New tool helps employers estimate COVID-19 benefit costs

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NFP, an insurance broker and consulting firm, has launched a new tool to support employers as they assess the effects of the COVID-19 pandemic on their benefit costs and strategy.

Some employers — because of where their employees are located, the demographics, and underlying health conditions and because the industry they're in is putting them at higher risk — have much larger potential expenses associated with the coronavirus than others do.

“The first thing we had to understand was what the chances are that an employee in your population will be infected,” says Rich Krekstein, managing director at NFP. “A law firm in central Pennsylvania and a hospital in New York City are not going to have the same risk factors. This tool helps employers understand their liabilities related to the cost of care of COVID-19 and also understand that that liability changes as the infection rates change.”

The tool uses proprietary models and artificial intelligence to project future infections, testing, diagnosis and treatment. Through a comparison of an established baseline of testing and positive infection rates in an employer’s state and country, the model can project estimated costs.

The modeling scenarios address testing and treatment costs for up to 180 days to ensure reliable projections using the latest data, which means that the tool doesn’t just show the current risk of infection, but also future risk. Refining the projections with recent data will help employers prepare and make informed financial decisions for future needs.

“We apply those [infection rates] to an employer’s demographic file to determine where those employees live and then update it on a daily basis, based on infection outbreaks in that particular county,” Krekstein says, noting the benefit for national employers with employees throughout the entire country, since it can predict the likelihood of infection for all those employees.

Through the modeling tool, employers can also get information on the cost of deferred services that are occuring due to the stay-at-home orders.

“COVID-19 is impacting employers in two main ways: one is direct cost and infections, and the second piece is the cost of deferred services,” Krekstein says. “We're only allowed to go to a hospital for emergency services, so if you had an elective service during that time period, it was rescheduled, which would be a deferred service.”

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