Review: Employer Benefit Guides

Credit Suisse conducted a review of 2020 “Employer Benefit Guides” to better understand the competitive environment for telehealth, expert opinion offerings, diabetes management etc. More than 300 open enrollment 2020 benefit guides including many from Fortune 100, were reviewed with key themes for 2020 highlighted.

It was found that telehealth offerings are steady in the large employer market. The large group employer market remains close to 90%+ penetrated, underscoring Credit Suisse’s view that any benefit of incremental telehealth adoption for low acuity medical conditions remains limited.

Additionally, large employers seem to be maintaining the status quo on telehealth offerings, underscoring the sticky nature of these contracts. In several cases, employers continue to rely on their medical plans for telehealth offerings instead of contracting directly. As for background information Aetna offers Teladoc Health,

Cigna offers Cigna Telehealth Connection powered by American Well and MDLive, Anthem offers LiveHealth Online powered by American Well, Blues (Well Connection, Blue CareOnDemand) etc. powered by American Well, and UNH virtual visits offerings list Teladoc, American Well, and Doctor on Demand as providers.

In most cases where employers have switched telehealth vendors for 2020, it was generally driven by a change in the contracted medical plan vendor. For example, ConocoPhillips switched from Teladoc to MDLive, and Blue Cross Blue Shield of Texas (BCBSTX) replaced Aetna as their health plan vendor.

Employers are trying to increase telehealth utilization by lowering or eliminating co-pays. Credit Suisse came across several instances where employers lowered co-pays or in some cases completely eliminated co-pays for telehealth visits however, consumer driven health plans with a HSA plan, are required to pay the full charge until their annual deductible is met.

Several benefit guides indicated the full cost for general medical visits are in the $40 to $50 range, for dermatology visits in the $70-$80 range, around $150-$180 for behavioral health initial assessments, and $70-$90 for psychiatrist/psychologist ongoing assessments. Among employers who still have co-pays for non-CDHP plus HSA plans, some are counting telehealth visit co-pays towards deductible but some employers are not.

Employers’ interest in covering dermatological services as well as behavioral services (beyond just low acuity medical care services) under telehealth, continue to increase with several instances of success for Teladoc (Avaya for dermatology services, Vanguard for both dermatology and behavioral, McClatchy for behavioral etc.). Lactation consultation coverage was another area of interest among employers expanding telehealth offerings for 2020.

Telehealth adoption is rising among small group/middle market employers. Unlike the large group market, small group and middle market employers are still not heavily penetrated (the estimate is close to 40-50% with respect to telehealth offerings). In fact, several small group employers have introduced telehealth offerings to their employees in 2H19/2020, with Teladoc Health capturing their fair share in that market.

Credit Suisse’s review of employer benefit guides seems to indicate an acceleration in adoption of second/expert opinion services for 2020. Among the major players, privately-owned 2nd.MD has had some very high profile employer contract wins including Delta Airlines, Credit Suisse, HP, GE replaced the (Cleveland Clinic Expert opinion program), plus Vanguard replaced Best Doctors, and JII, with Wells Fargo etc.

Another major expert opinion player, Grand Rounds, also saw some major contract wins for 2020, including Hologic, Teradyne, VMware, etc. while Teladoc’s foothold in the employer telehealth market remains strong, Credit Suisse’s benefit guides review does not suggest many instances of Teladoc’s cross-selling success with their expert opinion service Best Doctors/Advance Medical.

To sum up, Credit Suisse’s neutral view on Teladoc shares is premised on the fact that the growth in the B2B2C telemedicine market where Teladoc has a strong presence, has been moderating, However, the transaction with InTouch Health gives Teladoc access to the provider-driven telehealth markets which is a market likely to grow at a strong pace over the next few years, and should offset the moderation in organic revenue growth in the company’s core employer business.

Please email Jailendra Singh at for Credit Suisse’s detailed spreadsheet summarizing findings from all of the Employer Benefit Guides reviewed or to obtain further information.

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