In this piece in the Boston Business Journal, our Vice President, Prabal Lakhanpal, sets the stage for the current healthcare landscape and alternative strategies employers can take in order to offset costs and other challenges.

Women Can Have It All, If We Support Them

An industry has been created to help respond to the age-old question: “Can women have it all?”

Almost ten years ago, in 2013, we first heard Sheryl Sandberg’s self-coined phrase ‘lean in’, encouraging women to lean in to opportunities that put them in a more equitable position in their careers – to not be afraid to ask for a raise or promotion, and generally know their worth, and demand what that entails. In 2016, Paradigm for Parity was founded to get more women into the c-suite by 2030. Since then, organizations like Chief, have been founded to give C-Suite women the place and space they need to build networks and grow as leaders of their own. 

As I reflect on this on International Women’s Day, I am eternally grateful for the efforts of these women – and those who came before them – who have provided guidance, made space, and advocated to help advance other women. Few efforts are more than helping to elevate other women. 

And, while I believe women can have it all –  I know that for so many, including myself, it has come at a cost. We are on double duty all the time. 

Since my mother’s generation, women have come a long way in terms of what is available to them at a professional level. Gone are the days that the only careers available to women are teacher, nurse or secretary. Today, women are CEOs and pioneers of companies at an increasing rate, and I could not be more excited for what that means for our future, but also for my own daughter. 

 With that said, that “cost of having it all” remains high.  Even women who make similar salaries as their male partners, or who are the breadwinners in their family, often still bear the brunt of household and/or childcare duties. A successful career might mean being less present in a child’s life, or being unable to care for an aging parent, or even lacking the time to find love and nurture a romantic relationship, or simply being prohibited from doing anything for yourself. 

I want to be clear that I believe women can have it all, I am just looking forward to the day society sets women up to not only have it all, but supports them in the process. 

The COVID-19 pandemic shined a bright light on the ways in which our society has failed to provide for or support women. Within the first three months of the pandemic, 3.5 million mothers left the workforce due to childcare or caregiving responsibilities as well as layoffs and furloughs. The loss inspired a movement, the Marshall Plan for Moms, to center mothers in the economic recovery of the country, providing financial support to mothers for the labor they provide at home. And while the workforce is recovering, and a million women returned in 2021 – we are not yet where we were pre-pandemic.

I keep coming back to the resilience of women. While countless individuals quit their jobs in November of 2021, Women used this momentum to their advantage – to not only rejoin the workforce, but to ‘lean in’ and ensure they were getting what they wanted. Unlike a year ago, or in March of 2020, there are many jobs available, and most companies have taken a fresh look at salaries and benefits to gain a competitive hiring edge. Women make up 66% of the insurance industry, for example, but there seems to be a dearth of women leadership roles. 

All I can say is: now is the time. 

Now is the time to ask for that promotion, to make a lateral move that may have greater dividends in the long-term, and to advocate for yourself and for all women to get ahead.  

At Spring, we are proud to have incredible female leaders. As Managing Partner and co-founder, I faced a fair amount of adversity to get to where I am in the insurance/financial sector. Thus, I wanted to create a culture of diversity, equity and inclusion when I ventured out to start my own consultancy. 

For one, I have always fought for pay equity at Spring and fair hiring and advancement practices. Karen English, Spring’s Senior Vice President, has joined me on that journey. Karen brings in some of our biggest pieces of business and is a well-known thought leader in the leave and absence management space. She even plays an HR role within Spring, and does it all while raising two teenage kids, for whom she prioritizes basketball games and science fairs. 

Then we have Teri Weber, Senior Vice President, who is a true queen of all trades – from internal IT help, to driving our health and welfare accounts, to being a rockstar speaker, an amazing baker, and an attentive mother of two teenage girls. 

Anne Baldwin heads up our finance department and has revolutionized the way we keep our books. Christine Culgin leads our marketing. Within our broader Alera Group family, we are lucky to have many women executives, including our COO, our VP of Compliance, our Employee Benefits Practice Leader, our CHRO, and others. We even have a women’s mentorship program.

We are fortunate to be living in a time where there is so much support and advocacy for women to have it all, and I am proud to lead a company that helps to advance that effort. But so much more is needed. 

More support and networking opportunities must exist for women early on in their careers and women who cannot afford expensive membership dues. More organizations need to pledge pay parity. More organizations need to prioritize training and mentorship, with the goal of fostering honest dialogues and creating an atmosphere where employees feel supported and safe in speaking up and advocating for themselves. We need a sharper focus on communications, and employee engagement – for women and men.

As I look forward to International Women’s Days to come, I am committed to working toward a society that doesn’t just allow women to have it all, but supports them in getting there. 

Until then, let’s keep fighting the good fight! 

As seen in the New England Benefits Council (NEEBC) blog.

We are one year into eligible Massachusetts employees being able to apply for paid leave benefits under the Massachusetts Paid Family and Medical Leave (PFML) program. Although stats for the MA PFML Rookie Year have not been released yet, the first six months were telling:

While we await data for season of 2021, let’s dissect the highs and lows and see if MA PFML has a shot at Rookie of the Year!


Let’s start with the highs:


The plan appears to be running at a sustainable level with sufficient funding, indicated by a reduction in contribution rates, which is good for residents of the Commonwealth.


Employers were able to successfully create private plans without significant hurdles in the process, allowing MA firms to continue their history of rich benefit designs without negatively impacting corporate plans.


Massachusetts has been a strong example of early and broad education of the program. Individuals in the state were told about benefits that may be available to them in plenty of time before the program went live, giving them the opportunity to ask questions and better understand what their experience might be in the case they need leave. The state hosted various webinars to different audiences, providing real time information and continuous updates on the status of the program’s launch. The website houses a multitude of helpful information and is continually updated. For questions not answered in these channels, individuals may also call the DFML for benefit questions or the Department of Revenue (DOR) for questions concerning private plans or contributions, and the state is typically always able to answer even in-depth questions.

While the state has had multiple home runs implementing a PFML program, just like evaluating Rookies of the Year like Jonathan India and Kyle Lewis, we need to think of the swing-and-a-miss situations as well. The most significant strike for the MA PFML was their system:

Just like anyone’s first year in the pros, our first year with MA PFML threw us curveballs we did not expect, and as a result, we have learned some important lessons. The ever-evolving landscape of PFML laws has put pressure on employers with employees across the country, as they try to meet employee needs while balancing corporate responsibilities and equity. As we all become more seasoned players in this complex game of leave, Spring has outlined some best practices for employers handling PFML:

The replay we are watching the most, however, is that COVID-19 significantly increased the complexity of such a program. The need for leave has been exacerbated. Difficulty hiring employees has affected employers who must keep up productivity while more employees are away from their jobs, and the state had to administer a new leave program under less-than-ideal conditions. In addition, the tremendous growth of remote work has made it difficult for employers to determine where an employee may be eligible for leave.


Overall, workforces are evolving and regulations at the local, state and federal level need to be continually monitored. As we see benefits become available under new programs, such as CT PFML, and other states pass bills to develop PFML programs, such as New Hampshire and Maine, employers will need to assess their strategies and evolve accordingly.

Spring was named a Top Employee Benefits Consultant for 2021 by Mployer Advisor – check out the details in this press release.

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

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

Direct costs related to Covid-19

Costs associated with testing, treatment and vaccines remain a primary source of plan costs. The most direct impact on captives is the high cost treatment tied to severe hospitalizations, particularly due to potent strains of Covid-19 like the Delta variant. There may also be ongoing health needs for members who recover from Covid-19 or are long-haulers.


Deferral of care

Plan members have chosen to defer elective treatments. While some of this care was eventually incurred over the course of the last year, many plan members continue to hold back on care, whether because of discomfort in a hospital setting or difficulty in finding care due to bandwidth issues. This influences future costs, particularly with unpredictable costly surgeries.

Missed preventative care

Client data across industries also showed a significant reduction in preventative care visits, and lower test numbers in areas such as labs, CT scans and MRIs. As a result, many employers are concerned because if certain health issues are not identified and treated early, the severity of the case and corresponding cost of care may be higher down the road.


Behavioral health

Covid-19 propelled behavioral health issues into crisis levels. While it may seem indirectly related to broader healthcare, consider this: the national Alliance on Mental Illness reports that cardiometabolic disease rates are twice as high in adults with serious mental illness, and that depression and anxiety disorders cost the global economy $1 trillion annually in lost productivity. We are sure to see the repercussions of this in claims costs to come.

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


Employer Considerations


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


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


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


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


Captive Arrangements for Employee Benefits


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


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


Reduced total cost of insurance

Insurance carriers develop premiums by heavily weighing on industry averages, state rates and, to some degree, on an employer’s individual loss experience. This may lead to pricing that may not accurately reflect an organization’s actual loss experience. Insurance carriers usually price to include substantial overheads, including risk and profit margins. A captive provides employers an opportunity to recapture premiums from the commercial market and build a sustainable long-term model for their insurance needs.


Insulation from market fluctuations

Conventional commercial insurance is vulnerable to market fluctuations. This has never been more evident than today, with hard insurance markets and premiums that are increasing substantially with almost no change in coverage level. As a member in a captive program, employers are less susceptible to unpredictable rising costs imposed by conventional insurers every renewal season, as a balanced funding approach can smooth the cyclical volatility of the commercial insurance markets.


Protection from cashflow volatility

Leveraging a captive to fund medical stop loss can lower the cashflow volatility often faced by self-insured programs on a monthly basis. Having a captive cover claims at a substantially lower stop-loss level allows employers to smooth out plan funding and mitigate cashflow risk to the company.

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


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


Looking Beyond the Pandemic


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

In this Boston Business Journal Q&A, Spring SVP Teri Weber shares her thoughts on how employers can meaningfully tackle mental health issues at the workplace.

As seen in Captive International


As the dust begins to settle on the COVID-19 pandemic, forward-thinking organizations are focused on programs that provide competitive benefits as they look to lure new workers and retain existing employees. They recognize that employee benefits give them flexibility to deal with the changing employee landscape, from a demographic and geographic perspective, as well as improving employee wellness, maximizing their savings and increasing employee engagement in the modern era.

COVID-19 impacted insurance coverages and industries differently, but a picture is emerging of what the employee benefits landscape will look like post-pandemic

Prabal Lakhanpal of Spring Consulting

A holistic approach


Historically, employers were largely focused on ensuring they had adequate insurance coverage on a line-by-line basis, and these coverages often operated in silos. Today, more organizations are breaking down those silos and developing a view that is holistic, looking across the board to create an employee benefits program that emphasizes employee wellbeing and population health management.


Employee wellness is primarily the idea of not just providing employees with appropriate health, life and disability benefits, but also ensuring that employees have assistance regarding their overall wellbeing, including physical, financial, behavioral, social and intellectual health. Organizations increasingly understand how the individual components of their benefits programs are inter-related, and that evaluating and managing these relationships adds value to their employees.


A captive is an effective mechanism for achieving an integrated program. In an integrated captive program it is easy to bring together all the lines and ensure that the appropriate resources are being used to plug any gaps in the benefits portfolio. Most of our clients using this approach have been able to leverage the savings from the captive program to provide the additional coverages at almost no or nominal cost.


In addition, the transparency and clear line of sight into claims activity and utilization rates help employers plan for program changes, make decisions and adjust to changing employee needs sooner than they would be able to without a captive. Organizations that already had benefits in their captive when COVID-19 hit fared much better than those without one, as they were able to adapt quickly to make changes to their benefits that accounted for the unusual circumstances.


For example, we helped a large global employer leverage its captive to provide extended benefits for employees it was forced to furlough when the pandemic struck. Its carrier would allow for continued benefits for only three to six months, but by using the captive to take on the risk, the organization was able to keep benefits for furloughed employees for 12 months at no additional cost. This move went a long way to improve employee retention and morale.

Medical stop-loss


If we think about the range of employee benefits in the US, medical stop-loss is perhaps the one that has changed the most and attracted the most interest in the last few years. It is typically not an Employee Retirement Income Security Act (ERISA) benefit so Department of Labor (DOL) processes don’t apply.


There are two driving forces behind this interest. First, healthcare costs continue to skyrocket, causing employers to look at alternative ways to bend the healthcare cost. Medical stop-loss in a captive is a smart, cost-conscious response to these market conditions.


The second factor is that for a long-time medical stop-loss has largely been considered a first-party risk. Over time, law firms and accounting firms have gradually started to categorize it as a potential third-party risk.


This transition to medical stop-loss being a third-party risk is gaining substantial traction and impacting the way programs may be structured to achieve insurance tax treatment. This concept needs to be individually assessed at the employer level, considering the circumstances of the organization. We highly recommend working with a captive attorney or tax advisor to ensure compliance.

Life and disability


Life and disability are other lines that have changed significantly in recent years. Typically, any coverage subject to ERISA needs to go through a DOL exemption process in order to be placed in a captive. Life and disability are usually subject to ERISA. Historically, the DOL had an expedited process, which allowed employers to submit an application for approval to add benefits to a captive.


In late 2018, the DOL paused this process in order to rethink and better understand how employers are using these benefit lines in a captive. They have since conducted an analysis and created a more streamlined exemption process for which we are already seeing applications flow through the DOL.


As we look to the future, I believe this will encourage more employers to think about life and disability as potential coverages for captives. These coverages not only help employers achieve best-in-class benefits provision, they also support captive insurance structure from a diversification point of view.


Another growing area of interest is the self-insuring of employer-paid disability coverages. This is an extremely useful solution for organizations and is quick to implement, but the feasibility of this needs to be evaluated on an individual employer basis.

Voluntary benefits


While not new, voluntary benefits continue to pick up steam in the market. This trend correlates in part to my first point about a holistic approach, as voluntary benefits can offer a range of different protections that are not part of a traditional benefits package. In this way, employers and employees can address a larger spectrum of health and wellbeing concerns such as vision, financial wellness, or accident insurance, thus creating a more comprehensive program.


Voluntary benefits are an important tool to have as employers fight against rising healthcare costs, as they are a low-to-no-cost mechanism to support employees in managing those increasing costs.


Last, as most voluntary benefits are underwritten at extremely low loss ratios, insurance carriers make a substantial profit from a voluntary benefit that is fully-insured. By utilizing a captive (self-insured structure) for voluntary benefits, the employer can further reduce benefits costs for its employees. It’s a classic win-win.


Conclusion


The “new normal”, whether it feels normal or not, is not on the horizon, but at your doorstep. Cutting-edge businesses are taking a modern approach to address the challenging market conditions while still providing competitive benefits, retaining and attracting talent, and being risk-smart and mindful of their bottom lines.
Thinking holistically and reframing your strategy around medical stop-loss, life and disability, and voluntary benefits are just a few of the ways you can use your captive to stay ahead.

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.