kaiser Family Foundation.
  5. Daniel McDermott is a research assistant in the Program for the Study of Health Reform and Private Insurance, Kaiser Family Foundation.
  6. Heidi Whitmore is a principal research scientist in the Health Care Department, NORC at the University of Chicago, in Bethesda, Maryland.
PUBLISHED:Free Accesshttps://doi.org/10.1377/hlthaff.2020.01569

Abstract

The annual Kaiser Family Foundation Employer Health Benefits Survey is the benchmark survey of the cost and coverage of employer-sponsored health benefits in the United States. The 2020 survey was designed and largely fielded before the full extent of the coronavirus disease 2019 (COVID-19) pandemic had been felt by employers. Data collection took place from mid-January through July, with half of the interviews being completed in the first three months of the year. Most of the key metrics that we measure—including premiums and cost sharing—reflect employers’ decisions made before the full impacts of the pandemic were felt. We found that in 2020 the average annual premium for single coverage rose 4 percent, to $7,470, and the average annual premium for family coverage also rose 4 percent, to $21,342. Covered workers, on average, contributed 17 percent of the cost for single coverage and 27 percent of the cost for family coverage. Fifty-six percent of firms offered health benefits to at least some of their workers, and 64 percent of workers were covered at their own firm. Many large employers reported having “very broad” provider networks, but many recognized that their largest plan had a narrower network for mental health providers.

TOPICS

Employer-sponsored health insurance is the largest source of coverage in the United States, covering about 157 million nonelderly people.1,2 This article presents findings from the twenty-second annual Kaiser Family Foundation Employer Health Benefits Survey.3 As in past years, the 2020 survey asked firms about eligibility for and enrollment in their health benefits, as well as the characteristics of up to four of their largest plans. The survey was fielded from mid-January to July 2020, just as employers were beginning to feel the impact of the coronavirus disease 2019 (COVID-19) pandemic and economic downturn.

Study Data And Methods

Survey Sample And Methods

The sample for the 2020 Employer Health Benefits Survey included private firms and nonfederal government employers with three or more employees. In total, 11,188 firms were sampled. Of the more than three million firms within the survey population, 1,765 firms completed the full survey. Firms with more than nine employees that had completed the survey in either 2018 or 2019 were included in the 2020 sample; the remainder of the sample was randomly chosen within firm size and industry categories. The response rate for completing the full survey was 22 percent. Seventy percent of respondents completing the survey also participated in the survey in at least one of the past two years. To increase the sample size for estimating the percentage of firms that offer coverage, we asked respondents that declined to participate whether they offered benefits. Including the 1,765 firms that completed the full survey, 3,582 firms answered this question, for a response rate of 46 percent.

To produce nationally representative estimates, we developed weights specific to employers, workers, covered workers, and workers within each of the four specified health plan types. To control for item nonresponse, we imputed missing data using a hot deck approach, which replaces missing information for a firm with observed values from a similar firm. Differences referred to in the text use a p value of 0.05 as the threshold for significance. The 2020 survey was fielded from January to July, during which time many employers faced significant disruptions as a result of the COVID-19 pandemic. Responses reflect employers’ plans at the time of the interview; responses for approximately half of the interviews (making up 50 percent of the covered worker weight) were collected in January, February, or March. Employers make decisions about their plans before the plan year begins. Premiums for self-funded employers are usually reported as the cost for a former worker to enroll in coverage provided through the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) (deflated by an administrative fee) and do not reflect real-time spending.

Weights were calibrated to the Census Bureau’s 2017 Statistics of US Businesses and the 2017 Census of Governments within size and industry categories. Although these data represent the most current information available, there has been a significant amount of economic disruption thus far in 2020. Other than the offer rate, many statistics were weighted by the percentage of covered workers. Seventy-two percent of the covered worker weight was made up by firms with 200 or more workers. We had a smaller number of observations in 2020 compared to recent years, which precipitated a change in our weighting methodology. To reduce variance in weights within size and industry categories, we limited the number of margins used to calibrate weights and adjust for nonresponse.4

Survey Questions

Each year benefit managers are asked about the characteristics of their firm’s largest health maintenance organization (HMO), preferred provider organization (PPO), point-of-service (POS) plan, and high-deductible health plan with a savings option (HDHP/SO). We define the latter as plans with a deductible of at least $1,000 for single coverage and $2,000 for family coverage that offer a health reimbursement arrangement (HRA) or are eligible for a health savings account (HSA).5 “Small firm” refers to employers with 3–199 workers, and “large firm” refers to employers with 200 or more workers. Occasionally we refer to employer sizes that differ from these two categories. We define firms with many lower-wage workers as those in which 35 percent or more of employees earn less than the twenty-fifth percentile of national earnings ($26,000 or less in 2020); firms with many higher-wage workers are those in which 35 percent or more earn more than the seventy-fifth percentile of national earnings ($64,000 or more in 2020).

For the first time since the survey’s inception, we changed data collection from National Research LLC to Davis Research LLC. Although the survey’s methodology has been consistent over time, it is possible that some error was introduced through the change in data collection firms. Survey-adjusted standard errors (and statistical testing) measure uncertainty on the basis of the sampling strategy but do not measure biases that may be introduced through the data collection process, such as “house effects.” This year presented significant challenges in fielding the survey, as many employers implemented alternative work arrangements and benefit managers were strained by having to respond to the crisis. Given the multitude of events, it is difficult to separate house effects from the pandemic and other trends. More information on the sample and methods, including changes to the 2020 survey, is presented in detail elsewhere.4

Study Results

Cost Of Coverage And Worker Contributions

Average annual premiums in 2020 for workers covered by their own firms were $7,470 for single coverage and $21,342 for family coverage (exhibit 1). Since 2019, average single and family premiums both increased by 4 percent. During the past five years, the average premium for family coverage has risen 22 percent, which is more than inflation (10 percent) and workers’ earnings (15 percent).6,7

Exhibit 1 Average annual premiums for single and family coverage, 1999–2020

Exhibit 1
SOURCES Kaiser Family Foundation Employer Health Benefits Survey, 2018–20; Kaiser/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, 1999–2017. NOTES All estimates except for 2009, 2014, and 2016 single coverage are significantly different from the estimate for the previous year shown (p<0.05). The estimates for 1999 were not tested for statistical significance.

Average premiums for workers in PPOs were higher than average overall premiums for both single and family coverage. The average single premium for workers in HDHP/SOs was lower than the average overall single premium. The average single premium for workers at private, for-profit employers was lower than average single premiums for those in plans sponsored by public or not-for-profit employers. The average family premium was lower for workers in firms with a higher proportion of lower-wage workers than in firms with a smaller share of such workers (exhibit 2).

Exhibit 2 Average annual premiums and worker contributions for single and family coverage, 2020

Worker contribution
Premium ($)DollarsPercent
SingleFamilySingleFamilySingleFamily
All firms7,47021,3421,2435,5881727
Plan type
 HMO7,28420,8091,2125,2891726
 PPO7,880**22,248**1,3356,017**1828
 POS plan7,48520,4721,4196,2101932
 HDHP/SO6,890**20,3591,061**4,852**1624**
Region
 Northeast7,862**23,151**1,420**5,2261823**
 Midwest7,51521,6521,2775,5111826
 South7,296**20,593**1,2696,167**1831**
 West7,31720,390**976**5,06614**25
Firm size
 Small (3–199 workers)7,48320,438**1,1856,820**1735**
 Large (200 or more workers)7,46621,691**1,2665,112**1724**
Lower-wage workers
 Few lower-wage workers7,49321,486**1,2375,471**1726**
 Many lower-wage workers7,14819,332**1,3347,226**2038**
Higher-wage workers
 Few higher-wage workers7,218**20,524**1,2786,149**18**31**
 Many higher-wage workers7,717**22,147**1,2095,036**16**23**
Firm ownership
 Private for-profit7,209**21,2081,381**5,988**20**29**
 Public7,792**21,100865**4,724**11**24**
 Private not-for-profit7,830**21,7591,1735,26015**25**

SOURCE Kaiser Family Foundation Employer Health Benefits Survey, 2020. NOTES Data are weighted by covered workers. Wage cutoffs are based on Bureau of Labor Statistics Occupational Employment Statistics from 2018. Firms with few or many lower- and higher-wage workers are defined in the text. For plan type, significance denotes difference from “all plans.” For region and firm ownership, significance denotes difference from all other firms not in the indicated category. For firm size and wage level, significance denotes difference between levels within the category. HMO is health maintenance organization. PPO is preferred provider organization. POS is point-of-service plan. HDHP/SO is high-deductible health plan with a savings option.

**p<0.05

Covered workers, on average, contributed 17 percent of the premium for single coverage and 27 percent of the premium for family coverage in 2020 (exhibit 2). The family premium share was lower in 2020 than in 2019 (data not shown). Similar to previous years, covered workers in small firms contributed a higher share of the premium for family coverage (35 percent) than did covered workers in large firms (24 percent). The average dollar contribution from workers in all firms was $1,243 for single coverage and $5,588 for family coverage (exhibit 2). The family contribution amount was significantly lower than the average amount in 2019 but was similar to that in 2018 (data not shown).

Enrollment Across Plan Types

PPO plans had the largest share of enrollees in 2020, covering 47 percent of covered workers. Thirty-one percent of covered workers were enrolled in an HDHP/SO, 13 percent in an HMO, 8 percent in a POS plan, and 1 percent in a conventional plan (exhibit 3).

Exhibit 3 Distribution of health plan enrollment for covered workers, by plan type, selected years 1988–2020

Exhibit 3
SOURCE Kaiser Family Foundation Employer Health Benefits Survey, 2018–20; Kaiser/Health Research and Educational Trust Survey of Employer-Sponsored Health Benefits, 1999–2017; KPMG Survey of Employer-Sponsored Health Benefits, 1993 and 1996; Health Insurance Association of America, 1988. NOTES Fewer than 1 percent of covered workers were enrolled in a conventional, or indemnity, plan in 2012–14 and 2016–18. Information was not obtained for point-of-service plans in 1988 or for high-deductible health plans with a savings option (HDHP/SO) until 2006. See the Survey of Employer-Sponsored Health Benefits for a description of weighting changes over time, including in 2020 and 2005 (note 4 in text). HMO, PPO, and POS plans are defined in the notes to exhibit 2.

Thirty-seven percent of covered workers in small firms and 74 percent of covered workers in large firms were employed by a firm that offered more than one type of health plan to its workers in 2020. The number of plan types offered does not indicate how many health plans workers can choose from. Among covered workers in firms offering only one type of health plan, 56 percent were in firms that offered only one or more PPOs, and 24 percent were in firms that offered only one or more HDHP/SOs (data not shown).

There was a fairly large decrease in the percentage of covered workers enrolled in HMOs between 2019 and 2020 (exhibit 3). There is no clear explanation for this decrease, although one possible explanation is that the change in data collection firms affected how some plans were classified. Respondents do not always know what plan types they offer, and although we ask questions about plan attributes to help them make this choice, it can be difficult. The percentage of covered workers enrolled in an HMO in 2020 (13 percent) was not statistically different from the percentage in 2018 (16 percent).

Enrollment In Self-Funded Plans

Employers fund their health benefits by either purchasing insurance from a health insurer (insured plans) or paying the cost of some or all benefits directly, using the firm’s assets (self-funded plans). Sixty-seven percent of covered workers were in a self-funded plan in 2020—greater than the share in 2019 (61 percent). Covered workers in large firms were much more likely to be in a self-funded plan than those in small firms (84 percent versus 23 percent; data not shown).

In recent years a complicated funding option, often called level funding, has become more widely available to small employers. Level-funded arrangements are nominally self-funded options that package a self-funded plan together with extensive stop-loss coverage that significantly reduces the risk retained by the employer. The plan administrator (often an insurer) calculates an expected monthly expense for the employer, which includes a share of the estimated annual cost for benefits, a premium for the stop-loss protection, and an administrative fee. Thirteen percent of small firms said that their largest plan was a level-funded plan. In total, 31 percent of covered workers at small firms were in a plan that was either self-funded or level funded in 2020, which is significantly more than the 2019 level of 24 percent (data not shown).

Cost Sharing

Most enrollees share in the cost of care when they use services. Although the Affordable Care Act requires employer-based health plans to pay the full cost of care for certain preventive services, for other services, enrollees often must meet a deductible before their plan pays for some or most care. After the deductible is met, enrollees often must pay a copayment or coinsurance amount each time they receive services. A copayment is a specified dollar amount, whereas coinsurance is a percentage of the cost of services. Almost all plans have an out-of-pocket limit or a maximum liability that the enrollee is required to spend on in-network services. Federal laws require that plans cover the cost of testing for COVID-19 without cost sharing. Many fully insured group plans waived out-of-pocket spending for COVID-19 treatment for at least part of the year.8

General Annual Deductibles:

Most covered workers (83 percent) were enrolled in a plan with a general annual deductible for single coverage in 2020, similar to the percentage in 2019. For workers in a plan with such a deductible, the average deductible for single coverage in small firms was $2,295; in large firms it was $1,418. The overall average deductible for single coverage for workers in firms with a deductible was $1,644, similar to 2019 (data not shown).

Deductibles varied considerably around these averages. Among covered workers in small firms with a general annual deductible, 18 percent were in a plan with a single deductible of less than $1,000, and 31 percent were in a plan with a single deductible of $3,000 or more. Among covered workers in large firms with a general annual deductible, 35 percent were in a plan with a single deductible of less than $1,000, whereas only 7 percent were in a plan with a single deductible of $3,000 or more (data not shown).

Physician Office Visits:

Copayments remained the primary form of cost sharing when enrollees visited a doctor. Sixty-six percent of covered workers had a copayment for a primary care physician office visit in 2020, and 63 percent had a copayment when visiting a specialist. Average copayments were $26 for primary care visits and $42 for specialist visits. Twenty-three percent of covered workers had a coinsurance requirement for a primary care office visit in 2020, and 27 percent had a coinsurance requirement when visiting a specialist. The average coinsurance rate was 18 percent for primary care visits and 19 percent for specialist visits (data not shown).

Inpatient Hospital Services:

Most covered workers (84 percent) faced cost sharing if they were hospitalized, separate from any general annual deductible required under their health plan. Among covered workers, 65 percent had a coinsurance requirement, and 13 percent had a copayment. The average coinsurance rate was 20 percent, and the average copayment was $311 per admission (data not shown).

Availability Of Coverage

Fifty-six percent of firms with three or more workers offered health benefits to at least some of their workers in 2020, similar to 2019. Offer rates differed significantly with firm size: 53 percent of firms with 3–49 workers offered health benefits, compared with 92 percent of firms with 50–199 workers and 99 percent of firms with 200 or more workers (data not shown).

Although 89 percent of workers were employed by firms that covered at least some of their workers, many were not covered at their work. Only 82 percent of employees who worked for firms that offered coverage in 2020 were eligible to enroll in a plan offered by the firm, and of those, only 78 percent took up that offer. Overall, 64 percent of workers in firms offering health benefits were enrolled in a plan offered by their own firm, similar to the percentage in 2019 (data not shown). Changes in the overall economy, including business closures, work furloughs, and job losses, will shape the accessibility of employer coverage going forward.

Eligibility, take-up, and coverage rates varied with firm characteristics. The average shares of workers eligible for coverage, taking up coverage, and covered by their own firm were lower in firms with a relatively high share of lower-wage workers: 72 percent versus 82 percent for eligibility, 65 percent versus 79 percent for take-up, and 47 percent versus 65 percent for coverage at their own firm (data not shown).

Satisfaction With Provider Networks

Concerns over surprise medical bills have raised questions about the breadth and adequacy of health plan networks. There has been particular concern about services for mental health and substance abuse treatment, which have high rates of out-of-network use in large employer plans.9,10 We asked employers about the breadth of their provider networks and their satisfaction with the choice of networks available to them.

Among firms offering health benefits, 50 percent of small firms and 70 percent of large firms characterized the network of their largest health plan as “very broad,” and only 7 percent of small firms and 5 percent of large firms characterized it as “somewhat narrow” or “very narrow” (exhibit 4). Forty-five percent of small firms and 58 percent of large firms offering health benefits said that they were “very satisfied” with the choice of provider networks offered to them by their insurer or plan administrator (data not shown).

Exhibit 4 Among firms offering health benefits, how broad the firm considers their largest plan’s provider network to be, by firm size and type of service, 2020

Exhibit 4
SOURCE Kaiser Family Foundation Employer Health Benefits Survey, 2020. NOTES A broad network includes most doctors and hospitals in the area; a narrow network is one that is limited to a small number of providers. Small firms have 3–199 workers; large firms have 200 or more workers.

The picture was different for mental health and substance abuse services. Among firms offering health benefits, 35 percent of small firms and 37 percent of large firms characterized the network of their largest plan as “very broad” for people with mental health or substance abuse conditions (exhibit 4). Twenty-two percent of small firms and 24 percent of large firms said that they were “very satisfied” with the choice of provider networks. Among firms with fifty or more employees, 9 percent asked their health plan or administrator to increase access to in-network mental health and substance abuse providers within the past two years (data not shown).

Alternative Sites Of Care

Telemedicine:

The COVID-19 pandemic has focused attention on innovative and alternative methods of providing care to patients, including a broad range of digital communications and services that tend to be grouped under the broad rubric of telemedicine. Although before the pandemic we found that the vast majority of large employers covered telemedicine, relatively few enrollees used a telehealth service.11 We know that employers and health plans have expanded telemedicine options during the pandemic, and there has been a steep increase in telemedicine use.12 As noted earlier, the survey was fielded between January and July 2020, which includes periods both before and after the impacts of the pandemic became apparent. We did find significant increases in the shares of both small and large firms that offered telemedicine services in their largest health plan. This may reflect an underlying trend, responses to the pandemic, or increased awareness of the services.

In this survey, telemedicine refers to health care services provided through telecommunications to a patient by a provider in a different location. Eighty-four percent of firms with 50–199 workers and 89 percent of firms with 200 or more workers offering health benefits provided coverage for telemedicine services in their largest health plan. Among firms providing coverage for telemedicine, 43 percent of firms with 50–199 workers and 54 percent of firms with 200 or more workers had lower cost sharing for telemedicine than for a visit to a physician’s office (data not shown). Other analysis has shown that 52 percent of enrollees in the fully insured group market are in a plan that has waived cost sharing for telehealth services during the pandemic.12

Retail Health Clinics:

During the past few years, employers and health plans have added clinics located in supermarkets and pharmacies as an alternative for receiving preventive services or treatment for minor illnesses. Among firms with ten or more employees offering health benefits in 2020, 79 percent covered services provided in retail health clinics in their largest health plan. Among firms providing coverage for services delivered in retail clinics, 17 percent had lower cost sharing for a visit to a retail clinic than one to a physician’s office (data not shown).

Health Screenings And Wellness

Health Risk Assessments:

Health risk assessments are questionnaires that ask employees, and sometimes family members, about their medical history and lifestyle to identify potential health risks and problems. The answers can be used to target interventions and resources, such as wellness or disease management programs. Among firms offering health benefits in 2020, 42 percent of small firms and 60 percent of large firms provided their employees the opportunity to complete a health risk assessment (data not shown). Fifty-two percent of firms with 200 or more workers provided financial incentives to encourage their employees to complete the assessment (exhibit 5).

Exhibit 5 Among large firms offering health benefits, percent of firms offering various health promotion and wellness activities and incentives, by firm size, 2020

Exhibit 5
SOURCE Kaiser Family Foundation Employer Health Benefits Survey, 2020. NOTES Specific wellness programs include programs to help workers stop smoking, programs to help workers lose weight, and behavioral coaching. “All large firms” are those with 200 or more workers. Statistical tests are for significant differences between firm-size estimates within category. **p<0.05

Biometric Screening:

A biometric health screening is an in-person health examination conducted by a health professional to measure a person’s physical characteristics and health risk factors, such as cholesterol levels, blood sugar, blood pressure, and body mass index. Among firms offering health benefits in 2020, 33 percent of small firms and 50 percent of large firms provided their employees with the opportunity to complete a biometric health screening (data not shown). Thirty-two percent of large firms had financial incentives to encourage employees to complete the screening (exhibit 5).

In addition to having financial incentives to complete biometric screening, some firms have financial rewards or penalties tied to enrollees meeting specified biometric outcomes, such as maintaining their blood cholesterol or body mass below specified levels. Among all large firms, 9 percent had financial incentives tied to employees meeting biometric outcomes, similar to the percentage in 2019 (exhibit 5).

Wellness Programs:

Most firms offer educational programs to help workers engage in healthy lifestyles and reduce health risks. These programs may include online information and instruction, exercise programs and group activities, classes about health or nutrition, stress management, lifestyle coaching, or other similar programs. The program may be offered by the health plan, a third-party wellness provider, or the firm itself.

We asked firms offering health benefits about several specific types of wellness programs. Forty-one percent of small firms and 69 percent of large firms offered programs to help workers stop smoking or using tobacco, 36 percent of small firms and 58 percent of large firms offered programs to help workers lose weight, and 38 percent of small firms and 67 percent of large firms offered some other lifestyle or behavioral coaching program (data not shown). Overall, 53 percent of small firms and 81 percent of large firms offering health benefits offered at least one of these three types of programs.

Program Effectiveness:

Although many firms offer one or more health screening or wellness programs, not all believe that these programs are as effective as they would like. Two recent randomized studies of workplace wellness programs found limited effects on participants’ health or medical claims.13,14

In 2020 we asked firms offering these programs whether they believed they were effective at meeting certain objectives. Firms offering these programs have different objectives for different programs, so we offered respondents the opportunity to indicate that an objective was “not a goal of their programs” (exhibit 6).

Exhibit 6 Among firms offering health benefits and wellness or health screening programs, the firm’s opinion of how effective programs are at meeting various goals, by firm size, 2020

Exhibit 6
SOURCE Kaiser Family Foundation Employer Health Benefits Survey, 2020. NOTES “Reducing utilization” refers to reducing the use of health care services among enrollees. Health screenings and wellness programs are described in the text. Among large firms offering health benefits, 87 percent offer any of these programs, and 47 percent offer an incentive to complete at least one program. Among small firms offering health benefits, 68 percent offer any of these programs, and 16 percent offer an incentive to complete at least one program. Small firms have 3–199 workers; large firms have 200 or more workers.

In terms of health care use, or the amount of health care services used by enrollees, 16 percent of small firms and 8 percent of large firms said that their programs were very effective, and 8 percent of both small and large firms said that their programs were not at all effective.

In terms of improving enrollees’ health and well-being, 14 percent of small firms and 12 percent of large firms said that their programs were very effective, whereas 9 percent of small firms and 4 percent of large firms said that their programs were not at all effective.

When it comes to reducing the firm’s health costs, 16 percent of small firms and 11 percent of large firms said that their programs were very effective, and 16 percent of small firms and 9 percent of large firms said that their programs were not at all effective.

Other Employer Programs

We asked employers about several programs aimed at employees with lower wages and employees with chronic illnesses. For lower-wage employees, the increase in out-of-pocket expenses over time has raised concerns about affordability. Among firms offering health benefits with fifty or more employees, 7 percent offered programs to assist lower-wage employees with cost sharing such as copays or coinsurance (data not shown). When it comes to access to treatment for chronically ill employees, people with chronic conditions often face relatively high out-of-pocket expenses. Among large firms offering health benefits, 21 percent waived cost sharing for some medications or supplies to help employees with chronic diseases pay for their treatment. Firms with 5,000 or more employees were more likely (33 percent) to have a cost-sharing waiver than offering firms with 200–4,999 workers (20 percent; data not shown).

Firms had varied responses to expansions of the preventive benefit definition. In 2019 the federal government increased the number of prescription drugs and services that were considered preventive and that therefore could be paid for before a person who was enrolled in an HSA-qualified health plan met their deductible.15 Among large firms offering an HSA-qualified plan, 29 percent said that they changed the services or prescriptions that could be paid for by the plan before enrollees met their deductibles (data not shown).

Discussion

By the usual metrics—premium increases, offer and coverage rates, and changes in cost sharing—the market for employer-based coverage looks stable, and even quiet, in 2020. In the midst of the COVID-19 pandemic, these metrics do not tell the whole story, however: Virtually all health policy questions are now appropriately viewed through the prism of the pandemic. Unfortunately, the 2020 Employer Health Benefits Survey was designed and began collecting responses before the extent of the pandemic and the resulting economic crisis were understood. This means that the survey is not well suited to answering pertinent questions about the current status of employer-based coverage, including how many people lost coverage when they lost their jobs, how benefits were modified to address issues around safe access to health care, how many terminated employees elected COBRA benefits, how use and spending changed in response to the pandemic, and what plans and insurers anticipate for the coming year. We hope to address some of these questions in the 2021 survey.

Although employers face challenges with their health benefits, many also are simultaneously responding to other economic and workforce challenges.

Employers have faced—and continue to face—unprecedented challenges. Many have shown remarkable flexibility and innovation as they have responded to constraints forced on everyone by the pandemic, including employees working from home, social distancing and personal safety for workers and customers where workplaces remain open, and flexible work schedules to accommodate closed schools and other family needs. Compounding these challenges, employers face a dramatic economic contraction. Many people have lost their jobs, and future growth is uncertain. Although employers face challenges with their health benefits, many also are simultaneously responding to other economic and workforce challenges. We do not expect to see big changes in health benefit programs in 2021 as employers focus on more immediate issues, although many employers may continue to make changes related to access to care, including an expansion of telemedicine benefits and employee assistance programs.

Many employers and plans saw a reduction in health care use and spending in the first part of 2020. Although we do not know how much of this care will be forgone and how much will be delayed, both lower utilization rates and a weaker economy have reduced health costs for employers and health plans.16 Spending in 2021 remains uncertain, as employers may face the cost of new treatments for the pandemic and some pent-up demand from this year.

One issue that has come to the fore during the pandemic is mental health and well-being.1719 Public surveys show high levels of anxiety as the pandemic affects people’s family, work, and social lives. Sheltering at home has caused stress and personal isolation, which can be exacerbated when parents juggle the additional responsibilities of virtual learning and twenty-four-hour child care. Our anecdotal conversations with employers reveal deep concerns about the mental health of employees and their family members. One potentially positive development has been the expanded use of telemedicine to meet mental health and other health care needs. An analysis of utilization from Fair Health illustrated the many-fold increases in telemedicine use, with mental health services accounting for a substantial share of the increased volume.20 As the pandemic and accompanying economic uncertainty continue to take a toll on the well-being of workers and their families, increased access to mental and behavioral health services will likely become an ongoing issue for employers and society more generally.

ACKNOWLEDGMENTS

The authors thank Tricia Neuman (Kaiser Family Foundation [KFF]), Karen Pollitz (KFF), and Cynthia Cox (KFF) for their contributions to the instrument. Furthermore, they thank Ashley Kirzinger (KFF) for her advice on methodological issues; Lawrence Strange and Steve Paradowski (NORC) for assisting in interviewer training and computer-assisted telephone interview testing; Larry Levitt (KFF) and Drew Altman (KFF) for their review and guidance; and Jackie Cifuentes, Jason Kerns, and the staff at Davis Research LLC for their diligence in data collection. [Published online October 8, 2020.]

NOTES

   
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