Spring Wins Two of Captive Review’s 2019 Awards

We are incredibly excited to announce that the Spring team had a great night this past Monday at the CaCaptive Review Award Winner 2019ptive Review awards reception in Burlington, Vermont.

Spring took home the award for Employee Benefits Specialist of the year, and our Senior Consultant, Prabal Lakhanpal, won the Emerging Talent award for service professionals.

Our team works tirelessly day in and day out to deliver the best, research-driven and innovative service to our clients, with the goal of always producing tangible results. All of our staff is encouraged to participate in educational and industry related events and organizations so they can continue to build their skills and knowledge, and Prabal is a prime example of this development and growth. Always at the forefront of employee benefits and how they intersect with captives, we are constantly thinking outside-the-box to help clients fund competitive benefits packages that makes sense for their organization, its culture and its risk profile. This has been a particularly strong year for us, and we thank Captive Review for the recognition.

Spring to Speak in 3 Sessions at DMEC Annual Conference

As a long-time sponsor and advocate for the Disability Management Employer Coalition (DMEC), Spring is excited to continue our involvement in this year’s annual conference.

The event, which takes place from August 5-8 in Washington, D.C., will bring together around 500 professionals in HR, Benefits, Disability and Absence Management fields, and is sure to be a thought-provoking and fun few days. This year, Spring team members will be featured a few times on the conference agenda:DMEC Annual Conference

  • Launching Your Organization’s Self-Audit Checklist: Tuesday, August 6th, 3:35PM
    Senior Vice President Teri Weber will be running this short quick-dive session, which will guide audience members on effectively conducting an internal compliance audit.
  •  The RFP Process: A Deep Dive: Wednesday, August 7th, 2:30PM
    Teri Weber and Senior Vice President Karen English will be joined by clients on this panel that outlines the who, what, and the how of conducting an RFP. Best practices and case studies will be shared.
  • Got ROI?: Thursday, August 8th, 9:30AM
    In this general session, Karen, Teri and Disability Management professionals from Baystate Health Systems and Chevron will speak to how to determine if an absence management program is producing ROI. The audience will be left with a framework to overcome common challenges and learn from the success of large employers.

So, if you are heading to the DMEC Annual Conference, be sure to catch us at one (or all!) of these sessions, and say hello to our team at booth #312. We promise good conversation and fun giveaways!

Spring to Speak at VCIA 2019

Our team has long been involved with the Vermont Captive Insurance Association (VCIA), an organization that has done much to advance the captive industry in one of the country’s strongest captive domiciles. The VCIA Annual Conference is a hot event in this sphere, bringing over 800 professionals together each year in Burlington, Vermont to share their experienceCaptive Insurance and learn from each other.

This year, not only is Spring an exhibiting sponsor at VCIA, but our Managing Partner, Karin Landry, will also be leading a session, Association Health Plans & Captives: New Regulations, New Opportunities. This advanced session will feature a panel and will cover why Association Health Plans (AHPs) came to be, the shifting regulatory landscape around them, where that leaves us today, and an employer case study that ties in captives. The session will represent multiple perspectives: the consultant, the attorney, and the insurer.

The presentation will take place on Wednesday, August 7th from 10-11AM. We hope you can join, but if not, be sure to say hello to our team at booth 44 at VCIA!

5 Things to Think About Before Introducing a Student Debt Benefit

In 2018, Americans held a whopping $1.5 trillion in student loan debt, beating both the national auto and credit card debt rates. This number has grown exponentially in recent years, having an impact on all employees but arguably hitting the millennial generation hardest. As a result, employees are deferring home purchases and retirement savings due to their student loan obligations. In turn, this creates a challenge for employers working to recruit these employees, who are experiencing financial challenges and not at optimal productivity or engagement.

Employers across the country are recognizing this crisis, and implementing solutions to mitigate its effects for employees. However, nothing is simple. In considering a student debt relief benefit, organizations need to think about:

  1. Strategic goal(s)

  2. Financial wellness

  3. Funding and taxability

  4. Administrative complexity

  5. Employee demographics

In this article, we will elaborate on these factors and outline the pros and cons of several established student debt benefit programs. We will also provide our perspective on the future of the market – is this a short-term trend or something that is here to stay? Click here to read the full article.

The Latest in MA Paid Family and Medical Leave

By Karen English and Teri Weber

What You Need to Know

In June of 2018, Massachusetts passed a paid family and medical leave policy, making it the fifth state to do so after California, New Jersey, Rhode Island, New York, and Washington, and almost in tandem with D.C. Since then, Massachusetts employers, employees and industry professionals like ourselves have been closely following the regulatory progress and stipulations of this new program.

The Law: A Brief Overview

The Massachusetts Paid Family and Medical Leave law provides employees working for a Massachusetts employer with up to 26 weeks of job protected, paid family and medical leave for qualifying reasons, which include but are not limited to:

  • One’s own or a family member’s serious health condition
  • Bonding with a newborn or adopted child
  • Tending to a family member who is an injured servicemember

The law also offers job protection during and after a leave. The nuances of the policy and modifications have been slowly rolled out over the last year. More details about employee eligibility, employer requirements and readiness, and pay allocation can be found here. As with all state-wide legal overhauls, the policy is quite complex.Paid Family and Medical Leave Massachusetts

The program is meant to be funded through employer and employee contributions, with employers using MassTaxConnect to determine contributions and appropriate tax filing.

The Latest

The Paid Family and Medical Leave benefits were set to be available to employees starting January 1st, 2021 for bonding, military exigency and one’s own serious health condition, with a second wave being rolled out on July 1st, 2021 for other available and applicable benefits. To ensure sufficient funding for the program, employers were to start paying paid leave taxes starting July 1st, 2019.

As the deadline approached, however, employers in the state became concerned over unanswered questions and lack of time to prepare. Members of the Associated Industries of Massachusetts sent more than 2,500 messages to Governor Charlie Baker explaining that they lacked the time and clarity to stay on track for the July 1st deadline. Massachusetts lawmakers heard the grievances and acted accordingly. On June 11th, 2019, the state agreed to a three-month delay on paid leave tax collection, which will now begin on October 1st, 2019.

What This Means For Employers

The extension allows us all to get more familiarized with the ins and outs of the law and plan accordingly. Employers will be focused on whether an exemption applies, how the breakdown of corporate tax vs. payroll deduction will work, and what portion(s) of their workforce are eligible for the different benefits outlined. The additional time will also enable employers to effectively communicate the changes. Updated key dates to be aware of include:

  • Required Withholding Now Starts October 1, 2019
  • Contribution Rate Has Been Adjusted from 0.63% to 0.75% of Employee Qualifying Earnings
  • Remittance of Contributions for the October 1 to December 31 Quarter Will Be Due January 31, 2020
  • Timeline Has Been Extended for Required Employee Notices to September 30, 2019
  • Timeline Has Been Extended for Exemption Applications to December 20, 2019
  • PFML Final Regulations Are Scheduled To Be Posted on June 17, 2019 and Become Effective on July 1, 2019

Please get in touch if you have questions about the Massachusetts Paid Family and Medical Leave law and how to prepare for the program’s rollout. We have experts in leave management and compliance that are happy to help you navigate this new policy.

 

Syzygy Insurance Co. v. Commissioner of Internal Revenue

What You Should Know

Recently, the Courts ruled that Syzygy Insurance Company (“Syzygy”), a micro captive created by Highland Tank & Manufacturing Co. and its Associates (“HT&A”) did not qualify as an 831(b) micro-captive entity between the years of 2009 and 2011. Federal courts have been especially assertive outlining bad fact patterns for certain captives, as seen in similar case results such as Avrahami v. Commissioner (“Avrahami”) and Reserve Mechanical Corp v. Commissioner (“Reserve”).

Understanding the criteria and results of these court rulings is imperative to ensure that your clients’ captives, or even your own, are appropriately managed and operated.

In this whitepaper, we outline an in-depth analysis of the court case and decision, and provide you with a checklist for ensuring compliance and validity for your captive, no matter its size. Download to learn more about:

  • Circular flow of Funds
  • Arm’s-Length Contract
  • Valid and Binding Policies

and more, so that your captive isn’t the next one getting negative press!

 

Crafting Cell Captives

Cell captives can help companies achieve a range of goals, and their use cases and utilization rates have been increasing in recent years. While moreCell Captive companies are adopting a cell captive structure, that doesn’t make them any less complicated. Accounting guidance and other regulatory factors often prohibit organizations from aligning the financial reporting of their cell captive with the corporate objectives of the entity.

In this whitepaper, co-authored by Karin Landry, Managing Partner of Spring and Josh Partlow, Partner at Johnson Lambert, will walk you through the evolution of cell captive structures, and provide guidance on financial reporting options and how to address GAAP guidance.

Download the white paper to get a brief history of cell captives, understand the different structures available, insight into the decision to consolidate or not, how variable interest entities come into play and more. We’ll use a sample balance sheet to illustrate these concepts.

Download the White Paper: Crafting Cell Captives

 

Verification

 

 

5 Reasons to Consider an Integrated Workers’ Comp and Disability Program

For employers with robust benefits programs in place, an integrated approach is continuing to become an increasingly popular way to take things to the next level, and for good reason. Although the concept is not new, and our team of experts has been developing solutions for years, certain aspects are getting employers’ attention.

Spring’s 2016 and 2018 employer surveys, led by Spring’s Senior Vice President Karen English, show that the core drivers to developing an integrated program are:

  • Costs savings
  • Simpler administration
  • Upgraded employee experience
  • Enhanced tracking capabilities
  • Improved compliance

There’s a lot more impacting these areas than you might think, so let’s take a deeper dive.

Cost Savings:

Having an efficient benefits program with systems that speak to and work with each other can go a long way for your bottom line. Integration provides greater transparency into your workforce – absence management challenges, productivity, employee health – among other things. This knowledge is an opportunity to create a healthier, more present workforce.

If this sounds like qualitative “fluff”, it’s not. One healthcare client was able to save over $10M in direct and indirect costs through integration. These savings resulted from savings in the following areas:

  • Workers’ compensation
  • Disability
  • Unplanned absence
  • Vacation
  • Other Leaves of Absence

Their program, done in tandem with captive insurance company funding, also yielded risk diversification and stability, as well as further saIntegrated disability managementvings of 10% of premiums.

The graph to the right shows the average levels of employer savings achieved by implementing an integrated program, spanning a range of direct and indirect cost categories.

 

Simpler Administration:

All parties benefit from an integrated benefits system. An immeasurable amount of time and effort is saved from not having to go to different platforms for critical information. This will speed up the claims process.

The best integrated programs send notifications and communications, and offer automated triggers, case management and documentation. For managers, results are easier to explain. For employees, access is simpler and more approachable. At the corporate level, you can expect faster turnaround time and greater visibility.

Upgraded Employee Experience:

Employees do not typically understand the nuances surrounding absences, nor the various policies, plans, and processes involved. They simply need time away. By integrating absence to include occupational and non-occupational events, your employees will experience:

  • Fewer points of contact
  • Clearer processes to follow
  • Faster turnaround times
  • Improved information access
  • Increase self-service options
  • Decreased confusion

These benefits lead to an enhanced employee experience including higher engagement, both at the organization and with their health. As all HR professionals know, engagement is critical for recruiting, retention and overall performance. Whether at risk or not, all employees will appreciate a smarter, more robust benefits program and an employer that is looking out for their wellbeing.

Enhanced Tracking Capabilities:

To make sustainable improvements, it is imperative to track your integrated program and mine the data across all absences to investigate patterns and draw predictions. An integrated program allows for metrics across plans and policies with drill-down features such as:

  • Occupational vs. non-occupational
  • Paid vs. unpaid
  • Job protected vs. non job protected
  • Return-to-work vs. stay-at-work
  • Sick, vacation, etc.
  • Self vs. family
  • Continuous vs. intermittent
  • Diagnosis specific

With all these different facets captured uniformly, you have reporting that is comprehensive; supports workforce planning and budget; allows for strategic planning with HR as a business partner; and offers opportunities for prevention; so that your organization can be proactive instead of reactive. These kinds of insights allow employers to move into population health management.

Improved Compliance:

With the hub of intelligence that an integrated program offers, employers have a more reliable way of remaining compliant when it comes to things like the ADA, FMLA and ERISA, as well as any state-specific regulations and policies unique to the company. Automation will make leave requests and absence tracking much easier to manage, and accurate documentation will aid accountability for employers and employees alike.

Ultimately, an integrated workers’ compensation and disability program can have significant positive impact on a company and its employees, especially for larger employers. We have seen great, quantifiable success with integrated programs from our clients. If you are thinking that this process seems too big a task to take on, don’t worry. Any company can start at any point along the continuum shown below, and gradually work their way to a model that facilitates population health management in the workforce.

 

Population health management