2222222222

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.

Advertisement




“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.

Advertisement




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.

Advertisement




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.

Advertisement




“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.

Advertisement




“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

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

Advertisement




In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

Advertisement




Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

Advertisement




How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

Advertisement




One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]