Originally posted in partnership with PICPA.
By William J. Hayes, PICPA Administrator of Content & Partnerships
On Dec. 2 and 3, 2021, the PICPA will hold its 2021 Insurance Conference live via webcast. The impact of COVID-19 on the insurance industry will be featured, presented by three representatives of McConkey Insurance & Benefits: Jeffrey A. Glass, vice president and principal; Edward A. Tobin, director of claims; and Chris J. Rice, executive benefits and financial services consultant. The trio offered us a few moments of their time to answer questions about what attendees will learn at the upcoming conference.
What are some of the different methods available for funding group health care plans?
Glass: There are multiple methods to consider for financing group health care plans. Traditional fully insured programs are still popular (especially for employer groups with 20 or fewer covered employees), but there has been tremendous growth in self-funding options (or variations of self-funding) for groups with 20 or more covered employees.
In addition to standalone fully insured plans, employers with more than 20 covered employees can now consider standalone “level-funded” self-funding programs, standalone “pay as you go” self-funding, and a host of proven group purchasing programs that leverage group purchasing power to access wholesale discounts. In addition to lower costs, group purchasing of self-funding programs have proven to deliver more transparency, services, and stable renewals to employers versus the standalone market options.
Has COVID-19 affected workers’ compensation claims? Do you see any notable changes or issues?
Tobin: At the outset of the pandemic, insurance carriers and the defense bar were preparing for what many presumed would be an onslaught of new cases and complex legal issues surrounding COVID-19 in the workers’ compensation setting. To the surprise of many, COVID-19-related claims remain relatively low compared with total yearly workers’ compensation filings. Many attribute the lower-than-expected claim rate to the difficulty in securing medical evidence that clearly satisfies the issue of demonstrating legal causation.
Recent statistics estimate that about 15,500 claims were submitted in Pennsylvania alleging work-related COVID-19 exposure. Of those claims, an estimated 1,800 were acknowledged by the carrier as work-related. Approximately 6,500 were denied outright. The remaining claims were litigated or disposed of as “temporarily compensable” following the initial investigation and findings.
The health care and nursing/elder care industries made up the largest percentage of COVID-19-related workers’ compensation claim filings. To date, there have been no changes to the Pennsylvania Workers’ Compensation Act or Occupational Disease Act providing a “presumption” of work-related exposure for those working in fields often presumed to be more at risk of exposure. (i.e., health-related, correctional-related, residential care). The state legislature similarly did not alter state law or the evidentiary burdens already in place.
An unforeseen off-shoot born of the pandemic has been an increase in “at-home” work-related injuries. These claims can be difficult given the inherent lack of corroborating evidence and a general lack of control the employer has investigating allegations. Claims adjusters remain vigilant when investigating. Proper documentation and detailed statements taken after an alleged incident are more important now than ever.
Have there been any developments in life or long-term-care insurance coverage because of the coronavirus?
Rice: It should be noted upfront that long-term-care insurance is not “nursing home insurance.” COVID-19 has raised interest in home care, or nursing care given in one’s existing residence. Most long-term-care insurance policies pay for care received anywhere. This fits the demand to create a financial structure to be able to pay for long-term care at home.
A negative impact of the pandemic on long-term-care insurance has been more stringent underwriting standards. Previously, most policies only required a questionnaire/telephone interview and review of medical records. Many carriers now require an in-person medical exam if the application or telephone interview shows a cause for concern.
As time goes by, hybrid life/long-term-care insurance policies are becoming more popular compared with traditional long-term-care insurance policies. The main reason for this is that most hybrid policies guarantee no increase in premiums and provide a death benefit if the long-term care benefit is never used. Traditional policies are “use it or lose it,” so if you do not use the long-term care benefit, you could potentially get nothing for ever-increasing premiums. The amount recoverable to beneficiaries in a hybrid policy varies, but it is usually at least the amount of premiums paid into the policy if no benefits have been paid out previously.
For more information on the impact of COVID-19 on the insurance industry, as well as sessions on insurance taxation, statutory accounting, the economic and capital market outlook, and more, make sure to register for the Dec. 2-3 PICPA Insurance Conference.