2020 kicks off to a promising start: women are making headway in the labor market and hold more than half of all U.S. jobs. California’s contentious new gig worker law, AB 5, goes into effect, and is immediately met with resistance from Uber, Lyft and other gig-economy companies. Speaking of employment law, the National Labor Relations Board scores a $76 million win (the largest on record) for contractors suing CNN in a dispute that dragged on for 17 years, in which the news giant was accused of anti-union practices. COVID-19? What’s that? Though the virus that will come to dominate the headlines of this year has already taken root in China, the United States does not have its first confirmed case until January 21. The Department of Health and Human Services declares a public health emergency on January 31, but the impact on U.S. citizens initially remains minimal. ACA lawsuit watch: Racing the political clock, Democrat Attorneys General ask the Supreme Court to fast-track its review of the legal challenge to the ACA, but the court declines to rush its review.
Design by Chris Nicholls
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3.6%
AB 5 protest: RozenskiP/Shutterstock
3.5%
Another sign of the rosy economy: Fidelity reports that 401(k) balances have hit an all-time high, averaging $112,300—nearly double 2009’s average balance of $62,600. In other finance news, Morgan Stanley announces plans to buy E-Trade Financial for $13 billion, and benefits broker OneDigital shells out $45 billion to buy RIA Resources and move into the retirement space. Meanwhile, HR software giants Kronos and Ultimate Software announce merger plans. Senator Edward Markey and Representative Alexandria Ocasio-Cortez unveil their version of the Green New Deal, a much-publicized (and criticized) plan for transitioning the country to 100% renewable energy. While the plan is DOA, it highlights the increasing focus on climate change and its impact on the economy. Consequently, ESG (Environmental, Social and Governance) investing will be an ongoing topic throughout the year, both among financial planners and company CEOs. The first death attributed to COVID-19 occurs in Seattle (though later investigations would suggest the virus was spreading undetected in California much earlier) casting a shadow on the rest of the year as panic sets in.
Ocasio-Cortez: Rachael Warriner/Shutterstock
4.4%
COVID-19 outbreaks take root in key metropolitan areas as well as in media headlines. On March 13, President Trump officially declares the virus a national emergency. States and businesses quickly shut down, and employers pivot to a remote-work model. Congress passes the Families First Coronavirus Response Act (FFCRA), which provides key paid- and sick-leave benefits for U.S. workers. This is followed by the Coronavirus Aid, Relief and Economic Security (CARES) Act, which provides $2.2 trillion in economic stimulus funding, including the Paycheck Protection Program, a forgivable-loan program aimed at small businesses. Despite these efforts, a record 3.28 million file for unemployment in the final week of the month. All told, the health care industry will lose 43,000 jobs during March alone. The pandemic sparks a shift in health care, as insurers vow to waive-cost sharing requirements and states reopen their ACA exchanges (though the federal government declines to do the same for its Healthcare.gov platform). Loosened restrictions, as well as stay-at-home orders, will also drive a surge in telehealth use, which, according to one estimate, sees a 4,347% in March over the previous year—a trend that will only continue to increase. Supply chain chaos! March sees a surge in purchases of toilet paper, causing retailers nationwide to impose limits on purchases. Grocery store shelves also sit empty, while restaurant suppliers struggle to find ways to offload their surplus. Drug manufacturers also warn of shortages caused by panic buying. Lost amid the headlines: Benefits brokerage Aon announces plans to acquire Willis Towers Watson for $30 billion. In addition, the battle against the U.S. opioid epidemic rages on, with impacted cities and counties scoring a $1.6 billion win against generic opioid manufacturer Mallinckrodt.
14.7%
The effects of the pandemic continue to be swift and immediate, with unemployment claims skyrocketing 3,000% in the first week of April, causing many state unemployment sites to crash. Backlogs in unemployment filing will stretch on through the remainder of the year. Vermont senator Bernie Sanders drops out of the Democratic presidential race, leaving Joe Biden as the presumptive nominee. While this puts the brakes on the Medicare for All movement, Biden will adopt several progressive health care reform ideas, including the possibility of a public option and lowering the age of Medicare eligibility. The fight to bring down out-of-control drug prices rages on, as states hone in on the high cost of insulin and place limits on how much manufacturers can charge, while a class-action lawsuit filed at the end of March accuses major drug manufacturers of artificially inflating prices. ACA update: Health insurers score a $12 billion win with a Supreme Court ruling in their favor over the issue of risk corridor payments. The provision, included in the original health care law, was intended to protect insurers from losses incurred when participating in the public exchanges.
Sanders: Rich Koele/Shutterstock; Biden: Evan El-Amin/Shutterstock
13.3%
The death of George Floyd at the hands of Minneapolis police officers ignites the flames of racial tensions that have long been simmering across the country. Protests break out first in Minneapolis, then other major U.S. cities, with calls to defund the police. These social demonstrations also prompt a renewed focus by employers on diversity and inclusion efforts, as well as significant discussion among benefits industry professionals about the lack of diversity within their own ranks. After a much-hyped reveal last year, Haven CEO Atul Gawande announces plans to step back, and Amazon & Co. begin the search for a new leader to spearhead their health care venture. The pandemic proves to be lucrative for some in the health care business, but not for others. By one estimate, health systems are losing $1.4 billion in daily revenue due to canceled or delayed appointments and medical procedures. The steep decline in utilization is good for health insurers, however, who begin to offer rebates on insurance premiums and waive cost-sharing requirements for certain procedures and drugs. In response to the major shift in health care needs, the IRS announces it will allow employers to offer employees an opportunity to make mid-year health plan changes, such as enrolling in a health plan or making changes to their FSA contributions. Uber and Lyft are hit with a lawsuit from California Attorney General Xavier Becerra alleging the companies are violating the state’s independent contractor law by misclassifying drivers as contractors.
George Floyd: bgrocker/Shutterstock
In a major win for the LGBTQ community, the Supreme Court rules that sexual orientation and gender identity are protected under the Civil Rights Act, and that workers cannot be fired for being gay, lesbian or transgender. Despite this ruling, the LGBTQ community continues to suffer setbacks as a result of policy changes from the Trump administration, including the rollback of health care protections from the Department of Health and Human Services. It’s official: the United States has entered a recession. In fact, according to the National Bureau of Economic Research, the recession began in February, marked by a peak in payrolls and personal spending and low national unemployment rate. The Congressional Budget Office estimates that the economy won’t recover until 2030. While health care utilization remains depressed, major health insurers end the quarter with record earnings. UnitedHealth Group reports net profit in Q2 nearly doubled from the same period in 2019, and medical spending plummeted from 83.1% of premium revenue to 70.2%. “The entire ACA thus must fall with the individual mandate.” The Department of Justice files its initial brief establishing its stance on the fate of the law, putting to rest the possibility that the administration will fight to keep parts of the law intact. In other health care reform news, a district judge rules against the American Hospital Association in its quest to block the implementation of the Trump administration’s price transparency rule, which would require hospitals to disclose their negotiated prices.
11.1%
Walmart and Amazon both make headlines as they move deeper into the health care space. Not only does Walmart expand its health care clinic footprint with the opening of new Walmart Health clinics, it also announces plans to sell Medicare plans in Texas starting in August. Meanwhile, Amazon switches gears to invest in brick-and-mortar health care, partnering with Crossover Health to open 20 “Neighborhood Health Centers” offering primary care services to its employees and their families. Not to be left out, Walgreens announces a partnership with VillageMD to roll out primary care clinics in its stores over the next five years. Seeking a health care reform win, President Trump issues an executive order he touts as the “most far-reaching prescription drug reforms ever.” The policies include an order that will tie drug prices to international benchmarks and loosen restrictions on the importation of drugs from Canada. Health care utilization continues to suffer, with the American Hospital Association predicting a $323.1 billion loss in revenue for the year. Primary care practices, in particular, are suffering and expected to lose more than $15 billion before the year ends.
10.2%
Walmart Health: Walmart; Amazon: Sundry Photography/Shutterstock
With reopening restrictions still in effect to various degrees across the country, school districts grapple with how to safely start a new year. Many Americans opt to keep children at home and conduct classes remotely, adding to the stress of working parents. Goodbye, employment gains: Despite an overall rebound, women’s unemployment rates are still 20% lower than pre-recession levels, compared to men’s 9%. Economists fear that increased caregiving burdens will continue to drive more women from the workforce in coming months. The summer wildfire season could become the worst in U.S. history (mirroring that experienced by Australia during the winter months). Record-setting wildfires drive evacuations in California, Washington, Colorado and other Western states. Joe Biden selects former rival Kamala Harris as his pick for vice president. The Supreme Court announces plans to hear arguments in the legal challenge to the ACA—after the election. Oral arguments will begin November 10. CMS announces that it will make permanent the telehealth changes it implemented at the start of the COVID-19 pandemic. These include lifting geographic restrictions on health care delivery, expanding its list of eligible telehealth services, and relaxing restrictions on what services practitioners can provide. The result allows more than 10 million Medicare beneficiaries access health services over a four-month period.
8.4%
Harris: Nuno21/Shutterstock
As if partisan political tensions weren’t bad enough, the death of storied Supreme Court Justice Ruth Bader Ginsburg sets off a new battle. The Republican-majority Senate vows to confirm a new justice before the end of the current term, a complete 180 from their 2016 refusal to confirm President Obama’s pick during an election year. Aetna announces a new health insurance plan that will leverage its relationship with CVS retail stores. Aetna Connected will offer no-copay appointments at CVS MinuteClinics and HealthHUBS, as well as 1- or 2-day prescription delivery, discounts on health-related items and greater access to CVS’s managed pharmacy network. President Trump issues a long-awaited vision for health care reform, the America First Healthcare Plan. The Executive Order leans heavily on highlighting existing efforts, such as protecting pre-existing conditions, capping insulin costs for Medicare enrollees, ending surprise medical bills and increasing price transparency. Following its June announcement of the acquisition of Personal Capital, Empower Retirement announces it will acquire MassMutual’s retirement plan business. President Trump and First Lady Melania Trump are diagnosed with coronavirus, as are several close White House advisors and staff. The president is flown to Walter Reed Medical Center and receives a cocktail of drugs and steroid treatments to speed his recovery and get him back on the campaign trail.
7.9%
Ginsburg: Ben Von Klemperer/Shutterstock; Trumps: Alex Gakos/Shutterstock
The U.S. COVID pandemic enters its “third wave,” with no vaccine yet in sight, despite promises from President Trump that one would be available before the election. Polls show that many Americans remain hesitant to get a vaccine due to safety concerns caused by the rushed approval process. Pharmacy giant Purdue Pharma’s reign comes to an end. The company pleads guilty in a DOJ investigation into its opioid marketing tactics, resulting in some $8 billion in fines and the dissolution of the company. Kaiser Family Foundation’s annual benchmarking report pegs health care premiums at $21,342 per family. Meanwhile, the latest estimates suggest that 8 million workers have lost employer-sponsored insurance during the pandemic. One week before Election Day, the Senate rushes through the confirmation of new Supreme Court Justice Amy Coney Barrett in a 52–48 vote. The CMS unveils its Transparency in Coverage rule, which builds on the hospital price transparency rule scheduled to go into effect in January. This new rule will require insurers and employer-sponsored health plans to post in-network and out-of-network negotiated rates. Teladoc Health posts $288.8 million in revenue for this year’s third quarter, more than double the $138 million that the company posted during the same period in 2019.
Barrett: Ken Cedeno/CNP/Bloomberg
6.9%
Record-setting mail-in voting leaves no clear winner of the presidential race on election night, leading to a suspenseful and controversial few days before Joe Biden emerges as the victor—a result that will be challenged by the Trump campaign in several states. Meanwhile, control of the Senate hinges on Georgia’s two runoff races in January. With a Supreme Court hearing just weeks away, open enrollment for the 2021 ACA exchanges kicks off. Despite the pandemic, rates will be 2.7% lower, on average, than last year. The now-conservative-majority Supreme Court kicks off hearings of the Texas-led challenge to the ACA. Justices John Roberts Brett Kavanaugh indicate a willingness to join with progressives in upholding the law without the individual mandate.
6.7%
Biden: Matt Smith/Shutterstock
After top health insurers’ revenues soared to almost $1 trillion in 2019, they’re poised to rise even higher in 2020, driven by decreased demand for medical services. Demand is expected to pick up in 2021, however, with Willis Towers Watson projecting an increase in employer health care costs between 0.5% to 5.0%, and Mercer pegging its estimate at 4.4%. As the COVID pandemic drags into the new year and company offices remain closed, employers continue to adjust their benefits strategies. Top of mind in 2021 will be paid leave, mental health, financial wellness and caregiving.
As 2020 kicked off, no one could have predicted the momentous disruptions we would see in every aspect of our professional and personal lives. While the clock won’t magically reset on January 1, 2021, here’s hoping that we can all look forward to a little more peace and stability in the new year.
