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2018 Power Broker

Employee Benefits

Jennifer Akhter
Senior Vice President
Aon, Dallas

Nontraditional Insurance for Nontraditional Workers

The U.S. Woman’s Chamber of Commerce was looking for health insurance and related education for traditionally uninsured parties, including part-time workers and small women-owned businesses, said Fred Karutz, a third-party consultant.

Together, he and Jennifer Akhter developed solutions.

“Jenn drove creation of the multichannel health care coverage and education campaign,” Karutz said. “She brought industry expertise wrapped around her knowledge of the customer experience to translate what I knew about the consumer health business into thoughtful action for the Women’s Chamber.”

Akhter also helped Uber address workers’ comp. As independent contractors, Uber drivers don’t get benefits.

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“We wanted to tackle workers’ comp in an affordable way,” said Patty Daberkow, project manager, Insurance Solutions, Uber Technologies.

In collaboration with Uber and OneBeacon, Akhter created a program to protect drivers. Used with the Uber app, the program offers “benefits” designed for independent workers. Since the program piloted, it has rolled out to more than 30 states.

A company with more than 20,000 employees wanted “affordable, ACA-compliant” health insurance for its part-time and seasonal employees, said its director of benefits.

He turned to Akhter, who established an online environment linking employees to state and federal health care exchanges and to additional carriers providing ACA-compliant plans.

Breaking Protocol

Eric Barthel
Vice President
HUB International, Newport Beach, Calif.

“Eric Barthel helped Stanislaus County, Calif., abandon the ‘normal’ brokerage process, where carriers set the rates and then brokers beat them up,” said Jody Hayes, CEO. Instead, he helped create a nonprofit organization to build its own health plan.

This year, when the county had enough data, Barthel used it to negotiate better contracts with carriers.

“Typically you don’t know what you’ve bought, only the cost of the entire package,” Hayes said. “Eric changed that dynamic. Instead of being in the business of buying health insurance, we are now in the business of buying health care.”

Even allowing for the vagaries of what might have been, Barthel’s strategy brought “substantial” savings: $26 million in 2016 compared to projected costs for the county’s traditional health care program through 2011.

Along the way, inflationary costs fell from an annual average of 11 percent between 2005 and 2011 to 6 percent between 2012 and 2017.

“Eric knows what a broker should know, then a whole lot more,” said Hayes.

That includes providers, said Mary Lou Bennett, board member, Retired Employees of Kern County, Calif., such as the clinics and hospitals Barthel recruits to take blood work and distribute educational information at its health fairs.

“Health fairs can get out of hand because of no-shows,” she said. “Everybody Eric invites always comes through.”

Bennett’s board depends on his negotiation skills. During conferences, Barthel negotiates with the myriad of insurance companies that want to get involved.

Cutting Costs Without Sacrificing Convenience

Angela Bassinger
Senior Consultant
Gallagher, Dallas

“Keeping our employees healthy is a win-win in terms of our workforce and our dollars,” said Mark Browder, CFO, ChildCareGroup. For Browder, maximizing health care dollars with an effective benefits program is especially important because ChildCareGroup is a nonprofit. Every cent counts.

Angela Bassinger helped the company get the most for its money by suggesting a telehealth vendor that would provide added convenience and ultimately decrease expenses on its health plan by reducing the need for doctor or emergency room visits.

From January 2016 to February 2017, the company saved an estimated $132,000 in claims that would have been incurred if the members chose an onsite visit instead of telemedicine.

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Bassinger also helped the nonprofit implement a pharmacy advocacy program that evaluates employees’ medications for compliance and suggests lower cost alternatives where possible.

“Angela has also rallied her office to throw some holiday parties for the kids and bring them gifts — so she supports us in other ways outside of providing insurance. She’s got our back,” Browder said.

Bassinger and her team also helped Prospect Airport Services drop their fixed costs on excess insurance by about 15 percent, even while clearing the hurdles of Affordable Care Act compliance.

Delivering in a Turbulent Market

Dustin Brand
Senior Consultant
INSURICA, Oklahoma City

Ongoing efforts to comply with the Affordable Care Act, uncertainty over its future and medical cost inflation all result in an ever-changing marketplace. Entities with limited resources — like municipalities and nonprofits — struggle the most to keep pace.

“Dustin Brand walked us through the market changes. We changed carriers this year and switched to more managed care through an HMO. There were more restrictions, and presenting plan changes to employees can be very sensitive and emotional.

“Dustin was there to address each employee’s questions,” said Janice Cain, city manager, the city of Altus in Oklahoma.

Brand implemented a similar change for Goodwill of Oklahoma. The organization’s health care costs were burgeoning due to both expanded eligibility under the Affordable Care Act and to largely unmanaged emergency medical care and pharmacy utilization.

Brand was able to partner the nonprofit with an Accountable Care Organization, which offered an HMO that introduced more medical management into the plan. This helped to control costs while still allowing employees the flexibility of using urgent care services and a few other specialists without a referral.

Brand was also able to secure around $200,000 in premium subsidies from the state’s Insure Oklahoma program. In the end, he and his INSURICA team saved Goodwill close to $1 million.

“He is very knowledgeable and is an expert in the field. He presents information well on the options available and can identify the issues we may encounter up front,” Cain said.

Deep Dive Into Client Needs

Matthew Creighton
Senior Vice President
HUB International, San Diego

“Matt Creighton understands us,” said Trish Besaw, director, human resources, Family Health Centers of San Diego.

While higher rates prevail, HUB International’s Creighton redesigned the nonprofit’s health plan, which had taken hits from expensive claims, offering better benefits at a reduced renewal rate.

And he found health coverage allowing employees, many of whom live in or near Mexico, to use Mexico’s affordable medical and dental facilities while still allowing emergency care in California.

In time for Welk Resorts’ open enrollment, said Tracy Ward, vice president, corporate culture, Creighton and his team created a benefits microsite, an online version of its benefits platform, enabling mobile access with links to websites and carrier contacts.

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With Creighton’s help, Welk also introduced a wellness portal to replace its onsite classes, improving participation across the company’s multiple locations. He also helped launch an initiative to analyze workforce productivity and absence management.

“He poured a lot of effort into bringing these projects to fruition,” said Ward.

When Rivulis Irrigation spun off from John Deere, the new company needed to find an equivalent benefits package as quickly as possible for its already shaken employees, said Nannette Doolittle, human resources manager.

“We needed a quality broker to find good insurance and make quick, smart decisions,” Doolittle said. “Matt worked hard and fast. He’s very detail oriented.”

Taking the Long View

Suzanne McGarey, CEBS, CLU
Managing Principal
EPIC/Ascende, Houston

A private equity firm in Oklahoma had a unique problem. They did not have a competitive employee benefits program, because they didn’t need one.

The successful firm had no trouble recruiting employees, and the prestige of working there overshadowed any concerns employees might have had about their benefits, or lack thereof.

But then the leadership changed, and the firm’s reputation took a hit. Now if the company wanted to recruit the best of the best, it needed to revamp its benefits offering. Enter Suzanne McGarey, CEBS, CLU, and her team at Ascende.

“As a PE firm, every dime we spend is scrutinized by our equity partners, so we have to keep costs low while still offering competitive benefit plans. So we have to determine what employees find valuable.

Ascende helped us conduct a survey of our employees so we could get a feel for what matters to them,” said the firm’s VP of human resources and administration.

McGarey also helps her clients develop long-term plan strategies.

When HR technology company Empyrean Benefit Solutions debated whether to switch from an unpopular high-deductible plan back to a PPO, McGarey helped them to recognize that the problem was not the plan but the education being provided to employees.

She helped Empyrean communicate with and market the plan to its employees. She also helped them implement a wellness program that rewards participants with a few dollars each day deposited in their health savings accounts.

“The program rewards positive behavior rather than punishing lack of participation.”

The Advocate Clients Count On

Tracie McPherson
Area President
Gallagher, Madison, Miss.

Forrest General Hospital needed to reduce the cost of prescription drugs as part of its $25 million-plus medical plan.

Working with the hospital’s internal pharmacy staff, employee health and pharmacy benefits managers, Tracie McPherson helped it negotiate some of the nation’s lowest prescription drug costs with a new pharmacy benefit manager while preserving grandfathered status on the plan, said Troy Daniels, VP and CHRO, Forrest General.

After accomplishing the new pharmacy benefit structure and better financial arrangements, “She approached me about expanding employee health to virtual visits to accomplish additional savings at our outlying facilities,” Daniels said.

For business reasons, St. Dominic Health Services switched to a TPA better known for being a health insurance company. The transition was “an absolute mess,” said Diedra Bell, CFO. They had problems moving data and setting up the plan in the TPA’s system.

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“Tracie spent hours with the new TPA about how to administer our plan,” Bell said. “She went to bat for us on customer service and how to adjudicate our claims.”

There’s more. To help mitigate a significant projected cost increase in its medical plan, McPherson worked with St. Dominic’s executive benefits committee to negotiate better arrangements with a pharmacy benefit manager. The new program is on target to generate savings of more than 20 percent on prescription drugs.

“Tracie is a strong advocate. She won’t let go until she’s found the best solution for us.”

Managing the Benefits Balancing Act

John Mejasic
Voluntary Benefits Specialist
Gallagher, Radnor, Pa.

An employee health care program needs to balance the financial considerations of the employer with the needs and demands of its workers. As health care costs show no signs of coming down, the task is often onerous and unpleasant.

But for his clients, Gallagher’s John Mejasic has demonstrated tireless effort to make both sides happy.

When Temple University Health System wanted to offer their health plan as a group policy as well as an individual policy, Mejasic went to every employee already enrolled in the individual policy and helped them to assess whether they could benefit by switching to the group plan.

That level of involvement not only helped employees better understand their options but also helped Temple maximize their health care spend so that enrollees got the most benefits for their buck.

But employee benefits go beyond medical, dental and vision care. Mejasic also helped some clients build student loan and tuition assistance programs.

“He has found us some excellent deals on those programs. We’ll be rolling it out mid-year, and I think it will be well-received by our employees,” said Charelle Hirsh, director of compensation & benefits, Dr. Reddy’s Laboratories.

“We’ve also added a second opinion resource through Pinnacle Health, offered under critical illness coverage. It’s offered remotely, so employees don’t have to travel to consult with a second expert.”

Not Your Average Actuary

Martin Molloy, FSA
Associate Partner
Aon, Columbus, Ohio

Martin Molloy, a Fellow in the Society of Actuaries, put his analytical and mathematical skills to good use for Trelleborg Coated Systems US, Inc. The company had inherited a pension plan from an acquired entity that had no clear summary in its plan document.

“It was mostly boiler plate language,” said Eden Isbell, HR director, Trelleborg. “There were certain ways we had to calculate things based on that language, instead of how our previous actuary had done it before.

“Molloy understood the plan document, and how the previous actuary had operated, and what we needed to be able to amend.”

He brought in an ERISA attorney to make amendments to the plan document and helped to draft new language that more accurately represented how the plan was accounted for.

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“When I have questions about things I don’t understand, Martin can explain things clearly and thoroughly without making me feel inadequate. And he always makes himself available to meet with our pension committee,” Isbell said.

“He works with us and our ERISA attorney to make sure our documents are fully compliant.”

He did the same for Motorists Mutual Insurance Company when it merged with another business and needed to adjust the way it accounted for health plan costs.

Motorists also needed to reduce its workforce after the merger and implemented an early retirement incentive to do so, which made the accounting method change more challenging. Molloy helped the company accurately capture costs related to paying out retirement benefits.

No Task Too Demanding

Vali Nourishad, ARM, CEBS
Principal
Mercer Health and Benefits, Irvine, Calif.

Vali Nourishad comes through for demanding customers, said David Henry, vice president human resources, Foundation Building Materials — a self-described demanding customer.

Henry wanted a value-based employee benefits program. He solicited employee comments and entertained every suggestion as the company shrugged off its existing benefits package: Free life insurance? Free long-term disability? Maybe.

The team had 60 days to market, select, design and roll out the program. Every juncture allowed two hours for review, modification and vetting. Too ambitious, said a number of brokers Henry considered. When can I start? Nourishad asked.

Despite acquisitions two weeks into the RFP that added thousands of employees and incomplete historical data, Nourishad helped executive stakeholders make decisions in time for a successful implementation and open enrollment.

Vesna Mardjonovic, total rewards manager, Zodiac Pool Solutions North America, is another self-described tough customer. “I’m a New Yorker,” she explained.

Zodiac was reviewing its employee benefits from the ground up. In two weeks, Nourishad presented 64 options for executive review.

It gave employees a benefits allowance that they could spend according to their own needs, including high- and low-deductible plans, medical, dental, vision and flexible spending accounts.

“Our CFO was amazed,” Mardjonovic said.

Won’t Take ‘No’

Beth Vernon
Senior Account Executive
Gallagher, Pittsburgh

“Not my job” is not in Beth Vernon’s vocabulary, said Dawn Rice, benefits manager, Nemacolin Woodlands Resort.

In the first year of her tenure as broker, Vernon went head-to-head with the carrier to get a 17.9 percent overall health insurance rate decrease, a two-year rate guarantee and a wellness incentive that wasn’t even on the prior broker’s radar.

And because the owner “really wraps her arms” around employees, Vernon had the carrier’s vice president on the phone regarding an employee’s spouse’s hospital admission.

Vernon also interceded in a 29-year associate’s eye surgery: “Beth arranged the visit with the low-vision specialist,” Rice said. “She made a difference in the treatment plan.”

Her willingness to fight in the trenches makes a difference in carriers’ willingness to cover experimental treatments, said an attorney with Babst Calland Attorneys at Law.

For example, the carrier for a shareholder’s child, who had a dismal prognosis for muscular dystrophy, refused experimental treatment coverage. Vernon interceded, moving up the carrier’s executive chain. It finally agreed to cover the drug for a year.

Now the child can raise his arms and offer some muscular resistance, feed himself and play video games, greatly improving his quality of life.

“Beth will advocate again,” the attorney said. He’s hopeful that success with the first experimental treatment will ease resistance in the future. “She has the tenacity and persuasive skills to do it. She’s a mild-mannered pit bull.”

Making the Complex Simple

Regina Walsh
Area Vice President
Gallagher, Philadelphia

Law firms have unique obligations when it comes to their benefit structures, because partners utilize them as investment vehicles and they may intertwine with pension plans. Managing the moving parts requires technical expertise and the ability to explain any changes in layman’s terms.

“We were not happy with one of our existing programs. We were paying a lot for insurance. Some of our partners were still underinsured. Some used it as an investment vehicle, and the investments were continually misallocated,” said Richard Rowe, executive director, Wilentz, Goldman & Spitzer, P.A.

“Regina came up with three to five alternate plans and presented them to the management committee. She was able to establish a relaxed atmosphere from the start and earned their trust. She corrected misunderstandings that some partners had about both the existing and the new product.”

Ultimately, Walsh saved the firm $1.5 million in premiums by restructuring the program without changing or removing any of the benefits for partners.

Another law firm also needed help educating its partners about their options, especially since the firm has a complex pension structure. Walsh came through for that firm as well, said Dennis Foley, treasurer, Weil, Gotshal & Manges.

“Regina helps find the most cost-effective life insurance coverage, navigates potential minefields and thoughtfully answers our questions.”

Finalists: 

Catherine Borbone
Executive Vice President
Alliant Insurance Services, Alpharetta, Ga.

Nicole Negvesky
Area Senior Vice President
Gallagher, Tampa, Fla.

Edward J. O’Malley, RHU, CLU
Mid Atlantic Region Practice Leader
Gallagher, Mount Laurel, N.J.

Randy Rider
Senior Vice President, Employee Benefits
HUB International, Newport Beach, Calif.

Mary Alice Sexton
Executive Vice President
Krauter & Company, New York

Teri Weber
Partner and Senior Consultant
Spring Consulting Group, Boston

 

 

 

 

 

 

 

 

 

 

 

More from Risk & Insurance

More from Risk & Insurance

Pharma Under Fire

Opioids Give Rise to Liability Epidemic

Opioids were supposed to help. Instead, their addictive power harmed many, and calls for accountability are broadening.
By: | May 1, 2018 • 8 min read

The opioid epidemic devastated families and flattened entire communities.

The Yale School of Medicine estimates that deaths are nearly doubling annually: “Between 2015 and 2016, drug overdose deaths went from 33,095 to 59,000, the largest annual jump ever recorded in the United States. That number is expected to continue unabated for the next   several years.”

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That’s roughly 160 deaths every day — and it’s a count that’s increasing daily.

In addition to deaths, the number of Americans struggling with an opioid disorder disease (the official name for opioid addiction) is staggering.

The National Institute on Drug Abuse (NIDA) estimates that 2 million people in the United States suffer from substance use disorders related to prescription opioid pain relievers, and roughly one-third of those people will “graduate” to heroin addiction.

Conversely, 80 percent of heroin addicts became addicted to opioids after being prescribed opioids.

As if the human toll wasn’t devastating enough, NIDA estimates that addiction costs reach “$78.5 billion a year, including the costs of health care, lost productivity, addiction treatment, and criminal justice involvement.”

Shep Tapasak, managing principal, Integro Insurance Brokers

With numbers like that, families are not the only ones left picking up the pieces. Municipalities, states, and the federal government are strained with heavy demand for social services and crushing expenditures related to opioid addiction.

Despite the amount of money being spent, services are inadequate and too short in duration. Wait times are so long that some people literally die waiting.

Public sector leaders saw firsthand the range and potency of the epidemic, and were among the first to seek a legal reckoning with the manufacturers of  synthetic painkillers.

Seeking redress for their financial burden, some municipalities, states and the federal government filed lawsuits against big pharmaceutical companies and manufacturers. To date, there are more than 100 lawsuits on court dockets.

States such as Ohio, West Virginia, New Jersey, Pennsylvania and Arkansas have been hit hard by the epidemic. In Arkansas alone, 72 counties, 15 cities, and the state filed suit, naming 65 defendants. In Pennsylvania, 16 counties, Philadelphia, and Commonwealth officials have filed lawsuits.

Forty one states also have banded together to subpoena information from some drug manufacturers.

Pennsylvania’s Attorney General, Josh Shapiro, recently told reporters that the banded effort seeks to “change corporate behavior, so that the industry can no longer do what I think it’s been doing, which is turning a blind eye to the effects of dumping these drugs in the communities.”

The volume of legal actions is growing, and some of the Federal cases have been bound together in what is called multidistrict litigation (MDL). These cases will be heard by a judge in Ohio. Plaintiffs hope for a settlement that will provide funding to be used to help thwart the opioid epidemic.

“From a societal perspective, this is obviously a big and impactful issue,”  said Jim George,  a managing director and global claims head with Swiss Re Corporate Solutions. “A lot of people are suffering in connection with this, and it won’t go away anytime soon.

“Insurance, especially those in liability, will be addressing this for a long time. This has been building over five or six years, and we are just now seeing the beginning stages of liability suits.” 

Basis for Lawsuits

The lawsuits filed to date are based on allegations concerning: What pharma knew or didn’t know; what it should have known; failure to monitor size and frequency of opioid orders, misrepresentation in marketing about the addictive nature of opioids; and false financial disclosures.

Opioid manufacturers, distributors and large drugstore chains together represent a $13 billion-a-year industry, meaning the stakes are high, and the pockets deep. Many have compared these lawsuits to the tobacco suits of the ’90s.

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But even that comparison may pale. As difficult as it is to quit smoking, that process is less arduous than the excruciating and often impossible-to-overcome opioid addiction.

Francis Collins, a physician-geneticist who heads the National Institutes of Health, said in a recorded session with the Washington Post: “One really needs to understand the diabolical way that this particular set of compounds rewires the brain in order to appreciate how those who become addicted really are in a circumstance where they can no more [by their own free will] get rid of the addiction than they can get free of needing to eat or drink.”

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk.” — Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

The addiction creates an absolutely compelling drive that will cause people to do things against any measure of good judgment, said Collins, but the need to do them is “overwhelming.”

Documented knowledge of that chemistry could be devastating to insureds.

“It’s about what big pharma knew — or should have known.  A key allegation is that opioids were aggressively marketed as the clear answer or miracle cure for pain,” said Shep Tapasak, managing principal, Integro Insurance Brokers.

These cases, Tapasak said, have the potential to be severe. “This type of litigation boils down to a “profits over people” strategy, which historically has resonated with juries.”

Broadening Liability

As suits progress, all sides will be waiting and watching to see what case law stems from them. In the meantime, insurance watchers are predicting that the scope of these suits will broaden to include other players in the supply chain including manufacturers, distribution services, retail pharmacies, hospitals, physician practices, clinics, clinical laboratories and marketing agencies.

Litigation is, to some extent, about who can pay. In these cases, there are several places along the distribution chain where plaintiffs will seek relief.

Nancy Bewlay, global chief underwriting officer for casualty, XL Catlin

Nancy Bewlay, XL Catlin’s global chief underwriting officer for casualty, said that insurers and their insureds need to pay close attention to this trend.

“Pharma and its supply chain need to know that this is here now. It’s not emerging, it’s here, and it’s being tried. It is a present risk,” she said.

“We, as insurers who identify emerging risks, have to communicate to clients. We like to be on the forefront and, if we can, positively influence the outcome for our clients in terms of getting ahead of their risks.”

In addition to all aspects of the distribution chain, plaintiffs could launch suits against directors and officers based on allegations that they are ultimately responsible for what the company knew or should have known, or that they misrepresented their products or signed off on misleading financial statements.

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Shareholders, too, could take aim at directors and officers for loss of profits or misleading statements related to litigation.

Civil litigation could pave the way, in some specific instances, for criminal charges. Mississippi Attorney General Jim Hood, who in 2015 became the first state attorney general to file suit against a prescription drug maker, has been quoted as saying that if evidence in civil suits points to criminal behavior, he won’t hesitate to file those charges as well.

Governing, a publication for municipalities and states, quoted Hood in late 2017 as saying, “If we get into those emails, and executives are in the chain knowing what they’ve unleashed on the American public, I’m going to kick it over to a criminal lawsuit. I’ve been to too many funerals.”

Insurers and insureds can act now to get ahead of this rising wave of liability.

It may be appropriate to conduct a review of policy underwriting and pricing. XL Catlin’s Bewlay said, “We are not writing as if everyone is a pharma manufacturer. Our perception of what is happening is that everyone is being held accountable as if they are the manufacturer.

“The reality is that when insurers look at the pharma industry and each part of the supply chain, including the pharma companies, those in the chain of distribution, transportation, sales, marketing and retail, there are different considerations and different liabilities for each. This could change the underwriting and affect pricing.”

Bewlay also suggests focusing on communications between claims teams and underwriters and keeping a strong line of communication open with insureds, too.

“We are here to partner with insureds, and we talk to them and advise them about this crisis. We encourage them to talk about it with their risk managers.”

Tapasak from Integro encourages insureds to educate themselves and be a part of the solution. “The laws are evolving,” he said. “Make absolutely certain you know your respective state laws. It’s not enough to know about the crisis, you must know the trends. Be part of the solution and get as much education as possible.

“Most states have ASHRM chapters that are helping their members to stay current on both passed and pending legislation. Health care facilities and providers want to do the right thing and get educated. And at the same time, there will likely be an uptick in frivolous claims, so it’s important to defend the claims that are defensible.”

Social Service Risk

In addition to supply chain concerns, insurers and insureds are concerned that even those whose mission it is to help could be at risk.

Hailed as a lifesaver, and approved by the Food and Drug Administration (FDA), the drug Naloxone, can be administered to someone who is overdosing on opioids.  Naloxone prevents overdose by blocking opioid receptor sites and reversing the effects of the overdose.

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Some industry experts are concerned that police and emergency responders could incur liability after administering Naloxone.

But according to the U.S. Department of Justice, “From a legal standpoint, it would be extremely difficult to win a lawsuit against an officer who administers Naloxone in good faith and in the course of employment. … Such immunity applies to … other professional responders.”

Especially hard hit are foster care agencies, both by increased child placements and stretched budgets. More details in our related coverage.

While the number of suits is growing and their aim broadening, experts think that some good will come of the litigation. Settlements will fund services for the addicted and opioid risk awareness is higher than ever. &

Mercedes Ott is managing editor of Risk & Insurance. She can be reached at [email protected]