The coronavirus already has wreaked havoc on many U.S. businesses, but a second wave of economic devastation is about to crash down on American companies. The COVID-19 pandemic is inflicting massive health care costs that could drive up health insurance rates by 40 percent or more. Any assumption to the contrary is a dangerous miscalculation that will leave employers exposed at this year's health insurance renewal.

Executives must understand that, despite conflicting analyses, the COVID-19 pandemic is almost certain to cause 2021 insurance rates to skyrocket. Companies must take immediate steps now to manage their health care costs and benefits plans accordingly to avoid a major financial hit amid an economic crisis.

Deferral of care

Many health care brokers are touting an April 2020 report from the respected actuarial firm Milliman on COVID-19's effect on health care costs. Milliman predicts a net reduction in overall health care costs resulting from the deferral of non-essential and elective procedures.