Tag Archives: Marcella Giorgou

Infographic: Paid family leave requirements by state

Lobbyists and lawmakers across four states—Hawaii, Massachusetts, Connecticut, and Colorado—are considering paid family leave bills, with Connecticut’s legislation awaiting only a floor vote. If passed, the state would join California, New Jersey, Rhode Island, and New York in offering paid family leave benefits to its workers; Washington state and the District of Columbia will begin offering benefits in 2020.

Of those that offer benefits, the details of each paid family leave program vary from state to state. This infographic summarizes paid family leave requirements that employers must consider when adding these benefits to their health and welfare programs. To learn more, read Marcella Giorgou’s article “Paid family leave gaining traction in the United States.”

Paid family leave gaining traction in the United States

Beginning January 1, 2018, New York joined three other states to offer paid family leave in the United States. California, New Jersey, Rhode Island, and now New York all offer paid family leave programs funded through employee contributions. Washington state will begin offering paid family leave in 2020, funded through a combination of employer and employee contributions. Washington, D.C., will begin offering paid family leave in 2020 through employer contributions.

As more states implement paid family leave programs and the federal government continues to discuss it, paid family leave benefits as part of health and welfare programs have gained traction. Almost 60% of U.S. employers offer or are planning to offer paid leave in 2018 for new parents, and just under 50% offer or are planning to offer paid leave in 2018 to care for a sick family member.

Details of paid family leave programs vary from state to state. Employers with employees in multiple states need to navigate these different requirements in designing their programs. A summary of paid family leave requirements by state is shown in Figure 1.

In addition to the difference in benefits summarized above, details such as eligibility, waiting periods, and qualifying events, as well as how the benefits are delivered, differ from state to state. Most states provide the benefits through a state fund, although some allow for private insurers to participate in paid family leave, such as New York and New Jersey. New York also allows employers to self-insure their benefits.

As governments and employers (where self-insuring is an option) consider the cost of paid family leave programs, it is important for them to consider the following:

  • There is limited data available with regard to utilization of paid family leave benefits.
    • Although there is experience with respect to other paid family leave programs offered in states such as New Jersey it is important to adjust for differences in design and demographics of individual groups.
    • It is also important to consider disability claims related to maternity, as bonding with a newborn is generally where a majority of employees utilize paid family leave benefits. In New Jersey, approximately 85% of claims are for bonding with newborn children.
  • There will be administrative costs associated with the program.
  • Employers who self-insure in New York are required to hold a minimum security deposit to fund unexpected losses, which is determined at the employer level using assumptions prescribed by the New York Department of Financial Services (DFS). Also, the employers are required to submit their experience with DFS on an annual basis.

Some states and employers have taken the lead in implementing paid family leave programs in 2018. As others consider implementing paid family leave it is not only important to consider the cost of the program, but also the design, delivery, and funding. All of them are important to an employer’s leave management strategy.

This article first appeared in the March 2018 issue of Health and Group Benefits News and Developments.

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Employers cope with rising healthcare costs

In May 2017, Milliman released its 2017 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider organization (PPO) plan. The MMI increased $1,118 (4.3%) to $26,944, including a 3.6% increase in average medical expenditures and an 8.0% increase in prescription drug expenditures. This increase of more than $1,100 (a continuation of similar annual increases in the index since 2001) shows that federal healthcare reform efforts, which have mainly targeted the individual insurance market and Medicaid, have had little effect on reducing employers’ costs. Although this year’s MMI saw the lowest annual percentage increase in healthcare costs for a family of four with employer coverage since at least 2001, healthcare cost increases continue to outpace consumer price index (CPI) inflation trends, as shown in the chart below.

Employers have responded by:

Gradually transferring more of the cost to employees through contributions and plan design
Over the past five years, the MMI has increased 30%, while the employers’ share of healthcare costs has increased 25.7%. As a result employees are paying about 43% of the MMI, up from 41% in 2012.

Putting more pressure on vendors
For example, employers sponsoring self-insured prescription drug plans should be regularly reviewing pharmacy benefits manager (PBM) arrangements through requests for proposals (RFPs) and market checks.

Managing utilization of benefits and cost shifting by providers through strategies such as narrow networks and proactive medical management

Staying ahead of the prescription drug pipeline
Over the past few years, prescription drug trends have been greatly influenced by the entry of extremely expensive, curative hepatitis C treatments. While it looks like these treatments are no longer driving prescription drug trends, it is important to monitor the status of the prescription drug pipeline to understand what employers can expect to spend on prescription drugs in the coming years. Employers can stay ahead of the curve through strategies like utilization management, including prior authorization, step therapy, and pursuing specialty pharmacy rebates.

This article first appeared in the January 2018 issue of Health and Group Benefits News and Developments.

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Benchmarking analyses improve health plan cost management

A benchmarking analysis helps employers review their health plan data so they can find solutions to manage costs without shifting them to employees. It can also help employers mitigate the potential effects of the excise tax in 2018. In this article, Milliman consultant Marcella Giorgou identifies areas an employer can address so the plan can operate more efficiently.