In recent years, a new term, carewashing, has emerged in discussions about workplace culture and employee benefits.  The concept reflects a growing concern that companies are superficially adopting caring practices and policies—often as part of their branding—without genuine commitment.  Modern employers aiming to foster authentic and supportive workplace environments should reflect on this term and how it relates to their positioning with their external clients as well as their employees.

When we shine a spotlight on employee benefits, carewashing refers to the practice of companies presenting themselves as caring and employee-focused, without implementing substantial, changes that truly benefit employees. In some instances, employers may implement meaningful programs, but since employees are unable to take advantage of them due to cultural limitations they are still viewed as carewashing.  For example, a company might promote its new mental health day policy or wellness app extensively but fail to address systemic issues like excessive workloads, inadequate mental health resources, or poor management practices. The result is a veneer of care that can mislead both current and prospective employees about the organization’s true commitment to well-being. 

It is imperative that organizations work to combat carewashing because of the impacts it can have on the business, employees, and their families.

To mitigate the risk, employers must self-reflect and talk openly about their approach to employee benefits, ensuring their programs reflect their culture and vice versa.  In some instances, offering programs without cultural support may do more harm than good.  Using these guiding principles will go a long way to reduce the risk of carewashing:

Although the terminology will change, any program design that undermines the trust of employees or clients will lead to disengagement and dissatisfaction.  Make sure the programs you implement within your benefit offering do not mislead employees.  Employees often tap into employee benefit programs during some of the direst times in their lives; nobody wants to feel carewashed when what they really need in that moment is care. 

If you could use objective guidance on building and prioritizing realistic benefits initiatives, or evaluating your current state for carewashing red flags, please get in touch with our team.


1 Witters, Dan. “Showing That You Care About Employee Wellbeing.” GALLUP. https://www.gallup.com/workplace/391739/showing-care-employee-wellbeing.aspx

In August 2022, the Inflation Reduction Act (IRA, P.L. 117-169) was signed into law, bringing significant changes to Medicare. The law expands benefits, reduces drug costs, and improves the sustainability of the program, providing meaningful financial relief to millions of Medicare beneficiaries by enhancing access to affordable treatments1.

For the first time, Medicare now has the authority to directly negotiate the prices of certain high-cost, single-source drugs that lack generic or biosimilar competition. This groundbreaking provision is designed to help control costs and ease the financial burden on both the program and its participants.

Medications Selected for Price Negotiation

The Centers for Medicare & Medicaid Services (CMS) identified the initial group of drugs for negotiation based on multiple criteria, including the drug’s cost and the number of Medicare Part D enrollees currently using them. CMS engaged in direct negotiations with drug manufacturers to secure lower prices for some of the most expensive brand-name medications.

This negotiation process includes CMS presenting a final offer to the manufacturer, which can either accept or reject the proposal. The outcome? CMS and participating manufacturers have finalized pricing agreements, with Maximum Fair Prices (MFP) for ten selected drugs set to take effect on January 1, 20261,4.

This initiative is part of a broader, multi-year effort. By February 2025, CMS will select up to 15 additional drugs covered under Medicare Part D for negotiation, with new prices projected to be implemented in 2027. Another 15 drugs will be chosen in 2028, and an additional 20 the following year, expanding the reach of negotiated price reductions as required by the IRA4.

Although the Medicare drug price negotiations don’t apply to private insurance, 3.4 million people with employer coverage take at least one of the selected drugs. The ten medications are listed in the below graph3.

How Does This Affect Commercial Insurance?

Although these Medicare negotiations do not directly apply to private insurance, they could still have ripple effects on commercial drug pricing. Currently, 3.4 million people with employer-sponsored coverage use at least one of the drugs selected for negotiation3.

The impact on commercial insurance remains uncertain. Some experts suggest that lower Medicare prices could result in higher costs for private insurers as manufacturers look to recoup losses. Conversely, others believe that the negotiated Medicare prices could serve as a benchmark, potentially leading to lower prices in the private sector as well3.

While it’s too early to tell how private insurance will be affected, the ongoing Medicare drug price negotiations will be a closely watched development in the healthcare landscape.

To stay updated on this topic and learn more, click here.


1 Negotiating for lower drug prices works, saves billions. CMS. August 15, 2024. Accessed September 13, 2024. https://www.cms.gov/newsroom/press-releases/negotiating-lower-drug-prices-works-saves-billions
2 https://www.ajmc.com/view/lower-drug-prices-announced-under-medicare-negotiation-program
3 https://www.kff.org/medicare/issue-brief/explaining-the-prescription-drug-provisions-in-the-inflation-reduction-act/
4 https://www.cms.gov/inflation-reduction-act-and-medicare#:~:text=The%20Inflation%20Reduction%20Act%20makes,and%20limiting%20increases%20in%20prices

As Vermont was named the largest captive domicile globally in 2022, it has developed into a hub for alternative risk financing and insurance innovations. The Vermont Captive Insurance Association (VCIA) recently hosted its 2024 Annual Conference, a beacon in the captive insurance industry. This year’s conference, held in the heart of Vermont (Burlington), offered a dynamic platform for industry professionals to delve into the evolving landscape of captive insurance. From exploring the fundamentals of captive formation to addressing the pressing challenges posed by emerging technologies and regulatory changes, the conference provided invaluable insights and strategies. Attendees had the opportunity to engage with thought leaders, share best practices, and discover innovative solutions that will shape the future of the industry.

1) Captive Formation and Feasibility

Since Vermont is the most popular domicile globally, VCIA provides a great avenue to help first-time employers explore potential captive endeavors. Understanding the basics of captive formation and testing for feasibility is essential for anyone looking to establish or manage a captive insurance company. Here are some related sessions that caught my eye:

-The opening session, “Captive Immersion: Feeling Puzzled? Let’s Piece It Together,” brought together various stakeholders, including an attorney, underwriter, actuary, consultant and a state official to give piece-by-piece instructions on entering the captive industry.

– The presentation, “The Economic Landscape & Your Captive’s Investment Portfolio,” reviewed the current state of the economy and macroeconomic factors that may influence investment gains in a captive.

2) Emerging Technologies and Innovation

As the risk landscape evolves rapidly, captives must adapt to emerging tools and technologies. Addressing emerging risks such as cyber threats and leveraging innovations like AI and data analytics are vital for maintaining relevance and effectiveness in risk management, ensuring captives can proactively manage and mitigate modern challenges. These presentations spotlighted the need for alternative solutions to address emerging (and at times unforeseen) risks:

3) Regulatory and Compliance Updates

Navigating the complex regulatory environment and staying updated on captive taxation and oversight changes are crucial for compliance and strategic planning. It is essential that captive managers and owners are informed about regulatory requirements and can adapt their practices to remain in good standing and avoid potential legal pitfalls. Some insightful sessions include:

– Our VP, TJ Scherer, teamed up with the State of VT’s Dan Patterson in an open discussion group to chat about “Upcoming Changes in Regulation Oversight” and what captive owners in VT should keep their eyes out for.

– Four tax experts convened to discuss “Captive Taxation: What’s New & What’s Next.” They reviewed recent IRS, federal and state updates and discussed how companies can best prepare for an IRS audit.

4) Passing the Torch

Energizing new leaders and providing growth opportunities for newcomers are essential for the long-term sustainability of the captive insurance industry. By fostering new leadership, organizations can drive future success and address the ongoing challenge of talent shortages. These topics focused on the importance of developing talent to ensure that fresh perspectives and innovative ideas are woven into the industry:

– State of VT’s Chief Examiner, Heidi Rabtoy’s “Discussion Group: Attracting & Energizing New Leaders” spotlighted the current talent shortage in the insurance space, and tips to attract and retain next-generation industry leaders.

– One of my favorite parts of VCIA is the Newcomers’ Orientation; ensuring first-time attendees are educated and feel welcome is essential to the industry’s future success.

The enthusiasm and forward-thinking discussions from this year’s conference left a lasting impact on the captive insurance landscape. The conference highlighted the importance of understanding the fundamentals of captive formation and staying ahead of emerging risks, underscoring the critical need for compliance amidst shifting regulations. Moreover, the focus on cultivating new leadership promises a vibrant future for the industry. By harnessing the knowledge and connections gained at VCIA, risk professionals are well-equipped to navigate the complexities ahead and drive continued success in the world of captive insurance.

In a recent podcast from the International Risk Management Institute (IRMI), or Chief P&C Actuary, Peter Johnson gives an inside view into the actuarial methodologies that go into calculating loss development patterns and optimizing risk management strategies across long-tail lines. You can find the full podcast episode here.

As summer winds down, the Disability Management Employer Coalition (DMEC) hosted its 2024 Annual Conference in the energetic city of Nashville, TN. Known for its rich musical heritage, Nashville provided a lively backdrop for this year’s event, bringing together professionals from across the absence management spectrum to discuss the latest trends, challenges, and best practices. Here are some key highlights from the conference.

1) The Future of Paid Family and Medical Leave (PFML)

The focus on mental health remains prevalent as organizations continue to find innovative ways to support employee well-being. This year’s conference offered valuable insights into how mental health is evolving in the benefits industry:

-The session The Importance of a Guided Claim Experience emphasized the need for compassionate and informed support during the claims process, which can significantly impact employee well-being.

– I was joined by a group of leave solution leaders to examine findings from a recent leave report which looked at various factors including recruitment, retention, productivity, moral, and more with a focus on how successful employers are addressing leave managementns on benefits spend and workplace culture.

One of the catchiest presentations, Walk, Crawl, Run: The PWFA Turns One, reflected on the one-year anniversary of the Pregnancy Workers Fairness Act (PWFA) and best practices for HR teams to stay compliant.

2) ADA/FMLA Compliance Updates

Navigating the complex web of federal, state, and local regulations remains a critical challenge for employers. This year’s sessions provided valuable guidance on staying compliant while managing diverse and geographically dispersed workforces:

3) Telework Accommodations

As companies continue to navigate the post-pandemic landscape, finding the right balance between remote work and returning to the office is top of mind. The conference sessions provided practical insights into managing this transition effectively:

– The session “You Can Have Paid Leave AND a Productive Workforce. Here is the Secret Sauce.” explored how flexible work arrangements can coexist with robust paid leave policies to enhance employee satisfaction and productivity.

– Council from Reliance Matrix explained how many employers are quick to provide leave of absence to workers with a medical condition, whereas many alternative compliant leave options exist in their presentation, Encouraging Employees to Stay at Work or Return to Work.

Another eye-catching session, We Goofed. Now What? An Accommodations Tale, brought light to a common scenario in which an employer fails to provide adequate accommodations under the ADA and/or PWFA; as well as best practices to address said employees’ needs.

4) Tech/AI’s Role in Absence Management

Technology continues to play a transformative role in the absence and disability management space, offering new ways to streamline processes and improve decision-making:

– Spring’s in-house attorney, Lynne Noel, together withPatagonia’s Senior Manager, Leave of Absence, Lauren Shipper, discussed Using Benchmarking to Refresh Your Program. They highlighted the importance of leveraging data to stay competitive and refine absence management programs. Insights provided actionable strategies for using benchmarking as a tool for continuous improvement.

– A group of data analytic experts explained the practical parameters of AI solutions in claims processes and the upsides and dangers to implementing AI systems in their presentation, The Transformation: How AI is Enhancing Analytics and Optimizing Decision-Making.

– During the session, The Future of AI in Leave and Disability Management, three leave and disability administrators discussed the current state of AI in the industry and how it can help streamline processes and improve employee satisfaction.

Final Thoughts

The DMEC 2024 Annual Conference in Nashville was a resounding success, filled with opportunities to learn, connect, and share best practices. From deep dives into compliance and mental health to exploring the latest technological innovations, the conference offered something for everyone. As always, it was a pleasure to reconnect with industry leaders and bring back fresh ideas to enhance our consultative offerings. We’re already looking forward to what next year’s conference will bring!

Spring has won Captive Review’s US Awards the top Captive Consultant of the Year. You can find the full list here.

Our captive team joined the Global Captive Podcast to record an episode reviewing Spring’s recent efforts in securing tentative authorization for a client from the Department of Labour regarding an ERISA exception for a pension risk transfer. You can find the full podcast episode here.

Spring recently published an article on Captive.com illustrating 7 ways captive insurance can benefit organizations. Check out the full article here.

One of the most exciting attributes of captive insurance is that every program looks different. There is so much variety and a wide range of ways to structure coverage and utilize surplus. I have been talking with captive owners representing various industries, organizational sizes, and stages of captive maturation to get their unique stories and understand how they are putting their captive to work for their specific risks. Indeed, no two stories have been the same.

In a recent interview, I sat down with Karen Hsi, Executive Director, Captive Programs at University of California Office of the President, and one of the sharpest minds of young captive talent. The University of California (UC) did not need to obtain Department of Labor (DOL) approval for their captive programs, making the process simpler!

Q: What benefits do you currently have within your captive, and why did you choose the captive path?

A: On the employee benefits side, we have voluntary benefits – accident, critical illness, and hospital indemnity – in our cell captive. This program has been in effect since the start of 2020 and uses a fronting carrier, and as of this year (start of 2024), it is 100% seeded to the cell captive.

We brought these products into the captive because we wanted to customize offerings and add some bells and whistles for employees at a better price. We used a cell captive so that we wouldn’t jeopardize the tax status of our single parent captive. Our original goal with this strategy was not to make money but  break-even while primarily to be able to offer better benefits.

Over the course of time we have been able to build a stable program, and after shifting away from a broker structure so that commissions and other costs are stripped out. As we establish these financial efficiencies, we want to keep building upon the program either by reducing employee costs or by further enhancing or customizing offerings. For example, one unique benefit that we were able to add with our surplus is a mammography offering within critical illness. We found that utilization was high, so we are confident it adds value to employees. Another policy we were able to add into the supplemental health program was a COVID-19 rider, which had a cash incentive for employees to proactively get tested for the virus. We were able to put this in place quickly and think we would have had a hard time doing so without the captive.

Overall, we have seen about 20% savings with this program and as things stabilize, we hope to lower rates further for employees.

Q: Are there any other benefits UC has in a captive?

A: We write life insurance – employer and employee paid – in a separate cell captive because it is large enough for its own cell. The life cell captive also launched in 2019 and is doing well, with approximately $16.3M in accumulated earnings since inception. During the pandemic, we had a fair amount of turnover, so we used the success of the captive to boost our life insurance policy as a tactic for succession planning and business continuity.

We hope to someday to move disability into the captive, but the timing hasn’t been right yet. We want to better manage the risk first so that the board is more amenable to bringing it into the captive.

Q: Any other surprises?

A: I think in the beginning it was a mindset and relationship change when we shifted things with the carrier to move to a fronting company. They now have a seat at the table and we have a longstanding relationship.

Q: Anything interesting on the horizon?

A: We are looking into the potential of long-term care insurance in a captive. There also might be an opportunity to rent out a cell captive to one of our sister/affiliate organizations (e.g., California State entities), where they have their own cell and voice and where we can provide resources. I think this might be a beneficial move and would be a valuable way to collaborate.

No matter what the future brings, I know that we are not done yet (with growing our captive programs), and we’re excited to see what else we can do. I appreciated the time Karen spent in chatting with me and will be paying close attention to these exciting developments and opportunities to expand their captive. If you’re looking for expert advice to assess feasibility of additional benefits in your captive, feel free to get in touch with our team.