Telemedicine Crushed It in 2020. Will the Service Be Just as Amazing in 2021?

By: Terri Rhodes | April 21, 2021

Terri L. Rhodes is CEO of the Disability Management Employer Coalition. Terri was an Absence and Disability Management Consultant for Mercer, and also served as Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

The pandemic has changed a lot of things — online shopping, at-home entertainment, work arrangements, take out and food delivery — and telemedicine.

Advancements in computers, phones and artificial intelligence made telemedicine possible years ago; however, policy stood in the way of activating it.

It took a pandemic and relaxed federal government regulations to enable implementation. Prior to the pandemic, almost one third of provider organizations did not utilize telemedicine.

Then in March 2020, the country all but shut down. In April, visits for outpatient care had fallen nearly 60%. If medical visits, including mental health, were to continue at all, telehealth had to expand. Doctors, therapists and employers adapted.

Medicare began compensating physicians for a broader range of telehealth services, and enforcement of certain HIPAA restrictions were effectively waived — allowing doctors to treat patients and prescribe medication using the Internet of Medical Things.

A year later, telehealth is now an accepted and established part of the U.S. health care system. According to a report from Rock Health, live video telemedicine was used by 43% of patients in 2020.

As is the case with other online technologies, adults 35-54, higher-income earners, highly educated individuals and those with chronic conditions were the early adopters. Individuals who were 55 and older, located in rural areas, and who had limited education were less likely to use telemedicine.

Changes in Insurance Coverage

The accelerated adoption of telehealth has been met with changes in insurance coverage — including those mandated by the government. For example, West Virginia introduced a bill in March that would require insurers to cover the same services for telehealth they would cover in-person beginning in July 2021.

If passed, it would be the first such law in the state.

In Arizona, a 2020 law mandates commercial insurers cover more forms of care via telehealth — such as remote patient monitoring and asynchronous visits. Payers must also cover telemedicine visits from all specialties, according to legislation that went into effect this year.

With these and other new laws, all but seven states now have some requirement on the books for how commercial insurers should cover and pay for telehealth.

New Opportunities for Collaboration

Telemedicine has not only helped insurers and patients; it has also helped the health care industry during the pandemic. Telemedicine technology has made it possible for doctors and hospitals to collaborate with one another in new ways and pool resources at critical times.

Banner Health, a nonprofit system of hospitals in six states, saw a rush of COVID-19 patients in 2020. The organization worked with Intel and the telehealth platform VeeMed to bring advanced telemedicine software to over 1,000 in-room televisions across Banner’s 28 facilities.

This allowed specialists in infectious disease, pulmonology, critical care, cardiology and nephrology to see more patients without risking transmission.

Telemedicine may also be an answer to upcoming health care challenges.

As more than half a million registered nurses are predicted to retire by the year 2022, telehealth could help ease this drop-off of on-site personnel by allowing physicians, and even nurses in different locations, to provide medical support to patients virtually. This means more remote health care positions could become available — opening new opportunities for those entering the health care industry.

Advantages for Employers

Telemedicine also has advantages for employers.

Less time away from work means higher productivity. And while it’s still too early to tell, increased convenience could lead to more utilization of the kind of care — preventive and mental health — that reduces absence and other costs.

This is especially the case with therapy and counseling. The proliferation of employer-provided stress management resources, including phone apps, has made mental health-related care easier than ever to obtain.

It’s also likely reduced real or perceived stigma. Any increase in the utilization of mental and behavioral health resources is good news for increased productivity and reduced absence, disability and total employer health care costs.

Telemedicine and the Future Workforce

If we have learned anything from this pandemic and the resulting shift to telemedicine, it is that we need to pay attention to the future of our workforce.

According to the Pew Research Center, millennials make up 73 million of the U.S. population. According to several studies, they have trust issues with the health care system, and they tend to look for faster responses that leverage technology such as self-service portals, online appointment scheduling and telemedicine.

The studies indicate the following about millennials:

77% have used a phone to find information about a health condition.
74% value being able to schedule their appointment through a mobile application.
64% would be open to virtual care treatment options as an alternative to in-office visits.
52% would choose a primary care physician who offers virtual care treatment options over one who does not.

The Continued Role of the Federal Government

The federal government will also continue to play a role, especially when it comes to leave and disability. Last year, in a major move, the U.S. Department of Labor (DOL) issued COVID-related guidance that, under certain circumstances, telemedicine is the equivalent of an in-person visit.

On Dec. 29, 2020, the DOL made this permanent for determination of eligibility under the FMLA. To be considered an in-person visit, a telemedicine visit must be an exam, evaluation or treatment by a health care provider; be permitted and accepted by state licensing authorities; and should be a video conference.

In the first session of the 2021 DMEC Virtual Compliance Conference in March, the DOL’s Helen Applewhaite reiterated that this change is permanent.

Not all is rosy though; there are some disadvantages of telemedicine. Telemedicine may not provide a full view of an illness or injury. There is a potential risk of missing minor signs and symptoms, which can lead to incomplete or inaccurate results.

The telehealth policies and reimbursement rules associated with the industry are still developing. Privacy concerns, difficult-to-use software, poor internet/phone connections and loss of power can impact use and satisfaction.

Even though significant strides have been made, there are still challenges for patients and health care providers who are interested in adopting telemedicine practices.

Overall, the advantages outweigh the possible disadvantages. More investment by both the private and public sectors — including increasing broadband in rural areas and educational efforts among patients who may not know about or trust remote medical care — are needed.

Given telemedicine’s low risks and high rewards, those investments and outreach programs are almost certainly on the horizon. For employers, this will mean new ways to deliver health care to their employees and changes in how absence and disability is managed. &

Vermont’s Future Is Golden

Challenging market conditions are driving insureds to captives. Vermont offers a reliable domicile.

Hard markets in commercial insurance lines have been a problem for years now. Many lines don’t show signs of softening, though some, like cyber, have ebbed over the past few years.

High claims volumes and costs have caused carriers to tighten terms and conditions, introduce new exclusions and increase premiums. A variety of different risks are included in this market tightening, and it’s affecting both public and private companies.

As Sandy Bigglestone, deputy commissioner for the State of Vermont’s captive insurance division, explained, schools, churches and other nonprofits are contending carriers are “excluding sexual abuse and molestation from coverage for a lot of these types of entities. These organizations understand the risk and the public needs to have confidence the organizations are addressing the risks, so they must have the coverage.”

Though many commercial lines are affected, property has perhaps been hit the hardest. Increased claims, inaccurate property valuations and other challenges have caused insurers to tighten their books in recent years. 2024’s spate of hurricanes will likely make matters worse.

“There continues to be challenges in the commercial market,” Bigglestone said. “Some companies are coming to us with risks that they say they’ve been self-insuring on their balance sheet, and why not transfer that to a captive to receive greater benefits?”

Consistency and Stability

Sandy Bigglestone, Deputy Commissioner for the State of Vermont’s Captive Insurance Division

With the commercial insurance market so unstable, companies are turning to captives to house their exposures. Vermont, a long-time domicile, is getting increased attention because of their strong reputation and their leadership as the top domicile worldwide.

“All stakeholders enjoy the stable political and regulatory environment Vermont has to offer to operate in,” Bigglestone said.

Of course, a lot of consideration goes into deciding whether or not a captive is the right choice for a particular company. Businesses need to assess their exposures and their books to make sure they can adequately operate a captive.

There are significant advantages, however. “For low frequency, high severity risks, captives can access the reinsurance markets directly, so it’s very attractive for businesses to put a captive in place,” Bigglestone said.

And carriers are more accepting of captives as part of a broader insurance program.

“Captives are changing the relationship businesses have with commercial carriers,” Bigglestone said. “Commercial carriers are wanting to see companies with skin in the game; therefore, the relationships have evolved to be less transactional and more strategic.”

Balancing Bureaucracy

With 76 global domiciles, companies have a lot of options when it comes to selecting a captive partner. “Captive insurance domiciles compete globally for the business,” Bigglestone said. “If you were to put all 7,000-plus captive insurance companies around the world, all in New York, it wouldn’t have the same economic impact as 700 captives in Vermont does. The captive insurance industry is very important to our state and we will continue to support it in any way we can.”

Businesses should look for domiciles that balance a need for quality regulations with a process that isn’t overly bureaucratic and is seamless for business owners to navigate.

“Companies are attracted to an environment with quality regulatory standards and a stable regulatory environment,” Bigglestone said. “Vermont sets the regulatory standard in terms of financial analysis and examinations.”

In addition to quality regulations, firms will want to seek out a domicile that is agile enough to license captive insurance companies that fit their unique needs. It is important that a domicile have firm but fair regulation and the experience to consider new ideas and implement them. Companies must consider a variety of factors when choosing a domicile and not everyone will be the right fit for every company.

“You have to consider the captive owner and the industry sector that that owner operates in, as well as the insurance risks that are going into the captive program,” Bigglestone said. “Captive laws and regulations have to have a reasonable degree of flexibility to accommodate all the varying needs of owners and then impose rules based on the merits of each captive program.”

She added that creativity is a critical part of the process: “The ability to vet concepts and ideas with trusted individuals is key to having quality standards,” Bigglestone said. “And it can make captives appealing to insureds who are tired of commercial carriers not meeting the needs of the business, and who desire more control over their insurance programs.”

“When you think about the commercial marketplace, commercial insurers are supposed to operate in each jurisdiction in a competitive manner. Commercial carriers often look the same. They sell auto coverage to anyone with a driver’s license. The rules and regulations imposed upon commercial insurance companies are designed to be more formulaic for that reason,” Bigglestone said.

“Uniform regulatory standards apply to commercial carriers for the protection of the policyholders. These are standards all insurance regulators focus on, and standards captive insurance regulators need to understand, but with a specialized focus.”

A Quality Domicile Built for the Future

A combination of experience, regulatory standards and talent make Vermont a top domicile for companies looking to form a captive. The longevity of licensing captive insurance companies for over forty years is a testament to the quality work they’ve provided in the past and will continue to provide for many years to come.

Vermont’s reputation has helped the state attract and retain top captive talent, ensuring the businesses it serves are in good hands. The state has 32 employees dedicated to captives, and their average employee retention is 15 years. The Vermont Captive Insurance Association, the largest captive insurance trade organization, also helps companies connect with professional services needed to make their captive successful.

“There’s a whole host of service providers with proven expertise right here in Vermont,” Bigglestone said.

Taken together, Vermont’s resources, expertise and talent make it a prime domicile. They’ve been on a growth trajectory over the last few years and that’s unlikely to change anytime soon. Companies can trust their captive will be in good hands when they choose Vermont.

“Vermont has always competed on quality,” Bigglestone said. “We do have a mission and that hasn’t changed in over 40 years. It’s to maintain a system, or domicile that attracts quality business to Vermont, to promote our reputation in the industry, and to uphold a regulatory framework to protect the solvency of the companies that choose to place their business here.”

To learn more, visit: www.vermontcaptive.com

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with State of Vermont. The editorial staff of Risk & Insurance had no role in its preparation.

The State of Vermont, known as the “Gold Standard” of captive domiciles, is the leading onshore captive insurance domicile, with over 1,200 licensed captive insurance companies, including 48 of the Fortune 100 and 18 of the companies that make up the Dow 30.