SIDEBAR Summer/Fall 2020 - 13

MONTGOMERYBAR.ORG

SHOULD EMPLOYERS PASS ON
COVID-RELATED PREMIUM
INCREASES TO EMPLOYEES?

W

hile most industry professionals would agree the
COVID-19 pandemic will impact health insurance
premiums, few have a grasp yet on just how
significant any increase will be. Until we know more, one
question employers might want to consider thinking about is
whether they should pass any increase on to employees.
Although many employers have traditionally passed on
parts or all of an annual premium increase to employees in
the past, doing so at this time might not be a good strategy.
Although bearing the extra cost for healthcare insurance might
place extra weight on the employer's bottom line in the near
term, by looking at the long-term picture, there might be
some solid reasons to avoid doing so. Here are a few points to
consider:
* Although many employers have been impacted
significantly by the COVID-19 crisis, many employees
have suffered even more. In addition to the strain on their
personal finances, some have also felt the pandemic's effects
quite emotionally through illness and deaths of those they
love.
* Higher health insurance costs or increased deductibles
and copays, especially during this time when their financial
situation may already be compromised, could lead
employees and their covered dependents to skip preventive
healthcare or necessary medical procedures. This in turn

can have significant impacts on the employer, both in
terms of productivity loss and higher healthcare costs down
the road if and when any untreated medical conditions
worsen.
* Many contemporary studies show that employee
well-being is more likely when workers are engaged in a
pro-healthcare office environment. Passing on increases
or raising cost-sharing through copays and deductibles
can sabotage the level of employee engagement and can
lead to a reduced level of employee happiness and greater
employee absenteeism and turnover, all of which can
impact the employer's bottom line.
Most employees will be very appreciative that their
employers chose to treat them well during this time when
they struggled financially. Employers should consider the
benefits...increased employee productivity, enhanced loyalty
and improved morale, before deciding on whether they should
pass on any COVID related increases to their workforce.
The Montgomery Bar Association offers its members access
to My Benefit Advisor as a solution for employee benefits,
including voluntary offerings. For more information about My
Benefit Advisor, visit our website at montba.mybenefitadvisor.
com or contact Ray Keough at (610) 537-1393.

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SIDEBAR Summer/Fall 2020

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