Background

According to Pharmacy Times, between July 2021 and July 2022, more than 1,200 medications had a price increase that surpassed the inflation rate during that time of 8.5%, with the average increase across these drugs coming to a staggering 31.6%. Overall prescription drug spending is projected to rise at an average annual rate of 6.1% through 2027.

Why are we seeing this uptick? An aging population, healthcare services costs, and administrative costs (e.g., financial transactions and patient services) are likely partly to blame. There are a range of strategies and tactics to help combat rising pharmacy costs within your benefits program, but it is important to understand what is driving these costs both globally and specifically within your organization. There is much talk about the skyrocketing costs of specialty medications. Specialty medications are now responsible for over 50% of total pharmacy costs, yet only about 2% of the population is using them.1 Unfortunately, a significant portion of pharmacy spend is going towards innovative and/or targeted therapies that treat rare, complex, genetic or inherited diseases, and cancer – all of which are usually beyond our control.

Preventing the Preventable

On the other hand, however, there are several behaviors that have a strong influence on health outcomes: tobacco use, alcohol consumption, physical activity, and diet.6 A direct correlation between cigarette smoking and the risk of heart disease has been shown and it is in fact the single most important modifiable risk factor for heart disease. Cigarette smoking has also been linked to certain cancers, which is the second leading cause of death in the United States. In fact, 16 million Americans have at least one disease caused by smoking, costing over $240 billion in healthcare costs annually.1 

Obesity has been linked to multiple chronic diseases including heart disease, diabetes, and musculoskeletal conditions impacting bone health. The Centers for Disease Control and Prevention (CDC) reports that obesity adds another $173 billion worth of burden on the healthcare system per year because of resulting complications. Several studies have documented the adverse cardiovascular health effects that plague overweight adults. This is partly because obesity adds increased demands on the heart to supply blood to the body.  Excess body weight and obesity are linked with an increased risk of high blood pressure, diabetes, heart disease and stroke. Losing as little as 5 to 10 pounds can make a significant difference in your risks. Even if weight control has been a lifelong challenge, taking small steps today can go a long way.2

Diet and physical activity are behaviors that directly influence weight. However, they may also have direct effects on diseases.

Wellness interventions provide an opportunity for us to have some control over the healthiness of our workforce. These interventions play an important role in moving the needle by working to solve for the root causes at play. Employers should be incentivized to implement these preventative programs not only because wellness programs are considered as “nice perks” that increase employee morale and productivity, but also and more importantly, they are tangible solutions that can reduce the burden of health and pharmacy costs. If less employees need prescription drugs in the first place, pharmacy spending could decrease dramatically. Seems easy, right?  

Let’s Get Tangible: Wellness for Outcomes

The higher the risk factor prevalence within a population, the greater healthcare costs are likely to be, both within the pharmacy realm and overall. Therefore, wellness initiatives targeted towards combatting, reducing, or preventing these risk factors will have a more tangible impact on reducing costs and improving health outcomes.

A Targeted Approach

There are six key lifestyle behaviors that promote a long and heathy life3:

The goal is to reduce the need for prescription medication by stopping problems before they even exist. In a study of 55,000 people, those who made healthy lifestyle choices such as avoiding smoking, eating healthy, and exercising lowered their heart disease risk by about 50%.4 In fact, unhealthy lifestyle behaviors such as those that oppose those listed above cause approximately 70-90% of chronic diseases, which yield up to 75% of total healthcare spend in the U.S.5 As such, when it comes to medical and pharmacy costs, the most successful wellness programs  will be those aimed at those six pillars and affecting long-lasting behavioral changes.

Wellness Point Solutions

The good news is, the wellness industry awakened with this realization a decade or so ago, in the midst of out-of-control healthcare costs, and now there are a plethora of wellness companies and tools available for employers to leverage. In fact, in the U.S., the wellness industry represents $1.2 trillion in revenue6. Homing in on the six behaviors above, employers might consider the following*:

A range of wellness point solutions are out there, and the all-encompassing ones will have tools pointed toward all six of our wellness pillars. Additionally, larger employers have started to introduce onsite health clinics and resources to make employee engagement in their health more convenient. Some incentivize through walking or step challenges. Health plans build in wellness incentives such as reimbursements for gym memberships. Whatever it looks like, introducing preventative measures that lessen the prevalence of disease and poor health outcomes; reduce the need for prescription drugs, lost work days, and absence from work; and improve mental health; can lessen overall healthcare costs and prove advantageous for your workforce.

Before you make any decisions around wellness solutions, be sure to understand what is driving your pharmacy spend within your own organization. We recommend working with a consultant or actuary to take an unbiased and robust view of your data. Better yet, consider taking the next step to…

Work With a Clinical Pharmacist

Even the best wellness programs cannot prevent or reverse existing and/or genetic health problems within a workforce population, and there are times when prescription medications are necessary. Typically, a clinical pharmacist is not part of your health benefits team, weighing in on strategy and dissecting the needs of your workforce population. I firmly believe this is both a gap and an opportunity.

An experienced clinical pharmacist can look at the full array of options available through a different lens, putting all the pieces together (medical, Rx, wellness, etc.) and provide targeted recommendations to improve outcomes while controlling costs.

Another important role of a clinical pharmacist is the ability to recognize signs of medication non-adherence, which can cause disease progression and adverse outcomes. If your organization is spending money on prescription drugs that are not being taken correctly and therefore cannot have the intended effect(s), a pharmacist can flag that up.

Get in Touch

When it comes to healthcare and pharmacy costs, many of the factors involved are out of our hands. However, we do have some power to affect change and take control through preventative, wellness, and innovative and targeted pharmacy solutions. Given the current climate, why wouldn’t we aim to do so?

If you need assistance assessing your current wellness programs, navigating the marketplace of vendor solutions, conducting a Request for Proposal (RFP), auditing your pharmacy benefits contract terms and utilization data, or are interested in leveraging a clinical pharmacist to yield customized and impactful results, our team would love to chat with you.

*Please note, Spring’s intent is neither to promote nor recommend any of these specific solutions, but rather to portray a snapshot of what is available in the market.

1https://www.wellsteps.com/blog/2020/01/02/benefits-of-wellness-lower-health-care-costs/
2https://www.stroke.org/en/about-stroke/stroke-risk-factors/risk-factors-under-your-control
3https://www.verywellhealth.com/lifestyle-factors-health-longevity-prevent-death-1132391
4https://www.health.harvard.edu/blog/lifestyle-changes-to-lower-heart-disease-risk-2019110218125#:~:text=The%20good%20news%20is%20that,disease%20risk%20by%20nearly%2050%25.
5https://www.wellsteps.com/blog/2020/01/02/benefits-of-wellness-lower-health-care-costs/
6https://www.zippia.com/advice/health-and-wellness-industry-statistics/#:~:text=Here%20are%20some%20statistics%20about,products%20is%20about%20%24168%20billion

Title:

Director of Client Services/Brokerage Practice Leader.

Joined Spring:

I joined Spring in 2015, before Spring was acquired by Alera Group.

Hometown:

I am a New Englander through and through! I was born and grew up in Boston and lived in Jamaica Plain and Roslindale.

At Work Responsibilities:

As Spring’s Brokerage Practice Leader, I work directly with employers and carriers to implement top-tier employee benefits programs for employers of all sizes. Some of most common areas include group health plans, dental, life insurance, disability, and FSAs, HRAs & HSAs.

Outside of Work Hobbies/Interests:

I love being outdoors (when the New England weather allows!). Some of my favorite things to do outside of the office are hiking, fishing, boating, and sports.

Fun Fact:

Many people don’t know this, but I was actually an extra in the movie, “Blown Away”.

Describe Spring in 3 Words:

It’s very tough simplifying my nearly decade at Spring into just 3 words. But I guess I’d have to go with professional, caring, and reliable.

Favorite Movie/TV Show:

I enjoy the classics, my favorite movies are To Kill a Mockingbird and Casablanca.

Do You Have Any Children?:

Yes, I have two children, Ryan and Kaleigh, they’re both in their 20s now.

Favorite Food:

Italian and Japanese!

Favorite Place Visited:

Although these two places are almost polar opposites, my favorites are Italy and Alaska.

Favorite Band:

I love my 80s music, so I’ll have to go with U2.

Bucket List:

I really want to visit the Pyramids in Egypt.

If You Won the Lottery, What Would You Do With the Money?:

I would start a scholarship program for disadvantaged children, to help give them a full ride through college.

It seems like every year we are seeing new developments in the world of captive insurance on both the national and international scales. After recently attending The Captive Insurance Companies Association (CICA) 2023 International Conference, I wanted to share some of the hot topics on the minds of captive professionals around the world. As a board member of CICA and chair of CICA’s NEXTGen young and new professionals committee, I was excited to be so involved this year. The conference definitely did not disappoint; in addition to “extra-curriculars” like the golf tournament and brewery tour, the event also provided great opportunities for networking and learning about current trends and best practices in the world of captives and what the future holds for the industry. I hope you enjoy these highlights.

1. Regulatory and Tax Updates

As per usual, regulatory updates were a highly discussed topic during the conference. As a long-term attendee and speaker at CICA’s annual conferences (and other captive conferences alike), regulatory updates are always pertinent, as laws and best practices are constantly shifting, as seen in the following:

– In a session titled “The Lay of the Land: Captive Taxation,” speakers explored recent administrative, legislative, and judicial updates affecting captive taxation, with a focus on 831(b) small captives.

– Following the addition of 87,000 IRS agents (following the Inflation Reduction Act), a group of tax experts and a lawyer discussed how this will most likely impact audits of small captive cases.

– Three state regulators from North Carolina, South Carolina, and Oklahoma discussed updates we can expect to see from various domiciles during their session, “There’s a New Sheriff (Regulator) in Town.”

– On the second day of the conference, I presented on “What’s New with the DOL and Employee Benefits?”, where we delved into the upsides of writing employee benefits into a captive and how it intersects with DOL regulations.

2. Navigating Inflation

From eggs to rent, no sector can avoid inflation, including the captive/alternative risk financing arena. With that being said, controlling costs and reducing risk is a top priority for many employers across industries and around the world. This year I heard some exciting ideas when comes to addressing inflation, some of which included:

3. The Captive Formation Process (Experiences from Captive Owners)

A couple sessions turned the tables and looked at captives from a different point of view: that of the captive owner. It was very interesting hearing from captive owners on their experiences with forming a captive and what goes through their minds during the process.

4. Shaping the Future Captive Arena

As the Chair of CICA’s NEXTGen young and new professionals committee, I was impressed with the focus CICA put on providing sessions and events aimed specifically towards young professionals looking to enter or grow within the industry. As regulations, best practices, technology, lines of services and more constantly change, it is essential that the next generation of captive professionals are equipped and ready to shape the future of the practice.

– One of my favorite parts of the conference was the CICA Student Essay Contest. University students were given 3 case studies to select from and wrote an essay on establishing a captive for their specific case study (including selecting policy options, determining underwriting and pricing, etc.).

– During the session, “Building Your Personal Board of Directors – Considerations During the Different Stages in Your Career,” speakers discussed the upsides to developing a personal Board of Directors to support career growth and how to get started.

– Finally, I spoke on a panel that discussed what NextGen captive professionals value most in a job. We looked at ways to combat the great resignation and how organizations can better align with young professionals’ career goals.

With many conferences under my belt, CICA never fails to provide a great platform for networking and sharing ideas, I am excited to see what the future has in store for the association and for captives overall. In the meantime, our team will continue to keep our fingers on the pulse of captives to assure we provide clients with industry-leading captive and alternative risk financing services.

As we transition past the pandemic, we are seeing shifts in remote, hybrid, and onsite practices across the US. Below are some of the top trends impacting workforces nationwide.

1Zippia. “25 Trending Remote Work Statistics [2023]: Facts, Trends, And Projections” Zippia.com. Oct. 16, 2022
2Alera’s EB Market Outlook
3https://globalworkplaceanalytics.com/telecommuting-statistics
4https://fortune.com/2023/01/25/workers-prefer-remote-first-roles-hybrid-work/

Our Senior Vice President, Prabal Lakhanpal, has recently joined The Captive Insurance Companies Association (CICA)‘s board of directors. He also currently chairs CICA’s NEXTGen Young and New Professionals Committee; check out the full article here.

During The Captive Insurance Companies Association (CICA)’s 2023 annual conference, our SVP, Prabal Lakhanpal presented on behalf of our Managing Partner, Karin Landry, during which he present on what next-gen professionals value most in in a job. You can find Captive International’s recap here.

Each year, I use International Women’s Day to share my reflections on what it has been like to be a woman leading in a male-dominated industry, to be the mother of a daughter, and to uplift women’s organizations and the efforts I believe are critical to empowering women professionally. This year, I wanted to focus on action rather than reflections, so I am mapping out a three-step process for women to help make sure they are paid fairly relative to their male counterparts.

Past Imperfect

Pay inequity and gender discrimination has been a problem since the workforce diversified to include women and people of color. Fortunately, recent legislation at all levels of government from state to federal have adopted policies to help prevent this kind of discrimination. In some jurisdictions like Connecticut, Delaware, Michigan, and Atlanta there are laws in place that prohibit employers from asking candidates about salary history. And in California, companies with 100+ employees are required to report pay data by gender and race.

The bad news is that even with all of these policies, a gender pay gap still exists. In 2022, according to the Census Bureau, women in the U.S. made around 82 cents for every $1 a man earns.  In C-suite roles, the ratio is 75 cents to a dollar. In fact, data shows that with the current rate of progress, executive positions will not achieve gender parity until 2060.1

It’s time to change that.

What You Can Do

Hopefully your employer is practicing pay equity. However, it doesn’t hurt to do your own due diligence by following these steps.

1. Benchmark yourself against the market

First, do your research. If you don’t know how much others make in your field, how are you supposed to know if you are being fairly compensated?

Platforms like Indeed, Glassdoor, PayScale and Salary.com share data on average salaries based on job title and skillset. As you do your fact finding, make sure you consider factors such as location, years of experience, the size of your company, special degrees or certifications you have, etc. Sharing a title doesn’t necessarily make you an equal candidate. It is also important to consider incentives outside of your normal paycheck, such as stock or equity, bonuses, 401(k) contributions or pension plans, benefits and other offerings. If you have friends or family in a similar field, see if they are willing to have honest conversations about their compensation. Alternatively, maybe you know someone in HR or recruitment whose brain you can pick.

Based on market data and your experience and skill level, determine a “fair” salary band and see where you fall on that spectrum.

2. Ask for what you deserve and need

Be clear about what you want from your job and your company, and give them the chance to do the same. One of my biggest takeaways from being a woman executive is that men are not afraid to negotiate or ask for raises or other incentives, and women are often reluctant to do so. My advice is not to assume that you will be handed a raise even if you truly do deserve one, and that there are many things in life you won’t get unless you ask.

Consider how other incentives that your company can offer like flexible hours, remote or hybrid work, etc. may impact your value through your employer’s lens. Speak to your manager and understand what might be required from you to advance to a next level, or why you aren’t there now. Don’t let gender be the limiting factor.

3. Pay it forward

Join a women’s leadership or mentorship program to expand your network.  Is there a group you can join at your organization? If not, consider starting one. Look outside your company to see if there are women’s groups you could benefit from joining. Leverage your network, and if you find that your network is small, prioritize growing it. If you have concerns about DEI practices at your company, voice them. If you have experienced sexism in the workplace, speak with your HR department and/or manager – speaking up is an act of service in and of itself.

We have made headways in the fight for pay equity. For the first time, Forbes reported in January 2023 thatover 10% of Fortune 500 companies have a female CEO. While a milestone and proven progress, I can’t help but wonder if we should really be celebrating 10%, and instead focusing our efforts on 50%. So, this International Women’s Day, I recommend all women take a more active role in achieve pay equity. Widespread change can start at the micro level.

1 https://chief.com/articles/the-pay-gap-for-executive-women-is-the-largest-its-been-since-2012-heres-why?utm_campaign=NL-US-2023-02-24-CIB&utm_medium=newsletter&utm_source=marketo&utm_content=hero-cta-button

No matter the product or service you’re selling, or the impact your business makes in your community or the world at large, the consensus is that the most important asset an organization has is its people. Our HR and Benefits colleagues know very well that keeping employees happy and engaged (and keeping them in general) is not only makes for a positive atmosphere, but is also a strategic business move. So maybe you’re celebrating Employee Appreciation Day with a grateful shoutout, or a catered lunch, but don’t forget to look at the bigger picture of the precedent you’re setting – whether intentional or not – with your benefits programs.

Physical Health

Beyond the “it’s the right thing to do” mentality, benefits that support employees’ physical health are important for another reason: unhealthy employees will be far less productive, if present at all. Take a look at your health plans to ensure affordability, access, and breadth of care. Components like dental and vision insurance should also be considered here. Beyond health insurance, many companies offer supplementary tools or services that promote physical health such as fitness reimbursements, point solutions for things like diabetes management or musculoskeletal issues, health coaching services, walking challenges, and more.

Mental Health

Mental Health America reported that nearly 20% of Americans were experiencing a mental illness in 2022. The World Health Organization (WHO) states that depression and anxiety cost the global economy approximately $1 trillion every year. While employers cannot solve the mental health crisis, many believe that they do have a responsibility to provide related resources and prioritize employee mental health in some way. At Spring, we recommend tackling mental and behavioral health through the lens of its three most common barriers: cost, access, and stigma. Any programs offered should try and solve for these. For example, does your health plan cover mental health related appointments? In addition, there are a wide range of services available in this area. Some companies bring in yoga instructors on-site. Alera Group provides Spring Health at no cost to employees, which offers complimentary digital therapy sessions, coaching, and other tools. Apps like Calm and Headspace provide guided meditation and anxiety management practices. Paid time off for mental health or built-in “breaks” during the workday, such as designated times when meetings are prohibited, can also help. Simple tactics like demonstrating openness to discussing mental health in the workplace can go a long way to lessen any stigma.

Financial Health

Especially in today’s economy, employees need help saving for retirement, investing wisely, and being financially informed and educated. We also know that financial stress can be related to mental health, so by focusing on financial health you can impact multiple components of employee engagement. At a basic level, leading employers offer a 401(K) or similar retirement savings plan, with an employer match. As a next level, tax-friendly benefits like Health Savings Accounts (HSAs) can be helpful, and there has been a lot of buzz around student debt repayment programs which employers can choose to contribute to or just offer as a voluntary benefit. Other voluntary benefits like life insurance, identity theft protection and short- or long-term disability insurance can contribute to an employee’s financial wellness. Other perks might include financial counseling services and educational seminars.

Equity

Do your employees in different states have access to the same paid leave? To the same reproductive healthcare? To the same disability coverage? Do your executives and your more junior team members have the same benefits and incentives? Do your programs address a diverse range of needs, accounting for factors like location, race, gender, and age? Equitable benefits send the message of appreciation to all employees and instill the feeling of fairness and compassion.

Career Progression

Most employers take pride in hiring ambitious and hard-working employees. Don’t let your corporate structure or practices inhibit that ambition. Employees feel appreciated when they have a clear path for growth and opportunities to step up. From a benefits perspective, this might mean incorporating mentorship programs, education or certification programs, tuition reimbursement, or formal training programs.

Employees should feel appreciated on a regular basis, and not just on Employee Appreciation Day. By making sure you have these five pillars accounted for in your benefits program, you can create a positive culture of appreciation and satisfaction.

Captive Review releases their annual Power 50, where they showcase top leaders in the captive space. This year, they selected our Managing Partner, Karin Landry, #7. Check out the top 10 professionals here.