Spring’s VP Prabal Lakhanpal is breaking is tying together employee benefits, captives, and third party risk in this piece published in Captive International.

Dazed & Confused

Think about your last visit to the doctor. Did you know what questions to ask? Did you leave with a clear picture of the next steps or alternative options? Did you know the cost of your appointment and treatment path before starting it, or what would be covered by your health insurance? If you answered “no” to any of these questions, you are certainly not alone.

Bend Financial[i] recently conducted a survey that showed that only 29% of people were completely confident in their ability to navigate the healthcare system, whereas 56% were entirely confused when it comes to health insurance. Unfortunately, an alarming subset of consumers opt to avoid healthcare completely, too defeated by the complexity.

Beyond health insurance, employees must navigate the suite of benefits offered to them by their employer. While these are meant to provide support, they can cause more confusion when employees are looking for assistance. Employers must consider how introducing a new program or benefit will fit into their overall strategy and integrate the resources, without adding to the complexity employees face.

[i] https://www.bendhsa.com/newsroom/more-than-half-of-americans-confused-by-health-insurance-including-hsas

 

Breaking Through the Fog

Advocacy tools have popped up as a response to the confusing environment. These tools offer a wide variety of clinical, educational and administrative resources, such as:

The landscape for these platforms is robust and ever-changing. The spectrum of vendors include those that offer:

1. Holistic approach

Major players may provide all of the above features on a one-stop shop model for employees.

2. Preventive approach

Some vendors focus on prevention of common conditions, encouraging employees to get annual eye exams, diabetes screenings, cancer screenings, medication adherence, and more.

3. Targeted approach

This last category of vendors specialize in support for employees with common chronic conditions including diabetes, hypertension and high cholesterol. While likely not the most costly conditions, the potential for savings and member support is significant when factoring in the volume at play. These vendors aim for condition management by giving members the tools to monitor and manage their conditions better on their own, hopefully necessitating less emergency care in the future.

Comparatively, other tools focus only on the highest cost conditions and members, such as cancer diagnoses. Offering a specialized tool for members going through this difficult time enables them to procure the best and most cost-effective care, while also giving them access to resources related to nutrition, mental health, and more. While available on a standalone basis, advocacy solutions may also be accessible to employers through their insurance carriers, Third-Party Administrators (TPAs), or Employee Assistance Programs (EAPs). Programs embedded with a carrier or TPA tend to focus on overall health management programs, disease management and wellness, as well as resolving billing issues and comparing costs of providers. A commonality across platforms is the prioritization of the consumer experience – offering easy, self-service access in mobile apps or online portals. Members typically have a single point of contact at the advocacy company, so they know who to call and do not have to navigate being transferred or having an unfamiliar staff member pick up their case. Overall, for employees, health advocacy platforms may:

For employers, health advocacy tools can:

Advocacy Adoption: Is It Right For You?

Ultimately, it is up to the employer to determine what programs would best support their employees. Based on the 2020 Integrated Disability Management (IDM) Employer Survey conducted by Spring Consulting Group, 61% of employers offer a health advocacy solution today, compared to only 41% in 2018. Determining which model and which vendor to select can be difficult as there are many players in the market. In assessing whether an advocacy tool would be a good fit for your organization, any decision around advocacy solutions should be tied to program objectives.

Health advocacy solutions can provide cost savings to employers or health plans, as they direct employees to access only necessary healthcare services, perhaps at a lower cost facility than they otherwise would have used. A tool like this should, in theory, help avoid bigger, high-cost problems down the road by assisting the employee with addressing issues early. Certain vendors may even offer a cost savings guarantee. However, it will take time to see a possible Return on Investment (ROI). On the flip side, an advocacy solution can encourage greater utilization, such as for behavioral health services. While a higher utilization rate may mean increased claims, giving employees tools to access the services they need can lead to less emergent or high-cost care down the road. As such, you should determine if you are looking for immediate or long-term results.

There is a lot of logic behind the argument that an advocacy tool will increase engagement. However, if an employer has had trouble engaging employees in the past, such as in wellness challenges, incentives, education, etc., nothing is guaranteed. Vendors claim that anywhere from 30% to 80% of employees will participate in their program, but this is highly variable based on different aspects of the program and the employer, such as program features or employer incentives. 

By equipping members with the necessary tools to make health care decisions based on value and outcomes, better outcomes are achieved. The plan data will guide your decision related to population health management. For example if you are struggling with diabetes specifically, you may want to consider a targeted point solution focused on diabetes management before committing to a more comprehensive program that tends to be more expensive.

With an advocacy tool, members have support to mitigate confusion around healthcare services, surprise billing, complex diagnoses…but it only works if members leverage the support. Programs should be communicated often and where possible linked to activity within the plan. We always recommend eliciting employee feedback before launching a program such as this, to ensure you are solving for problems that really exist for employees, instead of problems you think exist for employees. Sometimes our clients even roll out a smaller pilot program as a test before implementing the wider solution for the whole organization.

Most organizations will have a few different goals at play, which are not limited to those listed above, but typically there is a hierarchy to consider. Working with a trusted advisor can help to understand key differences and ensure programs are designed to work for the employer and their employees. At Spring, we routinely help employers vet solutions to find the one that is optimal for their goals and population.

Conclusion

Overall, health advocacy tools have risen in popularity for a reason. They address critical problems in our healthcare system – confusion, expenses, access, lack of trust – and serve as a different avenue for employers to limit the rising costs associated with healthcare. Advocacy helps ensure employees are understanding the care they receive and have greater visibility into actual costs. While results will vary by platform and organization, vendors are confident in their results; they report significantly lower healthcare trend for clients, compared to previous years when there was no advocacy program in place. With an ever-changing landscape, it is possible that health advocacy programs can bridge the gap between consumers and care, but only time will tell if they can make a long-term impact on the market.

Our Senior Vice President, Teri Weber spoke in a panel discussion hosted by the Boston Business Journal. She discussed the importance of mental health resources during the pandemic. Check out the article here.

Our Senior Vice President, Teri Weber published an article in the Boston Business Journal explaining how organizations can better support employees who also act as caregivers. Check out the full article here.

In Risk & Insurance’s March 2021 magazine, they spotlight research conducted by Spring and quote our Managing Partner, Karin Landry. Check out the magazine here.

Employees bring their whole selves to work each day which allows for the highly efficient, effective, and creative workforce we enjoy. As Human Resource professionals we appreciate the diversity of our workforce and continue to adjust within our employee benefit programs to meet the changing needs of our employees and their families. Top employers know that thinking more strategically about caregiving will help them fight for top talent and provide the corporate culture employees are seeking especially in this more complicated caregiving landscape brought on by COVID-19. 

The concept of caregiving is not new but as our workforce evolves it is becoming more critical to consider caregiving as an area of opportunity within employee benefits. This shift, further amplified by the pandemic, highlights a cavern between top tier employers who appreciate the multitude of responsibilities employees must navigate versus those that hire people despite them.

The Rosalynn Carter Institute for Caregiving recently released Caregivers in Crisis: Caregiving in the Time of COVID-19. This thoughtful piece attaches hard data to the burden we have all experienced over the last 6 weeks. The data indicates that 83% of caregivers have increased stress since the start of the pandemic, and 42% have indicated that the number of other caregivers available to help them has declined. Caregivers themselves – in addition to those requiring care – are experiencing an increased burden from isolation, stress, financial concerns, and general instability.

Employers that are new to the concept can consider caregiving solutions as a continuum or suite of solutions; not a one size fits all approach or something that has to be implemented all at one time. A core offering typically includes:

Enhancements allow for 24/7 live support and paid time off when necessary to address caregiving emergencies.

Defining Caregivers

AARP estimates that each year approximately 40 million American adults provide support to others with basic functions (i.e. activities of daily living).  Many of those, including 75% of millennial caregivers are working. 
 
For millennials in particular the stress of caregiving can be more challenging since they are typically providing care for more hours in a week, making less money and having less support from other family members (i.e. reduced family size).  Also of note, millennials are the most diverse caregiving community to date (i.e., racially, ethnically and more likely to identify as LGBTQ+) which can be important to consider related to diversity and inclusion.

It is important to think broadly about caregiving solutions. In addition to introducing separate solutions, it is equally important to shift our mindset and expand common employer benefits that could be leveraged for extended family members (i.e. second opinions, medical guidance with challenging health diagnoses, etc.). The term caregiving must also extend beyond elder care of medical conditions but include children struggling with online school or developmental disabilities or Medicare eligibility and financial planning when moving into retirement. The goal of caregiving solutions is to support your employees as both caregivers and those needing care. 

We have all heard the announcement on the airplane about putting on your own mask before helping others; employer sponsored caregiving is building on that logic and allowing your employees to more efficiently:

Caregiving support as an employee benefit is still in its infancy. Unfortunately, many employers do not realize the need, the impact on employee performance and the demand that exists at the employee level. A 2019 Harvard Business School Study, The Caring Company, indicates that while only 24% of employers surveyed believed employee caregiving influenced their employees’ performance at work, 80% of employees surveyed admitted that caregiving had an effect on their productivity. In addition, 32% of employees surveyed indicated that they left a job because of their caregiving responsibilities. 

Employers who take a proactive position on caregiving support – along with the tools needed for successful roll out and measurement – will see a direct impact on attraction, retention, productivity, and corporate morale. 

If your organization is interested in exploring caregiving support as an employee benefit, or is ready to identify partners for a best practice roll out, please reach out to our team.   

As seen on Captive Insurance Company Reports (CICR)

As organizations have grown and globalization has created an international workforce, a lot of employers are faced with challenges around the selection, administration and management of their employee benefits across the globe. International benefits programs can be a complex maze to navigate, given the varying local cultures, business practices and legislations.

We are seeing an uptick in organizations looking to harmonize their global programs. The COVID-19 pandemic has accelerated this need. With increasing globalization and limitations of travel, employees are spending more time online virtually engaging with colleagues across the world. We have come to rely on digital connectivity, which makes it easier to share ideas and understand the experiences of others. As many organizations moved to a remote work environment, employees are wondering why they ever needed to be in a specific location every day, and relocation is on the rise. With all of this said, a siloed benefits program may not align with the upwards trend of globalization. As your international employees meet online, you will want them to find comparable policies and practices being followed, regardless of physical location.

As multinational corporations, employers are relying on businesses or consumers from other countries to drive business growth. It is important to understand how to appeal to a diverse customer and employee base – how to celebrate differences while bringing everyone together. Benefits and wellness programs can serve as a unifier, engrained in your culture as a way for employees to feel a sense of belonging. Creating and maintaining a strong culture is exceedingly difficult when you have an international workforce, and a synchronized benefits program is a great way to unite your people.

Traditionally there have been two major schools of thought on international programs. One is to have a completely decentralized benefits program, where each country’s local teams have control over benefit offerings. This approach has the least resistance as local teams are able to make decisions in the best interest of the local employees. From a global perspective, this limits the benefits that accrue to the organization as there is no coordination of carriers, limiting the ability to get preferential pricing. From an employee’s perspective, moving from one country to another for short-term and long-term assignments can mean a complete overhaul of their benefits. Alternatively, the second approach is where the head office controls most major aspects of the benefit offerings globally – including the carriers and the benefit plan designs. This option usually generates savings for the company, as employers are negotiating for global contracts. However, local partners usually push back on this approach or require accommodations. Providing accommodations and carve outs creates confusion and a lack of cohesiveness, eventually resulting in the slow disintegration of the global program. 

One may wonder why creating such a program is the need of the hour. Most employers are interested in providing market competitive benefits in a cost-effective manner, while being able to leverage the scale of the company across the globe. A good benefits strategy also acknowledges and adjusts to local practices and cultural needs. Finally, employers are looking to ensure that the benefits they provide are valued by their employees, who represent a diverse population across the globe.

As you can see, both of the approaches mentioned have pros and cons, but most importantly, they do not provide a sustainable way to build a long-standing multinational employee benefits program. Luckily, there is a more advantageous option. Leveraging a captive can provide organizations with the ability to create a third kind of program structure, one which brings the positive aspects of the first two approaches and builds on them to create a framework that adds value to all stakeholders – employees, employer, local and international HR teams.

This approach allows for centralized decision making as it relates to carrier selection. Most of the clients we work with choose to select one or two multinational carriers, creating flexibility for local teams. Due to a stronger employer negotiating position, the centralized carrier selection process ensures lower rates and pricing across benefit lines and geographies. The transaction is structured such that the risk associated with benefits is ceded by the carriers to the employer’s captive, where it is pooled across all lines of coverage and countries. This creates greater stability for the program as a whole and limits the possible rate increases for programs and countries due to one bad claims year. Using the captive also provides employers with the ability to go beyond what local carriers will provide. Since the risk of the plan is with the captive, the carriers operate as third-party administrators (TPAs) and are usually willing to provide better coverage terms than under traditional fully insured plans.

In addition, in cases where employers are looking to go above and beyond to provide better than market benefits, the captive can help fund these elements at cost. For instance, we helped a major technology employer looking to provide HIV related coverage for its employees across the globe, and they were able to have the benefit be administered by the carriers on a local basis and pay for it through the captive. Without a captive, funding for this coverage might be difficult as local carriers may not know how to price this coverage or may not want to cover it under their plan design at all. In addition to HIV, mental and nervous related benefits along with fertility programs are other popular coverage employers like our client mentioned above are providing in this manner as many countries do not offer these benefits as part of their standard offerings, but they are benefits yielding an increasing employee interest.

From a local HR perspective, such a program provides some flexibility for carrier selection, while being able to control local plan offerings. The additional plan offerings which may not be provided on a local level create a huge value proposition, ensuring local HR buy-in for this program.

 

Captives and multinational benefits programs not only save money while providing better benefits, but they also provide a holistic view of the programs from a risk management perspective and lower the administrative burden. To recap, here are some advantages that make such a program extremely attractive:

Fill Gaps in Critical Coverage

Cultural norms and market availability play a huge role in what your employees across the globe want and what they can access. A benefit available in the US may not be available through commercial carriers in Brazil. A captive allows for customized coverage and can help even the playing field for your international employees. For instance, COVID-19 has heightened the need for covered mental health assistance as a component of a health plan. A lot of international plans do not provide this essential benefit. A captive is a cost-effective way of obtaining this coverage for all your employees.

Obtain Higher Limits

Using multinational pooling programs and captives allow employers to increase the coverage limits available to local employees. For instance, most carriers have filed local policies allowing for life insurance benefits of up to $5M in most countries. However, they offer guaranteed issue limits of around $500K in international markets. Using this approach, we have seen carriers increase guaranteed issue limits.

Improve Your Reporting

A captive allows the parent organization to be one step closer to claims and plan activity. With less intermediaries than a traditional insurance structure, a captive leads to greater transparency and faster access to data. As a result, captive owners have enhanced data management and tracking capabilities they can use to inform decisions in real-time. This way you can follow your investment closely and understand your return, or where changes need to be made. With a global workforce, this becomes critical.  

Gain Flexibility

In traditional fully insured programs, there are limitations on the plan designs you can create. A captive creates an opportunity to customize your plans according to your unique workforce, and with a range of international needs, this will become even more valuable. COVID-19 has shed light on the importance of such flexibility, with organizations seeing changes in exposures and gaps they did not know existed.

Lessen Your Administrative Burden

By eliminating conflicts and engagements with local brokers, employers reduce the time spent on administration as these needs are met by a centralized team of support staff who have all your plan information and do not need to be brought up to speed on the cultural nuances of the programs and geographies. Also, captives eliminate the need for bidding exercises and negotiations on both the central and local levels. Due to the transparency of a captive program, there is almost no need for bidding of carriers to get lower pricing. The captive is capturing any surplus in pricing and using it to provide improved benefits to the employees.

Answer to a Hardening Market

Maintaining an international benefits program that is comparable in value across your diverse workforce is no small feat. With globalization, digitization and relocation on the rise, your employees are not siloed within their geography, and an integrated benefits program can serve to bring your employees together and improve your corporate culture. We have seen great success with multinational corporations moving toward a more centralized approach, where the same robust set of benefits can be offered to employees across the globe. By pairing this strategy with a captive, you can offer enhanced benefits, additional coverage and plan designs customized for your population, all while generating savings, improving your data and reporting, and “future-proofing” your benefits program. If you have questions about how to get started on harmonizing your international benefits, or aren’t convinced why you should, please get in touch.

Maintaining an international benefits program that is comparable in value across your diverse workforce is no small feat. With globalization, digitization and relocation on the rise, your employees are not siloed within their geography, and an integrated benefits program can serve to bring your employees together and improve your corporate culture. We have seen great success with multinational corporations moving toward a more centralized approach, where the same robust set of benefits can be offered to employees across the globe. By pairing this strategy with a captive, you can offer enhanced benefits, additional coverage and plan designs customized for your population, all while generating savings, improving your data and reporting, and “future-proofing” your benefits program. If you have questions about how to get started on harmonizing your international benefits, or aren’t convinced why you should, please get in touch.

Our Managing Partner, Karin Landry published an article in the Boston Business Journal focusing on the gap in employee benefits for gig workers, which has risen greatly during the pandemic. Check out the full article here.

Our Managing Partner and Senior Vice President, Karin Landry and Karen English laid out some of their predictions of what businesses can expect to see in 2021. Check out the HR Teach Outlook piece here.