A Blueprint of Health & Welfare Benefits: A Recap of NEEBC’s Beyond the Basics (Level 2) Event

Last week I had the honor of presenting at the New England Employee Benefits Council (NEEBC)’s Health & Welfare: Beyond the Basics (Level 2) event. The event provided great insights into how employers can adapt their corporate culture and provide strong benefits to attract and retain top-tier talent. Sessions focused on the following four critical areas of health and welfare: healthcare, data analytics, lifestyle accounts, and employee absence.

  1. Healthcare

David Chamberlain from Brown & Brown clarified the difference between health and wellness and steps employers can adopt to promote preventative care. He later dove into the differences and advantages of discount analysis verses repricing and how this all ties into pharmaceutical needs. Finally, he outlined the landscape of Pharmacy Benefit Managers (PBMs) and how new disrupters such as Amazon Pharmacy are able to provide pharmaceutical capabilities for people with and without insurance.

       2. Data Analytics

Mary Delaney from Vital Incite explored the need for data when developing benefits strategies. She explained how data such as age, gender, medication patterns, likeliness of hospitalization and other indicators are essential when developing a health/medical insurance plan. Lastly, she explains how this data can be collected through employee needs surveys and analyses of national health data trends.

       3. Lifestyle Accounts

Firstly, Jennifer Aylwin from Vertex Pharmaceuticals defined lifestyle accounts as a taxable account that employees can use for reimbursable expenses chosen by the employer. Due to the COVID-19 pandemic, many employees are now working in a hybrid or remote setting, and LSAs are a good practice to keep those employees content and engaged.

       4. Absence

As for absence management, I had the pleasure of presenting on this topic. I started by exploring some of the benefits of adopting absence management policies, such as reducing administrative costs and fostering a positive corporate culture where employees feel valued. I ended by showing how strong absence policies paired with effective communication of those policies have proven to provide a better experience for employees and greater workplace efficiency.

 

All in all, it has been great finally being able to see so many familiar faces in person again. As we adjust to a post-pandemic life, it is essential that we implement health and welfare strategies that match the need of employees currently. I look forward to connecting with many of you again during NEEBC’s Annual Summit in just a couple weeks on May 25th!

They’re Better than Benefits, They’re PERKS!: A 2022 PERKSCon Conference Recap

This year, I had the pleasure of attending the New York City PERKSCon event last week. PERKSCon is the world’s largest employee experience expo and provides great insights into the future of benefits and how employers can remodel their benefits strategies to better position themselves in the war for talent. Attendees included senior-level staff, HR managers, consultants and brokers from organizations ranging from under 200 employees to 5,000+. During the expo we saw some innovations in benefits we would have never believed if we hadn’t attended, including jukeboxes in the workplace, telehealth for pets and Lego gift packages for remote team building. 

Although vendors at PERKSCon represented a vast range of services, some of the most prevalent “perks” surrounded family support, mental health, and financial wellness.  

  1. Family Support

This year there was a great focus on family related benefits, with children and new parents at the helm. Employers are transitioning towards different parental support benefits than we’ve seen in the past, especially with many employees working remote or hybrid. Some of the most interesting family related benefits included: 

  • Pump Spotting: They support all things breast feeding including an app, networks, and lactation support. 
  • Outschool: Provides classes for children 2nd grade to middle school, support for working parents and tutoring & test prep for all ages (including SAT). 
  • Medela: They help foster a healthy return to work for new parents as well as provide pumps, ship breast milk, and identify lactation suites. 

       2. Mental Health

Mental health awareness and solutions have been on the rise, even more so since the onset of the pandemic, and employees expect mental health resources from their employers. As we’ve largely moved away from the office and into our home offices, there has been a push to provide mental health support virtually. A couple interesting and innovative mental health related perks included: 

  • Impact Suite: Provides a mental health app, which offers unlimited teletherapy, lifestyle coaching, digital wellness materials and 24/7 support. 
  • Breathing.ai: A digital health solution that reduces stress through guided meditation and breathing exercises, all while tracking your time away from screen, heart rate and other wellness categories. 

       3. Financial Wellness

When it comes to PERKSCon, financial wellness is always a hot button topic. Employers are looking at how they can best support their staff, and in this economy, money speaks louder than words. As such, helping employees with financial wellbeing has become a more common practice and we have seen a range of solutions gain traction over the past few years. Specific to PERKSCon, some financial benefits tools we found interesting include: 

  • Learning Lux: They help employees set financial plans by setting up 1 on 1 coaching and providing tracking and utilization reporting. 
  • Vault: They enable employers to offer loan benefit options, tuition reimbursement programs, 401(k) matches based on student loan payments and more, including individual counseling. 
  • Addition Wealth: A digital platform that helps employees make strong financial decisions (including stocks and investments, 401(k), taxes, etc.) and connect with financial professionals. 

 

I was thrilled to attend PERKSCon in person in NYC this year. The event never fails to provide great networking opportunities and showcase some of the most unique and premier benefits in the industry, something that our clients are continuously seeking. We look forward to seeing many of you again at a future PERKSCon event; it will be just one “perk” of many!  

To Transform Healthcare, Let’s Prioritize These 6 Areas

A recap of the Boston Business Journal Future of Healthcare Event on April 7th

Spring was proud to sponsor the Boston Business Journal’s breakfast event earlier this month. The title, “The Future of Healthcare,” is a critical point of discussion for our team and our clients day in and day out, and carries more weight now since the pandemic highlighted critical system gaps. Our consultants continuously look for innovative solutions that help organizations mitigate the impacts of rising healthcare costs, attract and retain employees, address behavioral health, and ultimately frame insurance and employee benefits in a more strategic way. Our work closely aligns with the market and what is trending with key players, such as insurance carriers, healthcare providers, technology vendors, and more. As such, we were delighted to get the inside scoop directly from industry partners.Future of Healthcare

The in-person (refreshing!) event provided much food for thought and called upon the sentiments of a range of stakeholders. Michael Dandorph, President and CEO at Tufts Medicine, provided the healthcare provider viewpoint. Andrew Dreyfus, President and CEO of Blue Cross Blue Shield of Massachusetts (BCBSMA), an industry veteran, brought the health plan perspective to the table. And Ali Hyatt, General Manager of Provider Commercialization and Marketing at Amwell, a telemedicine company, rounded out the discussion.

While the panelists all brought different points of view, there was a clear consensus as to what areas of healthcare need the most attention, and where the industry should focus in order to shape a more positive “Future of Healthcare.” A common thread was the need to view healthcare through the lens of the consumer (the patient) and find ways to improve that experience. We repeatedly heard the word transformation, meaning we all need to reframe our thinking and our approach to address the following key areas:

  1. Affordability

It’s no surprise that affordability was front and center, as healthcare costs continue to climb. As Dreyfus pointed out, the problem only got worse when COVID-19 necessitated paying higher salaries to staff, and caused premiums to increase. The rise of high-cost specialty drugs, which now represent around 25% of healthcare spending, and the consolidation of healthcare systems add even more fuel to the fire. As a result, employers are increasingly shifting more of the health plan costs to their employees, creating real barriers to care. Dreyfus cited a survey that found that in Massachusetts, half of the public has delayed or avoided necessary care due to costs. And as Hyatt pointed out, access is the most important driver of affordability. It is lack of access that tends to escalate prices for all parties within the healthcare system.

But enough about the problem; we all know it’s grim. When it comes to solutions, the panelists had ideas. Amwell is focused on making things like follow-up treatment, appointment making and care regimens easier to build an infrastructure that yields better outcomes. Tufts Medicine is working to build trust with consumers to help them better manage their health proactively, so that perhaps the patient never has to come to the hospital at all. Dreyfus emphasized the need to move away from the current fee-for-service system, where physicians earn less if they can keep a patient out of the hospital, which is backwards. “We should be paying for health and outcomes,” stated Dreyfus. High costs in a pandemic-stricken environment have pushed people away from engaging with healthcare systems and added to stress, leading to increased issues surrounding…

  1. Mental Health

The speakers came at mental health from multiple angles. There is the obvious problem, which is that COVID-19 took immeasurable tolls on mental health. For as much good that technology has done regarding the flexibility to “work-from-anywhere,” it has also been detrimental. Dandorph pointed out that remote work for many just means logging on earlier and signing off later, with almost no down time. Hyatt added that a recent Microsoft study showed that employees were pulling an additional “third shift” from 9-10PM, feeling the need to log back in at night after tending to family or other obligations. Beyond work pressures, we also have retirees and seniors to consider, who have been isolated, vulnerable and afraid since the onset of the pandemic, and have been exhibiting increasing signs of depression and/or dementia as they struggle with loneliness.

Then there is the more specific problem, which is burnout within the healthcare industry. Dandorph dubbed this the “pandemic before the pandemic,” with suicide rates among physicians more than double that of the general population. COVID-19 amplified things, and staff has been retreating ever since, adding to the labor shortage we are seeing across all sectors. To solve for this crisis, the panelists stressed the need to simplify processes to relieve the burden on healthcare professionals. They are looking at ways to eliminate clinicians spending hours on the phone for pre-authorization processes, or typing up notes, and ultimately remove steps when possible. By integrating automation technologies and digitizing routine tasks, not only will staff get back time, but administrative costs should also go down.

The good news is the stigma around mental health has fallen – maybe not completely, but significantly. For their part, BCBSMA has dramatically expanded their staff in this area, adding around 17,000 social workers, psychologists, psychiatrists and others. In some cases, the health plan is paying mental health practitioners more to bring them back into insurance networks, as they are often separate due to administrative burden. BSBCMA has also committed to pay at parity for mental health visits indefinitely.Employee Burnout

The panelists agreed that all the touchpoints of healthcare are inter-related; you can’t have a strong system if one cog in the wheel is poor. Specifically, the mental health component can be helped in part by…

  1. Digitization

Telehealth was a hot topic at the Boston Business Journal event. While it was even higher during the height of the pandemic, Tufts Medicine is still seeing about 80% of behavioral health visits and  15%-20% of all healthcare visits in a virtual format.

In summary, there’s no going backwards. Telehealth is here to stay, and Hyatt told a memorable story highlighting its value beyond mere convenience. She described a patient treated by Amwell who, at the time did not have a primary care physician (PCP) and was struggling with bronchitis systems. He was a smoker, mid-50’s, with various health issues such as emphysema and high blood pressure. He remembered he had access to Amwell and through his virtual visit, the clinician was able to discern that his nebulizer tubing was cracked, that he was not taking his blood pressure medication, and that his wife’s cuff he had been using wasn’t the right fit. After the visit these problems were resolved and he was enrolled in a care management program through the insurer from which he receives nutrition tips, reminders about appointments, and more. As Hyatt put it, “This was a consumer who would have gotten lost in the system.” Dreyfus agreed that seeing patients in their home environment can be extremely valuable, as the clinician can do things like look into their fridge to get a gauge of their diet, look into their medicine cabinet to understand drug-to-drug interactions, or flag things like rugs that could cause a fall.

Telehealth does not work for every medical issue, and some still prefer in-person care. Importantly, Dreyfus flagged up that someone seeking mental health services, for example, may not be comfortable doing so in their home, which could be the source of their stress. But as Hyatt pointed out, we shouldn’t be viewing it as telehealth versus in-person care, but how it all works together. The panelists think of telehealth as the beginning of a series of services that are more focused on the patient experience with the goal of increasing…

  1. Consumer Engagement

As Dandorph explained, a virtual healthcare visit is one aspect of where the future of healthcare is going, but we need to think about digital more broadly. He pointed out that in the tech industry for example, they have figured out how to engage consumers and be a regular part of their lives without being intrusive. Healthcare isn’t there yet. But if we can engage patients with their health early and often, and make their care needs and system navigation easier to understand, the result will be better outcomes and lower costs across the board. Dandorph introduced the concept of food as medicine and suggested partnerships that could enable all types of populations to eat healthier.

There are myriad ways to achieve such engagement, and one of them pitched by Dreyfus is to make the home the new locus of care. We were able to figure out at-home COVID-19 tests, so why stop there? Are there other tests or treatments that could be out-of-the-box? With the appropriate clinical support, better outcomes may be more likely in a home environment, and could be more comfortable for the patient and convenient for unpaid caretakers. This is especially true for elders, where the panelists agreed that long-term care needs to be a big piece of this puzzle as we move forward.

To bridge the consumer engagement gap, Tufts Medicine is thinking differently regarding hiring and leadership. Dandorph and his team brought in leaders from outside the healthcare realm, more familiar with consumer markets, who could think differently about making those connections and building brand recognition. Hyatt echoed this sentiment. At Amwell, they prioritize having a mix of staff; a balance of those from healthcare who understand the realities and the regulatory environment, and those from outside the industry who can bring fresh ideas and rethink the consumer experience. Hyatt noted that the biggest issue at a health system in New York was around payment and billing, where patients were frustrated with the complexity. We again get back to simplicity.

While all of these innovations are fantastic, we need to remember that they are not all equally accessible, which brings us to…

  1. Inequity

Like mental health, health inequity was another issue unmasked by COVID-19. There is still a digital divide, where technology solutions may not be accessible for some. There are social determinants of health to consider, Dandorph noted, such as food access, safe housing, economics, and education. When we talk about Food as Medicine, as an example, it may not be simple for everyone due to costs or inconvenience. And as Dreyfus pointed out, we are still dealing with underlying racism in care. So, what can we do about it?

recently collected all their member data – race, ethnicity, and other measures – and published it in a transparent way, highlighting where they stand now and where they need to improve equity efforts. They also developed similar reports for healthcare systems and vendors in the region. Then, they committed to using their value-based care programs to eliminate the inequities they found. The health plan made a $25 million grant to the Institute of Healthcare in Improvement in Boston. And starting in 2023 they will be the first plan in the country to pay hospitals more for achieving equity goals, as they have in the past to improve quality of care. Tufts Medicine is focused on developing more culturally competent services, as a start, but Dandorph stressed that health inequity is a societal problem that will require stronger…Improving Healthcare Partnerships

  1. Partnership

Yes, the healthcare system in the U.S. is broken in some ways. But it isn’t just up to hospitals and carriers to fix it. The panelists emphasized that things work better when silos are broken down, admitting even their organizations could work in closer collaboration, as they are aligned on priorities and direction. Dandorph explained the need for more partnership between the private and public sectors. For example, federal regulation is needed in the realm of high cost prescription drugs. Further, the government funds 40% of all healthcare in the U.S. through either Medicare or Medicaid, and many of its members are the ones suffering most from problems related to inequity and mental health. “These are macro societal issues,” said Dandorph, and as a society we need to elevate the economic status of those vulnerable communities and work on building trust between the people and the companies who can help them. This will take more work than any of the panelists’ organizations can do

alone. It will require community leaders. It will require businesses and employers to be more involved. Just like patients need help connecting the dots of their care, we need to connect the dots between each other.

Ultimately, the first 5 focus areas can be solved for only if #6 plays a larger role. Many of the objectives discussed – shifting from a sickcare system to a healthcare system, lowering costs, minimizing complexity, eliminating disparities, driving engagement in healthy behaviors – can only be accomplished through greater and widespread collaboration and connectivity.

Organizational Change Philosophy: Time for a Makeover

Heraclitus, a Greek philosopher, has been quoted as saying “change is the only constant in life.”  If that’s true, and I believe it is, then why is it so hard for us – both people and organizations – to accept change and realign goals and objectives?  We could cite deep routed tradition at universities and colleges, pillars of success permeated from board chairs at non-profits, family values passed from prior generations at partnerships, or implanted views from shareholders.  But whatever it is, the things that once got us climbing toward the top may also be what is holding us back from reaching the next summit.

As I refine my lens as a thought leader in employee health and welfare programs, I believe traditional change philosophies may be outdated.  As organizations continue to evolve and grow, those corporate flaws that once reflected in the mirror as fine lines are becoming deeper.  Workers and customers are redefining their definition of perfection and demanding more action, transparency, and change.  Alas, our approach to organizational change requires a facelift, or maybe just a makeover. Organizational Change

I think Martha Freymann Miser, PhD summarized things well in a piece called Three Myths of Change.  In that piece she highlights 3 myths of change, which reflect some outdated philosophies of change management:

  • Change Starts at the Top
  • Prediction is Possible
  • Control Equals Efficiency

Myth Makeovers

Although it is poetic to think that change starts at the top, I think it’s more accurate to say that change starts with leaders. Those leaders may or may not be at the top. In addition, I think there is a healthy skepticism that exists in many corporate cultures making it necessary to find change agents within all areas of your organization, so colleagues can take inspiration from their peers as well as senior leaders.

The myth of prediction is possible resonates with me because that is how I live my personal life…plan, plan, plan, execute. My goal is to methodically plot things out and make calculations to predict the future and remove the unknown. However, planning does not remove risk, it just mitigates it – or at least that is what I tell myself. Martha says it best with, “We like to believe we can plan change and roll it out much like a new system in a factory.” Unfortunately, that is rarely the whole story, and organizations need to accept and embrace some modicum of the unplanned.

Given the recent COVID-19 landscape, organizations were forced to reconsider how they managed and regulated performance, which is a necessary lesson in the myth control equals efficiency.  With all the standardization and best practices (which of course have a place), it’s possible we have removed the flexibility required to be pliable and see change as an opportunity rather than an obstacle.

More important than highlighting the myths, Martha summarizes three new approaches that hit the nail on the head after we have spent the last two years living in a world where change within our personal and professional lives was not just constant but imperative.

  • Use New Metaphors
  • Do Less Planning and More Experimenting
  • Celebrate Disruption

These refined strategies require that we accept our organizational flaws since they are arguably what makes our organization special, human, and best in breed.  Instead of focusing on the laugh lines, focus on what got us to today…the laughter and experiences…and build from there. If we think like aging entrepreneurs going under the knife isn’t necessary, we can makeover our organizations (and ourselves) by shifting our mindset.  From there we can reap the benefits of a stronger organization with workers who know they are living their best lives because they are part of our workforce culture and mission, not in spite of it. Our client, edHEALTH, has a model based off of the need for change for its members, and is well versed in rolling with the punches it cannot control.

Tools to Support COVID-19 Compliance

Vaccine mandates for COVID-19 continue to evolve and change. Organizations are facing pressure from various internal stakeholders as well as federal and state agencies that often contradict each other.  COVID-19 rates are declining in the US, which has translated into decreased mandates and the lightening of previous requirements. With that said, some areas of the world are experiencing a renewed surge, which may signal a pendulum swing is coming related to vaccine and mask mandates. Only one thing seems certain – mandates and COVID-19 requirements will keep changing, and employers must design programs, policies and tools that continue to be flexible.

Regardless of your organization’s current strategy surrounding vaccines, testing, and masking protocols, it is critical to consider tracking systems, communications, incentives, and equity.

  • Vaccine tracking systems. While public tools like this COVID-19 tracker are available, many organizations are wondering how they can record and track vaccine and booster status if that is a requirement for employees. Without a tracking mechanism, policies will be difficult to enforce. However, collecting vaccination status and test results is considered confidential medical information. It is important to understand the privacy factors and risks involved in housing such information. Whether using a third-party platform or something internal, make sure you cover your compliance bases.COVID-19 compliance
  • Communications. No matter the course of action you take, be prepared to deal with opposing viewpoints. If you are taking a hard vaccine mandate stance, does that mean employees who do not comply will be terminated? Are you offering exemptions and if so, how easy are those to get? Are you at risk of being sued over these policies? Alternatively, if you are not implementing a vaccine mandate or similar masking/testing requirement, it will be important to make accommodations for employees who feel unsafe in such an environment. Perhaps separate workspaces need to be ensured, or expanded remote working policies put into place. Whatever your corporate decisions, plan to over-communicate. If your programs and policies are fluid, many employers have found an information hub useful so employees know where to look for the most current information.
  • Incentives. In 2021, incentives for vaccinations were popular. State governments facilitated cash-based lotteries. Honda offered cash incentives to employees, and Kroger offered both cash and free grocery incentives. In true Massachusetts form, the state offered free Dunkin’ iced coffees to those getting vaccinated. Now, incentives have petered out a bit, but Arkansas is still handing out a $20 lottery ticket to anyone who gets a shot, and New York is offering the chance at ski passes to those who get a booster. The bottom line here is that vaccination and booster incentives are fair game. Just keep in mind that at this stage in the game, they may or may not be effective.
  • Equity. The walk back of the federal OSHA law means a patchwork of policies exist between states. If your organization has employees in multiple states, make sure you are aware of the legislation across the board. As an extreme example, be prepared to develop a policy strategy for employees in states where vaccine mandates are prohibited even for private companies. A uniform policy may not be feasible but ideally you should set corporate requirements and then adjust only where required by law.

 

The vaccine discussion has been a hot topic for over a year and we are not done with it yet, as risk factors keep changing.  If you have questions about vaccine compliance, communications, accommodations, or reporting, please get in touch with Spring and we would be happy to help. Our client, edHEALTH, and its member schools, have effectively navigated the evolving and charged landscape of COVID-19 policies, which have been even more complicated in the realm of higher education. Here are some additional tools available to help you out.

Teri’s Top 10 – December 2021

The holiday season is upon us which means we are all in a frazzled state trying to make our list and check it twice!  My mind – like yours – is not just full of work-related topics but also so many personal tasks.  Here are the top things taking up space in my brain (not all work related):

10:  Many of us have been running on some level of adrenaline over the last 22 months!  I have been listening to Unlocking Us (podcast by Brene Brown) and something she said really spoke to me: “After six to seven months of running on adrenaline, your surge capacity is maxed out and you need to find a new energy source.”  I’ve realized I don’t have a new energy source and I need to find it and that’s going to be a priority for me in 2022.

9. The status of federal paid leave within the Build Back Better plan is still unclear. I recently worked on a webinar that talked about how paid leave is an equity consideration.  That can be found here: http://resources.industrydive.com/why-americas-paid-leave-problem-is-a-diversity-equity

8. For those from the Constitution State…buckle your seat belt. Connecticut Paid Family Leave is ready to accept claims. Do not delay looking at your policies.  Make sure your internal programs are designed to run concurrently with paid statutory leaves whenever possible.  If you want access to Alera’s recent webinar, let me know!

7. The Kaiser Family Foundation (KFF) has released its 23rd annual Employer Health Benefits Survey (EHBS) and it indicates that average annual premiums for employer sponsored health insurance in 2021 were at $7,739 for singles and $22,221 for families. On average workers contribute 17% for single coverage and 28% for family coverage.  The full report is here:  https://www.kff.org/report-section/ehbs-2021-section-1-cost-of-health-insurance/

6. Data from KFF validated that employers across the board took many steps to help their members deal with mental and behavioral health benefits. Sixteen (16%) percent of employers developed new resources for employees, 31% expanded telehealth services and an estimated 4% waived or reduced cost sharing in this area.

5. There was a lot of discussion in 2021 about flexible time off (FTO) programs. If you are ending the year paying out or carrying over significant PTO liability…think about what you can do differently in 2022 to reduce that liability through policy changes and by encouraging use of time off.  Many employees are burnt out and need time away to recharge and be the best version of themselves for their co-workers and their families.

4. Employers are facing yet another round of COVID-related decision making. From vaccination mandates, benefits premiums, remote work and more, we are bringing you our survey results here on how businesses are tackling these issues.

3. Pharmacy costs continue to climb with a lot of attention on high-cost gene therapies that may have up to a $2.125M annual price tag per year. For self-insured employers, you need to be very thoughtful about how you handle these costs. More funding solutions are entering the market, but you need to think holistically.  For fully insured employers, make sure your renewals consider spreading these large claims (typically through pooling point) so it’s a more accurate reflection of your ongoing experience.

2. The No Surprises Act certainly feels like it will be full of surprises. Although carriers and TPAs seem “ready” to comply but nobody is exactly sure how it will work just yet or what cost impact we can expect.  So…that’s stressing me out!

1. The last item, which might encompass my entire list in January, is workforce planning.  We need to dig deeper into this great resignation and figure out how we retain top talent, plan for succession of employees, and encourage retirement when appropriate.  More to come on that…

Teri’s Top 10 – November 2021

First edition (hopefully not the last)

Like many of you I spent most of 2020 building a cocoon around myself and my family.  Although I have fared very well compared to others, it has been a battle the last few months to dig myself out of the cocoon I started building in March 2020.  It felt like my regular routine – which never seemed like much of a burden before – was TOO MUCH.  During the down time I thought of countess things I should be doing…yet did very few of them.

So, starting this month, I’m going to attempt to do at least one of the things I talked about…craft a top ten list for my HR colleagues.  I want this to be digestible, as I know we all have a lot of emails and other materials to read, so I will include 5 meaty topics and 5 quick hits.

#10:  We ended October thinking we would know soon if 12 weeks of federal paid leave will finally become law. My prediction was that although momentum was gained within the Build Back Better infrastructure package and things were advanced in the House, the simmer in the Senate will be like my pasta sauce on a busy Sunday…well-intentioned but burnt on the bottom. Some legislators are hoping the private sector will pick up the tab through some type of mandate, others are hoping that a smaller duration benefit (i.e. 4 weeks) would be more palatable.  At this point it’s hard to know if my pasta sauce will be on the menu this week or burnt to a crisp.

#9:  If you have been living under a rock you probably still heard the FDA advisory panel has OKed COVID-19 vaccines for children ages 5-11.  The Kaiser Family Foundation research indicates that 1 in 3 parents say their child will get the vaccine right away once eligible. Employers should be prepared for potential time off requests for not only the vaccine but also if any additional care is required.  Here are some additional insights from KFF.

#8:  If you aren’t aware of GISThealthcare, it’s one of my favorites. They recently shared an infographic about the burden of mental health on emergency room departments.  It’s very insightful and reminds me how important behavioral solutions are for employers. Here is the content that grabbed me.

#7:  Diversity, equity and inclusion is and should be a priority for all employers. That cannot exist without health equity. When folks ask me where to start, I suggest beginning by giving it a definition, setting tangible short-term goals and at a minimum start gathering data. The basic tenants of health equity from a 2017 Robert Wood Johnson Foundation still resonate and are the core tenants of the work we do:

  • Identity important health disparities
  • Change and implement policies to remove those unfair practices
  • Evaluate and monitor your efforts with short- and long-term measures
  • Reflect and plan next steps

#6:  We continue to support employers as they review their absence policies to ensure they are compliant and in line with peer for the best attraction and retention. We recently produced a white paper related to parental and family leave.  You can find it here.

#5:  MA PFML has increased in benefits in 2022 and decreased contributions. MA employers should notify their workforce of the changes (employee acknowledgments are not required with this update; but you should continue to track acknowledgement for new hires).

#4:  CT PFL goes live January 2022. The State of Connecticut announced in July that Aflac has been selected as claims administrator for the paid leave program. Spring/Alera will have another webinar to help support any final implementation questions, stay tuned for details.

#3:  My colleague and friend Gretchen Day was quoted in the NYTimes about financial stress.  In short, she advocates employers to think more holistically about employee issues.  Give it a read.

#2:  Was delighted to collaborate with Aimee Gindin at Torchlight for a piece around Biden’s paid FMLA program.  We talk about juggling the 3Cs – Cost, Compliance and Culture.  Check it out here.

#1:  As HR professionals, I know you put your blood, sweat and tears into open enrollment.  It pains us that so many employees wait until the last minute or may not pay attention or understand the plans even though we have taken great care to make information accessible. My reminder to my HR friends and colleagues is for many employees, choice related to benefits is a burden. What we view as a comprehensive suite of thoughtful offerings is a chore on their to do list. They know how important it is but sometimes that makes it even harder to commit. Try to be patient with them!

 

Until next month!

Teri

In a World of Uncertainty, a Captive Can Be Your Constant

As seen in the Captive Review Group Captive Report, September 2021.

With the rapid spread of the Delta variant, the Covid-19 pandemic continues to leave employers with a series of unpredictable risks directly related to the pandemic. Among these risks is the potential higher cost of healthcare benefits offered to employees, a factor which must be built into any long-term risk management or cost-containment strategy. Covid-19’s impact on healthcare costs Based on tracking data across multiple employers, the future impact of Covid-19 on high cost claims will directly impact health insurance. Key factors include:Healthcare cost management

  • Direct costs related to Covid-19: Costs associated with testing, treatment and vaccines remain a primary source of plan costs. The most direct impact on captives is the high cost treatment tied to severe hospitalizations, particularly due to potent strains of Covid-19 like the Delta variant. There may also be ongoing health needs for members who recover from Covid-19 or are long-haulers.
  • Deferral of care: Plan members have chosen to defer elective treatments. While some of this care was eventually incurred over the course of the last year, many plan members continue to hold back on care, whether because of discomfort in a hospital setting or difficulty in finding care due to bandwidth issues. This influences future costs, particularly with unpredictable costly surgeries.
  • Missed preventative care: Client data across industries also showed a significant reduction in preventative care visits, and lower test numbers in areas such as labs, CT scans and MRIs. As a result, many employers are concerned because if certain health issues are not identified and treated early, the severity of the case and corresponding cost of care may be higher down the road.
  • Behavioral health: Covid-19 propelled behavioral health issues into crisis levels. While it may seem indirectly related to broader healthcare, consider this: the national Alliance on Mental Illness reports that cardiometabolic disease rates are twice as high in adults with serious mental illness, and that depression and anxiety disorders cost the global economy $1 trillion annually in lost productivity. We are sure to see the repercussions of this in claims costs to come.

Health insurer risk premium margins built into insurance pricing have been increasing in light of all this uncertainty, as well as broader trends such increased prevalence of high cost specialty drugs and increasing hospital costs. In fact, the most prevalent specialty medications are increasing in price at 10%-15% annually, further contributing to unpredictability of future claims.

Employer Considerations

During the pandemic, employers have needed to confront their organizational philosophy on the employee value proposition and balancing the investment in employee benefits with the impact on the company’s stakeholders. The impact of Covid-19 has made employers more acutely aware of the need for sufficient healthcare coverage for employees and their families.

In order to provide attractive benefits in an environment of rising costs and volatility, employers must rethink the programs they offer and how they are funded. Many organizations have also revisited benefit program governance structures, how decisions are made, and how programs are monitored.

Perhaps your remote workforce has different needs than they did in 2019, or the pandemic has triggered new problem areas that can be addressed through wellness solutions or advocacy tools.

No matter your path, employers seeking to ensure that they offer comprehensive healthcare benefits to employees at an affordable cost need to consider the financial management benefit of potential long-term cost savings and mitigation of volatility associated with captive structures.

Captive Arrangements for Employee Benefits

As employers look at the impact of the pandemic, organizational planning requires balancing the increasing cost of healthcare with the risk associated with solutions that reduce the total cost of the program. At its simplest form, health insurance can be expensive if a fully insured program is purchased, as organizations pay a risk margin, often 20% to 40%, for transfer of the risk to an insurer. Small to mid-sized organizations typically mitigate this cost by self-insuring a portion of their healthcare risk with medical stop-loss to cover higher cost claims. However, the higher risk premiums required by health insurance, including stop-loss insurance, lead to steep healthcare plan costs and/or, in some cases, being forced to take on higher-than-optimal risk.

A captive arrangement is a strategic way for employers to benefit from self-insurance while creating a sustainable solution to partner with commercial markets. Captives provide substantial competitive advantages over traditional self-insurance, such as:captive insurance

  • Reduced total cost of insurance: Insurance carriers develop premiums by heavily weighing on industry averages, state rates and, to some degree, on an employer’s individual loss experience. This may lead to pricing that may not accurately reflect an organization’s actual loss experience. Insurance carriers usually price to include substantial overheads, including risk and profit margins. A captive provides employers an opportunity to recapture premiums from the commercial market and build a sustainable long-term model for their insurance needs.
  • Insulation from market fluctuations: Conventional commercial insurance is vulnerable to market fluctuations. This has never been more evident than today, with hard insurance markets and premiums that are increasing substantially with almost no change in coverage level. As a member in a captive program, employers are less susceptible to unpredictable rising costs imposed by conventional insurers every renewal season, as a balanced funding approach can smooth the cyclical volatility of the commercial insurance markets.
  • Protection from cashflow volatility: Leveraging a captive to fund medical stop loss can lower the cashflow volatility often faced by self-insured programs on a monthly basis. Having a captive cover claims at a substantially lower stop-loss level allows employers to smooth out plan funding and mitigate cashflow risk to the company.

For employers that may not have their own captive or the resources to form one, there are a variety of group captive solutions in the medical stop-loss space. These solutions are turnkey in nature and simple to implement. Most well-structured group captive programs aim for a seamless transition for employers where there is almost no disruption. In other words, from an employee’s perspective, the claims process is entirely the same. With group captives in particular, all the mechanical aspects are handled by the group captive management team, with minimal effort required for an employer.

There are several group captive arrangements that employers can tap into. In selecting the most appropriate arrangement, you need to consider factors such as the upfront cost of the program, the extent to which customization will be available, the flexibility you will have for your organization within the group captive model, and how renewals will work.

Looking Beyond the Pandemic

As we look forward beyond the pandemic, employers should consider ongoing healthcare program effectiveness. Healthcare costs will continue to increase and become a larger portion of organizational budgets, but it is not too late to start leveraging innovative solutions to mitigate these costs. You can proactively adjust your tactics today and be better prepared for tomorrow, and with a captive you are truly in the driver’s seat.