Businesses large and small put a pause on making large changes to their health plans, adopting a wait-and-see approach before switching plans.
Early in the pandemic, Matthew Renauro, founder and CEO of Lancaster-based online health insurance platform, Benefix, expected to see many of the 151,000 businesses using the platform switch plans and carriers to reduce costs as the economy took a hit.
What Renauro was surprised to find was that many of the businesses on the platform, all of which have between two and 100 employees, had no need to make dramatic changes to their staff’s health plans because most health insurance companies decided against raising premiums during the national crisis.
“If you were locked in at X premium a month in 2019 and it was flat in 2020, there weren’t a whole lot of reasons to switch,” he said. “For the most part, the PPP helped keep these small businesses afloat and be able to continue their coverage.”
Benefix is an all-in-one health insurance platform for small business benefits that allows brokers to quote, enroll and manage plans online. Where Benefix did see a change was in the number of brokers using the service.
The company’s revenue tripled in the past year and its sales cycle for enterprise deals now takes 65% less time than it did in 2019. That growth could be attributed to more brokers wanting to communicate with their clients through a completely online platform rather than visiting a brick-and-mortar locations, according to Renauro.
“There are all these indicators to show that the industry is changing and we are fortunate to have built a foundational platform and the infrastructure needed to support that growth and scale,” he said.
In a January 2021 survey of 100 organizations by Harrisburg employee benefit and investment advisory firm Conrad Siegel, a majority of the firm’s large business clients reported that they too were not making changes to their benefits packages in 2020.
Only 7% of respondents said they anticipated making changes to their health care benefits because of the pandemic while 54% expected that the pandemic wouldn’t materially increase or decrease estimated health care costs.
Roughly a third of the businesses in the report said that they expected the pandemic to increase overall estimated health care costs.
“Those numbers aren’t surprising, they are relatively consistent with what I saw in my clients,” said Rob Glus, a partner and consulting actuary at the firm. “People had enough to work on during the pandemic. They didn’t want to change their health plans and the last thing you want to do on top of that is make changes to the medical program.”
One of the businesses included in Conrad Siegel’s report was Lancaster-based High Company LLC. High has more than 2,000 employees with 1,400 of those enrolled in its medical plan and did not increase contributions for its employees from 2020 to 2021.
Last year, High saw a significant increase in virtual appointments and a decrease in preventative services. Liz Ford, the company’s compensation and benefits director, said she and her team tried to emphasize mental health benefits through its insurer, Capital Blue Cross, and its employee assistance program.
This year, High will try to get more employees to do preventative services such as mammograms, colonoscopies and physicals since many people missed out on such services during quarantine, Ford said.