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:
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.
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.
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.
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 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].
Inflation, rising property values and natural disasters have had a significant impact on the habitational real estate market. All these factors have caused a hardening of the insurance market with higher premiums, stricter underwriting standards and more limited and restrictive coverage. As carriers continue to heavily scrutinize habitational insurance coverage, commercial residential property owners need to take a renewed focus on their safety and loss control strategies to ensure they are proactively protecting their property and residents.
Exposures and risks vary depending on the region where properties are located. But across the board, more and more commercial residential property owners are seeing an increase in claims stemming from three key areas – security issues, amenity spaces and environmental hazards. While these trends persist, there are steps property owners can take today to help limit their exposure.
Insufficient surveillance coverage or an inability to manage surveillance systems can get property owners in hot water during accident investigations. Here are some proactive steps to take before an incident occurs:
As demands for more robust amenities grow, these spaces introduce new risks and exposures for property owners. From dog parks and playgrounds to pools and gyms, here are preventative steps to help reduce liability:
Weather and environmental issues will always create liability exposures for property owners, but today, they are becoming increasingly complex and harder to predict. Take these steps to get ahead of environmental and weather hazards:
No two property’s safety and loss control programs are going to look the same. Risk mitigation strategies must be tailored to the region, property classification, style and type of residents living there and more. Working with a highly experienced broker partner who understands the multitude of safety risks can help give property owners peace of mind. Conner Strong & Buckelew’s Safety, Risk Control and insurance experts can help property owners navigate today’s underwriting challenges and determine the risk mitigation strategies that will work best for their property and their budget, while ensuring compliance with local ordinances and regulations.
If you’re ready to improve your property’s safety and loss control program, contact a member of our team today.
The financial strain put on higher education institutions during the pandemic continues to have a deep impact on the industry. As operating costs have escalated and the number of students seeking college degrees drops, many institutions, primarily smaller, private, independent colleges, face significant financial headwinds.
The current trends are reshaping how higher education views employee benefits. While benefits in the higher ed space have historically been very robust, financial pressures have pushed colleges and universities to pivot towards operating more like other industries where leadership with CFO backgrounds drive key decisions.
With employee benefits often being the second largest expense after payroll, smaller, independent colleges will need to be agile and adopt strategies that make the most of their budgets. Taking a proactive approach can help higher education institutions lower costs while maintaining or improving employee satisfaction.
As healthcare costs balloon, higher education institutions should consider the following strategies to curtail spending and improve benefits for their employees:
Prescription drug spend continues to be a top contributor to health benefit plan costs and the pharmacy benefits managers (PBMs) offer modest rebate programs to help offset pharmacy spend. Pharmacy coalitions do much more, ensuring employers have the best contract terms and rebate structures possible and employees have access to high-quality, low-cost medications. Conner Strong & Buckelew’s pharmacy coalition covers over a million lives and brings unparalleled leverage strength to the institutions that join.
Data warehouses and analytics can help employers uncover cost drivers and gaps in care in their employee population. With a data warehouse, employers can see who in their population is utilizing care, what the prevalent trends are and where there are gaps in care. Armed with such data, institutions can begin to develop proactive solutions to avoid costly claims before they develop.
Advancements in medicine have made early disease detection and diagnosis far more accessible. Employers can offer programs to understand their employee populations’ risk of developing diseases like cancer through DNA testing. Detecting these diseases before they emerge or at their earliest stages is critical to reducing costs in the long term. Additionally, employees with disease markers can then be actively monitored so any sign of the disease can be addressed much more cost effectively.
Employees with chronic conditions or managing multiple healthcare issues at once can quickly turn into high cost cases if their conditions are not properly managed. Introducing programs that connect these employees with resources like care managers or health coaches can help employees better navigate the healthcare system and ensure they are taking the necessary steps to manage their conditions and avoid visits to the emergency room.
Most higher ed institutions cannot afford to be reactive. Proactively reducing risks that can lead to costly claims requires more than standard wellness programs. Conner Strong & Buckelew has assisted a number of colleges in deploying proactive strategies that offer a strong return on investment.
With our out-of-the-box thinking and in-house population health and pharmacy experts, we are able to help institutions find unique solutions to their employee populations’ specific needs and challenges. Our employee benefits services, including data analytics, pharmacy benefits management and population health solutions, help drive down costs while enabling improved health for your employee population.
If your institution is ready to take a proactive approach to employee benefits, please call us at 1-877-861-3220 or email [email protected].
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.
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.
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.
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.
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.
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].
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.
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.
| Clinical Trials Liability Insurance | Traditional Health Insurance |
|---|---|
| Insurance purchased by a life science company primarily to provide protection in the event of third party claims alleging bodily injury to a participant of a sponsored clinical trial. | Insurance to provide medical expense protection — typically employer sponsored for the benefit of participating eligible employees and their eligible family members, or individually purchased. |
| Designed to cover legal defense costs and damages (awarded or via settlement) stemming from injury claims/lawsuits, including damages for medical costs associated with the alleged injury. | Designed to cover the costs of preventative care and treatment for a wide array of medical conditions encountered by plan participants, with limitations and out of pocket costs detailed in a plan summary. |
| Participants are typically directed to contact the trial site when they experience trial-related symptoms that require medical attention, and the sites must provide the necessary care. But often, the costs are not reimbursed/covered by the liability policy. | Coverage generally excludes medical care related to adverse events directly related to experimental products in clinical trials, but does include medical care to treat the health impacts related to the underlying disease or illness itself. |
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?
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.
| Clinical Trials Liability Insurance | Traditional Health Insurance |
|---|---|
| Because of its limited scope, clinical trials liability insurance is relatively inexpensive. For example, an oncology company conducting a small trial could secure a $5 million policy, that encompasses the entire patient population enrolled in single or multiple clinical trials, for as little as $15,000 annually. | The broad coverage under a traditional health plan comes at a much higher cost. Family premiums for employer-sponsored health insurance rose 7% this year, reaching a per-family average of $25,572 annually, with employers contributing $19,276 per family and workers contributing the $6,296 difference. |
| The controlled purpose, conditions, protocols and constant medical monitoring under which clinical trials are conducted, combined with participants’ acceptance of disclosures and warnings about the potential risks, contribute to low claims frequency and hence the dramatically lower price point. | While plan summaries outline coverage, out-of-pocket costs and coverage limitations, the high costs reflect utilization for a broad spectrum of covered conditions and the expectation that most claims will be paid, regardless of what caused or contributed to the underlying condition for which treatment is sought. |
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.
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.
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.
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].
By Brian Weiscarger and Joe DiBella
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.
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.
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.
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.
