Background

With terms like “quiet quitting”, the “great resignation”, and “burnout” becoming regularly intertwined in our vernacular, attracting and retaining key talent has never been more nuanced. Since benefits priorities and expectations are constantly shifting, validating the benefit offerings through competitive benchmarking may be the most important tool in an employer’s arsenal.

At its core, benchmarking is a process of measuring or comparing against certain indicators, industry standards, or best practices. It is used to evaluate various aspects of the program and develop plans to improve upon the current state. Benchmarking can yield actionable insights, enhance your metrics standards (e.g., what constitutes success), enable you to build a business case for change, or defend the current process and programs available.

Types of Benchmarking

Performance benchmarking, one of two main types of benchmarking, uses quantitative data and measures to inform decision-making and business cases for change. Practice benchmarking, the other main type, is more qualitative in nature. It focuses on how an activity is conducted through people, processes and technology and provides insight into gaps and best practices that could be applied. Both play a critical role in comparing employee benefit programs and should be used in tandem.

Each of these can involve internal benchmarking, where the comparison is made against your own data over time, either in the aggregate or by different business units, product lines, departments, programs, geographies, and the like. They can also entail external benchmarking, where metrics or practices of your company are compared to one or many other companies. This involves external sources or custom surveys and provides an objective understanding of current state. External benchmarks are necessary to validate your offering remains competitive in the market; however, internal benchmarks are imperative to track against previously set metrics and targets.

Your vendor partners, including insurers, coalitions, trade organizations and benefit advisors (i.e., Spring / Alera), can typically support the demand for external benchmarking.

Getting Started

The good news is that you may be better positioned to begin benchmarking than you think.
We recommend the following roadmap for effective benchmarking:

  1. Define Your Objectives
    1. Roles and responsibilities
    2. Timeliness
    3. Metrics for success
  2. Determine Your Data Gathering Strategy
    1. Understand definitions and what you are trying to measure
  3. Identify Data and Tools You Have Available
    1. What tracking tools are at your disposal in-house or through partners
    2. What data is available internally
    3. Consider supplemental sources of information
      • Insurance carriers
      • Third party administrators
      • Brokers, Consultants and Advisors
      • Benefit associations
      • Research firms
  4. Organize Results Into Actionable Reports
    1. Identify areas where change is needed
    2. Use results to provide support in business case to C-suite / upper management
  5. Continually Monitor
    1. Benchmarking is most successful when it is not a one-and-done activity, but rather a regular business activity, as the benefits landscape is always changing. Further, if your benchmarking results bring about a change in policy or protocol, you want to be sure you are prepared to measure whether that change yields the intended result.

There are many different areas of benefits an organization can benchmark, from health plan design to retirement benefits and disability insurance. If you are unclear about where to start, consider where your biggest pain points exist and consider those the highest priorities. If significant pain points do not exist, benefit plan design is usually an optimal place to begin benchmarking as process details hinge on plan design.

As employers fight for top talent and work to deliver equitable benefits, family-first benefits have risen to the top of the priority list for most progressive employers, but the definition of family first continues to evolve. An increase in parental and caregiving leave, use of lifestyle accounts, coverage for family planning and infertility including at times travel reimbursement demonstrates an employers’ commitment to their diverse population and the constantly changing definition of family friendly. Women’s health, however, during and beyond childbearing years, is beginning to take center stage.

In recent years, the stigma around infertility and reproductive health issues has lessened. The CDC reports that around 19% of American women struggle to get pregnant. In vitro fertilization (IVF) can cost between $15,000 – $30,000 per cycle without insurance, and surrogacy costs range from a staggering $100,000 – $200,000.1 Given the expense as well as the physical and mental toll of reproductive challenges, employers and lawmakers responded, with almost half of U.S. states requiring fertility insurance coverage. Most of these laws require benefits be provided for the diagnosis and treatment of infertility, as defined by the state. Many require IVF to be a covered benefit for plans that provide pregnancy-related benefits, while others may only mandate that insurers offer coverage options related to infertility for employers to select.

Under these fully insured plans, some restrictions apply and requirements must be made for coverage. For example, coverage may be restricted by various clauses such as the definition of infertility (i.e., 2-year history of infertility, infertility associated with certain conditions such as endometriosis, etc.), lifetime maximums (e.g., $15,000), and approved treating providers. Further, laws may only apply to certain plans, such as those with more than 100 lives.

In Massachusetts, for example, all insurers who provide pregnancy-related benefits must provide coverage for the diagnosis and treatment of infertility, including artificial insemination, IVF, Gamete Intrafallopian Transfer (GIFT), egg banking, and more. Infertility is defined by being unable to conceive during a period of 1 year if the female is 35 or younger, or during a period of 6 months if the female is over 35. There is no legal limit on a number of treatments, however, insurers may set limits based on clinical guidelines and patient medical history.2

Although states with fertility insurance laws often provide a minimum level of coverage, many employers are not subject to those state requirements (i.e., self-insured plans). Therefore, employers must make critical decisions surrounding plan design for infertility or alternative family planning benefits. This analysis should include benchmarking against peer groups to ensure the offering is competitive as well as a cost-benefit analysis to account for the additional spend.

The healthcare system for women’s health is fragmented. The healthcare lifecycle for women is centered around one life stage – childbearing – during which years healthcare spend is considerably higher than for male counterparts (i.e., ages 19-44).3 However, women are experiencing poor outcomes across many health metrics.4 In addition, many women do not feel heard by their healthcare provider, especially women of color who experience considerable disparities in care and health outcomes. 

Spring would encourage employers to think about women’s health as a priority and begin to track metrics against standards (i.e., preventive services, primary care, etc.). Thinking about women’s health without infertility at the center is important. Consider creative services around birthing (i.e., doula services), support postpartum (i.e., breast milk storage and shipping), and movement into menopause support. Perhaps most critical is working to support women seeking care and ensuring their voices are heard, a pivotal component in bettering health metrics for women.

1 https://money.usnews.com/money/personal-finance/family-finance/articles/how-much-surrogacy-costs-and-how-to-pay-for-it
2 https://resolve.org/learn/financial-resources-for-family-buildinEmg/insurance-coverage/insurance-coverage-by-state/
3 https://www.healthsystemtracker.org/chart-collection/health-expenditures-vary-across-population/#Average%20individual%20health%20spending,%202019%C2%A0
4 https://hologic.womenshealthindex.com/en

The U.S. is one of the only countries in the world without a federally mandated paid parental leave policy. This gap has motivated many states to take matters into their own hands, creating their own statewide paid family and medical leave (PFML) laws, which typically include parental leave (bonding with a new child) but also additional absences from work due to common life events such as a serious illness or to care for a sick family member. Similarly, individual companies often have their own parental leave offerings, knowing that it is critical to a successful employee attraction and retention strategy. 

In years past, the focus was on the mother’s access to maternity leave, and any paternity leave offered was perceived as a “bonus.” However, modern assessments of equity and discrimination should have employers reassessing how their parental leave programs are framed, especially given guidance recently released by the Equal Employment Opportunity Commission (EEOC).

What You Need to Know

Parental leave is a key example of how employers can ensure they are putting their diversity, equity, and inclusion (DEI) values to work. Recent guidance, legislation, and general buzz around this topic make it a prime time to ensure that your programs are compliant. Please get in touch if you should have any questions about leave laws or best practices in this area.

As we progress through 2023, maneuvering changing regulations and compliance updates have been challenging for HR professionals across the nation. Many COVID-19 provisions are expiring soon, states are constantly shifting paid leave policies and managing hybrid/remote workforces are just a few hurdles employers are facing when it comes establishing effective and compliant leave programs. Every year the Disability Management Employer Coalition (DMEC) hosts their Compliance Conference, where experts from around the nation discuss current trends in compliance, best practices for employers, and the future of the industry. This year I traveled to the beautiful (and warm) Orlando, Florida, to attend this year’s conference. As per usual, the conference provided a great platform for networking and ensuring attendees are tuned into the most pressing compliance matters.

This year, my colleague, Jennifer Campagna and I presented on Navigating Ancillary Paid Leave Options to Support Employee Well-Being, but with a unique twist. We included an interactive game to help attendees understand the benefits of ancillary leave options and how they can intertwine with your current offerings. During the session we handed out “Leave Bingo”, a Bingo-style game where attendees listened for key works and concepts throughout the presentation, to see if they have the words on their Bingo board. Winners received prizes and we all got a little pick-me-up from the chocolate provided. I was impressed with the leave offerings employers across the nation have adopted, some of which we covered in our presentation, like leave related to domestic violence, bereavement, mental health, and more. Although all these ancillary options sound great, they can be costly and difficult to manage from a compliance standpoint.

Aside from the game, we reviewed federal and state laws influencing corporate leave policies and how successful companies are managing their policies. Our presentation included case studies on organizations that implemented alternative leave programs and how it impacted their workforce. Many employers have realized one key to retaining/recruiting talent and combating productivity loss is by revaluating their leave policies and addressing pain points.

Some less traditional types of leave include:

As a board member of DMEC and an advocate for equitable paid leave programs, I am delighted to see where the future of the industry is headed. It is unlikely that we will see a nation-wide Paid Family and Medical Leave (PFML) program introduced in 2023, but we are consistently seeing updates and clarifications to regulations such as the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA), in addition to the uptick in state PFML programs and adjustments to existing state plans. Spring and I will continue to keep you up to date with updates in the absence management space and provide our clients with industry-leading programs that best match the needs of their specific workforce.

*Additionally, all Spring/Alera clients receive complimentary access to AleraHR and Alera Dashboard, which provide digital tools that help employers and HR teams manage employee benefits compliance deadlines and updates. It also provides users with a robust compliance library with insightful guides, comprehensive checklists, tools and calculators to create forms, job descriptions, explore salary comparisons.

In 2023 we are expecting to see lots of changes when it comes to Paid Family and Medical Leave on both the state and nation-wide level. In this whitepaper, we break down the current landscape of paid leave programs and recommendations for employers to adopt and manage effective paid leave policies.

Title:

Senior Vice President and Co-Founder.

Joined Spring:

I was one of the original founders of Spring (alongside Karin Landry) back in 2004, as a spin out from Watson Wyatt Insurance & Financial Services, Inc.

Hometown:

I was born and raised in Golden Valley, Minnesota (Minneapolis area), but went to college in Wisconsin.

At Work Responsibilities:

I lead our absence management team, and work with employers of all sizes and industries and leading insurance carriers and administrators in the space. I also head up our Spring’s market research surveys and benchmarking. 

Outside of Work Hobbies/Interests:

Being outside, going for walks; spending time with family, and of course, watching my kids play basketball.

Fun Fact:

One thing many people don’t know about me is that I actually use to run track in high school and led the 4×100 relay.

Describe Spring in 3 Words:

Interesting work & caring culture, I guess that’s actually 5 but that’s how I would describe Spring. The people all care about each other and have each other’s backs and support each other. We have a motivated team that is eager to collaborate.

Do You Have Any Children?

Yes, I have two beautiful children, my daughter is 17 and my son is 15.

Favorite Place Visited:

Greece, by land and sea! It has to be my favorite because of the history, beautiful architecture and amazing weather!

If You Were a Superhero, Who Would You Be?:

It would be Elastigirl from The Incredibles because her arms are so long and she can hold everybody. She can take care of everything!

the International Foundation of Employee Benefit Plans recently wrapped-up their 32nd Annual Health Benefits + Conference Expo (HBCE) in Clearwater Beach, Florida. The conference brought together healthcare and benefits professionals from a range of industries to discuss leading topics and share expectations for the future. Having heard such positive feedback about the event, Spring was glad to attend, exhibit, and speak at the conference. Below are some of our biggest takeaways.

Spring Booth HBCE

1) Pharmacy Cost Containment

This year there was a lot of talk surrounding the price of prescription drugs and tactics employers can adopt to help control costs without cutting benefits. There are many factors influencing the high costs of pharmacy drugs, some of which include chronic disease prevalence, the aging population and the growing volume of specialty medications. Below are some of the top sessions focused on controlling Rx costs.

– Representatives from Express Scripts explained the upsides to working with a Pharmacy Benefit Manger (PBM) and how they can help address pharmacy policies in their session titled, “How to Work With Your Pharmacy Benefit Manager.”

– The CEO and Co-Founder of TruDataRx, Cataline Gorla, discussed how comparative effectiveness research (CER) is being used by other countries to decide which drugs work best for specific medical conditions, and how self-insured employers can save money with said data.

2) Addressing Chronic Conditions

According to the Center for Disease Control (CDC), 90% of the nation’s healthcare spending goes towards people with chronic and mental health conditions1. As chronic diseases are very common among the American workforce, employers have started implementing specific benefits and policies to address common conditions, such as diabetes and obesity. Some of the sessions around this topic that we found most interesting include:

– Speakers representing the Nashville Public School System explained how they were able to introduce free resources such as telenutrition and fitness center access to help combat obesity and other health disparities.

– Dr. Mudita Upadhyaya from St. Jude Children’s Research Hospital presented on prevention strategies to address mental health and obesity in a pre- and post-COVID world; and why a mixed approach may be best.

– The Diabetes Leadership Council’s CEO, George J. Huntley spoke on diabetes and chronic disease risk management strategies, including medicines and technology that can help patients manage and prevent the disease.

3) The Future of Healthcare & Benefits

In recent years we have seen a great shift in the healthcare and benefits industry; we saw a great increase in telehealth, mental health resources, new/alternative types of paid leave, including sick leave and more. As we transition to a post-COVID world, we expect the evolution to continue. Below are some of the top trends professionals believe we will face in the coming years.

– Our Senior Vice President, Teri Weber, presented on market forces employers can utilize to meet future absence management challenges. Her session listed techniques employers can adopt to improve day-to-day administration of disability, absence and accommodations.

– In a session titled “Innovative Health Care Models—The Future of Direct Primary Care,” the presenter explained how many employers are changing to value-driving healthcare models to boost access and reduce costs.

– A session titled “Breaking the PTO Mold, Without Breaking the Bank,” reviewed how typical Paid Time Off (PTO) programs can be altered to better support employees’ well-being and financial health.

– The final session of the conference spotlighted how the pandemic has led to an increase in personal, economic and other stressors and has had a drastic impact on mental health, substance misuse and addiction. Attendees were informed on how they can implement workplace solutions that address these issues as well as identify warning signs.

The warmer weather was certainly a bonus, but the insights we gleaned and connections we made were what will keep us coming back to the HBCE conference. We want to thank IFEBP and our fellow colleagues who took the time to share their experience, stop by our booth, and make the energy so positive.

1https://www.cdc.gov/chronicdisease/about/costs/index.htm

As seen in the New England Employee Benefits Council (NEEBC)’s blog.

Last year around this time, I gave a year-one progress report on the Massachusetts Paid Family and Medical Leave (PFML) program, as it had finished its first year of paying out benefits to eligible workers. Since then, the MA PFML program has continued to mature and adjust according to experience, and, around New England, Connecticut has had PFML benefits available for one year, and there are related updates from Rhode Island, New Hampshire, Vermont and Maine to report.

Massachusetts: A Year in Review

In fiscal year 2022 (July 1, 2021 – June 30, 2022), the Massachusetts Department of Family and Medical Leave (DFML) experienced1:

– Over 112,500 applications, with 20% being denied
– 59% of applications were related to medical leave, 31% for bonding, and 10% to care for a family member
– Only 32 approved applications for military exigency leave and 7 approved applications to care for a service member
– Claimants aged 31-40 had the most approved claims (40%) and more than 1.5 times as many women had an approved leave (61% of claims), compared to men (35% of claims)
– Average weekly benefits were $793.55 for family leave and $754.84 for medical leave
– Turnaround times from the time the application was submitted to an initial decision was a median of 17 calendar days
– Average duration of leave was 12 weeks, assuming a 5-day work week
– Total benefits paid was equal to about $603 million (an increase of about 245% from FY21 which accounted for January 1, 2021-June 30, 2021)

In 2023, Massachusetts will be updating maximum benefit amounts and reducing total contributions.

– The maximum weekly benefit is increasing to $1,129.82, effective 1/1/2023. This is an increase of about $45 from the 2022 weekly maximum. For any employees who may have leave that runs from 2022 into 2023, the weekly benefit that was determined when leave was approved will continue. The new maximum will not be applied until there is a new MA PFML leave application.
– Contributions, however, will be reduced in 2023. The total contribution is decreasing from 0.68% to 0.63%, for employers with 25 or more covered individuals. The medical leave contribution will be 0.52%, with employers funding 0.312% and employees responsible for up to 0.208%. The family leave contribution will be 0.11%, with employers able to collect the total contribution from employees. Employers with less than 25 employees are not required to submit the employer portion of premium.

The financial earnings requirement was also updated in 2023. Employees must have earned at least $6,000 and 30 times the PFML benefit amount during the base period to be considered eligible for MA PFML.

Connecticut: First Year Activity

Connecticut has now had PFML benefits available for 1 year. During the first six months of the program2:

– Over 44,127 applications, with 40% being denied of those that received a decision
– 44% of approved applications were related to medical leave, 29% for bonding (own child and adoption/foster care), 18% for pregnancy/childbirth, and 9% to care for a family member
– Only 15 applications were approved for family violence, 12 for organ and bone marrow donation, and 2 for qualifying exigency
– Claimants aged 26-41 had the most filed claims (53%) and more than double the number of females applied for leave (28,814), compared to males (14,213)
– Average weekly benefits paid were $562.01
– Average approved duration of leave was 6.79 weeks
– Total benefits paid was equal to about $81 million
– Almost 137,000 businesses have registered with the CT Paid Leave Authority and claim applications have been received from every city and town in the state

Based on the experience in the state in 2022, Connecticut is not making any major changes to the program in 2023. However, the social security contribution and benefit base increased to $160,200 on January 1, 2023, and CT minimum wage increases to $15/hour on June 1, 2023, which will impact benefit and contribution amounts.

Please note that the program has some key differences when compared to MA PFML, such as the availability of leave for organ and bone marrow donation, as well as leave related to family violence. Differences in benefit amounts, leave duration, and eligibility conditions also make it difficult to directly compare CT and MA PFML experience.

Other New England Updates

Massachusetts and Connecticut are not the only New England states to be seeing PFML progress. Rhode Island has an established temporary disability insurance program (TDI), which was the first statutory disability program in the country, established in 1942. In 2014, they became the third state to offer family leave benefits through temporary caregiver insurance (TCI). In addition, the state does not allow private plans, making the model slightly different than other PFML programs in the region. On January 1, 2023, a few updates to TDI and TCI became effective. The state’s taxable wage base increased to $84,000, which will impact the contribution calculation. The benefit duration also increased to 6 weeks, from 5 weeks in 2022. Finally, the financial eligibility conditions claimants must meet increased so that employees must have paid at least $15,600 in the base period or meet the alternative conditions wherein they earned at least $2,600 in one of the base period quarters and base period taxable wages equal to at least $5,200. 

A new outlier is New Hampshire’s first-in-the-nation, state-sponsored voluntary plan where NH employers and eligible NH workers can purchase a paid family and medical leave plan through the state’s insurance carrier. New Hampshire selected MetLife as its insurance partner and began paying benefits on January 1, 2023.

Similarly, Vermont spent 2022 developing a voluntary program to be administered by The Hartford, their selected insurance carrier. Beginning July 1, 2023, state employees will be covered under the program, with other private and public employers with 10 or more employees eligible for coverage in 2024, and small employers and individuals able to purchase coverage in 2025.

Maine also made strides in developing the structure of their state mandated PFML program. Maine created a commission to study PFML programs and to propose a PFML model for the state, which kicked off in May 2022. Policy recommendations are expected to be presented to the Legislature in 2023. 

Are You Up to Speed?

As the PFML landscape continues to evolve at the local, state and federal leaves, policies need to be monitored on an ongoing basis. Employers should ensure they are compliant with the requirements of each individual leave program, as differences exist between all established paid family and medical leave policies. If any of your employees are impacted by a state PFML policy, organizations should review plans, policies, and processes to confirm they are in line with any legislative changes. To do so, the following checklist can be followed:

– Register in any new states where employees are located, if required
– Ensure contributions are being collected appropriately
– Update employee notices and benefit documentation, as appropriate
– Confirm employee count to determine if any changes to contributions are required
– Review private plan strategies based on previous year experience and changes to contributions
– Renew private plans as appropriate
– Validate company sponsored leave programs coordinate with PFML to the extent possible

If you need assistance ensuring PFML compliance or to assess the optimal plan set up for your organization, Spring’s consultants are happy to help www.springgroup.com

Paid Family and Medical Leave continues to be a confusing point for employers, compounded by new legislation being proposed at a seemingly constant pace. As leaders in the disability and absence management space, we are dedicated to staying on top of updates around PFML, among other areas.  After a busy year in that regard, with another on the horizon, we wanted to share this brief overview.

In 2022, there was more movement towards state PFML laws being passed after decreased activity in previous years, largely due to the COVID-19 pandemic. For example:

In 2023, we expect continued activity. Pennsylvania and Michigan have outstanding proposals for PFML, which will likely be decided upon in 2023, one way or another. Additional states may also put forward proposals in upcoming legislative sessions.  

In addition, and as seen in the updates below, states with existing legislation continue to make adjustments to their PFML programs. Adjustments to contributions and benefits are typically expected, most commonly, but not always, at the end of the calendar year.

The map below shows a summary of states with existing PFML legislation and programs in place, those who have proposed legislation without it being passed, and those that have not had any activity related to PFML in recent years.

Massachusetts

In 2023, Massachusetts will be updating maximum benefit amounts and reducing total contributions.

The maximum weekly benefit is increasing to $1,129.82, effective 1/1/2023. This is an increase of about $45 from the 2022 weekly maximum. For any employees who may have leave that runs from 2022 into 2023, the weekly benefit that was determined when leave was approved will continue. The new maximum will not be applied until there is a new MA PFML leave application.

Contributions, however, will be reduced in 2023. The total contribution is decreasing from 0.68% to 0.63%, for employers with 25 or more covered individuals. The medical leave contribution will be 0.52%, with employers funding 0.312% and employees responsible for up to 0.208%. The family leave contribution will be 0.11%, with employers able to collect the total contribution from employees. Employers with less than 25 employees are not required to submit the employer portion of premium.

Other State Updates

Other states have made updates to their programs effective January 1, 2023, unless otherwise noted below. Some states may make changes off calendar year (e.g., District of Columbia, Rhode Island), which are not included if they have not yet been released.

Employers should review their PFML plans, policies, and processes to confirm they are in line with any legislative changes. To do so, the following checklist can be followed:

If you need assistance ensuring PFML compliance or assessing the optimal plan set up for your organization, Spring’s consultants are happy to help.