I had the pleasure of leading a panel last month at the 2023 VCIA Annual Conference entitled, “Tips for Communicating the Value of Your Captive,” and it was a lively discussion with great takeaways I wanted to share.

Background

Today’s economy is tough, and the insurance markets have hardened. As a result, organizations are in reactive mode, looking for combative strategies to mitigate bottom-line issues. A captive insurance program has long been a risk management tool that allows organizations to weather proverbial storms like these. For those organizations with a captive, risk managers might have to defend against a piggyback mentality from leadership or other stakeholders, because the current environment creates temptation to treat a captive like an ATM regarding surplus. In addition, goals and purpose surrounding a captive are likely to change over the years. As such, it’s important to be able to illustrate captive performance in tangible ways that will resonate with audiences outside the core captive team.

Captives as Problem Solvers

There is a time and place to leverage capital surplus from a captive, but a great strategy is to use that by pouring additional coverage and innovation back into your insurance programs. To do so, we recommend securing reliable relationships with your broker and actuary to understand your captive’s risk appetite, what problems could be solved via a captive, industry statistics and trends, and whether the risk is worth the reward for a particular initiative. TPA or data analytics partners are also critical to assess exposures and determine potential loss prevention measures. Lastly, your captive manager should serve as a valued second opinion and will help evaluate the ramifications of exposing equity in the captive to new potential losses.

The ultimate goal here should be to reduce the total cost of risk (TCOR).

To bring concepts to life, one of Spring’s clients used captive surplus to hire a return-to-work coordinator, which in turn improved overall disability and productivity goals. Another client worked to obtain sexual abuse & molestation coverage that was difficult to procure. A private equity firm was able to retain ransomware coverage after a significant claim hit and utilized the captive to buy down the retention for individual entities, mitigating premium increases.

Metrics to Consider

Every captive has different experience, objectives, and risks represented, so it is hard to pinpoint benchmarks that will hold true across every program. That said, there are some factors and calculations that should be top-of-mind regarding captive performance.

Qualitative

While numbers and hard ROI are often the priority, “soft” indicators, such as those listed below, should not be discounted.

Quantitative

For the numbers crowd like our actuaries, below is a non-exhaustive list of metrics to consider when working to gauge your captive’s success.

Given the difficult markets we are facing as an industry, we are stressing to our risk manager clients the criticality of captive optimization, but also the need to truly have a pulse on your captive’s performance and be able to illustrate it to a wider range of stakeholders who may be under financial pressure. If you could use assistance in developing customized key performance indicators (KPIs) for your captive program, or in diving into these qualitative and quantitative measures at an organization level, Spring’s consultants and actuaries are ready to help.

As a mark to the end of summer, The Disability Management Employer Coalition (DMEC) hosted their Annual Conference in the beautiful (and beachy) San Diego! The conference is in a different city every year, and it was refreshing being by the water this time. DMEC is one of the leading organizations in the absence and paid leave landscape; their conference brings together stakeholders from all across the industry to connect and discuss trends and best practices.

Here are some buzzworthy topics I wanted to share from the conference:

1) Mental Health Support

Although the demand for employer support for mental health and wellbeing services may not be as high as it was during the COVID-19 pandemic, it remained a hot button topic at this year’s conference. As mental health support solidifies its place in the benefits industry, employers are looking at innovative ways to stand out and cut costs. Some related presentations I found insightful include:

-The very first session of the conference, “A Mental Health Culture Shift: Addressing It from the Top Down,” brought together representatives from multiple health systems to discuss the importance of developing mental health resources that work for employees of all levels.

– In the presentation, “The Echo Pandemic: Mental Health, Lost Time, and Benefits Spend,” the speaker reviewed the ROI impact of preventative wellbeing solutions on benefits spend and workplace culture.

– In a one-of-a-kind presentation, a licensed psychologist reviewed “Regulated Psychedelics for Mental Health & What You Need to Know.” As psychedelic therapies are expected to be approved in 2023-2024 for PTSD treatment, this session reviewed how this will impact employers and their mental health offerings.

2) Compliance Strategies

It seems like at every conference and event I attend, compliance is top of mind for employers across the nation. With shifting national, state, and local regulations, it can be difficult to stay compliant while satisfying a dispersed workforce. Here are some noteworthy sessions related to compliance:

3) Returning to the Office/WFH Approaches

As the worst of the pandemic echoes behind us, many employers are trying to revert to tradition and get people back in the office (or find some middle ground). Decisions made regarding this dynamic will lay the foundation for employee culture and how employers approach leave management. Below are some relevant presentations I wanted to highlight:

– Experts discussed “Transitional Return-to-Work Programs that Last,” this included the cost benefits of these programs and tactics to educate and motivate front-line managers.

– A representative from Headversity, provided tips and resources to help empower future generations of women leaders. This included addressing accommodations that support the work-life balance of female employees.

4) Leveraging Tech

Tech in the absence and disability space continues to evolve with the introduction of new innovations and tools that can help create efficiencies and drive best practices. Even building on existing tools and systems can help us better understand current patterns and trends. Here are some presentations I found most insightful:

– In an interactive session with DMEC’s CEO, Terri Rhodes, Spring’s Jackie Myers and me, the attendees engaged in DMEC Benchmarking Jeopardy, which spotlighted DMEC’s new benchmarking platform that Spring helped build, which will give users an easy and user-friendly way to compare and contrast absence management policies and procedures.

– My colleague Marcy Updike and I reviewed survey data that analyzed the monetary value of flexible time off programs and their potential impact on recruiting and retention during our session, “The Value of Workforce Flexibility: Impact & Tradeoffs.

– Representatives from three different absence software companies discussed “Key Considerations for Selecting & Implementing Software as a Solution.” They reviewed employee considerations for implementing absence software and tips for managing day-to-day operations.

As a regular attendee and partner of DMEC, I have to say this may have been my favorite destination to date! As we approach the end of summer, it was great enjoying a few days of sunny weather. Throughout the busy few days, the Spring team and I had a great time reconnecting with industry leaders and deepening our knowledge of innovations in the leave management space. We are excited to see what next year’s conference has in store for us!

At the end of 2022, Vermont became the largest captive domicile globally with 639 active captive insurance companies. So, it was only fitting that the Vermont Captive Insurance Association (VCIA) had one of the biggest turnouts this year at their annual conference, which brings together insurers and reinsurers, captive owners and risk managers, regulators and other industry professionals to network and discuss current trends in the industry. This year the Spring team and I had the pleasure of once again exhibiting and speaking at the conference in beautiful Burlington, Vermont. Below are some of the topics that took the spotlight.

1) Managing economic fluctuation

From groceries to rent it seems like nobody can avoid inflation, which is no different in the captive insurance and risk management sectors. Due to increased claims, stricter underwriting and high healthcare costs, many employers are looking into alternative risk financing options to stretch the dollar. Below are some of the sessions from VCIA I found most pertinent when addressing the economic landscape.

– In a session titled “The Economic Landscape & Your Captive’s Investment Portfolio,” speakers reviewed how interest rates, inflation, and other economic indicators have changed the captive industry post-COVID.

– The session “Impact of Inflation on Your Captive” reviewed how rising inflation and supply chain interruptions are impacting the captive industry, and what we can expect moving forward.

2) Pitching captive insurance

Although captive insurance can increase savings, reduce risk, and lead to investment opportunities, C-suite and other stakeholders may be hesitant due to resources and risk. No matter how efficiently a captive program is designed, it can’t be maximized without buy-in from all parties. Here are some presentations I found most insightful on boosting communication.

3) A look forward

In just the past half decade we’ve seen drastic developments globally including devastating climate events, a widespread pandemic and war spreading overseas. These events remind us that there are always factors beyond our control that can complicate established best practices, but VCIA speakers gave their views on what’s to come.

a) Prepping the next gen

As an annual attendee at VCIA it was great to see the sheer number of new faces and developing talent at the conference. This year VCIA made sure to include an array of introductory level sessions designed to solidify foundational captive knowledge for those entering the industry. Some of the sessions I found most intriguing include:

– A two-part session titled “(The) Newcomer’s Guide to the Captive Industry” brought emerging leaders together to express their unique experiences in the captive space and tips for others entering into captives for the first time.

– In an interactive discussion group on “Building Talent in the Captive Industry,” industry leaders discussed major workplace challenges and tactics for building a strong talent base that will one day drive the future of the industry.
b) The future of captive insurance

Although often thought of as a traditional sector, we continue to see innovative approaches to risk financing across employee benefits and P&C. Here are forward-looking presentations I found interesting.

– A captive owner and business professional explored recent innovations and solutions in the ‘captive insurance laboratory’ during their session, “Where Will Captives Go Next? The Latest Uses for Captives.”

– One group of speakers took an interesting approach and spoke on “Leveraging New Tech and Data Visualization Tools for Captives.” They reviewed how various stakeholders can utilize tech to bolster actuarial analyses and efficient decision-making.

As a regular VCIA attendee, I found this conference to be the most fun to date. Aside from all the happy hours, free giveaways and tasty meals, I had a great time reconnecting with industry leaders and deepening my knowledge of captives. On behalf of Spring, my colleagues and I enjoyed the opportunity to exhibit and look forward to next year’s conference. Lastly, I had the pleasure of being accompanied by a captive owner and stop loss carrier to present on risk management strategies that are impacting employer-sponsored health plans and the rising costs associated.

A summary of our webinar with the Northeast HR Association (NEHRA)

When it comes to health and productivity programs, the past several years have been a time for Benefits and HR professionals to test out a range of initiatives in response to pandemic and post-pandemic challenges, priorities, and employee expectations. Now, however, the market is in a different place and it is time to assess the impact of recent program offerings; does the reward outweigh the risk?

The Big Picture

Today’s economy is creating urgency around making sure benefits programs are properly managed. High inflation rates touch everything; the impact doesn’t stop at the grocery store or the gas pump, it extends to already high healthcare costs. In addition to the economic reality, we have seen an increase in healthcare utilization coming from new treatments and technologies available, further increasing costs. Relatively low unemployment may have shifted attraction and retention goals for some organizations, but a rise in layoffs is having tangible effects on the labor market at large which trickles down to employer strategies. It’s not just employers facing challenges, though, as healthcare services have become unaffordable for many and consumers/employees are also feeling the cost burden.

As a starting point, take a look at your data to answer questions like:

You should then be able to assess whether or not your benefits align with your population as well as your corporate objectives. When determining true return on investment (ROI), it’s important to consider both human and financial perspectives.

Now that we have established a bird’s eye view of the risk versus reward equation, let’s drill down into key plan components that factor in.

1. Risk Management

There are a range of risks to consider within your benefits strategy. There is the risk of buying insurance, and the allocation of funds. There is the risk to your employees of undertaking a high cost treatment, if necessary, which may not be feasible for lower wage workers.

When it comes to benefits funding, the following graphic illustrates the spectrum of options available, where the risk taken by the employer increases as you move toward the right.


While a fully insured plan largely frees the organization of risk, there is typically a lot of overhead and administrative costs involved and less governance when it comes to claims management. Overall, though, we encourage our clients to consider this spectrum and determine where they fit in related to risk appetite, budget and resources, specific health trend, and more.

2. Financial Management

Related but separate from risk management comes the financial management of your benefits program(s). There are three key activities that fall within this bucket:

The insights gleaned from the financial management arm should be embedded into your overall benefits and risk management strategy, rather than live in a silo.

3. Pharmacy

Pharmacy has been top of mind for employers, understandably so given the rapid rise in prescription drug costs, which now constitute anywhere from 20-25% of total healthcare spend in the U.S. Specialty medications account for 50% or more of pharmacy spend even though only about 2% of the population is using them. Brand and generic drug costs are also rising at rates we have not seen in the past, perhaps in correlation with inflation. Suffice it to say, employers are struggling to mitigate their own costs as well as the costs for their employees. So, what can be done?

Within the pharmacy benefits landscape, two areas have been getting a lot of attention: weight loss drugs and biosimilars.

Weight Loss Drugs

Chances are you’ve heard about a new wave of “Hollywood diet” drugs. There has been an enormous amount of marketing going on around these new weight loss drugs, especially in the realm of social media and influencers. All of the buzz has also gotten the attention of employers, who are asking us questions surrounding coverage, costs, and pros and cons.

To provide some background, of the four weight loss drugs taking center stage, only two have indications for weight loss, while the other two are being used off-label. Weight loss drugs are not new, but these varieties are showing results we haven’t seen before, and their arrival on the market is timely, as about 42% of the population is either overweight or obese.

From a health and productivity standpoint, we know that obesity increases a person’s risk of developing a chronic condition, which leads to higher healthcare costs. But we also know that there are financial and non-financial reasons to foster a happy and healthy workforce. Can and should weight loss drugs be an answer for employers?

These new drugs are retailing for about $1,300 a month, so we need to consider annual costs and the longevity of how long an employee will need to stay on the medication. For employers considering them to their plan, we recommend it being one piece of a comprehensive strategy that also includes wellness initiatives and/or a commitment from those prescribed the drug. In addition, you must build strong monitoring protocols to judge effectiveness and impact on overall plan costs and utilization.

The inclusion of weight loss drug coverage in a health plan will make sense for some employer groups, and not others. We recently talked with an employer client who saw enough value in even a 10% reduction in body weight to convince them to cover the drug. However, any decisions need to be based, once again, off of population data and corporate objectives. This is a new and evolving sector, so your strategy should remain fluid as we see developments.

Biosimilars

Biosimilars are non-generic alternatives to those specialized medications that are very targeted in how they work and on what conditions they combat. There has been a lot of anticipation surrounding biosimilars as a solution to the specialty drug cost crisis. At the beginning of the year, a biosimilar of Humira, the number one drug dispensed in the U.S. which is used to treat inflammatory conditions, entered the market as the first biosimilar. While there has been some impact, to date it has not been the silver bullet we were hoping for. We can see below that biosimilar adoption rates are all over the map depending upon the condition for which it’s being utilized.


For employers, what’s important is vigilance in understanding where your Pharmacy Benefit manager (PBM) has positioned biosimilars as far as coverage is concerned. We have found that PBMs are placing biosimilars typically at the same parity with the reference, or brand name product. In this case both Humira and its biosimilar would be considered tier 3 medications, which does not yield the anticipated savings. Why is this? Well, there may be additional rebates available to employers and health plans if they continue to use the reference product.

This is a complicated space that continues to change at a rapid pace. Overall, though, if biosimilars are working the way we want them to, we need to figure out a way for all stakeholders to embrace them as a lower cost alternative instead of being locked into brand name drug prices. In some cases, the drugs are life-changing, so we do want to cover them but in a more sustainable way. We work with clients to ensure they are informed of and ready for these advancements and nuances.

4. Targeted Point Solutions

The term “point solutions” now represents a large umbrella of tools, however it typically references programs that target specific diagnoses such as diabetes, oncology, and hypertension. In recent years there has been significantly more interest in point solutions from our employer clients, and, especially with multiple solutions running at a time, these can be a slow leak on spend. Now is a good time to take a step back to answer that risk versus reward question for point solutions.


The best place to start in assessing point solutions whose reward outweighs the risk is data analytics. Try to use any data you are getting from your health plan, internal teams, or the industry to benchmark your spend. In areas where your spend is high relative to benchmarks, do a deep dive for potential solutions that can help. Some pitfalls in this area include:

5. Absence Management

Absence management is highly correlated with your health plan performance, since the vast majority of your high cost claims will also include a leave of absence, so there are both plan costs and productivity rates at play here.

Making absence programs more challenging is the volume of stakeholders involved and laws with which you need to comply (as seen below).


Further, when we talk about absence management, we account for a wide range of benefits including short- and long-term disability, statutory disability, workers’ compensation, FMLA, ADA state paid family and medical leave (PFML), and others.

With absence, different than with medical plans, your company’s managers and supervisors are directly involved when it comes to plan design, governance, staff training, etc., so it is an area where you typically need to look inward to drive change.

When it comes to the risk/reward balance of an absence management program, employers can make sure corporate programs are set up the way they want, for example, promoting the right attraction and retention strategy. Remember that the more generous your programs are, the more they will cost and the higher the risk you take on. If shifting some responsibility to an outsourced partner, be sure you still have monitoring protocols in place.

Closing Thoughts

Across these five areas and more, we encourage you to get familiar with your organization’s plan and demographic data. Depending on your size, the level and depth of data available might be different, but there is always some data available, such as industry standards and benchmarks. Whether you are focused on weight loss drug strategy, funding, or point solutions, you can take those data-driven insights and apply them across these four pillars to determine your best practice.

If you are having trouble getting started, or could use specific guidance surrounding the topics mentioned, please get in touch with our team.

As we wrap up Mental Health Awareness Month, it was only fitting that the New England Employee Benefits Council (NEEBC) hosted their Annual Summit just a couple of weeks ago. Mental health awareness and wellbeing resources are top of mind for employers and HR teams across the nation, and, as we saw at NEEBC, specifically a focus in New England. Some additional hot button topics during the conference included:

1) Inflation/cost control strategies

Maneuvering around inflation and costly claims are top priorities for benefits professionals nationwide and was a constant topic of discussion by both presenters and attendees. The first keynote panel focused on the “Current Economic, Political and Cultural Landscape:  Where We Are. Where We’re Going. Why It Matters.” They explored typical cost drivers, workplace trends (hybrid, remote, and on-site), and how HR teams can help preserve New England’s unique culture within their workforce.

2) Understanding the needs of your workforce

As many employers have shifted to remote and hybrid models, communication and understanding the needs of the workforce has been challenging for many. One session that really resonated with me included two benefits specialists from ZOLL Medical; they reviewed how benchmarking and survey data helped give their workforce a voice when it comes to their benefits. On the other side, they also looked at pitfalls and obstacles they faced initially and how they overcame them, and steps they took to optimize their survey process.

3) Promoting wellbeing and mental health

Finally, mental health and employee wellbeing continue to be top-of-mind at HR and benefits conferences across the nation. As mental health resources have become a mainstream benefit area, employers are now looking at alternative and new programs to stand out and retain/attract talent. A professor from Northeastern University’s Department of Health Sciences presented on social determinants and their impact on employee health and wellbeing. He leveraged his research to outline best practices and how HR teams can alter their offerings to fit the needs of a diverse workforce.

As a pharmacy consultant, I was excited to see the interest people had in Rx cost control tactics, PBM logistics, and specialty drug strategies. The costly and challenging landscape of pharmacy benefits should motivate employers to implement program changes; we can help. Here are some considerations and tools employers can utilize to address employee wellness, which, in turn has a direct impact on pharmacy costs. Thank you to NEEBC for another insightful event and we look forward to the next one.

Every year The Risk and Insurance Management Society (RIMS) hosts their annual RISKWORLD conference, which brings together thousands of risk professionals from across the globe to network and discuss current trends and new innovations in the industry. This year the conference took place in Atlanta, GA and featured a wide range of fun activities including a pickleball tournament, a golf event, and a group of service and therapy animals to play with. Outside of all the “extracurricular” activities the conference had to offer, it helped paint a clearer picture of what is driving the risk management sector and how employers are combating different obstacles. We noticed that the following five areas got a lot of spotlight at RIMS this year.

1. Career Development

It seems like every year increasingly more sessions are focused on the future of the risk management sector and how young professionals can grow into industry leaders. As boomers begin to retire and millennials start taking on larger roles, conferences like RIMS are recognizing the need to be sure the next generation has the tools they need to be successful. Below are some of the top sessions I found most interesting:

– A session titled, “How to Take Risk Off the Books and Demonstrate Your Value to the C-Suite” focused on strategies risk professionals can take to properly explain risk mitigation strategies to C-suite executives to help elevate their value.

– Risk Directors from two different universities presented on the importance of teaching the next generation about non-traditional risks and preparing them for future barriers (ex. cyber liabilities, ESG, climate change, etc.).

– One session took a unique approach and brought together three industry leaders that were originally on the same team but all accepted different opportunities. Each presenter gave insights into their specific journey and what young professionals can do to drive the trajectory of their careers.

2. Claims Management

As inflation is top of mind for businesses across the globe, cutting costs and managing claims is a high priority for risk teams. This year presenters looked at a range of business lines and various approaches to handling claims processes.

3. Cyber and Technology Risk

Although cyber is not a new concern the risk-world (no pun intended), we are seeing a lot of evolution and maturation in this space. This year speakers tackled cyber coverage from many different points of view, some of which included:

– In the session, “Ransomware Postmortem: The Anatomy of a Cyber Breach,” the presenters expressed what employers can do at different stages of a cyber breach to mitigate losses, and what is going through the minds of hackers during planning, execution, and post cyberattacks.

– In response to the Ukraine-Russia War, one group presented on current cyber warfare trends and how international sanctions can impact regulations and cyber claims.

– The session, “Understanding Autonomous Vehicle Risk and Insurance,” speakers gave a comprehensive review of autonomous vehicle risks and market conditions to pay attention to, such as legislative developments and availability of insurance products.

It seems like every year we are seeing new developments in the world of captive insurance on both the national and international scales. After recently attending The Captive Insurance Companies Association (CICA) 2023 International Conference, I wanted to share some of the hot topics on the minds of captive professionals around the world. As a board member of CICA and chair of CICA’s NEXTGen young and new professionals committee, I was excited to be so involved this year. The conference definitely did not disappoint; in addition to “extra-curriculars” like the golf tournament and brewery tour, the event also provided great opportunities for networking and learning about current trends and best practices in the world of captives and what the future holds for the industry. I hope you enjoy these highlights.

4. Diversity, Equity, and Inclusion (DEI)

As we progress through 2023, employers across the nation and internationally are working to develop programs that address DEI efforts. Although DEI was not the leading topic of discussion this year, I still wanted to share some of my favorite sessions that address unique social issues in the risk management/insurance space.

– Workers’ Compensation experts clarified how understanding DEI needs of injured workers can directly help with the recovery process and their return to work. Furthermore, they explained how greater communication can reduce the risk of continued disability and litigation.

– As Artificial Intelligence (AI) is making headlines globally for its potential (both negative and positive), many fear for perpetuated biases the systems may hold. One presentation investigated potential discriminatory liabilities when it comes to automating recruitment and other employment decisions and how it can intersect with different compliance regulations.

– A group of 5 female executives tackled the issue of women in leadership positions in the risk management/insurance space and tools they utilized in their career paths to help combat gendered stereotypes and achieve leadership roles.

5. Strategic and Enterprise Risk Management

When it comes to developing a concrete and concise program, risk management teams have an abundance of options and strategies to consider. This year, enterprise risk management (ERM) was a hot button topic, with sessions covering:

– The session, “Social Media: Managing the Continuous Stream of Emerging Risks” explored a new stream of liability, social media risks. Speakers from Oracle and Salesforce reviewed the history of social media risks and potential response plans for future incidents.

– Two insurance executives reviewed how the pandemic forced organizations to integrate resilient and adaptive programs, opposed to more traditional and defensive programs we saw pre-pandemic. They then laid out risks and disruptions organizations should be ready to face in the post-pandemic world.

– A representative from Merit Medical dove into her company’s approach to ERM and how they optimized their program through strong leadership support. Her session was titled, “Enterprise Opportunity Management: Optimizing the Value of ERM with a Focus on the Positive.”

As a regular RIMS attendee, I have to say, this conference was one of the best. I was able to connect with so many interesting people and deepen my understanding of best practices and trends. Aside from the socializing and happy hours, Spring had a great time exhibiting and attending the informative sessions; I look forward to next year’s conference! In the meantime, our team will continue to assure we provide clients with industry leading captive and alternative risk financing services.

As we progress through 2023, maneuvering changing regulations and compliance updates have been challenging for HR professionals across the nation. Many COVID-19 provisions are expiring soon, states are constantly shifting paid leave policies and managing hybrid/remote workforces are just a few hurdles employers are facing when it comes establishing effective and compliant leave programs. Every year the Disability Management Employer Coalition (DMEC) hosts their Compliance Conference, where experts from around the nation discuss current trends in compliance, best practices for employers, and the future of the industry. This year I traveled to the beautiful (and warm) Orlando, Florida, to attend this year’s conference. As per usual, the conference provided a great platform for networking and ensuring attendees are tuned into the most pressing compliance matters.

This year, my colleague, Jennifer Campagna and I presented on Navigating Ancillary Paid Leave Options to Support Employee Well-Being, but with a unique twist. We included an interactive game to help attendees understand the benefits of ancillary leave options and how they can intertwine with your current offerings. During the session we handed out “Leave Bingo”, a Bingo-style game where attendees listened for key works and concepts throughout the presentation, to see if they have the words on their Bingo board. Winners received prizes and we all got a little pick-me-up from the chocolate provided. I was impressed with the leave offerings employers across the nation have adopted, some of which we covered in our presentation, like leave related to domestic violence, bereavement, mental health, and more. Although all these ancillary options sound great, they can be costly and difficult to manage from a compliance standpoint.

Aside from the game, we reviewed federal and state laws influencing corporate leave policies and how successful companies are managing their policies. Our presentation included case studies on organizations that implemented alternative leave programs and how it impacted their workforce. Many employers have realized one key to retaining/recruiting talent and combating productivity loss is by revaluating their leave policies and addressing pain points.

Some less traditional types of leave include:

As a board member of DMEC and an advocate for equitable paid leave programs, I am delighted to see where the future of the industry is headed. It is unlikely that we will see a nation-wide Paid Family and Medical Leave (PFML) program introduced in 2023, but we are consistently seeing updates and clarifications to regulations such as the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA), in addition to the uptick in state PFML programs and adjustments to existing state plans. Spring and I will continue to keep you up to date with updates in the absence management space and provide our clients with industry-leading programs that best match the needs of their specific workforce.

*Additionally, all Spring/Alera clients receive complimentary access to AleraHR and Alera Dashboard, which provide digital tools that help employers and HR teams manage employee benefits compliance deadlines and updates. It also provides users with a robust compliance library with insightful guides, comprehensive checklists, tools and calculators to create forms, job descriptions, explore salary comparisons.

It seems like every year we are seeing new developments in the world of captive insurance on both the national and international scales. After recently attending The Captive Insurance Companies Association (CICA) 2023 International Conference, I wanted to share some of the hot topics on the minds of captive professionals around the world. As a board member of CICA and chair of CICA’s NEXTGen young and new professionals committee, I was excited to be so involved this year. The conference definitely did not disappoint; in addition to “extra-curriculars” like the golf tournament and brewery tour, the event also provided great opportunities for networking and learning about current trends and best practices in the world of captives and what the future holds for the industry. I hope you enjoy these highlights.

1. Regulatory and Tax Updates

As per usual, regulatory updates were a highly discussed topic during the conference. As a long-term attendee and speaker at CICA’s annual conferences (and other captive conferences alike), regulatory updates are always pertinent, as laws and best practices are constantly shifting, as seen in the following:

– In a session titled “The Lay of the Land: Captive Taxation,” speakers explored recent administrative, legislative, and judicial updates affecting captive taxation, with a focus on 831(b) small captives.

– Following the addition of 87,000 IRS agents (following the Inflation Reduction Act), a group of tax experts and a lawyer discussed how this will most likely impact audits of small captive cases.

– Three state regulators from North Carolina, South Carolina, and Oklahoma discussed updates we can expect to see from various domiciles during their session, “There’s a New Sheriff (Regulator) in Town.”

– On the second day of the conference, I presented on “What’s New with the DOL and Employee Benefits?”, where we delved into the upsides of writing employee benefits into a captive and how it intersects with DOL regulations.

2. Navigating Inflation

From eggs to rent, no sector can avoid inflation, including the captive/alternative risk financing arena. With that being said, controlling costs and reducing risk is a top priority for many employers across industries and around the world. This year I heard some exciting ideas when comes to addressing inflation, some of which included:

3. The Captive Formation Process (Experiences from Captive Owners)

A couple sessions turned the tables and looked at captives from a different point of view: that of the captive owner. It was very interesting hearing from captive owners on their experiences with forming a captive and what goes through their minds during the process.

4. Shaping the Future Captive Arena

As the Chair of CICA’s NEXTGen young and new professionals committee, I was impressed with the focus CICA put on providing sessions and events aimed specifically towards young professionals looking to enter or grow within the industry. As regulations, best practices, technology, lines of services and more constantly change, it is essential that the next generation of captive professionals are equipped and ready to shape the future of the practice.

– One of my favorite parts of the conference was the CICA Student Essay Contest. University students were given 3 case studies to select from and wrote an essay on establishing a captive for their specific case study (including selecting policy options, determining underwriting and pricing, etc.).

– During the session, “Building Your Personal Board of Directors – Considerations During the Different Stages in Your Career,” speakers discussed the upsides to developing a personal Board of Directors to support career growth and how to get started.

– Finally, I spoke on a panel that discussed what NextGen captive professionals value most in a job. We looked at ways to combat the great resignation and how organizations can better align with young professionals’ career goals.

With many conferences under my belt, CICA never fails to provide a great platform for networking and sharing ideas, I am excited to see what the future has in store for the association and for captives overall. In the meantime, our team will continue to keep our fingers on the pulse of captives to assure we provide clients with industry-leading captive and alternative risk financing services.

This year we had the pleasure of spending Valentine’s Day with some of healthcare’s sharpest minds within the Boston area at the Boston Business Journal’s “State of Healthcare” luncheon. Spring was excited to sponsor the event again as we take pride in both our Boston roots and in our commitment to advancing innovation in healthcare. As attendees enjoyed a delicious lunch, an impressive panel took the stage to share their different viewpoints on healthcare: Anne Klibanski, MD, President and CEO of Mass General Brigham (the Brigham); Lora Pellegrini, Esq., President and CEO of the Massachusetts Association of Health Plans (MAHP); Kevin Tabb, MD, President and CEO of Beth Israel Lahey Health; and Greg Wilmot, President and CEO of the East Boston Neighborhood Health Center.

After every conference or event, I like to take the time to reflect. Here are my five key forces impacting healthcare today, in Boston and beyond.

1. Capacity

Anne kicked things off by addressing a crisis in national healthcare: capacity, meaning there is not enough room to take in the patients who need the kind of care in which Massachusetts prides itself. In fact, every day over 200 patients within the system sit in the emergency room or elsewhere because there is no bed for them. This type of emergency capacity used to happen once every few months, but it is now the daily norm.

The problem is obvious. What is not so obvious is the solution. However, Anne provided the following insight: access is capacity. So, when we think long-term, we need to focus on efficiency and access in order to solve for capacity issues. The discussion called to mind the following questions:

– Are community hospitals being fully leveraged for the kind of care they are best suited for?

– What kind of care can be delivered virtually, and are we maximizing those capabilities? A recent development here is virtual urgent care.

– How can we increase hospital at home usage? The fact is that people prefer this method, and it increases care while decreasing costs.

– How can we increase our ability to treat patients in an outpatient or ambulatory setting? Massachusetts is near the bottom in the country when you look at the number of outpatient sites available. We need more sites, closer to home, with a lower cost model, so that we can save beds at highly specialized facilities like the Brigham for patients who need them most.

2. Affordability

Lora joined the stage to help uncover the factors behind the longstanding issue of affordability. At MAHP, they are focused on trying to make healthcare both simpler and more affordable. In Massachusetts, Lora said, we have the best data in the country regarding the drivers of healthcare costs, and that data identifies the two top drivers as unit price and pharmaceutical costs. Lora stressed the importance of the pharmaceutical and life sciences companies taking responsibility and being a part of the conversation around healthcare costs. While health plans traditionally take very little margin, and instead make most of their money from investment income, pharma on the other hand is taking in approximately a 30% profit for drugs that are sometimes federally funded. In this regard, more transparency around pricing and accountability is needed. Additionally, Lora highlighted the following affordability factors:

– Technology can and should be leveraged for things like prior authorization and streamlined credentialing. “There should be no paperwork,” said Lora. While you might be surprised that telehealth is not its own item on this list, the panelists pointed out that it is critically intertwined with affordability. Kevin pointed out that the big costs in healthcare are not individual visit payments, but rather frequent trips to the ER and people becoming sicker because they didn’t get care sooner. By marrying this goal of moving more people to outpatient or community health centers when appropriate with the access benefits of telehealth, we can make a difference in costs.

– Healthcare costs are prohibiting employers from offering other innovative benefits to employees. How can employers find a balance? For self-insured employers, which Lora says make up about 60% of the MA market, there is more of an ability to customize programs and invest in wellness initiatives and other perks. On the flip side, for fully-insured employers, especially small businesses, this is harder to do. What we see sometimes is when costs are added due to new legislation or another development, employers start considering a self-insured model, but when more parties leave the merged market, the older and sicker populations are left behind.

– The Massachusetts Health Policy Commission (HPC) is doing great work, but Lora says they hold too little authority, something that needs to change.

To expand upon this topic, Greg pointed out that the key to the cost problem was to increase access and utilization of primary care and preventative medicine, stressing that by improving health outcomes upstream, we can mitigate the downstream impacts on the rest and more expensive aspects of our health system. Community health systems like the East Boston Neighborhood Health Center plays a big role here.

3. Workforce

Kevin brought us up to speed on the core challenges in healthcare related to workforce, a topic which he emphasized is a widespread issue across industries and geographies. In healthcare, though, he explained that it is the top issue keeping executives up at night and described it as an “acute on chronic crisis.” Importantly, Kevin noted that the workforce crisis didn’t come to fruition overnight, and we won’t get out of it overnight either. We were at the edge of a precipice, and the pandemic tipped us over. At Beth Israel Lahey Health, they are focused on competitiveness of job offers, adaptation of roles and flexibility, and partnering to train up both within the community and within their system.

As Greg noted, healthcare workers have “been running a marathon at a sprinter’s pace.” He is focused on rebuilding the workforce, one that is reflective of the populations they serve and emphasized the need to focus on the next generation of talent.

On the topic of workforce, Anne added that it’s not just about salary. At the Brigham they are rethinking how to create a safe and healthy work environment. We have seen a rise in workplace violence in healthcare and beyond, so how do we better protect our staff? “We are what we tolerate,” remarked Anne, so we need to make sure we’re not tolerating behaviors and practices – both from staff and from patients and other constituents – that we shouldn’t. This brings us to our next point.

4. Equity

As Anne pointed out, allowing gender-based or racist remarks, or violent behavior prohibits the development of a safe and inclusive workplace. Greg brought a unique viewpoint to the conversation as his community health center serves a very diverse population. Smaller clinics and health centers are often over-looked, but as Greg noted, one in five MA residents are receiving care at a community health center. He stressed the need for a two-prong approach:

  1. What happens in the exam room, which at community health centers is largely primary care and preventative medicine.
  2. What happens outside the exam room. Here Greg noted the importance of social determinants of health such as behavioral health, housing stability, food insecurity, education disparities, language barriers, and technology. How do we bring these issues into governmental policy? How do we invest in communities of color to address things head-on instead of waiting until they fester into bigger problems? How do we ensure equitable opportunities in the job market?

Greg argued that only by focusing on these two health components in tandem will we make any difference in health equity, and healthcare at large.

When it comes to telehealth, a digital divide still exists related to broadband, Wi-Fi, devices, medical literacy, and age (there is a large gap in senior utilization of telehealth). This needs to be part of the equity equation too. Do we need fancy technology? Or, as Kevin pointed out, “almost everyone has a phone.” Could a phone call suffice in some cases?

Lastly, all panelists agreed that COVID-19 highlighted the inequities that had been there all along, creating an urgency around equity that we very much needed.

5. Unity

Greg left us with a powerful, albeit brief poem by Muhammad Ali to ponder: “Me, We.” His point was that while we all have a personal responsibility for affecting change, we also can’t achieve that change on our own. It takes a “me” and it takes a “we.” The consensus was that each stakeholder has a role – providers, insurers, pharmaceutical companies, the government, and so on. When these cogs in the wheel operate in silos, the wheel does not turn.

Anne remarked that when the pandemic hit, it created a galvanizing force that brought all types of parties, including so-called competitors, together for the common good. Now, the impacts of COVID-19 have faded, but the panelists pondered why we can’t use our broken system as the next galvanizing force to bring everyone to the table. Numbers 1-4 on this list cannot be addressed without prioritizing number 5. This will require more active listening and compromise.

Overall, the Boston Business Journal’s State of Healthcare luncheon provided a thought-provoking and multifaceted conversation that gave me much to think about. But as we move toward what is hopefully a brighter future for healthcare, I will leave you with one final thought from Greg Wilmot:

“If we were to rewrite our [healthcare] system, would we design it the same way? We have been writing the same story and changing the last chapter and expecting a different outcome. That doesn’t work. We need to go back and start at the beginning, and rewrite chapters 1-10.”

Greg Wilmot