Large Group ERISA Health Plans Have Been the Launch Pad of Digital Health Innovation

58 percent of nonelderly Americans access their healthcare with employer- sponsored health insurance. Employer coverage helps make quality health care affordable, with the average business covering 82 percent of the cost of health insurance premiums for single coverage and 71 percent for family coverage. For businesses and workers alike, there are tax advantages to employer-sponsored health coverage since health insurance is exempt from income taxation, making a dollar of health coverage worth more than a dollar of salary compensation. Accordingly, health coverage is consistently ranked as the most valued employee benefit, and surveys consistently show that Americans are overwhelmingly satisfied with the health coverage they get through their large employer.

What is often overlooked is that large employers have not only been picking up most of the cost of healthcare over the last decade, they have also been the primary sponsors of digital health innovation that improves quality of care and health outcomes. Large employers — such as Microsoft, Google, and Accenture, who offer large group health plans governed by the federal Employee Retirement Income Security Act of 1974 (ERISA) — have recognized that healthy employees are more productive. By focusing on wellness, preventive (and more expedient) care, and chronic disease management, a business can help ensure its workers can focus on their job rather than on health concerns.

Outlined below are three of the most popular digital health programs that were first trialed and have now become a mainstream part of large employer ERISA plans:

WELLNESS PROGRAMS

Workplace wellness programs accomplish two main goals — keeping employees physically and mentally healthy and reducing health care costs. Wellness programs range from digital health assessments and behavioral health awareness to a host of other programs that improve health such as fitness classes and competitions, nutrition counseling, and smoking cessation programs. Employees often think of “wellness” as proactive illness prevention and chronic condition management.

MOBILE HEALTH AND TELEMEDICINE

Mobile health is the provision of healthcare performed remotely by means of phone, tablet, and computer. Close to half of doctors are now using telemedicine to treat patients as the COVID-19 pandemic changes how physicians deliver care. That’s up from 18 percent of physicians using telemedicine two years ago according to The Physicians Foundation’s “2018 Survey of America’s Physicians.” Mobile apps also help patients schedule visits, provide medication reminders, offer advice on nutrition and risk mitigation, and connect patients with specialists. Telemedicine consultations lead to significant cost savings as mobile consultations are typically 1/3 the cost of an office visit ($125 or more).

WEARABLE TECHNOLOGY

Wearable technology in healthcare includes electronic devices like smartwatches, which are designed to collect the data of users’ personal health and exercise in real time. 35% of America’s Healthiest 100 Employers promoted wearables in their workplace wellness programs. These devices, often used in connection with employer wellness programs, can also help employees lower their health insurance premiums by improving employee good health.

Looking forward, the big question is how to extend the advances in wellness and digital health made under large group health plans to other segments of the U.S. health insurance industry. Two very underserved and fragmented segments of the U.S. health insurance market — the small group market (covering 51 million Americans) and the individual health plan market (covering 17 million Americans) — have seen little adoption of the digital health programs described in this article. Legacy regulations existing in these two markets have blocked or delayed the integration of proven wellness and digital health programs into the “off the shelf” small businesses and individual health plans that exist today. As a consequence, small business and individual health plans have fallen far behind large group ERISA plans both in terms of quality of health outcomes and affordability — two measures that are closely intertwined. The most logical and immediate way to fix this inequity is to allow small businesses, sole proprietors, and freelancers to purchase ERISA large group plans directly.