COVID-19’s impact on coverage

by | Dec 12, 2020 | Take 5 Articles

The majority of plan sponsors stepped up and maintained coverage for laid-off employees during the early months of the pandemic.

Job losses peaked at 1.9 million during the period from February to April, stated Paul Henricks, associate director of data innovation and insights at PDCI MARKET ACCESS, at a virtual conference hosted by the Group Insurance & Pharmaceutical Committee in November (slide deck not publicly available). Meanwhile, the number of Canadians (including dependents) who lost coverage from a private health benefit plan due to job loss peaked at approximately 729,000.

The PDCI analysis builds upon the findings of the Canadian Life and Health Insurance Association. IN A STATEMENT released on September 16, CLHIA states: “Industry-wide data collected over the past six months shows that 98.5 per cent of the 27 million who had coverage through their health benefit plans in March continue to be covered.”

As job recovery continues, PDCI projected that 99% of Canadians who had coverage in March would have coverage by the end of September.

PDCI modelled a pattern of lost coverage over the six-month period from March to April, with a forecast for September. For plan members affected by job disruptions, PDCI estimated the number who lost their benefits entirely as well as those who experienced an increased copayment burden due to lost income or the loss of coordination of benefits.

Loss of coverage peaked in May, when 2.7% (about 729,000) of previously covered lives no longer had private coverage due to job loss (up from 0.8% in April). This declined to 2% in June, 1.8% in July, 1.5% in August and 1.0% (about 240,000 lives, projected) in September.

An increased copayment burden climbed from 1.8% in March to a high of 6.7% (about 1.8 million lives) in April. It declined to 4.3% in May, 3.1% in June, 2.9% in July, 2.4% in August and 1.6%, (about 440,000 lives, projected) in September.

Henricks also stated that, as of September, Canada’s seasonally adjusted employment trend shows that 68% of job losses observed from February to April have been recovered. Rates of recovery vary by region: from below 60% in B.C., Alberta and P.E.I. to more than 80% in Quebec, Manitoba and Newfoundland and Labrador.

This article is part of The Benefits Alliance Take 5 for Health Benefits. Take 5 is a quarterly initiative that provides a deeper look a the employee benefits space by providing examples, research and case studies on what’s working for employers in Canada.