Category: Latest Thinking

By Franz Wagner,  Alexander Buzbee, and Jordan Carter

Behavioral health nonprofits face a multitude of challenges today. From low reimbursement rates and federal funding cuts to growing workforce shortages, many non-profit organizations have had to re-evaluate their long-term sustainability in an environment where competition from the for-profit sector continues to rise.

As a result of the current climate, many behavioral health nonprofits are looking at mergers and acquisitions (M&A) as a proactive strategy to preserve organizational longevity amidst escalating funding challenges. The recent news of the upcoming merger of Brightli and Centerstone, which will set an industry milestone with a combined annual revenue of $1 billion, makes a case for behavioral health nonprofits to consider combining resources with like-minded organizations.

In any M&A transaction, insurance and risk management are important factors to consider and plan for before, during and after an agreement is reached. An experienced insurance broker can serve as a crucial resource for nonprofits looking to acquire another company by helping to navigate merger risk management strategies — including due diligence and program integration.

Due Diligence: Assessing Total Cost of Risk

A core element of an acquiring company’s due diligence process should be determining the target company’s total cost of risk — or the sum of expenses incurred by the organization to manage risk that might be assumed upon completion of the transaction.

Calculating total cost of risk entails an assessment of the target company’s:

• Current Program Structure, Terms and Premiums
• Outstanding Liabilities – Exposures for Deductibles, Potential and Identified Uninsured Losses and Collateral
• Historical Information – Exposures, Coverage Terms and Loss Experience
• Current Risk Management Policies and Procedures
• Financial Condition

Once the acquiring organization has a picture of the target company’s total cost of risk, it can then be used as a lens for evaluating the target company’s financials to assess if all cost-related exposures have been adequately identified and captured. By conducting a thorough due diligence assessment with a focus on total cost of risk, acquiring companies can better ensure there will be no surprises after the acquisition due to potential unexpected cost variances from a current or prior insurance program. Further, this information can be used to establish a post-merger/acquisition insurance cost proforma that can serve to identify any ongoing insurance-related cost efficiencies.

Similarly, it also pays for target companies to have a full understanding of their own total cost of risk so they can correct course on issues that may become acquisition obstacles or hurt their appeal to potential acquirers.

Assessing total cost of risk as part of the due diligence process requires extensive data analytics and coverage expertise resources that might not be present within a behavioral health nonprofit’s leadership team or staff. That’s where a broker with substantial M&A expertise can deliver value.

Program Integration: Risk Management and Insurance Planning

As part of due diligence, an acquiring company should take a closer look at any disconnects or issues uncovered and determine strategies to address them. For example, addressing legacy claims under claims-made policies or assessing the need for representations and warranties insurance (RWI) to protect the buyer from inaccurate statements or seller solvency risks.

At this point, the acquiring company should also map out the structure of the combined company’s risk management and insurance programs to ensure there are no gaps in coverage and to maximize the efficiencies in both programs. In some cases that might mean keeping the insurance separate for a time or it could mean combining some or all policies at close. The acquiring company might also consider what, if any, additional risk management, claims management or safety and loss prevention measures should be implemented.

There isn’t a one-size-fits-all approach to M&A risk management and insurance for nonprofits. Working with an experienced broker partner with an in-depth understanding of M&A transactions will help acquiring organizations ensure they implement the best solutions for their needs.

The Conner Strong & Buckelew Advantage

Insurance and risk management are essential in M&A transactions. Conner Strong & Buckelew has deep expertise to guide clients through every stage of the process, serving as an extension of their team and providing support before, during and after the deal. Starting with a comprehensive due diligence process focused on the total cost of risk, our team delivers holistic solutions tailored for behavioral health nonprofits, helping organizations achieve successful and sustainable deal outcomes to support their long-term growth goals and objectives. Ready to elevate your M&A strategy? Contact us today to partner with experienced professionals committed to your success.

By Lovedeep Saini, Ph.D. and Shalin Dave

As artificial intelligence (AI) continues to evolve, there will be a massive shift in the way businesses conduct employee benefits planning and administration. AI and machine learning algorithms are able to continuously sift through huge amounts of data quicky and in real-time, enabling more automation and supporting deeper insight into employee population and claim data. Today, human resources departments are starting to test AI tools — implementing things like chatbots or smart recommendations. But these use cases only scratch the surface of what AI is and will become capable of in employee benefits.

Enhanced Data Analysis

When implemented strategically, AI can offer significant advantages for plan design and benefits administration. However, as these tools continue to evolve — and the data analysis they provide becomes more accurate — it’s important to remember that AI is a tool. It should be thought of as “augmented intelligence” — not an all-knowing machine. Its purpose is to help plan administrators make more informed decisions.

Here are a few examples of how AI will impact, streamline and optimize plan design and administration:

• Actionable Population Health Intelligence – AI will enhance employers’ ability to analyze integrated employee data to identify emerging health risk trends across their entire workforce — before they drive up claims. Self-insured employers in particular stand to gain unprecedented visibility into population health trends, which will support more strategic and cost effective plan designs.
• Targeted Claim Prevention – By providing greater visibility into population health at the individual level, AI will also support targeted interventions and personalized employee healthcare solutions that can prevent high-cost medical events. By helping to orchestrate members’ health journeys rather than simply processing claims after care is delivered, AI will drive overall plan cost savings while improving member health outcomes.
• Plan Utilization and Optimization – Richer data through AI supports plan administrators’ ability to track utilization of wellness and other programs in real time — and make more informed decisions about program improvements or communication strategies. And with future AI advancements, benefits packages could automatically adjust features, networks and incentives in real time based on utilization, costs and health outcomes — without waiting for annual renewals.
• Reference-Based Pricing Healthcare Models – AI is starting to show up in reference-based pricing strategies (also known as indexed reimbursement strategies) to help analyze market data such as index cost fluctuations in real-time. As this use case continues to evolve, it will support more dynamic price adjustments and help lay the groundwork for negotiations and plan customization.

For employees, the advantages of deeper, more dynamic data through AI will translate to simpler, more supportive everyday experiences — from quicker and more robust answers from AI chatbots, to timely reminders for health checkups, to personalized guidance on which benefits fit their needs best.

The Keys: You Need Good Data and Human Touch

Getting the most out of AI requires access to comprehensive, accurate employee health data — ideally integrated data that encompasses medical claims, pharmacy utilization, biometric data, workplace analytics and behavioral indicators. For this reason, AI’s ability to influence plan administration and design is fully maximized when companies are in a captive or self-funded model, where they have direct access to the detailed data required to train algorithms and uncover patterns down to the individual member level.

That doesn’t mean fully insured employers can’t benefit from applications focused on employee engagement, such as benefits navigation, member enrollment, communications and population health insights. For example, generative AI tools can be designed to answer basic benefits questions or help members with the enrollment process.

Regardless of funding structure, successful AI deployment and implementation require human oversight. AI is a tool designed to augment human expertise in benefits strategy, not replace it. Employers must work with benefits advisors who understand strategic plan design, AI capabilities and regulatory requirements to ensure responsible implementation that protects employee privacy while maximizing business outcomes.

The Conner Strong & Buckelew Advantage

As AI transforms employee benefits employers need strategic partners who understand its opportunities and challenges. Conner Strong & Buckelew is already helping clients build strong data foundations and governance that will prepare them for the next generation of AI supported benefits programs. Our in-house benefits experts and dedicated AI analytics team monitor AI trends, advise on regulatory and privacy issues and work with employers to chart a path for AI-driven benefits strategies.

If your organization is ready to explore how the strategic use of AI can support plan design, cost containment and improved health outcomes, reach out to a member of our team today.

By Ed Cooney

Signed into law on October 29, 2024, Act 121 amends Pennsylvania’s Workers’ Compensation Act to address mental health coverage for first responders, specifically focusing on post-traumatic stress injury (PTSI), often referred to as “PTSD.” It will take effect on October 29, 2025.

Key Provisions

EFFECTIVE DATE

Provisions apply to claims filed on or after October 29, 2025, and injuries occurring within five years before that date (October 29, 2020).

COVERAGE FOR PTSI

Act 121 allows first responders, including firefighters, police officers, and emergency medical services personnel, to file workers’ compensation claims for PTSI resulting from exposure to traumatic events in the course of their employment.

PRESUMPTION

The law does not create an automatic presumption that PTSI is work-related (unlike California’s SB 542). Instead, first responders must still demonstrate that their PTSI is directly related to their job duties.

DEFINITION OF FIRST RESPONDER

The act clearly defines which occupations are covered, including paid and volunteer firefighters, law enforcement officers, and EMS personnel.

Implications for Clients

ACCESS TO BENEFITS

First responders in Pennsylvania now have a clearer and broader path to seek workers’ compensation benefits for PTSI, but they must provide evidence linking their condition to a work-related traumatic event.

NO AUTOMATIC PRESUMPTION

Unlike some other states, Pennsylvania requires proof of causation; the burden remains on the employee to show the connection between their mental health condition and their work.

SUPPORT FOR MENTAL HEALTH

The law recognizes the unique mental health challenges faced by first responders and aims to support them in accessing care and benefits.

Before Act 121 in Pennsylvania

Pennsylvania courts recognized mental-mental injury claims (where a psychological injury arises without a physical injury) could be compensable. However, the burden of proof was high and there was no presumption, which made it especially difficult for first responders. Claimants had to show:

• The psychological injury (like PTSD) was caused solely by abnormal working conditions (i.e., conditions significantly different from what others in the same occupation face).
• The mental health condition was diagnosed by a medical professional and was directly caused by the job. For first responders regularly exposed to trauma, courts often ruled such conditions were “normal” for the job, so claims were denied. Some rare claims were successful—but only in extraordinary circumstances, like a mass casualty event, death of a coworker, or a particularly gruesome scene.

Now With Act 121

Act 121 removes barriers, making PTSI claims for traumatic exposure on the job significantly more viable and accessible. The Act does not create a presumption but removes the “abnormal working conditions” barrier and defines “qualifying traumatic events” for which claims can be made.

THE FIRST RESPONDER MUST SHOW

• They were exposed to a specific traumatic event on duty;
• They were diagnosed with PTSI by a licensed physician or
  psychologist; and
• There is a causal connection between the event and their mental
  health condition.

“QUALIFYING TRAUMATIC EVENTS” MEANS AN INCIDENT OR EXPOSURE

• Resulting in serious injury or death;
• Involving a minor who has been injured, killed, abused or exploited;
• Involving an immediate threat to the life of the claimant or another individual;
• Mass casualties; or
• Responding to crime scenes for investigations.

Key Strategies for Managing Act 121 PTSI Claims

CLAIMS MANAGEMENT AND REPORTING

TPA Clear Designation
Ensure your third-party administrator (TPA) is fully briefed on Act 121 and has a clear process for designating, coding and tracking PTSI claims. This will help ensure these claims are handled consistently and in compliance with the law.

Expansion of Injury Reporting Forms
Consider updating or expanding your injury/incident reporting forms to specifically include mental health and PTSI-related questions (to include trauma related and psychological exposures). This can help capture relevant details early and support proper documentation for Act 121 claims.

Review Union Contracts
Review collective bargaining agreements to identify any provisions related to mental health, workers’ compensation, or return-to-work (RTW) policies. Ensure that your approach to Act 121 claims aligns with contractual obligations and that union representatives are informed about the new law.

TRAINING AND WELLNESS INITIATIVES

Supervisor Training
Train supervisors and managers to recognize signs and symptoms of PTSD/PTSI and to understand the requirements of Act 121. This includes knowing how to respond to reports of traumatic incidents and how to support affected employees.

Wellness Programs
Enhance or implement wellness programs that address mental health, resilience, and stress management. Promote resources such as employee assistance programs (EAPs), peer support, and confidential counseling services.

CLAIMS MANAGEMENT BEST PRACTICES

Prompt Independent Medical Evaluation (IME)
Arrange for an IME as soon as possible when a PTSI claim is filed. Early evaluations can help clarify diagnosis, causation, and treatment needs, and may assist in managing claim duration and costs.

Monitor Medical Progress
Closely track the claimant’s medical progress and compliance with prescribed treatment. Maintain regular communication with treating providers to ensure appropriate care and timely updates.

Review Offsets
Evaluate whether benefits from other sources—such as disability insurance or pension plans—may offset workers’ compensation payments. Coordinate with your TPA and legal counsel to ensure proper application of offsets.

Return-to-Work (RTW) Options
Explore RTW opportunities, including light-duty assignments for employees recovering from PTSI. Work with medical providers to determine appropriate accommodations and facilitate a safe, supported transition back to work.

Early Intervention and Communication
Upon notice of a traumatic event or claim, reach out to the employee promptly to express support, explain the process, and provide information about available resources.

Dedicated Claims Contact
Assign a dedicated claims manager or point of contact for PTSI claims to ensure consistency, build trust, and facilitate communication between all parties.

Documentation and Recordkeeping
Encourage thorough documentation of all potentially traumatic incidents, including date, time, location, involved parties, and immediate response actions. Maintain claim files and keep organized records of all communications, medical reports, witness statements, and investigative materials related to each claim.

Data Analysis and Trend Monitoring
Track claim trends and analyze data on PTSI claims to identify patterns, root causes, and opportunities for prevention or process improvement.

CHALLENGING THE CAUSATION AND EXTENT OF DISABILITY

Course of Employment
Assess whether the reported traumatic event(s) occurred in the course and scope of employment. Gather incident reports, duty logs, and witness statements to confirm work-relatedness.

Disability Status
Review medical evidence to determine if the employee is totally disabled or capable of performing light-duty work. If medical records support eligibility for modified duty, document this and offer appropriate accommodations.

Surveillance and Background Checks
Where appropriate and lawful, consider surveillance or review of pre-employment and medical records to assess the validity of the claim and identify any pre-existing conditions or non-work-related factors.

Conflicting Medical Reports
If there are discrepancies between medical opinions regarding the diagnosis, severity, or timeline of PTSI, obtain additional expert opinions or request clarification from treating providers.

Witness Statements
Collect statements from coworkers, supervisors, and others who may have observed the incident or the employee’s behavior before and after the alleged traumatic event. These can be critical in establishing facts and timelines.

By Monica Attanasi, AIC and Colleen Vallen, CPA, CFF

Loss events, no matter the type, are disruptive, complicated and burdensome for any company in any industry. In the aftermath of a catastrophic event like a fire, cyber-attack or major weather event, businesses need to focus on mitigating the impact of the loss, resuming operations, serving customers and supporting employees — not draining resources managing a claim.

Working with an insurance brokerage that has an integrated forensic accounting affiliate can be a game changer. While the role of the forensic accountant varies based on the claim and business needs, a forensic accountant working together with an experienced claim advocacy team eases the disruption and burden on the company, so it can focus on the business while the integrated claim team handles the complexities and maximizes the claim recovery.

What are Forensic Accountants?

Forensic accountants are involved in quantifying the full impact of an event — including analyzing the cost of repairs/replacements, business income/lost profits, and increased or extra expense. This is a complex process requiring an investigative and analytical mindset to accurately analyze, evaluate and project losses. Working hand in hand with claim advocacy consultants, forensic accountants analyze documentation and information, prepare financial modeling to develop a loss projection, and prepare comprehensive reports to provide an in-depth understanding of the business and loss impacts to the insurance carrier. Forensic accountants also aid in responding to complex requests for information, analyzing and evaluating calculations prepared by the insurance company’s accountants, and in some cases, serving as expert witnesses.

A Holistic Approach to Claim Resolution

Every business and loss event is different, so there is no one-size-fits-all approach. Calculating and documenting a claim is not a simple fact gathering exercise. It is a process that requires in-depth understanding of financial information, complicated financial analyses and modeling, effective communication, creativity and strategy.

Critical to this process is the ability to understand and analyze the financial impacts of the loss and articulate the story behind the numbers. In addition to preparing financial analyses, forensic accountants use their investigative skill set to gain an understanding of the business, market and the industry in which the business operates to present a holistic picture to the insurance carrier. For example, knowing the company was planning to add a new division, launch a new product or acquire a new location might not be reflected in the historical financial data, but this information is incredibly relevant to accurately quantify business income and other financial losses.

Forensic accountants, in partnership with seasoned claim advocates, go beyond the numbers, using their expertise and experience to marry the story of a business with its financial numbers. In large property and other types of claims, the forensic accountant’s skills validate the process and lend credibility to the numbers. This can make a significant, positive impact on the claim outcome.

Forensic Accounting in Action

Real estate is an industry where catastrophic losses are common, due in part to large portfolios with geographic footprints that span the country and include catastrophe-prone areas. For a national real estate development and management company, the claim advocacy team at Conner Strong & Buckelew and the forensic accounting team at J.A. Montgomery worked together to drive a successful claim outcome.

The Loss Event

One of the company’s properties, located in New Jersey, experienced severe damage in 2021 from Hurricane Ida — a devastating category 4 hurricane that caused $75 billion in damage across 22 states. From day one, the forensic accounting and claim advocacy teams worked together to manage the property damage, business interruption and extra expense components of the claim. This included managing submission of the building spend package and preparing business income and extra expense claim calculations.

Key Challenges

The forensic accountants addressed several complications during the process. On the building spend side, the ongoing building spend required numerous updates and reconciliation along with the review of thousands of invoices and an allocation process that required intensive document review and client discussion.

On the business income front, the increased demand for apartments in New Jersey due to the COVID-19 pandemic added complexity to an already challenging calculation. This required performing an in-depth review of the market to validate the significant increases in rental costs that was not captured in the company’s historical data. The forensic accounting team was able to bring that market analysis forward in the narrative and calculated losses submitted to the carrier.

The Result

Our integrated claim advocacy and forensic accounting approach yielded a favorable $10 million+ claim settlement for the company. This included claims for recoverable depreciation and business income totaling $3.5 million, which were complex, challenging to document and subject to thorough review and analysis by the insurance company. As a result of the integrated forensic accounting and claim advocacy approach, the claim settlement was approximately 25% higher than it would have been with a standard claim submission and processing approach.

Maximizing Claim Outcomes and Minimizing Work

Catastrophic losses can hit at any time and can impact companies in different ways. Working with a brokerage that fully integrates forensic accounting with claim advocacy from end-to-end can translate to a more favorable claim outcome to help your company get back to business.

At Conner Strong & Buckelew, we provide a holistic claims strategy that starts from day one and doesn’t end until the claim is resolved. By partnering with our owned forensic accounting affiliate, J.A. Montgomery, whenever possible, we’re better able to tell your full story and maximize your claim settlement.

Contact a member of our team today to see how our holistic approach to claim management can help you be prepared when a loss occurs.

An Opinion Piece

By Joe DiBella

Overview

The No Surprises Act (NSA) took effect January 1, 2022, and was designed to protect patients from surprise medical bills, particularly in emergency and out-of-network (OON) situations. While successful in curbing balance billing for consumers, the implementation of the law has led to significant unintended consequences for employer-sponsored health plans, particularly those that are self-funded. The Independent Dispute Resolution (IDR) process, a core element of the NSA, has been marked by high volume, provider-favorable outcomes, and substantial administrative burdens. This summary outlines the law’s mechanics, its financial and operational impact on employers, and the urgent need for reform.

UNDERSTANDING THE NSA AND THE IDR PROCESS

Under the NSA, when a patient receives OON emergency care or services from ancillary providers at in-network facilities, the provider and health plan must negotiate reimbursement without billing the patient beyond in-network cost sharing. If no agreement is reached, either party may initiate the IDR process, wherein a certified arbitrator selects one party’s proposed payment. Initially, the “Qualified Payment Amount” (QPA) was intended to serve as the primary benchmark in IDR cases. The QPA represents the median in-network rate for a service in a geographic area. However, legal challenges and court rulings have allowed arbitrators to weigh other factors more heavily, such as provider experience and case complexity. Right or wrong, this has diluted the intended cost-containment role of the QPA.

THE DISPROPORTIONATE IMPACT ON EMPLOYERS AND PLAN SPONSORS

Employers and Plan Sponsors, and particularly those with self-funded plans, are bearing the brunt of NSA-related cost increases. The financial impact arises from both the direct cost of arbitration awards and the indirect administrative expenses tied to compliance and dispute resolution. Here are some data points that put the added costs into perspective:

1. Provider-Favored Arbitration Outcomes

• Providers win an estimated 85% of emergency-related IDR cases.
• Average payment awards in these cases are roughly 2.7x the QPA, with some cases reaching as high as 4x Medicare rates.

2. High Prevalence of Emergency Room Disputes

• Approximately two-thirds of all IDR disputes relate to emergency services.
• From Q1 2023 to Q2 2024, about 1.24 million surprise billing disputes were filed, over 40% of which resulted in arbitration.

3. Escalating Employer Costs

• QPA (benchmark): $600
• Typical Award: $1,620 (2.7x the QPA)
• Incremental Cost/Case: $1,020

• Annual Impact: $204,000 in additional claims cost
• IDR Fees: $315 to $1,300 per case = $63,000 to $260,000 annually

4. National Cost Exposure

• With an estimated 500,000 ER-related disputes resolved over 15 months, total added cost to the system could be as much as $500 million to $700 million annually.
• Administrative and certified IDR entity fees alone add another $105 million or more.

5. Administrative Burden and Compliance Risk

• Employers must ensure TPAs comply with IDR timelines and manage disputes. The costs of which are simply passed back to the employer.
• Compliance involves tracking QPAs, submitting documentation, and responding within strict periods.
• Legal volatility due to shifting federal court rulings has made consistent compliance difficult.

NSA REFORM PROPOSALS

There is growing recognition of the strain the NSA has placed on employers and plan sponsors. Legislative and regulatory proposals are emerging from Congress and the administration. H.R. 9572 in the U.S. House offers a series of fixes intended to rein in payments that are far in excess of the QPA which lead to increased financial exposure to self-funded plans. Below is a summary of some of the proposals in play:

Recommendations for Employers and Plan Sponsors

Employers and plan sponsors need to act and advocate for meaningful reform to the NSA. Left as is, the law may actually drive up providers leaving networks and increasing the probability of higher out-of-network usage overall. Conner Strong & Buckelew will be advocating for fixes to the law that does not undermine its intent but does fix the enormous new costs the law has shifted to employers and plan sponsors. Some immediate steps group health plans should consider include:

• Making IDR and QPA assumptions in budget models and reserves.
• Audit TPA processes to ensure IDR compliance.
• Consider network expansion and steerage strategies to limit OON exposure.
• Monitor federal regulatory updates and prepare to comment on proposed rules.
• Work with trade groups and lobbying organizations to advocate for legislative changes to fix the issues and flaws with the NSA.

Conclusion

The NSA has succeeded in reducing patient exposure to surprise medical bills, but at a substantial and rising cost to employer-sponsored health plans. The current IDR system disproportionately favors providers and leads to awards significantly above market benchmarks. Combined with administrative burdens and legal uncertainty, the system places employers at risk of financial strain and compliance errors. Employers and plan sponsors should actively advocate for reforms that restore the QPA as the primary benchmark, streamline the IDR process, and reduce fee exposure.

SOURCES:

• CMS.gov, IDR Quarterly Reports
• HealthSystemTracker.org, Kaiser Family Foundation
• ACEP.org, American College of Emergency Physicians
• CommonwealthFund.org, Health Affairs
• Academic.OUP.com, Oxford University Press analysis
• AHIP.org, Hall Benefits Law
• SLPHealthcareUpdate.com, Ogletree Deakins
• CBO, Congressional Budget Office Estimates
• Claritev.com, IDR Market Data
• FY2025 US Budget Summary (HHS Implementation Line Items)

By Jill Ambrose, MBA, BSN, RN and Simon Leung, PharmD

It’s an interesting time for the GLP-1 market. Now that Wegovy and Zepbound have been available for weight loss for a few years, early reports are being published on the outcomes of these drugs for both patients and their employers.

While GLP-1s are effective at promoting weight loss, there is still uncertainty around whether the long-term health benefits will be actualized by warding off high-cost acute events such as heart attack, stroke and complex diabetes management to name a few. Adding to that uncertainty is evidence of high discontinuation rates due to cost and adverse events. On top of that, the return on investment for employers will likely not be seen for a few more years. For organizations wondering what to do next, here’s a look at where the market is today and how to find an approach that works for your employee population.

A Complex, Evolving Landscape

The GLP-1 market is continuously evolving, and it’s becoming increasingly complex – making it hard for employers to make coverage decisions. In a survey from the International Foundation of Employee Benefit Plans, more than half (53%) of employers who cover GLP-1s for diabetes reported that they are not considering covering them for weight loss at this time. The survey also found that GLP-1s for weight loss accounted for an average 10.5% of total annual claims in 2025 compared to 8.9% in 2024. As many employers wait for prices to drop, there are a couple of market changes that need to take place first.

EXPANDING INDICATIONS

Manufacturers of GLP-1s are actively pursuing FDA approval for new indications of the drugs, many of which are linked to obesity. In 2024, the Food and Drug Administration approved Novo Nordisk’s Wegovy (semaglutide) to reduce cardiovascular risk in overweight or obese individuals, and approved Eli Lilly’s Zepbound (tirzepatide) to treat moderate to severe obstructive sleep apnea in adults with obesity.

Several manufacturers including Boehringer Ingelheim, Hanmi Pharmaceuticals and Kariya Pharmaceuticals are researching and trialing the benefits of GLP-1s for conditions with less clear links to obesity, like metabolic dysfunction-associated steatohepatitis (MASH), Alzheimer’s disease, Parkinson’s disease, obesity-associated cancers and substance use disorder. As GLP-1s are studied and approved for more indications, that should put some downward pressure on the market.

WAITING FOR GENERICS

Prices for GLP-1s have started to decrease, but not enough for most employers to consider covering them for weight loss. It’s likely going to take the introduction of generics to the market for there to be a meaningful decrease in price. While generics for older forms of GLP-1s like Victoza (liraglutide) have been approved for diabetes, generics for weight loss indications are not yet available. And generics for newer GLP-1s won’t hit the market any time soon. Novo Nordisk’s patent on semaglutide and Eli Lilly’s patent on tirzepatide don’t expire in the U.S. until 2032 and 2036, respectively.

Regulatory pressure to lower drug costs should have an impact on GLP-1s, but actualizing those reductions will take time. Right now, price cuts are focused on direct-to-consumer rather than health plans – with Novo Nordisk and Eli Lilly cutting prices for patients paying out-of-pocket.

The Big Question: Where Is the ROI?

It’s likely not the answer most employers want to hear, but the return on investment for covering GLP-1s for weight loss is not going to be realized in the short term. Employers should go in with the mindset that these drugs are a long-term investment in employee health and will not produce savings based on an annual budget.

In the near-term, employers might see gains in terms of increased productivity from employees using GLP-1s for weight loss, as obesity has been linked to higher absenteeism and productivity loss. But those returns are hard to measure.

Another key variable of ROI employers need to consider is what happens after employees reach a healthy weight and are weaned off GLP-1s? Research indicates that GLP-1s are most effective when combined with lifestyle and behavioral changes. For the best outcomes and maximum ROI, employees will need to have access to resources, like nutritionists and obesity medicine specialists, before, during and after GLP-1 treatment. Otherwise, as studies have shown, some members who stop taking the medication may gain back some or all of the weight they lost, putting them at higher risk for high-cost events.

Steps Employers Can Take Today

Right now, there’s no one-size-fits-all approach for employers to follow when it comes to covering GLP-1s for weight loss. Part of the challenge is the lack of a cost-effective approach for discontinuing the use of GLP-1s for both diabetes management and weight loss, so it’s hard for employers to predict how long employees might be using these high-cost drugs. And if they do stop, they’ll likely need programs to help them keep the weight off and maintain a healthy lifestyle.

LEVERAGING EMPLOYEE POPULATION DATA IS KEY

What employers can do today regarding GLP-1s for weight loss is take a closer look at their employee populations. Those with access to data warehouses can leverage clinical data annually to estimate how many employees might qualify for GLP-1s for weight loss (i.e. obesity diagnosis with no diabetes). This data can help employers determine the risk and potential reward of offering GLP-1s for weight loss in their employee benefits package.

MOVING FORWARD CAUTIOUSLY

The best advice for most employers is to continue to practice patience. Employers currently covering or contemplating adding coverage for GLP-1s for weight loss should consider utilization management strategies that might help contain costs, such as tightening controls on coverage eligibility or durations and mandatory nutrition and lifestyle coaching.

Employers that have chosen to sit it out for now should consider what, if any, alternative weight loss programs they may want to offer.

Your Partner in GLP-1 Strategy

No matter where your organization stands with GLP-1s, working with an experienced employee benefits consulting partner who understands and is following the evolving landscape is key.  There’s no perfect answer or single approach that’s right for every employee population. A good partner will work with you to determine an employee benefits program that will work for your company. At Conner Strong & Buckelew, our Consultants, Population Health and Pharmacy practice groups are working on the frontlines of GLP-1 adoption. We can help your company stay up to date in the rapidly evolving landscape and work with you to build custom solutions for your employee population. Contact us now to learn more.

By James Hanrahan, Michelle Leighton and Andrew Still

As the construction industry continues to boom amidst a tight labor market and increasing regulatory scrutiny, companies are facing a perfect storm of rising claims, costly verdicts and growing insurance premiums. Today’s risk environment demands a more proactive and strategic approach to safety and liability.

The Impact of Nuclear Verdicts and Social Inflation

Construction companies today are feeling a lot of pressure in the general liability and vehicle liability marketplace. Social inflation — which refers to the cost of insurance claims rising faster than the general economic inflation rate — is causing premiums to soar. Key factors contributing to this social inflation are increased litigation, third-party litigation funding and inflated awards of $10 million or more to claimants.

In an industry like construction where injury is a matter of when, not if, and fatality rates remain high, these nuclear verdicts pose a growing threat. A U.S. Chamber of Commerce study on trucking-related litigation found that the average award for plaintiffs’ verdicts between June 2020 and April 2023 was upwards of $31 million. Even more alarming, in 2023, a Dallas-based real estate developer had to pay more than $860 million in damages to the family of a woman who was killed in a crane collapse.

With the possibility of an attractive settlement, workers and other injured parties are more likely to pursue general liability and vehicle liability claims, and attorneys are capitalizing on the moment. For example, according to a report initially published by ABC News, some insurance groups are claiming NYC construction site workers are faking injuries hoping to collect large settlements.

Today’s litigious environment, coupled with higher medical costs, rising vehicle repair costs and large punitive damage awards are driving up premiums, but there is even more at stake. Beyond the monetary implications, the limelight that comes with a big claim or nuclear verdict puts construction companies at risk for reputational damage which could stunt new business growth and recruitment. With a lot at stake, construction leaders need to rethink their risk mitigation strategies.

6 Strategies for Proactive Risk Mitigation

In this volatile landscape, construction companies need to shift their approach to risk from reactive to proactive. Here are six strategies that can help prevent claims and help companies be protected should claims arise.

1. Implement a Centralized Incident Reporting Protocol

When an incident does occur, it’s crucial that construction companies have a streamlined process for reporting in place to ensure consistent documentation, timely carrier notification and early opportunities for claim advocacy and resolution. Incident response protocols should involve robust accident investigations that include root cause analysis to dissect what happened and why. By centralizing incident reporting, companies can eliminate gaps in communication and ensure all claims are handled efficiently.

2. Monitor Patterns and Take Steps to Prevent Recurrence

After a claim is resolved, it’s important to reflect on the “what, how, why” and any lessons learned during the claim advocacy process. This step can be instrumental in preventing future losses of the same nature. Trend analysis of prior claims is a valuable tool to uncover patterns and key insights. Claims history tells a story and looking back on previous cases can help construction companies determine targeted risk control strategies to prevent future losses and improve overall safety practices.

3. Advocate for Contractual Risk Transfer

There are tools that help companies transfer risk away from their insurance program and balance sheet. Construction companies should review subcontractor contracts and incorporate additional insured, indemnity and hold harmless provisions as well as insurance requirements that clearly assign liability to the appropriate party. When losses occur, clean contractual language allows for more efficient recovery and minimizes disputes.

4. Invest in Additional Safety Controls

With insurance premiums rising, investing in loss control can help construction companies reduce claims and realize insurance premium savings. Specifically, technology tools for incident reporting, analytics and telematics are another layer of protection construction companies can use to enhance risk management.

There are a few tactics that can be implemented quickly and at scale:

• Wearable technology that enables workers to stay on top of their health can help reduce the risk of health-related incidents. For example, a smartwatch can notify drivers when their heart rate slows, meaning they could be too tired to drive.
• Camera systems in vehicles and throughout the construction site are helpful to monitor workers and provide a record should incidents occur. In large vehicle fleets, this technology can also help drivers navigate better and see blinds spots.
• Drone footage can be used to analyze incidents and inspect the full worksite from top to bottom and spot any risk areas, such as potential slip, trip or fall hazards.
• Reviews of motor vehicle reports (MVRs) before hiring and regularly thereafter can help companies spot potential risks early.
• Regular driver training can also help ensure drivers maintain safe driving habits.

5. Ensure OSHA Compliance and Training

All construction companies should have compliance plans for OSHA standards that include regular training and inspections to ensure adherence. With younger, less experienced workers being brought onto sites, safety training is especially important to reduce risks. Some key OSHA standards construction companies should focus on are fall protection (which was the most frequently cited OSHA standard in FY24), personal protective equipment and confined space protection. Working with an insurance broker who has safety expertise can help companies get a leg up on OSHA compliance.

6. Foster a Culture of Risk Awareness

When safety is embedded from the top down, incidents decrease and fewer claims help lower the overall cost of insurance. A culture of risk awareness needs to start at the top with executives and senior leaders who value and promote safety throughout the entire organization, getting buy in from managers, supervisors and workers. To do so, leaders must switch their success mindset from that of just how quickly and on-budget a project can be completed to include how safely it can be done. When safety is tied to success, the entire organization is more likely to get on board.

Partnering with an Expert in Risk Control and Claim Management

With the frequency and cost of claims rising, construction companies need to refocus their safety and risk mitigation efforts. Collaborating with dedicated claim management and risk control advisors is more essential than ever.

At Conner Strong and Buckelew, our Property & Casualty group is comprised of experts in both claim advocacy and risk control, providing a full range of services to ensure clients are covered before, during and after a claim. Our risk control team specializes in designing and implementing complete safety and risk control programs — and works hand in hand with our claim advocacy team to provide guidance on proactive measures that can help reduce your total cost of risk and maximize your recovery should a claim arise.

An Experienced Broker Partner Should Check all the Boxes

When choosing claim management and risk control advisors it’s important work with a company that has deep expertise and resources in key areas, including:

• Coverage Gap Identification
• Industry Comparisons and Benchmarking
• Claims Trends and Frequency Analysis
• Root Cause Analysis
• Subcontractor Risk Management
• Regular Program Reviews
• Safety and Risk Management/Mitigation
• Alternative Insurance Solutions (e.g., captives, self-insured retentions)
• Designated Claim Advocacy Consultants
• In-house Team of Safety & Risk Management Professionals

If you’re exploring ways to improve site safety and manage claims more effectively, we’d be glad to connect and share insights. Contact a member of our team today.

By Michael Hanley

The employee benefits space is undergoing a transformation. With financial headwinds and new employee needs, many employers and plan sponsors are rethinking their programs and looking for ways to maximize savings.

Here are four key trends we’re following right now and some tactics employers and plan sponsors can take to address them:

1. Weight loss and GLP-1 drugs

What to know: About 40% of U.S. adults are obese and that number is expected to near 50% by 2030. Obesity is a medical condition that will continue to affect employee populations for the foreseeable future. The demand for weight loss drugs like GLP-1s has skyrocketed and some employees are demanding that their health plans cover these medications.

What to do: The reality is that only about 25% of group plans are currently covering GLP-1s for weight loss. While there is early research showing that GLP-1s can help employees lose weight, for most employers and plan sponsors the return on investment (ROI) from covering GLP-1s for weight loss is too far down the road. Additionally, without supplemental nutrition and lifestyle management, the vast majority of employees who stop treatment experience weight gain again. The best practice today remains to only cover GLP-1s for type II diabetes and not cover them for weight loss. Other tactics include tighter utilization protocols such as stricter requirements for eligibility, setting an annual or lifetime limit on how much the plan will cover and having employees work with a nutritionist and health coach before turning to GLP-1s. In time, as the cost of GLP-1s comes down, it may be reasonable to consider covering GLP1s for weight loss. For now, there is simply no ROI.

2. Large claims

What to know: There are a few health conditions driving large claims for employers and plan sponsors. Top among them is cancer, which when diagnosed at a later stage can be considerably more expensive. Cancer survival rates are rising, and emerging oncology drugs that provide life-saving treatments come at high price points. Maternity and newborn care continues to have the potential for large claims today, and we are also seeing employees with chronic conditions like diabetes or hypertension having upticks in hospitalizations due to improper management.

What to do: Focusing on prevention is key. Using a data warehouse is one way employers and plan sponsors can proactively identify large claims at earlier stages and use that information to conduct outreach to members who need help managing conditions or receiving preventive care. Another route is to offer care navigation programs that connect employees with advocates who can personally guide them through their care and help them avoid preventable costs.

3. Rising healthcare costs

What to know: Inflation is impacting the cost of medications and health services. In particular, the healthcare labor shortage has driven a competitive talent market, dramatically increasing labor costs for hospitals and health systems. Labor accounted for 60% of hospital expenses in 2023. As hospitals are dealing with higher operating costs and tighter budgets, they are passing those increases on to consumers.

What to do: We’re seeing growing interest from employers and plan sponsors in using indexed pricing (sometimes referred to as reference based pricing) to try to right size premiums and copays for their employees. Instead of relying on carriers to negotiate with hospitals on costs, indexed pricing uses a benchmark like Medicare to determine the price of medical services. This method protects employers and plan sponsors from inflated prices. Another alternative employers and plan sponsors might want to familiarize themselves with is the idea of Individual Coverage Health Reimbursement Arrangements (ICHRA). This approach puts the pressure of choosing a health plan on the employee, giving them a fixed amount to spend and letting them choose their benefits.

4. Pharmacy pricing and disruption

What to know: With prescription drug costs also rising, employers and plan sponsors are increasingly frustrated with the lack of data and transparency in pharmacy pricing. At the same time, they’re growing more concerned over the threat of fiduciary lawsuits. In the last year, companies including Johnson & Johnson, Wells Fargo and JP Morgan Chase have all been sued by employees alleging that they breached fiduciary duties under the Employee Retirement Income Security Act (ERISA) by failing to control drug costs.

What to do: Employers and plan sponsors can’t ignore pharmacy benefits. In this evolving landscape, it’s important to stay on top of what’s happening and understand the cost containment strategies available that generate meaningful savings. We are seeing the transparent pass-through pricing model with pharmacy benefit managers (PBMs) gain momentum as a way for employers and plan sponsors to increase transparency and potentially cost savings. Another avenue is joining a pharmacy coalition or buying group that provides employers and plan sponsors with greater negotiating and purchasing power to help them decrease their annual pharmacy spend.

The Conner Strong & Buckelew Advantage

The employee benefits space is experiencing severe financial headwinds. Employers and plan sponsors need to take a proactive approach to protect themselves and their employees from surging healthcare prices. Conner Strong & Buckelew’s Employee Benefits team works with employers and plan sponsors to recommend programs that are tailored to their unique needs. With population health and pharmacy experts on our team, we are at the forefront of new strategies and tactics to lower costs, improve employee health and reduce risk.

Get the most out of your employee benefits program. Contact a member of our team today at 1-877-861-3220 or [email protected].