Piecing Together the Puzzle of Paid Family and Medical Leave

I had the pleasure of speaking at The New England HR Association (NEHRA)’s Annual Legal Summit a couple weeks ago. The summit brought together attorneys, CEOs, insurance experts and HR professionals to discuss changes in regulations and laws that directly impact the workplace experience of employees. Some of the major topics discussed included how to adapt to a hybrid workforce, how to know who to hire during and cultural and legal considerations when facing substance use and mental health issues in the workplace. All in all, the conference was a great success and allowed for fantastic networking opportunities and provided guidance around a range of compliance considerations that apply to countless employers nationwide.

During NEHRA’s Legal Summit, I presented on, Piecing Together the Puzzle of the Paid Leave Landscape, in which I dove into history of Paid Family & Medical Leaves (PFML) in the US and explained the current landscape of which states provide PFML (and to what degrees). I moved on to show breakdowns on a global level for paid leave for new fathers, new mothers and for an employee with a health problem. As you’ve probably heard, data shows that the US is far behind when it comes to enacting federal legislation that provides paid family leave in comparison to the rest of the world. Without federal paid leave policies, it has fallen on individual states to create, enact and enforce paid leave policies. Of the fifty states in the US, 23 have rejected PFML proposals and have no safety net for employees who face medical or family issues that would require time off work, unless a program is provided by their employer.

After addressing some of the global and national trends, I explained some of the barriers of access to paid family leave within the US. For instance, women are 20% more likely to leave their jobs when they don’t have access to paid leave and 25% of new mothers return to work less than two weeks after giving birth1. Additionally, when breaking down access to paid leave based on race, research conducted by the National Partnership for Women & Families found that 28% of black respondents reported having requests for leave denied, compared to 9% of white workers. It is clear even within states or organizations that provide some form of paid leave, many Americans are facing very different realities when trying to utilize or understand their paid leave options.

As this was a legal summit, I tackled some of the major questions  employers ask about leave surrounding compliance, costs, and leave options if they reside in a state that does not provide PFML. I reviewed some best practices employers can take when developing and evaluating leave policies such as leveraging benchmarks, looking into funding options (e.g. self-insurance, captive insurance, etc.), and utilizing technology and appropriate metrics to evaluate financial impacts. I also noted that different perspectives must be considered when developing leave policies. For instance, employees have different priorities; they are often worried about job security, getting paid and workload upon return when assessing taking paid leave. On the flip side, navigating leave from an employer perspective can be a daunting task when having to traverse FMLA, state laws, ADA/ADAAA, HIPAA, discrimination laws and more; so, it is essential to utilize resources to make sure your company is abiding by all  regulatory standpoints.

All in all, I was in great company at the NEHRA legal summit! As per usual, NEHRA hosted some of the leading experts in the field and tackled major topics employers and HR professionals are facing currently. I hope to see many of you again during NEHRA’s 2022 Annual Conference in October.

 

1 https://www.nationalpartnership.org/our-work/resources/economic-justice/paid-leave/called-to-care-a-racially-just-recovery-demands-paid-family-and-medical-leave.pdf

Leading Trends in the Employee Benefits Industry, a NEEBC Annual Summit Recap

Last week I had the pleasure of attending the New England Employee Benefits Council (NEEBC)’s Annual Summit. It was great seeing so many familiar faces and reconnecting with industry leaders I haven’t seen in over 2 years! When walking around the exhibitor trade show, it was fantastic to see people connecting and developing potential partnerships. As for the presentations, we saw a variety of topics spotlighted, some of which included:

 

  1. Mental Health

As May was Mental Health Awareness Month, it was only fitting that mental health was again a leading topic discussed during NEEBC. As many workers have moved towards remote and hybrid work, there has been an increased demand for remote mental health services amongst employees. During a session on strategies employers can adapt to de-stigmatize behavioral health and increase access, Lisa Bertola and Sara Gunderson from Segal explained how employers must adopt data-driven strategies to improve mental health resources and access.

  1. The Great Resignation

As many know, The Great Resignation phenomenon has been front and center within the benefits industry for over a year. The Great Resignation has affected countless employers nationally and organizations are battling to retain and attract talent through strong benefit packages and inclusive workplace environments.

a)  The Great Disconnect

The ideology of The Great Disconnect arose from The Great Resignation and represents the disconnect between what employees want and what employers think employees want. COVID-19 and the shift towards hybrid/remote work changed what many employees value from their benefits. Offerings such as mental heath resources, tele-medicine and financial wellness resources became popular, and are slowly becoming the new standard in the industry. Michal Alter from visit.org explained this in detail during his session on The Great Disconnect, where he explored how employee benefits data analyses can better help employers engage and retain employees.

b)  Tech

When it comes to deciding what benefits to implement, employers now have greater access to digital tools that can help identify the benefits employees actually want. In a session with Corestream CEO, Neil Vaswani, and Salary Finance’s CDO, Anita Ward, they explored the current state of innovative HR technology and how it is being used to measure performance and employee happiness. They further explained how these technologies can better illustrate the needs of employees and help employers develop benefits packages in response that are competitive in the war for talent.

c)  Burnout

Recognizing burnout is the first step in identifying which employees are at risk of finding other employment opportunities. In a keynote address by Dr. Neha Sangwan, titled The Burnout Awareness Prescription, she spotlighted the significance of integrating “human software” into organizations. She laid out the importance of focusing on your employee’s health and well-being by keeping up to date with their passions and making sure their work successes can help them meet their personal goals. Assuring employees are feeling fulfilled both inside and outside of work is crucial when reducing workplace burnout and retaining top-tier talent.

  1. Prescription Drug Costs

As the US is one of the countries paying the most for prescription drugs, strategizing around the costs for Rx drugs was a hot button topic this year. In a session comprised of a lineup of experts from Upside Health Advisors, ICER, Imagine360 and Point32Health, they tackled the issue many employers face when setting up medical insurance plans…prescription drug costs. They looked at different Rx payment methods, including referenced-based pricing, and walked through case studies to highlight the pros and cons of alternative Rx options. They closed by clarifying how employers of any size can manage drug costs by evaluating different Rx pricing options.

 

As a member of the Board of Directors at NEEBC, it was great to see another successful Annual Summit come to life! Beyond networking, I enjoyed learning how different industry leaders are tackling some of our biggest issues head-on.

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!  

Top 3 Leading Topics in the Risk Management Industry: A RIMS 2022 Recap

For the first time since 2019, the Risk Management Society (RIMS) was able to host their annual conference in-person in San Francisco earlier in April. The conference brings together thousands of risk experts from around the world to share their thoughts on current trends and innovations in the industry of risk management. As COVID-19 rates have been declining, we were happy to have Spring present and exhibit at RiskWorld 2022.

Now that we’re back from the conference and settled into our normal routines, we want to take time to reflect on the main priorities of the industry that were touched on during RIMS 2022. So, if you weren’t able to attend in-person or virtually, here are some of the main takeaways and themes this year.

  1. Climate Change

Sustainability and building climate resilience has been a primary concern for many employers worldwide. With the unpredictability of natural disasters and other climate related risks, it is essential employers enact climate-related precautions in their organizations. Below we have included some of the groundbreaking sessions related to climate change and how to build climate risk strategy.

  • John Merkovsky explained how beyond property and causality damage, climate change can impact supply chains, workers’ compensation, and product liability in his “The Missing Role of the Risk Professional in Climate Resilience” event.
  • In a session titled “Climate Resilience,” Jim Boccher illustrates how employers can define disasters and emergencies and reflect on disaster recovery efforts to better prepare for future climate crises.
  • Spring’s Managing Partner, Karin Landry reviews some of the top current climate risks and how organizations can better prepare physically and financially for future climate threats. Her session also included Hyatt Hotels as a primary case study on how to approach climate risk as well as how to recover quickly from disasters when they happen.
  1. Cyber and Technological Risk

For years cyber and tech have been at the forefront of risk management and previous RIMS conferences. As technological innovations have improved our evaluations of risk, cyber threats and attacks have had the opposite effect.  This year presenters touched on many different facets of cyber and tech risks including:

a)  Artificial Intelligence

Artificial Intelligence has great potential in evaluating risks and is being used to optimize insurance assessment strategies. But AI is still fairly new and is only recently becoming more normalized in risk management. Check out what some of the speakers had to say about AI in the industry below.

  • Brijesh Kumar explained how AI is being implemented into claims management systems to reduce costs and improve efficiency in a very competitive market.
  • Tresa Stephens highlighted how although AI can benefit economic outcomes, it also poses many risk factors for both business and consumers.
  • In a session titled, “How Is AI Going to Disrupt Commercial Insurance?” Sandip Chatterjee outlines how the increasing presence of AI and the vast collection of public and client data can precisely and accurately quantify risk like we’ve never seen before.

b)  Cyber Resilience/Cyber Attacks

Cyber resilience has been key during the COVID-19 era, where many organizations have had to move towards remote and hybrid work. This transition has left employers prone to cyber threats and attacks their pre-COVID model did not protect them against. During RIMS 2022 cyber related risks were the most talked about topic and some of the highlights include:

  • During the “Your Money or Your Data: The New Game Plan for the Escalating Risk of Cyber Crime,” panelists explained how in just one month in 2021, companies paid upwards of $400 million in data ransoms.
  • Mark Hoffman outlines how to build back and streamline communication after a cyber attack, and how to adapt and prepare for the next cyber threat.
  • Steve Tomeo and Joshua Gold dive into regulatory changes in cyber insurance (on a local, state, federal and global level), and how privacy laws can force organizations to pay unwanted legal fees, fines and more.
  1. Diversity, Equity and Inclusion

In recent years, diversity and inclusion has been a top priority for employers around the world, and this was no different at RIMS 2022. Many panels focused on the current landscape of DE&I and how we can better implement equity and understand bias in insurance and benefits. Some insightful sessions included:

  • During the “DE&I in 2022: Have We Moved the Needle?” session, panelists discussed current DE&I risks and opportunities facing the industry and how we can better popularize the insurance and risk management industry amongst future generations.
  • Speakers at the “Culture as a Hedge Against Risk” session outline the importance of fostering company culture with a focus on workplace flexibility, health & wellbeing and professional development.
  • Presenters tackled the role systematic racism has played in the insurance industry during their “Defining Bias and Discrimination in Insurance: What Risk Professionals Need to Know” session.

 

We were delighted to finally be back at RIMS in person. The conference never lets us down in terms of learning more about different facets of the industry and providing great networking opportunities. We are looking forward to seeing many of you again during next year’s event in Atlanta!

Business, Interrupted: Post-Pandemic Policy Lessons

A recap of a presentation by Peter Johnson of Spring, Deyna Feng of Cummins, and Melissa Updike of KMRRG at the VCIA 2021 annual conference.

 

Black Swan Events and Market Capacityblack swan events

Over the last year and a half, the world as we know it has been flipped on its head. Not only did everyone’s day-to-day processes change completely, but the COVID-19 pandemic also stressed the insurance system significantly and resulted in a number of changes across various lines. “Black Swan” events are those that are unexpected, severe and affect a large number of companies and individuals which is exactly what happened with the COVID-19 pandemic. While the healthcare industry faced increasing premiums and alterations to mental health coverage, the property-casualty (P&C) market also was affected in an unpredictable way.

Rewinding back to prior to March 2020, the P&C market was experiencing an all-time high surplus, and was in a 10-year trend of suppressed rates. Therefore, when the “Black Swan” event of a pandemic hit, insurance companies were forced to significantly reduce capacity to mitigate social inflation and high-cost claim issues. In some cases this drop down insured limits by 75 percent or more of their prior year policy limits. This was evident particularly for cyber liability and umbrella coverage. Additionally, rates across lines were seeing double and triple previous years’ numbers.

On the other hand, some P&C lines actually saw improvement in their combined ratio during 2020. This means that where some lines saw increases in cost, other lines saw a drop in utilization, which “evened out” the overall market. This improvement can be seen in commercial and personal lines auto lines over the last year. The auto industry saw a dramatic downturn in utilization due to reoccurring “Stay at Home” executive orders hindering travel as well as other related changes to the industry.

Needless to say, this all yielded a difficult environment for employees and employers. In order to appropriately mitigate these new or changed risks, companies have been turning to policy exclusions as well as captive financing to better protect themselves and their employees from high-cost claims.

 

Policy Exclusions and How They Impact Your Business

During the pandemic, no insurance company or insured was truly prepared for the changes that were to come, and many insureds were faced with unexpected coverage exclusions and were left with potentially catastrophic payments. Some examples of policy exclusions include pandemic situations, interrupted business, long-term care, and others. However, employers who had a captive insurance company set up were sometimes safeguarded from policy exclusions, and companies without a captive increasingly flocked to establish one.insurance policy exclusions

To illustrate the advantages, one captive held their policy exclusions to the standard of COVID-19 claims and were able to mitigate those costs through their reinsurance retention. As another example, the Kentuckiana Medical Reciprocal Risk Retention Group (KMRRG), a captive, was able to flip their exclusion around long-term care, a move which, although it was only a small component of their business, significantly minimized costly losses. The framing of this exclusion allows employers to wrap reinsurance around this risk, specifically if they utilize a captive funding vehicle.

Captives offer more flexibility around policy language and terms, which can be adjusted according to the specific risks of the parent company. It is generally the responsibility of the brokers to let their insureds know which reinsurance renewals were at risk during the pandemic. Most commonly these lines were workers compensation, healthcare programs, and other P&C lines, which can be written into a captive or an RRG solution. Note RRG’s cannot write workers’ comp and can only insure liability lines.

 

Maximizing Captive/RRG Solutions

Captive insurance is not a new concept; however, it is often overlooked as a method for employers to protect themselves against risk. Captives not only better reflect underwriting records but also allow insureds to recoup investment incomes that would normally have been lost to insurance companies.

Captives support the parent company’s risk management overall and provide financial protection and long-term savings, both necessary for any business in ordinary and extraordinary times. Generally, our team sees that, for every $1 of premium that a client converts from a commercial reinsurer to a captive, 10 percent to 40 percent of long-term savings in the form of investment income and underwriting profits are yielded.

captive insurance solution

A captive can step in to help when commercial market rates are unreasonable, such as the 200 percent to 300 percent rate increases, we have seen recently, which of course are impossible for CFOs to plan for. This happened with many insureds’ umbrella coverage. Many companies over the last 20 months were forced to significantly lower their limits and increase their retention levels simultaneously. With changing premiums (mainly increasing) on top of this reduced market capacity, more and more often companies are utilizing captives to get control over these types of high costs and expand coverage.

Additional benefits of a captive or RRG solution include transparency and improved claims management. For example, if COVID-19 claims do develop, with a captive you can react with a very specific claims management strategy instead of relying on a commercial carrier to do so. This allows you to hand select your partners such as attorneys and other advisors. You can also be sure that your discovery responses are consistent. Additionally, group aggregates have hardened even more in the market which has forced captive managers to become more creative than before. An illustration of that creativity can be seen in the example below.

Hospital Professional Liability in a Captive: Many entities were trying to get their mitigation placed, and by increasing primary levels they were able to provide some protection and increase their claims control.

 

Bracing for the Future

In order to be properly prepared for the next “Black Swan” event, employers and employees should consider the major lessons learned from the past year:Captive insurance pandemic

  • Risk Diversification—This is not unique to a pandemic situation. When leveraging a captive, it is imperative to have a wide range of exposures. Our actuaries know that, in line with the law of large numbers, the more risks and more exposures, adverse financial outcomes become less likely and more manageable. Considering the correlation between the risks is equally critical as one risk could lead to a domino effect of triggering another high-cost risk. A general rule of thumb for captives is adding low correlating risk to a captive will lead to more stable year-to-year financial results.
  • Speed to Market—What is your process to quickly adapt to changing market conditions?
  • Analyze Current Structure—Can you withstand another “black swan” event? What are the coverage improvements that can be made internally?
  • Financials—What is your cots of risk and risk tolerance? Do you need an improved insurance/reinsurance strategy?
  • Supply Chain—Has an appropriate strategy been considered?
  • Other—Do you have uninsured/underinsured risks? Is there sufficient market capacity for your exposure?

If there is a positive we can take from COVID-19, it should be that we learned important lessons and won’t be as blind sighted in the future. Looking ahead, companies should ascertain whether they have the right tools in place to better manage risk and financial losses. In addition to the risk structures and their advantages outlined above, considering cross exposures and diversified risks is the best and easiest way for companies to protect themselves and their employees in the event of another “Black Swan” event. Lastly, having an aggregate view of risks across the organization often leads to creating the most efficient and cost effective risk funding programs.

Spring to Speak at CICA 2020

The Spring team is excited to enjoy warmer temperatures at the upcoming Captive Insurance Companies Association (CICA) 2020 International Conference. This will be the firm’s 12th consecutive year being involved in this conference, which brings together hundreds of the industry’s best and brightest to learn from each other.

This year, our Managing Partner, Karin Landry, will be on a panel of captive experts, sharing their experience and guidance for the industry’s future generations. She will be joined by Deyna Feng of Cummins, Inc., Pete Kranz of Beecher Carlson and Michael Scott of Allison & Mosby-Scott, thus offering the perspective of the employer, the consultant, and the attorney. The goal of the session is to give young professionals the chance to ask veterans any questions or discuss challenges in an informal format. The audience will switch between the four panel members at certain intervals, eliciting a “speed dating” sort of environment. CICA has recognized that this aging industry needs to focus on preparing tomorrow’s leaders, as well as attracting new and young talent. This session is a step in the right direction to achieve those goals.

If you are heading to the CICA Conference in Ranco Mirage, CA from March 8th-10th, please check out Karin’s session, “Speed Networking with Young Professionals”, which will run from 3-4 PM on Monday, March 9thCICA 2020

Spring to Present at Cayman Captive Forum

As the weather turns cold in Boston, the Spring team is looking forward to heading to the Cayman Islands in a few weeks!

It’s not just a holiday in the sun, however. Being one of the largest domiciles, Cayman is a breeding ground for captive thought leadership and Spring has been a longtime supporter of the Insurance Managers Cayman Captive ForumAssociation of Cayman (IMAC) who puts on this great event every year. In fact, Spring has been attending the annual forum for over a decade. This year, we are proud to announce that our Managing Partner, Karin Landry, will be presenting on voluntary benefits in captives on Thursday, December 5th at 3PM, during the three-day event.

Karin will be presenting alongside Larry Smith, Vice President of MedStar Health, a not-for-profit healthcare organization with over 120 entities in the Baltimore area. The session will highlight different advantages to adding voluntary benefits to your captive, and offer strategies and best practices for how to structure a program. The audience will be walked through two case studies to make the concepts come to life.

If you’re heading to Cayman, we hope you can make Karin’s session. If not, we’ll have a whole team that would love to chat with you at booth #7!