- The total cost to U.S. employee benefit plans caused by the COVID-19 pandemic could exceed $23 billion, according to a report published earlier this month by the Integrated Benefits Institute (IBI), a research nonprofit.
- That figure assumes a "high range" outcome in which the pandemic results in over 15 million U.S. cases, IBI said, and it includes estimates of costs due to short-term disability claims, potential sick leave wages and other benefits for workers absent due to COVID-19. The nonprofit estimated that up to 5.6 million employees could potentially be impacted.
- "As the numbers change daily, these findings are a very conservative estimate of coronavirus-related lost work time costs and excludes costs pertaining to paid family leave which was beyond the scope of this analysis," Thomas Parry, IBI's president, said in a statement.
While the $23 billion figure may appear staggering, employers might want to note that many variables — including the potential success of public health measures like social distancing — will influence the total number of COVID-19 cases as well as total costs.
IBI's "low-range" scenario assumes 4 million U.S. cases in total, including 1.5 million workers, while its "high-range" scenario assumes 15 million such cases, including 5.6 million workers. The current number of U.S. cases is fewer than 670,000 as of April 17, according to the Johns Hopkins University School of Medicine.
Much of the final cost from the pandemic may come from testing and treatment alone, according to a March analysis of self-funded employers by Willis Towers Watson. The most severe scenario projected by the firm, in which 50% of the U.S. population is infected with COVID-19, could result in employer healthcare cost increases of between 5% and 7%. Willis Towers Watson also estimated that costs per infected person could average $250 for mild cases and close to $100,000 for the most severe cases, including those that necessitate intensive care.
Access to paid leave has become one of the biggest conversations in HR during the pandemic. The federal government acted to expand paid leave access via the Families First Coronavirus Response Act, which amended the Family and Medical Leave Act and mandated paid sick time for certain scenarios related to the pandemic. As far as the private sector is concerned, however, the law applies only to small businesses with fewer than 500 employees, a number of which may be exempt from the requirements.
Other forms of accrued paid and unpaid leave may assist employees, but these may not be enough for those who contract COVID-19. "Even if employees have some sick days to fall back on, on top of everything else, they're going to lose about $2,000 in earnings if they contract coronavirus," Brian Gifford, director, research and analytics at IBI, said in the statement. "That's not only going to impact the US workforce, but also consumer spending when businesses try to restart after the pandemic."
Employers are exploring a number of avenues that can cut down on cost, and telehealth may be a natural consideration. Workers can use telehealth benefits to both determine whether they need to be tested for COVID-19 as well as help with some health concerns that aren't related to the pandemic, sources previously told HR Dive.
Certain regulatory requirements for benefits administration have been postponed in light of the pandemic. For example, the IRS has postponed the due date for employers required to file the Form 5500 Series for their employee benefit plans between April 1, 2020, and before July 15, 2020, according to attorneys with Jackson Lewis. Employers with original or extended due dates falling within that period now have until July 15, 2020, to make those filings, the attorneys said.