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More Workers Miss Work Due to Depression, Anxiety; Employers Can Help

by Inoventive Solutions
February 27, 2025

Each year, mental health issues such as depression and anxiety lead to a staggering 12 billion missed workdays globally, according to a new study by Resolute Psychiatry, an online platform that provides virtual counseling.

This absenteeism not only affects personal well-being but also results in significant financial losses. Employees who are struggling with their mental health can be less productive and may have lapses in concentration that can lead to poor performance and even workplace accidents.

Production and financial losses due to missed workdays, for any reason, cost the U.S. economy $1 trillion each year.

The compounding effects of these health challenges — fatigue, poor concentration, detachment, stress and physical symptoms — are obviously a serious challenge for businesses. Fortunately, there are steps that companies can take to provide mental health support in the workplace.

Access to mental health resources

One of the best ways to support staff dealing with depression and anxiety is to implement an employee assistance program. EAPs offer confidential services, including counseling, wellness workshops and access to mental health apps.

These programs can reduce barriers to seeking help and they address a range of issues such as substance abuse, occupational stress, relationship problems, emotional distress and major life events, providing employees and their families with essential support. 

One issue, though, is that EAPs are often limited in the amount of sessions that an employee can attend without out-of-pocket costs. A typical EAP limits counseling appointments to around three to six sessions per issue per year.

Train managers on mental health support

Equipping managers with the skills to recognize and address mental health challenges is vital for fostering a supportive workplace culture. Training should focus on:

  • Recognizing signs of mental health challenges: Managers should be trained to identify indicators such as changes in behavior, decreased productivity, increased absenteeism, and signs of stress or withdrawal.
  • Initiating supportive conversations: Managers need guidance on how to approach employees sensitively and confidentially, expressing concern and offering support without judgment.
  • Providing resources and referrals: Training should include information on available mental health resources, both within the organization (like EAPs) and externally, enabling managers to guide employees toward appropriate help.

Encourage staff to use their health plan

All Affordable Care Act-compliant health plans cover nearly all mental disorders, as well as substance use disorders and treatment for alcohol and chemical dependency.

In addition, federal law requires that mental health and substance use disorder benefits are covered in the same way as most medical and surgical services. This means that things like deductibles, copays and insurance must be the same for mental health and substance use as for other medical benefits.

Offer flexible work options

Developing flexible work arrangements, such as remote work opportunities, adjustable hours and designated mental health days, can significantly aid employees in managing their mental health. These arrangements can allow workers to take time off to take care of errands and other matters, or to attend counseling sessions.

These options help reduce stress, improve work-life balance and enhance overall job satisfaction. If you have an employee who is struggling with depression or anxiety, you may want to consider:

  • Adjusting roles and responsibilities, or
  • Moving to a different role or department if the current job negatively impacts their mental health.

The takeaway

Since the COVID pandemic, mental health issues have risen to the fore and employers have experienced the effects on their workers. Many Americans are dealing with growing stresses in their lives, particularly with the cost of living having skyrocketed during the last few years, the tenor of national discourse and global problems.

By integrating the above strategies, organizations can create a more supportive environment that addresses mental health proactively, benefiting both employees and the company’s bottom line.

"Specialty
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Specialty Drugs, Expensive Surgeries Driving Stop-Loss Insurance Costs

by Inoventive Solutions
February 18, 2025

Companies that self-insure their group health benefits, or are in partial self-insured plans called level-funding, are likely to see higher stop-loss insurance renewal rates due to the rapidly increasing costs of specialty drugs and cancer surgery claims.

Stop-loss insurance steps in to pay claims when they reach “catastrophic levels,” or if the aggregate amount of claims exceeds a set dollar amount. The increases in stop-loss insurance rates are also likely to affect group health plan providers, which typically pass on their higher costs to employers.

Executives of Cigna Corp., which provides medical stop-loss coverage to employers, warned of the coming wave of stop-loss increases during the company’s Q4 2024 earnings call with analysts in late January. Brian Evanko, the company’s chief financial officer, said that Cigna’s stop-loss insurance costs had spiked in the fourth quarter.

The main drivers of the cost increase were:

  • Spending on costly injectable specialty drugs, like Keytruda, an anti-cancer drug, and
  • Higher spending on inpatient surgeries for serious conditions such as cancer and heart problems.

Cigna’s experience mirrors what’s been happening in the overall stop-loss insurance market.

From 2022 through 2024, the overall individual coverage stop-loss insurance premium rates grew at an annualized rate of between 10.4% to 13%, depending on the deductible size, according to the 2024 “Aegis Risk Medical Stop Loss Premium Survey.”

Deductibles are usually in increments of $100,000 per claim. The average monthly premium per employee for a $100,000 individual deductible was $210.80 per month last year, while for a $500,000 deductible the cost was $46.30 a head.

Sun Life, another stop-loss insurer, has noted equally rising costs. In its 2024 “Sun Life Stop-Loss Research Report,” it said that:

  • Million-dollar claims rose 8% on a claims-per-million-covered-employees basis
    between 2023 and 2024, and were up 50% over the past four years.
  • Average cost of cardiovascular disease treatment was up 33%, higher than expected given medical inflation, and significantly higher than average cost for all claims, which was 5.9% over the same period.
  • Five new drugs entered the 20 high-cost injectable drugs list in 2023; two are used
    primarily in the treatment of cancer, and one each for immunodeficiency disorders, gout and blood disorders.

The takeaway

If you are a self-insured employer or have a level-funded plan, you’ll want to budget for these higher stop-loss rates as you will likely see your premium rise.

You can always tinker with your deductible as well to lower your costs, but that could mean holding more of the bag for any high-dollar claims. But you can also take steps to address your health plan’s cost drivers. For example, you can:

  • Consider encouraging your employees to engage in programs that focus on general health management, such as monitoring of blood pressure and blood sugar, weight management and exercise to improve their overall health.
  • Ensure that your employees have access to mental health services, particularly those who are dealing with a chronic or acute high-cost condition.
  • Ensure plans offer coverage for preventive care during pregnancy.
  • Provide assistance to employees who are having trouble navigating the health care and health insurance system.

Finally, to get a good understanding of your potential costs and for planning purposes, you should know the average cost of various high-cost claim conditions. Sun Life’s report has extensive lists of how much these types of claims are costing. You can find it here.

"Most
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Most Workers Uncomfortable with Cash-for-Coverage Plans

by Inoventive Solutions
February 11, 2025

A recent survey found that the majority of employees prefer traditional employer-sponsored health insurance over receiving cash through an individual coverage health reimbursement arrangement (ICHRA) to buy their own coverage on the Affordable Care Act marketplace.

The survey, conducted by Softheon, a health coverage distribution technology firm, and its subsidiary W3LL, found that 80% of respondents would rather have their employer provide health insurance, while only 20% preferred receiving employer funds to purchase their own plan.

The findings also showed that 54% of workers favored their firm offering multiple health plan options, while 26% preferred a single plan.

The findings reflect the importance of educating workers about ICHRAs if an employer is planning to start offering these vehicles.

How  ICHRAs work

ICHRAs allow employers to provide tax-free funds that employees can use to purchase their own health insurance on the marketplace or through private insurers.

With an ICHRA, employers set a fixed allowance for employees to use toward their health insurance premiums and qualifying medical expenses. Employees then select their own coverage and pay premiums upfront, submitting receipts for reimbursement up to their firm’s contribution limit.

The employer’s funding is tax-deductible, and reimbursements are tax-free for employees as long as they purchase a plan that meets the ACA’s qualifying criteria.

These plans have grown in popularity as companies look for cost-effective alternatives to group health insurance, especially small and mid-sized businesses that may struggle with the rising costs of traditional plans.

While ICHRAs provide greater customization, they also require employees to take a more active role in selecting and managing their own health coverage, which can be a barrier for those unfamiliar with navigating the insurance marketplace.

Employee comfort levels with ICHRAs

Workers’ attitudes toward ICHRAs varied depending on how the questions were framed. When asked directly about receiving a cash stipend for health coverage:

  • 29% said they were very comfortable with the idea.
  • 40% said they were somewhat comfortable.
  • 31% expressed discomfort with the concept.

Concerns about selecting their own coverage were also significant:

  • 30% of respondents worried about choosing the wrong plan and either getting too much or too little coverage.
  • 29% were primarily concerned about paying too much for a plan.
  • 63% believed that employer assistance in navigating the ACA marketplace would improve their experience.

ICHRA awareness and adoption

Four out of five respondents admitted to knowing little or nothing about ICHRAs, while 20% said they were somewhat or very familiar with the concept, even though they didn’t have ICHRA coverage themselves.

In light of this lack of awareness, if you plan to offer an ICHRA, you’ll want to educate your staff about the arrangements and ensure employees understand that they are responsible for selecting their own individual health insurance plan under an ICHRA. 

Key points to cover when educating staff:

Basic definition: Explain what an ICHRA is, highlighting that it’s a reimbursement account where the employer contributes a set amount towards the employee’s individual health insurance premiums. 

Eligibility: Clearly state who is eligible for the ICHRA within the company, including any criteria based on job role or location. 

Allowance amount: Specify the monthly or annual ICHRA allowance each eligible employee will receive. 

Plan selection process: Guide employees on how to shop for an individual health insurance plan on the marketplace or through other providers, emphasizing the importance of comparing coverage options to find the best fit for their needs. 

Reimbursement process: Explain how to submit claims for reimbursement, including required documentation and deadlines. 

Impact on premium tax credits: Inform employees how the ICHRA may affect their eligibility for premium tax credits, and how to navigate this aspect when selecting a plan.

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Employers Wrestling with Fiduciary Benefits Compliance Issues, Leave Laws

by Inoventive Solutions
February 4, 2025

A new report has found that employers are increasingly wrestling with two challenges in their human resources departments: growing employee benefits fiduciary liability issues, and administrative difficulties in managing employee leaves.

Employers are facing lawsuits by employees who allege they mismanaged their health and wellness benefits, and recently enacted legislation has increased their fiduciary responsibilities, the 2025 “NFP U.S. Benefits Trend Report” found.

Additionally, firms are spending more time ensuring that employee leave requests comply with federal laws, their own state’s laws and their company policies.

The report highlights the importance of employers putting in place processes for vetting vendors and taking steps to comply with federal and local laws to avoid penalties and lawsuits.

Growing fiduciary risk

A new class of lawsuit has emerged in the last year: Employees suing their employers over how they handle their health plans or for choosing vendors they allege do not have patients’ best financial interest in mind.

Any party with discretionary decision-making authority over the plan or plan assets must adhere to ERISA fiduciary standards and responsibilities, including acting solely in the best interest of plan participants and beneficiaries.

Recent legislative developments have expanded employers’ fiduciary obligations. The Consolidated Appropriations Act of 2021 introduced comprehensive reforms, requiring group health plans and insurers to enhance fee disclosures and pricing transparency.

These laws mandate that employers ensure their health plans are cost-effective, provide quality care, and comply with mental health parity and pharmacy benefit requirements. 

The rules apply to all employer-sponsored plans regardless of the funding methodology selected, whether fully insured or self-insured.

As well, employers are facing legal challenges over allegations of that they or their health plans failed to properly vet pharmacy benefit managers, leading to inflated prescription drug costs for employees.

In parallel, there has been a surge in litigation where employees allege that employers have breached their fiduciary duties under ERISA.

Notably, class-action lawsuits have been filed challenging the imposition of tobacco surcharges in employer-sponsored health plans, asserting that such surcharges violate ERISA, the Affordable Care Act and the Health Insurance Portability and Accountability Act.

The NFP report recommends that level-funded or self-insured plans regularly review vendor contracts to ensure compliance with contract terms. This improves cost-containment provisions of the plan and is essential to proper plan oversight.

Leave administration headaches

Employers are increasingly struggling to manage the complexities of leave requirements thanks to a tapestry of federal and state laws, as well as company policies.

More than 70% of employers spend more than four hours on administration for each leave request they receive from employees to ensure they comply with the Federal Family Medical Leave Act.

Here’s why the administrative burden is so challenging:

Unpaid leave laws — The FMLA requires that employees can take job-protected leave for up to 12 work weeks for health reasons or to care for a family member with health issues. In addition to this federal law, states have their own laws that may expand the acceptable reasons for taking leave and providing additional time off.

Paid leave laws — These are typically at the state level, but there are a few cities or municipalities that require that certain time off should be compensated to some degree. Paid leave laws provide benefits that are typically for shorter-term absences, while mandated state disability or paid family leave benefits cover leaves for longer-term absences (serious health conditions).

More states are enacting laws that require employers to provide a certain amount of paid sick leave as well.

Employer leave policies— Many employers will also have their own in-house rules for leave. The most common, according to the report, are:

  • Medical — 68% of firms
  • Family care — 65%
  • Personal — 53%
  • Bereavement — 53%
  • Parental (bonding) — 34%
  • FML-like — 23%

The takeaway

With employers facing a significantly higher fiduciary compliance burden and with the threat of lawsuits, ensure that your human resources team conducts comprehensive evaluations, while also emphasizing cost management and optimizing plan performance.

The focus should be on insulating your employees against more costs than necessary. As your broker, we can help with this.

Meanwhile, administration of leave requests must be approached with care to ensure compliance with local and federal law, which takes time. If you have a large workforce, the report recommends implementing tools like technology-supported or outsourced leave management.

Another option is a third party administrator that is skilled at handling leave requests under local and federal law.

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