On February 10, 2022 the Benefits Breakfast Club addressed risk mitigation challenges and solutions with the help of several industry experts from Normand Beaudry, myHSA, Equitable Life, and Ontario Blue Cross*. Presentations followed by break-out groups, led by presenters, discussed the risk challenges and solutions for small, mid-sized, and large group plans.
With ongoing change and uncertainty from the COVID-19 pandemic, poll results of our mostly advisor attendees indicate that they believe the most significant impact of COVID-19 on benefit plans is not over (72%).
According to presenters and attendees mental health continues to be the #1 concern, the impact and treatment delays resulting from COVID-19, chronic diseases and their comorbidities, and of course high-cost specialty drugs. Moving forward these concerns are not expected to change.
Based on discussions with attendees, plan sponsors and their advisors are struggling to manage risk using the solutions currently available to them. There are concerns about offering enough flexibility to attract and retain employees, particularly for small groups, but also ensuring plans are designed with not just the ‘want’ to have but also true insurance coverage, the ‘need’ to have.
In addition to mental health, poll results of the top risk challenges during COVID-19 included future claims levels across plans, treatment delays/access and rising disability claims. Looking forward, the biggest risk management challenges according to poll results include mental health, high-cost specialty drugs, access to treatment, chronic disease and the co- morbidities of chronic disease.
Daniel Drolet, Senior Partner, Group Benefits at Normandin Beaudry provided an overview of risk mitigation strategies including funding mechanisms, plan design, flexibility in plan design, and prevention strategies. Other presenters provided insights into other risk management tools:
- Meghan Vallis, Group Sales VP, Equitable Life spoke to flexible benefits which can be used as an effective tool to manage risk even for mid-sized and smaller groups if well designed.
- Steve McEwan, COO and Co-founder of myHSA spoke to the growth in demand, particularly during the pandemic, for both qualifying and wellness spending accounts. These options can provide an element of personalized coverage without opening the plan to significantly more risk.
- Sasha Opacic, Vice President Sales with Ontario Blue Cross, spoke to the challenges for small businesses to provide benefits to employees knowing that approximately 90% say that a benefit plan plays a major role in their decision to work at a company. COVID-19 has also driven demand for benefits and there are new solutions for even the smallest groups, including individually bundled plans.
Poll results told us that the most common risk mitigation strategies used by our mostly advisor audience focussed on spending accounts (qualifying or not), plan maximums and stop-loss that deliver finite dollar risk to plan sponsors.
Break-out group results
Three break-out groups each focussed on one of small, mid-sized or large groups. They were asked to discuss the options presented to address the changing risk landscape and comment on the extent to which plan sponsors believed they had a fiduciary responsibility for employees’ health and for providing more options to employees.
On options to address changing risk landscape:
- Large groups
- Some elements of insurance ‘needs’ should remain in plans vs ‘wants’
- Discuss the employer’s approach to benefits, their goals and support with good data.
- Risk management should include all stakeholders – private and public stakeholders. Issues like specialty drugs are everyone’s problem
- Opportunity to create a forum involving all stakeholders on challenges in risk management to generate ideas and act.
- Mid-sized groups
- Flex is good but size and claims levels can impact choices
- Employers want to help manage risk through defined contribution plans
- Pressure to offer more because employee retention is at a premium
- Insurers need to be better at providing data insights in order to target benefit design.
- Small groups
- Products are more rigid, less flexible – makes matching employer objectives to options challenging, particularly for non traditional groups
- Health care spending accounts – qualifying and non qualifying – can address different need and wants
- Employers struggle to maintain balance of cost management and employee retention.
On fiduciary responsibility for employee health and should they provide more options/choice:
- Large – need to communicate plan decisions better and educate plan members as well as providing prevention programs.
- Mid-sized – keeping their business open is their top priority, but with ongoing challenges in employee retention employers may feel less responsible for employee health. National standards like psychologically healthy workplace can be complex and overwhelming for small and mid sized businesses. Need better solutions for smaller groups.
- Small – challenging to find a financially sustainable balance between what employees want and what employers can provide, considering need for element of insurance. Modular flex can help solve some challenges for small groups.
Clearly the risk landscape continues to be complex with more areas of need and want from employees. More so than ever before plan sponsors need support from their plan advisors and insurers to evaluate current solutions and customize their plan based on their budget in order to not only manage risk, but also support prevention and disease management, as well as to attract and retain talent.
Look out for our summary of our March 24th webinar on Chronic Disease Management trends, prevention and management tools and our next webinar on May 19th when we will discuss the gaps in benefit plans and how to create a more resilient plan. We will share key take aways from several industry reports and hear from a round table of industry experts on what makes a plan resilient, and what lessons can be learned from COVID-19.
* Thank you to our experts for sharing their insights with us and moderating the interactive break-out discussions (and their respective scribes): Daniel Drolet, Senior Partner, Group Benefits at Normandin Beaudry (Jody Crowther, Senior Account Executive, Sterling Capital Brokers); Meghan Vallis, Group Sales Vice President with Equitable Life (Denise Balch, President, Connex Health); Steve McEwan, COO and Co-Founder of myHSA and Sasha Opacic, Vice President Sales with Ontario Blue Cross (Giovanna Marra, Ontario Blue Cross).