What Should I Know?

Employers that self-fund their health care benefits could see costs jump by as much as 7% this year as a result of testing and treatment costs related to COVID-19, according to an actuarial analysis by Willis Towers Watson.

The new Families First Coronavirus Response Act passed enacted in March, requires insurance plans to cover tests and medical visits that result in COVID-19 diagnostic testing, without cost-sharing or prior authorization.

How to Prepare Your Plan

Nearly 60 percent of Americans under age 65 are covered through their employer’s health plan. Health plans must cover approved diagnostic tests as well as health care provider office, urgent care center, telehealth, or emergency room visits that result in orders for diagnostic testing insofar as the services received during the visit relate to testing or determining the need for testing. The coverage cannot impose cost-sharing (i.e., deductibles, copayments, and coinsurance) and cannot be subjected to prior authorization or other medical management requirements. If the visit does not result in a COVID-19 test, or provides services unrelated to COVID-19 testing, it can be subject to cost-sharing or perhaps not even be covered. These requirements start at the date of enactment of the Response Act and last through the duration of the national COVID-19 emergency.

Multiple variables effect the potential outcomes. As the landscape evolves both externally and in your organizations, it will be essential to track the scenarios as the develop with a forward looking eye. Mercer has developed a framework for developing cost projections.

To update 2020 claims estimates, Mercer says employers need to start with their current 2020 estimate and make three adjustments. The first adjustment covers the costs related to individuals who receive a test, the second is for those who test positive and require treatment, and the last is an adjustment to reflect changes in how employees are consuming non-COVID-19 related medical services. Specifically, Mercer is seeing a reduction in non-critical “elective” services that could offset total costs.

Although only 5% of employers with self-funded health insurance already have a financial impact assumption, 21% say they have begun modeling it, according to Mercer. Among those that provided their working assumption, for about half it’s 5% or below, and for half its 6% or higher.


COVID-19 is changing the business landscape for health plans on a day-to-day basis.

  1. Wave member cost-sharing for in-network COVID-19 hospital care.
  2. Wave member cost-sharing for in-network COVID-19 testing.
  3. Expand telehealth services.
    • Utilize technologies such as FaceTime, Skype, etc. As well as audio only when video is not available.
  4. Wave prior authorization requirements.

Getting ahead of the curve can help to reduce this overall impact on a health plan.

Your Health Plan’s Coverage for COVID-19 Testing

The Families First Coronavirus Response Act requires health insurance issuers offering group or individual health insurance coverage to provide coverage and not impose any cost sharing (including deductibles and copays) for COVID-19 testing, as well as health care provider office visits, urgent care center visits, and emergency room visits. The bill also requires coverage of testing with no cost sharing under the Medicare Advantage Program, Medicaid and the State Children’s Health Insurance Program. The bill provides laboratory reimbursements for diagnostic testing of COVID-19 for uninsured individuals.

If you have any questions or would like some additional information, we are always here to help.

Vengroff Williams is an industry leading health plan subrogation provider to multiple Fortune 500 and Global 2000 firms.