Updated January 7, 2020
In recent years, telemedicine has begun to transform how patients obtain outpatient healthcare services. With benefits for both employers and employees, this is a service that more employers are including in their health plan coverage and you may want to include in your small business health insurance group plan as well.
Telemedicine utilizes modern communications technologies to provide patients with remote access to healthcare service. It is primarily used for outpatient services, where there is not a need for hands-on care. For example, patients might make telemedicine appointments if they have a cough, fever, stomach issues or similar symptoms.
The definition of telemedicine encompasses both phone conversations and online video chats, so medical providers have technically been able to offer these services for some time over the phone. The increase in video chat’s popularity, however, has rapidly accelerated the adoption of these services.
For employers, telemedicine can help mitigate increasing health insurance plan costs. Telemedicine appointments generally bill for less than comparable in-office services, which means insurance companies do not have to pay providers as much for claims. These savings help insurers keep premiums more affordable for employers and employees, ultimately lowering both parties’ premium payments.
Because small business health insurance group plan premiums are so high, any way they can be kept in check is welcome by employers. The average annual premium for an employer-sponsored family plan was $20,576 in 2019, and employers commonly ended up paying around $14,561 of this for each employee who had a family plan. At over $14,500 per employee family plan, just a small reduction in premium costs results in substantial savings.
The advantages that telemedicine can offer employers are confirmed by how many businesses have chosen to include it in their plans’ covered services. Since 2015, there has been nearly a 50-percent increase in the number of employers who have plans that cover telemedicine, with just 27 percent including coverage in 2015 and 74 percent offering coverage in 2018.
For employees, the benefits of telemedicine are obvious. In addition to any financial incentives offered by a plan (and many group plans offer incentives), it is far easier to get treatment remotely than by going to an office, clinic or hospital. This is especially true when seeking after-hours care, trying to manage childcare and/or work needs, when living in a remote location, or during inclement weather.
Telemedicine is not right for every situation, but it is a very attractive option when it is a viable and medically responsible one.
The total number of telemedicine appointments remains quite small — just over 0.5 percent of all claims according in one dataset — but the numbers suggest that employees might be quickly making the switch to the more convenient care.
For one, this data only goes through 2016. It does not reflect 2017 and 2018 numbers, when employers were adopting the service at a rapid rate. Many more employees may have tried these services in the past two years since 2016.
Additionally, the percentage of telemedicine claims has increased dramatically between 2013 and 2016. Even though the total number of these claims accounted for just 0.51 percent of all claims in 2016, that was more than six times the 0.08 percent rate in 2013.
According to the Mercer National Survey of Employer-Sponsored Health Plans 2019, while almost 9 out of 10 large employers offer a telemedicine program to their members, utilization is growing slowly. In 2018, an average of 9 percent of eligible employees used telemedicine services, up from 8 percent in 2017.
While not as conclusive as the employer data, the employee data certainly suggests that more and more employees are using telemedicine because of its convenient care.
Deciding on telemedicine for your small business health insurance group plan
Determining whether telemedicine is a service that your business should include in its employer-sponsored small business health insurance group plan is ultimately a decision that you must make based on the specific circumstances surrounding your business and employees. Keep in mind, though, that providing any extra benefits (and especially benefits that employees use) could help your business attract more quality employees, improve overall employee satisfaction and reduce annual turnover.
For help assessing your business’ situation and whether telemedicine makes sense for your employees, contact one of our knowledgeable agents. Small business health insurance agents are available from 8:00 a.m. to 8:00 p.m. EST and would be happy to help you make a decision that is right for your company.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.