Spring’s Senior Vice President, Prabal Lakhanpal will be presenting at Business Insurance’s World Captive Forum on January 25, 2024. His session will cover new emerging risks and provide tactics for improving captive risk distribution frameworks. You can find the full update here.

As we enter 2024 in an interesting economic and workforce environment, benefits professionals are once again looking to get creative with their offerings and ensure that they align with cultural and corporate objectives as well as budget. 

There is one benefit in particular that, while not new, has been gaining traction over the last few years and we expect continued momentum and adoption in 2024: lifestyle spending accounts.

What is a Lifestyle Spending Account?

A lifestyle spending account (LSA) represents a range of flexible benefits accounts that employers can offer to employees as funds toward eligible expenses related to health, wellness, and personal needs and interests. The employer defines what an LSA can be used for, with many companies including pet care or services, travel, leisure activities, and home improvement within their list of qualifying expenses. In this way, they cover a much broader spectrum of needs beyond those that are applicable within a Flexible Spending Account (FSA) or Health Savings Account (HSA).

Pros and Cons

Many employers are considering or implementing LSAs for their employees because they provide the following key advantages:

• Entirely customizable based on what would make a positive impact on your unique employee base 
  • Allow for enhanced diversity, equity and inclusion (DEI) within your benefits program 
• No budgetary surprises: employers decide on what they will contribute and if employees do not take advantage of the LSA, that money will not be spent, and the employer dictates whether or not funds can roll over year over year 
  • Generally not a big ticket item; contributions typically range from $500 – $2,000 per employee per year¹ 
• Ability to design an LSA based on wellbeing goals that could contribute to a healthier, more productive workforce 
• Demonstrates compassion and a commitment to employees that can lead to increased engagement, recruitment, and retention 
• Can lessen the need for multiple point solutions which can create significant administrative burdens
• Relatively simple and fast to set up 

LSAs aren’t for every company, though. Some factors that might indicate an LSA isn’t the right path are:

• Awareness: as with every facet of a benefits program, the employer will need to be thoughtful in communicating the LSA option
• Possible duplication: depending on your health plan, point solutions, and other wellness programs, you may need to be careful in designing an LSA that is not redundant to other offerings 
• Compliance considerations: while typically not the case, legal and tax implications (e.g., ERISA) may exist for LSAs that account for certain health expenses  
• LSAs are a taxable benefit, unlike pre-tax options like 401(k) plans, HSAs, and health insurance, so there will be different types of financial ramifications for employees who participate 

Looking Ahead

LSAs are becoming more and more popular; a 2023 Benepass study shows that 51% of companies are offering this benefit, as compared to 37% in 2022. Optum’s 2022 Financial Lifestyle Benefits Research found that 37% of benefits professionals were planning to add to or update an LSA in the coming year. At Spring, it has been a topic of interest for many of our clients as we refine our strategic benefits plans and consider program enhancements. If you are interested in an LSA but need guidance around implementation, processes and best practices, please get in touch and we would be happy to help you explore the option.

¹ https://www.mercer.com/en-us/insights/us-health-news/lifestyle-spending-accounts-your-top-questions-answered/

With winter quickly approaching, the Cayman Captive Forum last week provided a great escape from the cold weather and a fantastic excuse to visit a tropical paradise. As Cayman is the second largest captive domicile (behind Vermont), it is more than a vacation spot; a rewarding opportunity to address top trends and practices in the captive insurance and risk management space. Here are some driving topics of interest this year:

AI and Risk Management

As concerns surrounding artificial intelligence (AI) dominate headlines and conversations worldwide, it was only fitting that it was a popular topic of discussion this year at Cayman. AI holds an interesting position in risk management, in that it can be used to help identify risks and create efficiencies; but also can create vulnerabilities in cyber and digital. Here are a couple of innovative sessions on AI’s impact on risk management:

– During the presentation “AI and your Captive,” beverage distributor, Southern Glazer’s Wine and Spirits explained how they were able to optimize their captive using AI and machine learning tools.

– In the eye-catching session, “Chat-GPT/AI Concerns in Claims/Risk Settings,” risk experts reviewed how AI is being used in cyberattacks, especially towards healthcare organizations. They also examined the recent emergence of AI chatbots in healthcare.

Cyber Risks

This year there have been over 327 healthcare data breaches reported to the US Department of Health and Human Services, involving more than 40 million patients’ data¹. Cyber is a top priority for risk managers, especially those working for healthcare employers. Here are some highlights:

– The session, “Complex Cyber: Renewal to Claims” looked at current cyber insurance market trends for healthcare organizations and recommendations for protecting patient information from adverse incidents.

–With emerging technologies, cybercriminals have more tools than ever at their disposal. A presentation titled “Cybersecurity Trends and Tomorrow’s Challenges: Future-Proofing Your Organization” highlighted strategies to combat evolving cyber threats.

Risk Face by Healthcare Organizations

As Cayman is the largest domicile for healthcare organizations², healthcare-related risks receive a lot of buzz each year, and 2023 was no exception. Healthcare organizations face unique challenges, some of which include:

a) Social Risks

Within the healthcare sector, risk management teams must balance distinctive social and legal issues on top of day-to-day operations. Some noteworthy sessions included:

– The presentation, “The Impact of Social Inflation on Captives and Others,” reviewed shifting trends in medical professional liability and explored how risk management teams can better understand changing social influences and the risks tied to them.

– One engaging session entitled, “Reproductive Care Post-Dobbs: Protecting Patients and Providers,” provided insights into how a healthcare organization was able to identify emerging risks associated with reproductive care.

b) Workplace Safety and Medical Malpractice

With unique risks come unique coverages. Healthcare organizations often must turn to specialty insurers and experts to evaluate risks associated with workplace violence and medical malpractice. These topics were widely discussed during the conference:

– In the one-of-a-kind session, “Active Shooter Workplace Violence – Claims Coverages Consequences,” the Captive Owner from the University of Pittsburgh Medical Center drew takeaways from their mass shooting over a decade ago.

– A session on “Implementing Structured Communication Processes to Avert Malpractice Claims & Reduce Patient Harm” spotlighted how nearly half of malpractice claims come from miscommunication and provided suggestions on streamlining communication.

– The final session of the conference “People Behaving Badly” reviewed a high-profile case where medical providers harmed patients and professional liability considerations for healthcare companies when disciplining or terminating staff.

c) Other Priorities

In addition to the topics discussed above, some other notable healthcare industry-focused sessions included:

– As virtual care continues to be popular post-pandemic, a group of risk experts discussed recommendations for “Managing the virtual practice of medicine in multiple states & the unique risks associated with this practice.”

– In a virtual session, “A total guide to total cost of risk,” an actuary and captive consultant discuss how to properly calculate and identify Total Cost of Risk (TCOR) and suggestions on how to adjust to changes in TCOR.

The Cayman Captive Forum was a strong finish to the year in terms of lessons learned and connections made. The farewell beach party is always an added bonus!  We welcome this chance to reflect back and look forward to what 2024 has in store for the captive space.

¹ https://www.urologytimes.com/view/health-care-cyberattacks-soaring-in-2023
² https://caymanintinsurance.ky/about/

Title:

Consultant

Joined Spring:

I joined Spring in July 2017, shortly after I graduated from college.

Hometown:

I was born in Maine but grew up in Stockton, NJ. It’s a really small town and my elementary school only had about 60 people in it total.

At Work Responsibilities:

I work on our Absence Management Team and primarily help clients with their absence policies, as well as health and Rx plans. I also spend a lot of my time monitoring the paid leave landscape and updating our clients on legislative developments that may impact their leave programs throughout the country.  

Outside of Work Hobbies/Interests:

I recently moved back to NJ and spend a lot of my time with my family and dogs, reading, and exploring my new neighborhood.

Fun Fact:

I spent a semester studying abroad in Cape Town, South Africa!

Describe Spring in 3 Words:

Dedicated, Invested, and Fun

Favorite book (or one you’ve recently read):

I just finished All The Light You Cannot See. I don’t think I can pick an overall favorite book.

Pets:

My family dog Scout (Chocolate Lab) and my “nephew” Alan (Red Lab) but I consider them mine 😊

Captive International has released the winners for the 2023 US Awards. Spring is proud to announce that our Managing Partner, Karin Landry won the Best Feasibility Study Individual. We were also highly commended for Best Actuarial Firm, Top Feasibility Study Firm, and Top Captive Consulting Firm. Our team was also highly commended for the following: Best Individual Captive Consultant (Karin Landry & Prabal Lakhanpal), Best Individual Feasibility Study (Prabal Lakhanpal) and Best Actuary (Peter Johnson & Nick Frongillo).

After operational difficulties posed by the pandemic settled, a large, global hospitality organization wanted to refocus on employee health and productivity, with operational efficiency and risk management in mind. With an emphasis on the employee experience, the client engaged Spring to conduct a review of their workers’ compensation, disability and leave of absence plans, policies and processes with the goal of understanding how they compare to industry best practices and how insourced, outsourced, or cosourced models could yield improvements.

Spring’s Work

After thorough research and analysis, we proposed a shift from the decentralized, separate, and insourced disability and LOA model to a centralized, integrated, and outsourced approach across WC, FMLA/LOA, ADA, RTW and STD/LTD. Our holistic model incorporates:

• Minimal disruption by utilizing existing STD/LTD vendor for disability & LOA management and recommendations to optimize this partnership and establish linkages with WC vendor
  • LTD and STD continue to be funded through the captive
• Client team hiring plan/staffing model
• ADA claim management software
• Training for HR, managers, and vendors to align on both process and culture
• Best practices for intake, claim, submission, and customer service journey points
• Case management, claims administration, RTW and accommodation management
• Ongoing absence status and reporting/metrics
• Technology and administration partners to meet needs
• System integration with payroll, HRIS, and other systems

By outsourcing, the client can achieve its goals of:

• Increasing operational efficiency
• Improving employee health and productivity
• Applying the right resources at the right time
• Reducing administrative burden for client team
• Mitigating risk by transferring the responsibility for day-today absence tracking, management and compliance to a third party

The Results

Spring is working to implement the solution to yield the following quantitative and qualitative success factors:

Qualitative

• Decreases colleague and manager confusion and better the employee experience
• Positions HR in an advocacy role; enhance the ability to inform and remind employees of benefits and resources they have available to them to help during a time of need
• Increase employee satisfaction regarding applying for days off
• Better communication and integration between benefits and risk management teams

Quantitative

• Decreases claims costs that flow through to client’s captive (and number of claims, or incidence), leading to higher savings
  • Due to formalized processes and reporting
• Reduces benefit payout amount
• Enhances productivity due to fewer lost workdays (lessen duration of leaves) and stronger RTW
  • Due to early intervention, strong policy provisions, RTW and accommodation philosophy and tight benefit coordination
• Lowers replacement costs when colleagues are out
• Avoids legal claims and lawsuits
  • Anticipates close to $10M of direct savings over a 5-year period and a conservative ROI projection (savings minus expenses): $1.2M

Have questions about how to build or improve your absence management program to see tangible results like these? Check out our website or get in touch today.

While paid family and medical leave (PFML) remains in the state regulatory spotlight, much of the workforce is not covered by these laws or has leave needs outside of what is available. At the height of COVID-19, the American Journal of Emergency Medicine reported a 25%-33% increase in reported domestic violence cases. According to WHO, mental health issues rose 25% in 2020. These issues did not disappear even though the pandemic dust has settled.

Cutting-edge employers are leveraging ancillary types of paid leave as support tools for employees. They are thinking beyond traditional offerings and facilitating easier navigation so that when an employee experiences a hardship, understanding work leave options does not add to their mental burden. I had the pleasure of presenting on this topic at the 2023 Disability Management Employer Coalition (DMEC) Compliance Conference, and I wanted to share key insights.

Paid Leve Evolution

In October of 2023:

• 10 states and Washington D.C. currently require employers provide paid family and medical leave (PFML) benefits, in addition to Hawaii which requires only statutory disability benefits be provided
• 2 states have passed voluntary PFML laws with 6 more creating PFML insurance rules which allows employers to purchase insured PFML if they are interested
• 5 states are in the regulatory phase of PFML, where benefits are not yet available
• 32 states do not have PFML benefit laws (excluding Washington D.C., Hawaii which has a statutory disability benefit, and the states that fall solely into the “PFML insurance rules” category, as that does not constitute a state law)
• Still much of the workforce is not covered by these laws
• Check out our whitepaper for a more detailed landscape of state PFML policies

It has been a long road to get to this patchworked state, however. The push for time off dates back to 1910 when President Taft proposed that every American worker needed two to three months of vacation a year. U.S. legislators did not agree, so unions were left to bargain for paid vacation from the 1920s through the 1940s.

During World War II, when employers were scrambling for talent, the offer of paid vacation rose as a way to increase compensation due to wage controls that were in place at the time. Statutory paid disability laws began passing in 1942, with laws in RI, CA, NJ and NY in place by 1949.

On the federal level, very little progress was made until the mid-20th century, when women increasingly entered the workforce and thus the focus then expanded beyond paid vacation time to broader family-related leaves. From there, as illustrated below, we have seen an array of paid and unpaid leave laws pass at both the state and federal levels, with the onus for paid leave largely falling to state legislation due to a lack of movement on the federal stage.

Current Leave Landscape & Employer Tactics

Here is a high-level snapshot of leave options available today.

It’s important to note that of the above leaves, some are fully paid, some are partially paid, and some are unpaid. Job protection in the event of an absence from work may or may not be granted, depending on the situation and policy at play. This landscape leaves significant gaps, which many employers are looking to close with ancillary options.

Employers generally recognize the value of leave benefits, in that they serve to:

• Support employees
• Retain talent
• Recruit talent
• Combat productivity losses, often related to personal and family health problems (being “present” does not always mean being productive)

There is now a movement to expand upon traditional fundamentals in this area to better address widespread issues. Specifically, we have seen an uptick in (a sample list):

• Bereavement leave
• Domestic violence support
• Mental health support
• Personal leave
• Wellness days
• Compassionate leave
• Sabbatical leave
• Time Off in Lieu of Working Overtime (TOIL)
• Humanitarian leave

Even the most generous of programs, however, can fall short if careful thought is not given to communication strategies around offerings available, employee education surrounding leave eligibility and protocols, and population needs.

Compliance Considerations

The greater the volume of leave types on the table, the more complex compliance becomes. As such, employers should have processes in place regarding:

• Determining which leave laws and policies may apply to an employee’s request (federal, state, local) and run leaves concurrently when applicable
• Training managers involved in the employer’s leave policies
• Administering leave policies in a consistent and non-discriminatory manner
• Ensuring engaging in the interactive process to determine reasonable accommodations under the ADA which includes leave as an accommodation
• Continuing group health insurance benefits during employee leave
• Allowing for an equal amount of paid time off for parental leave policies for both caregivers  
• Using language in policies that is gender neutral 
• Ensuring adherence to reporting and tracking requirements

Looking Ahead

As veterans in the integrated disability and absence management space, we cannot see the future, but we can offer informed predictions about what’s to come. We anticipate state activity will continue to push employers to expand their leave offerings. Flexibility and work-life balance will remain in the spotlight, and employees will be working toward being more informed about their leave rights, so compliance will continue to take precedence. Operationally, we expect that more HR and benefits teams will turn to outsourcing to mitigate staffing issues, and will look to fully integrate leave benefits into a single system to reduce administrative burden, streamline processes, and increase reporting capabilities.

If you are interested in benchmarking your leave programs, integrating benefits, or better understanding best practices in this area, Spring would love to hear from you.

Spring has been recognized as one of the Top Employee Benefits Consulting firms in Massachusetts by Mployer Advisors, who focus on connecting employers with top-rated insurance advisors. We’d also like to congratulate our colleagues at Boston Benefit Partners, An Alera Group Company, for making the list as well! You can find the full update here.

As we prepare for 2024, we are in an interesting time for HR teams in that they are facing challenges such as back to office strategies and changing workplace expectations, all on top of a full plate of duties. Last week I attended the Northeast HR Association (NEHRA) Annual Conference, which brought together leaders and industry experts to delve into crucial topics that have become front and center HR today. This year’s conference explored vital themes, including mental health/well-being, innovative leadership tactics, and the importance of Diversity, Equity, and Inclusion (DEI). Here are the highlights from this enlightening event.

Nurturing Mental Health and Well-being

One major theme at NEHRA’s Annual Conference this year was meant health and well-being, a popular topic in the world of HR. The discussions were both insightful and innovative, with presenters emphasizing new trends and practices to help support employees’ mental health. Here are some presentations I found impactful:

– In the session, “Neuroinclusion in the Workplace: A Win-Win for Both Employers and Employees,” a well-being expert discussed strategies to support neurodivergent employees to foster workplace collaboration and effective communication.

-The Founder and CEO of Wellbeing Works, Shanna B. Tiayon discussed how HR departments can support employees experiencing trauma though proper communication and resilient HR structures.

– The closing keynote, titled “Transform Your Workplace Through Connection & Community,” focused on developing an understanding of the benefits of having a connected work community and how to develop inclusive programs.

Innovative Leadership Tactics

One of the most pertinent points discussed was the role of HR in shaping leadership. The event brought forward outside-the-box ideas for fostering leadership excellence, creating an inclusive environment, and retaining and developing potential future leaders. Below are some presentations I would like to spotlight:

– A presentation titled “Who’s on Deck? Succession Planning that Eliminates Fears and Reduces Cost,” reviewed the advantages of promoting talent internally and tips for developing middle management for leadership roles.

-A leadership development expert explored top management tactics and the importance of developing workplace conditions that bring out the best in people. The session was titled “Reimagining Managers: Why the Best Managers Don’t Manage People.”

– In the era of hybrid work, effective and efficient meetings can be challenging. The breakout presentation, “Mastering the Art of Meetings: Powering Up Your Gathering,” reviewed ways to prioritize productivity without sacrificing workplace culture during meetings.

Championing Diversity, Equity, and Inclusion (DEI)

Developing and enhancing DEI efforts continues to be a top priority for HR teams. The importance of setting measurable goals, conducting bias training, and engaging with underrepresented communities was emphasized. The conversations highlighted that DEI isn’t just an HR issue; it’s a business imperative. Organizations that embrace diversity are better equipped to innovate, excel, and adapt to the ever-changing global landscape. Here are a couple of presentations with insights I wanted to share:

– Two HR professionals discussed “Practical strategies to imbed DEIB Considerations Into Your Hiring Practices.” Some main points included implementing blind resumes, training hiring managers and recruiters on unconscious bias and diversifying the interview panel.

-In the session “Building a Personalized and Equitable Benefits Program,” the presenter discussed effective and realistic tactics to improve DEI efforts in employee benefits without breaking the bank.

In conclusion, the NEHRA Annual Conference 2023 proved to be a valuable platform for HR professionals to deepen their understanding of a plethora of challenges employers are facing. The event’s discussions and insights provided attendees with the knowledge and motivation needed to lead HR into the future, creating workplaces that are not only more productive but also more compassionate and equitable. The NEHRA Annual Conference continues to be a beacon for HR professionals in the northeast as they navigate the evolving landscape of the industry.