Category: Latest Thinking

By Raymond O. Burke and Dominic Micali

Stop-loss insurance can be a powerful tool to help employers with self-funded health insurance plans limit their overall risk. Under a stop-loss policy, losses in excess of a set deductible limit (“attachment point”) are covered by the stop loss carrier, protecting the employer from the financial impact of large, catastrophic claims. There are two types of stop-loss coverage; Individual (or specific) stop-loss, which deals with claims associated with a specific member, and aggregate stop-loss, which covers the totality of an employer’s claims spend in a given time period.

As the dynamics of healthcare and the demand for stop-loss protection evolve, here are three trends that could continue to impact the stop-loss market.

1. More small and mid-sized organizations adopt self-funded models

Fully insured organizations continue to face significant premium increases with little transparency from carriers as to what’s driving them. Beyond claims experience, things like premium taxes and the carrier’s rising administrative expenses also factor into rate hikes. And while high claims typically result in sharp premium increases at renewal, those higher premiums do not go down after a year with low claims.

While self-funding has long been common among larger firms, as premiums for fully insuring continue to rise, more smaller and mid-sized firms are discovering the financial and control advantages of moving to a self-funded model supported by stop-loss protection to limit their risk.

2. Rising frequency and severity of catastrophic claims

New and costly cutting-edge treatments and specialty medications are saving lives and improving outcomes for members with cancer or chronic conditions. However, they are also driving up the frequency and severity of large, catastrophic claims. Previously, a $1 million claim would be an exception to the norm. Today, it is not unusual for organizations to see several multi-million dollar claims a year — making the need to have the right stop-loss protection in place more important than ever.

3. Employee benefits captives continue to emerge as an attractive option

The trends discussed above have caused demand for stop-loss insurance to grow significantly. However, many employers are also deciding to participate in employee benefits captives to gain even more transparency and cost control. These innovative solutions allow like-minded employers with 100 to 500 employees to form and manage their own insurance entity. Rather than paying premiums to an insurance company, the employers contribute to a shared pool for stop-loss coverage.

As members of a captive, employers retain the profits when claims are low and share the financial impact with other captive members when claims experience is higher than expected. However, since the stop-loss premiums are based on the claims experience of a pool of employers, rather than a single employer, organizations in captives may benefit from best-in-class stop-loss contractual terms (including no-new lasers and rate cap provisions) and are not likely to experience the drastic stop-loss premium volatility that can occur when self-insuring on their own.

Brokers continue to add value to ease this transition

For employers transitioning from fully insured to self-funded models with stop-loss protection, an experienced broker partner is essential to navigating the process. Securing stop-loss coverage can be a complicated process and experienced brokers can offer guidance to ensure the policy is written in the employer’s best interest.

For example, organizations must be aware of the different vehicles and structures a stop-loss carrier will write into their contracts. Brokers with experience handling policies for a wide range of employers can flag potential areas for review, such as aggregate deductibles, lasers and other policy language that can significantly impact the amount of risk an organization assumes.

The Conner Strong & Buckelew Advantage

As the stop-loss space continues to evolve, the trends outlined above will be important to monitor as organizations continue to move from fully insured to self-funded. At Conner Strong & Buckelew, we have assisted countless clients with this transition, so they too can reap the cost-saving benefits. Additionally, we have deep experience helping employers who are already self-funded find better stop-loss solutions.

Today, over 80% of our clients are self-insured because of the unparalleled value we can provide under this structure. Our self-insured clients benefit from access to enhanced control of spending through data transparency, industry-leading pharmacy coalitions and rebates, population health and cost containment strategies, catastrophic claims screening technology, risk management expertise and much more. Combined with strategic stop-loss coverage placement, the culmination of these resources and expertise can create thousands of dollars in annual savings for your organization while maintaining employee benefits satisfaction.

If your organization is considering the self-funded route or is already self-funded and would like to learn more about alternative stop-loss options, please call us at 1-877-861-3220 or email [email protected].

What’s it like helping patients and employers navigate drug costs?

AS PUBLISHED ON LEADER’S EDGE

Given his background working with pharmacy benefit managers (PBMs) and medical insurers, as well as in helping individuals to fill their prescriptions, Simon Leung, Vice President and Head of Pharmacy for Conner Strong & Buckelew, has in some ways seen all sides of the prescription drug industry.

Leung’s experience has shaped his approach to pharmacy benefit consulting and his view on transparency for drug costs. He discusses where all the different industry players disagree, which cost-saving levers employers can access, and the value of different types of data that inform client strategy.

By Daniel S. Brettler

There is often confusion around insurance coverage for patient medical care stemming from the adverse effects of clinical trials. To help bring clarity, it’s important to first understand the fundamental purpose and coverage differences between Clinical Trials Liability Insurance and Traditional Health Insurance.

Purpose and Scope of Coverage

The distinctly different purpose and scope of these coverages makes it clear that there is a coverage gap when it comes to clinical-trial-related medical costs — particularly large, unexpected expenses. But what’s driving the gap?

Cost Considerations and Drivers

From a practical standpoint, the expectation that clinical trials liability insurance should act like traditional health insurance is not realistic when you consider the cost dynamics. As you can see in the comparison below, it is unlikely there would be a competitive clinical trials liability insurance market today if these policies provided broad health-insurance-like medical cost coverage for trial-related medical care.

The Conundrum: Closing the Coverage Gap

There is no one-size fits-all solution when it comes to closing the clinical trials medical cost coverage gap. But there are several approaches that should be considered individually or in combination.

1. Rethinking clinical trial budgets

Much of the cost of treating patients for trial-related adverse effects is accounted for in the clinical trial budget itself. As long as costs remain relatively low there is no issue. However, trial budgets often fail to contemplate large claims, resulting in insurance gaps when the cost of patient treatment rises to a material level.

2. Increasing liability policy clinical trial medical payment and expense sub limits

Many clinical trials liability policies offer some coverage for medical expenses — without a legal liability requirement — under a small sublimit, typically up to $25,000. Increasing this sub limit is a potential solution. Although it will drive up premium costs, this approach would also provide clinical trial sponsors with the apparatus to manage and pay claims.

It should be noted that when the insured is liable for injuries and there is no specific policy exclusion for the matter, medical expenses sought by the patient or others for whom liability may have been assumed are covered under the claim.

3. Negotiating better pricing with clinical trial sites and institutions

Currently, clinical trial sponsors are billed at standard hospital rates for medical care related to serious adverse events. In some cases costs are reaching millions of dollars for treatment of a single patient. Clinical trial sponsors should consider negotiating with sites for terms more consistent with those in place for health insurer managed care networks or Medicare.

Life science companies concerned about the impact of clinical trial patient medical costs need to work with a broker that has a verifiable track record of success providing guidance in this area. The experts at Conner Strong & Buckelew have the knowledgebase and deep industry expertise to help your organization build a strategy designed to mitigate the impact of large, unexpected medical claims and protect your bottom line.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].

Technological advancements continue to transform the way we live and work. But the efficiencies and enhancements gained also open new doors for cybercriminals to cause damage. To stay safe, organizations of all shapes and sizes must understand the latest cybersecurity best practices and insurance implications.

In honor of Cybersecurity Awareness Month, here are two trends for organizations to keep an eye on:

1. Advances in artificial intelligence (AI) create new cybersecurity risks and solutions

AI has the potential to exacerbate the threat of cyber attacks through more sophisticated phishing attempts, voice cloning and deepfakes. However, it can also be leveraged to more efficiently flag phishing attempts, identify suspicious behavior and thwart attacks.

Organizations should consider adding AI experts to their information technology departments. They should also ask their cybersecurity partners about these evolving threats and defense techniques to better understand how AI can be used for and against them and how to protect themselves.

2. Evolving carrier roles and requirements

In addition to requiring companies to maintain multiple layers of security as outlined in our previous article, some carriers are starting to actively monitor policyholders’ systems to test their defenses. This helps protect the insurance company’s interests as well as alerting policyholders to possible cyber vulnerabilities. In some cases, carriers are also requiring middle and up market policyholders to prove they have specialized personnel setting cyber policy.

Cyber insurance carrier practices and requirements will continue to evolve as new cybersecurity risks emerge, making it more important than ever to work with a broker who has a deep understanding of this dynamic environment.

Bridge the cybersecurity knowledge gap with informed insurance brokers

In such a rapidly evolving landscape, it can be difficult for organizations to stay up to date on their own. Insurance brokers with extensive cybersecurity expertise, like Conner Strong & Buckelew, regularly analyze new cyber developments and can offer advice to help you mitigate cybersecurity risks and secure the coverage you need.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].

For the past several years, organizations around the world have faced skyrocketing cyber insurance costs as insurers reduced coverage, increased deductibles and dramatically raised premiums. Some insurance carriers halted cyber policy renewals and stopped writing new cyber business.

However, these dynamics are beginning to change. In some cases, new capacity has entered the market as carriers see the opportunity to capture premium for select accounts with robust cybersecurity postures. In other cases, carriers have responded to certain cyber events, leading to mixed market conditions.

In honor of Cybersecurity Awareness Month, here are some trends and realities about the current state of cyber insurance:

• Some carriers have been reporting underwriting profits, which is creating more capacity. As a result of the increased capacity, we’re seeing premiums decline, allowing policyholders to secure broader coverage at more favorable terms in some areas of the market.
• Carriers are requiring companies to have robust cybersecurity systems in place. To protect themselves from losses, insurers are increasingly requiring policyholders to have certain internal security measures in place as a condition for coverage. These might include employee phishing training, data backups and multi-factor authentication. See our previous article on this topic here.
• Cyber insurance is still a volatile market. Similar to property coverage, the cyber market is susceptible to swings based on large-scale cyber events that impact profitability. Just as a bad hurricane season can impact property coverage, a string of costly cyber events can trigger underwriters to reduce cyber insurance capacity.

Secure coverage with an expert

Cybersecurity Awareness Month is a great time to reexamine your coverage needs. The cyber insurance landscape is complex and constantly changing, making the guidance and support of an experienced and knowledgeable broker more important than ever.

At Conner Strong & Buckelew, our in-house cybersecurity experts can analyze your situation, offer advice to help you mitigate cybersecurity risks and help you secure the coverage you need at the best possible terms.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].

Enhancing health outcomes, boosting employee compliance, and reducing healthcare costs

By Joe DiBella

As published on HR.com

Open enrollment offers human resources (HR) departments a critical opportunity. It’s one of the few times of the year they have their employees’ full attention to educate them on health plan information and guide them to make better choices.

Now more than ever, data analytics has a critical role to play for HR departments seeking to maximize the effectiveness of their open enrollment periods. The volume of data available to HR professionals has exploded, and powerful analytics tools have made extracting actionable insights faster and more efficient.

Typically, this data is used during open enrollment to help employees select the right plan. But there’s another way to use data analytics that’s gaining popularity. Innovative HR departments today are analyzing data around health plan utilization, identifying unused resources, and educating their employees during the open enrollment period in ways that save lives and significantly lower costs.

Data Analytics in Action

Not long ago, we worked with a large plan sponsor that was experiencing elevated rates of breast cancer in their employee population. This group turned to their benefits data for a solution. After reviewing the data, they found that only 50 percent of recommended employees were receiving their annual mammograms. While preventive mammograms are paid in full under the Affordable Care Act, only half of those recommended were receiving this life-saving screening. So, rather than just focusing on enrollment options, this group used open enrollment to launch a full-blown communications campaign to raise awareness about breast cancer and the organization’s low adherence rate for preventive mammograms.

Understanding that early detection is critical in treating this disease, the employer took this awareness campaign a step further. They set up a service that made it incredibly easy for employees to schedule mammograms and follow up with those overdue for the screening. In the end, this open enrollment campaign produced extraordinary results, elevating compliance with recommended screenings to 80 percent. Improving the population’s compliance with breast cancer screenings undoubtedly saved lives. It also saved the employer thousands of dollars in lengthy and costly cancer treatments over many years. None of this would have been possible had the employer not analyzed and acted on the insights gleaned from the collection of its employee data. And, importantly, using the attention open enrollment draws to get employees focused on this important issue.

How to Take Advantage

Leveraging data analytics to enhance open enrollment is accomplishable for employers of all sizes. Doing so requires some planning ahead. Here are four steps HR departments can take to set themselves up for success.

1. Get Access to Your Data: Most midsized and large employers should have access to their health plan and employee engagement data. But no matter what the size of the business, HR departments are entitled to this information. To get started, HR professionals can ask their health plan and insurance brokers for access to their employee data.

2. Utilize Powerful Analytics Technology: Without the right tools, sifting through high volumes of data can be a challenge for HR departments. Thankfully, there’s a powerful technology that adds speed and efficiency to this process. For example, data warehouse tools can capture a group’s claims and utilization experience and analyze drivers of cost and gaps in care so that specific actions can be taken to address cost and quality proactively. It was a data warehouse tool that allowed us to help the plan sponsor that focused on cancer screenings identify their low mammogram rate.

3. Look for Actionable Advice: Countless actionable insights are waiting to be uncovered in every employer’s healthcare data. It’s important to look at employee claims data to see what behaviors or claims are driving costs, what top conditions are leading to higher claims, and what gaps in care may exist that can lead to greater disease prevention or early detection. For example, are employees using a high-cost drug when a comparable generic alternative is available? Or are low-risk employees selecting high-cost plans when a different option is more suitable for them? Employers should also cross-reference these insights with the demographics of their employee population to get a better understanding of every opportunity to improve plan utilization. Armed with this data, employers are advised to leverage open enrollment time when employees are paying attention to build an action case.

4. Leverage Insights During Open Enrollment: Open enrollment is one of the few times when most employees are focused on benefits and healthcare, making it the perfect time to leverage these insights to influence employee behavior. Employers can create materials that educate employees on the services available to them and how to take advantage. These campaigns can include emails, videos, text messages, presentations, or any touch point that makes the most sense for the employee population. By educating employees at a time when they’re already thinking about health benefits, they will be much more likely to utilize the services available to them that can improve their health, increase early detection of serious illnesses, and ultimately save the organization money in future healthcare costs.

Partner with Experts to Maximize Success

For any employer or plan sponsor seeking to leverage data-driven insights during their next open enrollment period, it is important to partner with insurance brokers or consultants who have deep experience in both employee benefits and data analytics. These firms can help employers access, organize, and analyze their data in ways that produce quality, actionable insights. They can also bring powerful technologies to the table that can lead to the fast discovery of value-adding information. These experts can counsel organizations on how to best put these insights into action during open enrollment to ultimately improve employee health and lower overall healthcare costs.

Cybersecurity breaches happen nearly every day at organizations around the world.

Cyber criminals have grown increasingly sophisticated in their attacks, causing the frequency of breaches to skyrocket. According to the Identity Theft Resource Center, the number of breaches increased by 78 percent in 2023 compared to the prior year.

It’s no secret these incidents can cause significant financial, operational and reputational damage – and organizations of all sizes and industries must take precautions to protect themselves. In honor of Cybersecurity Awareness Month, we’re sharing the top five tactics organizations can leverage to enhance their cybersecurity defense.

1. Provide regular employee phishing training

More than ever, cybercriminals are leveraging sophisticated phishing attacks to breach company systems. Employees are an organization’s first line of defense. Training them to recognize and report phishing attempts has become one of the most important tactics to keeping sensitive information safe.

2. Maintain regular and redundant data backups

Ransomware attacks where cybercriminals prevent company employees from accessing their computer files, systems or networks are becoming increasingly common. The rising frequency of these attacks makes it critical to regularly back up important company information. Maintaining data backups separate from your main system, perhaps with multiple providers, can add an extra layer of security should any single provider suffer a data breach.

3. Use strong password protocols and password managers

Strong passwords are a first line of defense against bad actors accessing your network. Make sure your organization’s password requirements compel users to set strong passwords via more characters, upper and lower case letters, numbers and symbols. Encourage users to use random characters or long phrases and avoid common words, names or dates. And educate users to never share passwords. You can also use a password manager to generate passwords, store encrypted passwords, prevent reuse of passwords and advise users when passwords should be changed or are weak.

4. Leverage multi-factor authentication

Multi-factor authentication (MFA) has become a commonplace practice where users are required to provide more than just a password to log into their accounts. One example of multi-factor authentication is when users receive a one-time code via text or phone that they must enter in addition to their password to gain access. For single sign-on networks, it is also important to close potential “back doors” by making sure MFA is in place at multiple access points. Multi-factor authentication is one of the simplest and most effective ways to prevent cybercriminals from accessing private files or systems should they obtain a user’s credentials.

5. Install security patches and updates

Updating your systems and installing security patches promptly is an essential component of keeping your company’s system and data safe. Think of security patches as a way to close holes in your security fence. If you fail to act promptly when system patches are released, you leave your organization vulnerable to cyber attacks.

Essentials when securing coverage

Cybersecurity Awareness Month is a great time to brush up on cyber defense. Our experts at Conner Strong & Buckelew are going to be discussing cybersecurity and insurance issues all month long, offering tips to help organizations protect their data and systems. Not only are the tactics discussed above very effective in thwarting cyber attacks, but many cyber insurance carriers refuse to provide coverage unless these safety measures are in place.

Carriers often view these tactics as foundational musts and want to see additional layers of security when writing policies. At Conner Strong & Buckelew, our in-house cybersecurity experts can examine your situation and provide guidance to help you optimize your cybersecurity defense. We’re also deeply experienced in cyber insurance and can help your organization ensure it is protected.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].

On July 19, 2024 businesses around the world came to a screeching halt. Operations at airlines, television networks, banks, hospitals and more were shut down as a massive technical outage crashed computer systems around the globe.

Although the disruption caused by the event was similar to that of a ransomware attack where cyber criminals hold systems and data hostage, it was actually caused by a faulty update installed by CrowdStrike, one of the world’s most widely used cybersecurity firms. The outage impacted more than 8.5 million Windows PCs and servers connected to the CrowdStrike security platform, interrupting countless businesses worldwide.

In honor of Cybersecurity Awareness Month, we’re sharing three of the most significant risk management and insurance takeaways that emerged in the aftermath of the CrowdStrike incident.

Takeaway #1: Have incident response and business continuity plans in place

Organizations must have plans in place to quickly respond to cyber incidents and restore critical business functions and data with as little down time as possible. Plans must include comprehensive procedures to ensure early detection, mitigation of the effects of the event and rapid restoration of data and business operations. Plans should delineate a clear chain of command and the roles and responsibilities of staff members. Elements such as contact information and alternative channels of communication are essential to plans, and response and business continuity plans must extend to key vendors.

Takeaway #2: Know what’s covered in your policy

Many impacted organizations turned to their cybersecurity insurance policies to recover some of the revenue lost during the interruption. However, many were informed by their carriers that this was not a covered event because the outage was caused by a faulty security patch implemented by CrowdStrike, not by cyber criminals. Because there was no malicious act, most cybersecurity policies were not triggered, leaving the companies without coverage. To avoid coverage gaps in the future, it is critical for organizations to fully understand their cyber policy’s coverage limitations and work with their broker to find ways to close protection gaps.

Takeaway #3: Make sure you have strong contractual agreements with vendors

Beyond securing comprehensive insurance coverage, organizations must ensure their contracts with third party vendors include strong indemnity clauses. These contracts must clearly detail responsibility for damages and financial losses resulting from business interruptions caused by technical failures as well as cybersecurity breaches.

Turn to the experts

Cybersecurity Awareness Month is a great time to brush up on cyber defense and insurance. Our experts at Conner Strong & Buckelew are going to be discussing cybersecurity and insurance issues all month long, offering tips to help organizations protect their data and systems. Securing contracts and understanding coverage requires expertise, and it is best not to go at it alone. At Conner Strong & Buckelew, our team is deeply experienced in cyber insurance and can help your organization ensure it is fully covered. We also employ cybersecurity experts who can examine your cybersecurity defense to confirm best practices are leveraged.

For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].