Hello, 
      This appears to be box tree moth larvae- an invasive pest that will completely defoliate boxwood plants.  These need to be reported on this site: https://www.canr.msu.edu/tag/box-tree-moth
 They should be sprayed with a pyrethroid insecticide for homeowner use that can be used to control all life stages. Pyrethroid insecticides are those where the active ingredient ends in thrin, for example, cyfluthrin, permethrin, resmethrin, cypermethrin, lambda-cyhalothrin and sumithrin. The following article link contains more insecticide  options: https://www.canr.msu.edu/resources/insecticide-options-for-box-tree-moth-management-ir4-project 

When the caterpillars are smaller, homeowners can spray a Bacillus thuringiensis (Bt) product once every two weeks. However, Bacillus thuringiensis is not an effective control for larger caterpillars, eggs or adults. The ones in the photo above may be too large to be eradicated by Bt.  Bt is a bacterium that kills insects when ingested. There are subspecies of Bt that affect specific types of insects; kurstaki is the subspecies that specifically target caterpillar larvae. Look for product labels that say Bacillus thuringiensis subsp. kurstaki (Btk). This product may be useful to you for future outbreaks caught earlier.

I hope this is helpful.
Thank you for contacting Ask Extension.
Ruth

Remember- this is not a disease- it is an insect.  This is a new insect for this area, an invasive that was first spotted in 2023 here.  
You need to treat the pest by spraying one of the insecticides that I recommended, or one recommended in the article I linked to.  The insect will spread when the larvae that you are seeing pupate then turn into moths who then lay more eggs.  That life cycle is explained in this article: https://www.canr.msu.edu/news/what-the-box-tree-moth-quarantine-means-for-michigan-homeowners
Killing as many of the larvae will help decrease the number of moths, and eggs.  It will take a great deal of vigilance on your part, and repeated sprayings of pesticide. Check the bushes regularly to monitor pest populations. You will probably see more than one life-cycle stage on your plants at one time, so you will have the option of using the Bt product for the smaller larvae as they hatch and then the other pesticides that will be more effective for the larger larvae, moths and eggs.  

If the boxwoods are repeatedly defoliated, they may not live, so you may need to remove the plants.  If so, please place the plants in plastic trash bags that you seal and leave in the sunlight for 48 hours.  Then put them out for trash pick-up.  Try to locate any pupae that may have fallen to the ground and destroy those. 

It may not be advisable to replant boxwood in that area for some time.  Information advising timing on replanting is not yet available, but there are some nice alternatives to boxwood to consider.  Here is a list of alternatives to boxwoods for part-shade:

Yew, Holly, Inkberry, Bayberry.

https://cals.cornell.edu/new-york-state-integrated-pest-management/outreach-education/fact-sheets/box-tree-moth/alternatives-boxwood

If you have full sun, cultivars of Juniperus such as ‘Grey Owl’ or ‘Blue Star’; Chamaecyparis such as ‘Dwarf Hinoki’ or ‘Mops’;

and spruce such as Picea Abies ‘Elegans’, Picea Abies 'Little Gem' can be used.

You can use this Plant Finder to look,up various shrubs, here are some examples,

https://www.missouribotanicalgarden.org/PlantFinder/PlantFinderDetails.aspx?kempercode=d650

https://www.missouribotanicalgarden.org/PlantFinder/PlantFinderDetails.aspx?taxonid=252783

Match your choices to your soil and sunlight conditions. There are many cultivars that have small or medium mature sizes. In the article I would avoid plum yew shrub in South East Michigan, since we can sometimes have “polar events“ which may drop the temperature well below average.

We do recommend planting a variety of shrubs so that no new disease or insect is likely to wipe out your total planting. If you are open to planting some deciduous native shrubs, here is a list to consider:

https://www.canr.msu.edu/news/native_plants_for_michigan_landscapes_shrubs

I hope this is helpful.
Ruth