The transitional mechanism for the alternative extrapolation
Implications of the European Commission’s proposal for the Solvency II Directive.
Learn about five trends and creative approaches heading into 2022 for supplemental health benefits. Strategy consultant Christin Kuretich fuses Milliman market intel with a broader lens on society and the shifting nature of the workplace, to make some educated predictions on what we will see change and evolve in the voluntary benefits market. From mental health benefits to pet insurance and product design disruption, Christin gives a high-level overview on emerging approaches to supplemental products. Stay tuned for future episodes in this series, which will take a deeper dive into product design.
Announcer: This podcast is intended solely for educational purposes and presents information of a general nature. It is not intended to guide or determine any specific individual situation and persons should consult qualified professionals before taking specific action. The views expressed in this podcast are those of the speakers and not those of Milliman.
Rebecca Driskill: Hello, and welcome to Critical Point, brought to you by Milliman. I’m Rebecca Driskill and I’ll be your host today. In this episode of Critical Point, we’re going to be talking about the top five trends in supplemental benefit products going into 2022. And also, how the changing nature of the workplace and what’s happening around us is actually impacting the idea of what a supplemental benefit is.
Joining me today is Christin Kuretich, a strategy consultant for Milliman in Tampa who focuses exclusively on this market. Christin, hi and thank you for joining the podcast.
Christin Kuretich: Good morning, Rebecca. Thank you so much for having me today.
Rebecca Driskill: Yeah, thanks for joining. Before we dive into the five top trends for 2022, I was hoping you could talk a little bit about your focus in supplemental benefits. Is supplemental bennies—like, do people actually shorten it and say that?
Christin Kuretich: I love it, and I fully support that nickname. I’m a big word-shortener whenever possible, so let’s go with that. Rebecca Driskill: It’s kind of a mouthful I keep tripping on. But in any case, I was hoping that you could talk a little bit about your focus and supplemental benefits, and how you’ve seen the market and maybe more specifically the workplace change over the past decade or so. What is supplemental insurance?
Christin Kuretich: Yes and before we get into that, I’d just like to define supplemental benefits for our listeners. So when we say supplemental benefits, we’re talking about insurance outside of your medical plan, coverage like critical illness, accident, hospital indemnity, even short-term disability and life insurance. And, when we talk about change in this marketplace, things have changed pretty significantly over the last—what are we on? Twenty-two months of the pandemic, I think. So I have been working in the supplemental bennies space for about 15 years. And even though that sounds like a really long time, there has absolutely never been a dull moment over this decade and a half as far as this market goes. So going back a little more than a decade ago, starting with ACA and the shift from traditional worksite-specialist brokers, who were really the primary drivers of this market, we saw a shift happen with now the bigger ABC houses, starting to pay attention to these kinds of benefits. They used to be sort of off their radar, and with the shift and change in the regulations with ACA, these types of benefits really needed to come to the forefront and be a little bit more of a cohesive offering to employers. So what happened when that took place is what we in the industry call the “groupification” of these benefits. Historically, a voluntary or supplemental benefit was an individual product that was owned by the policyholder, completely portable, regardless of where they went to work or where they changed employers. And that really changed when these brokers got involved. So distribution really drove how they wanted the benefits to be sold and administered. And that followed more of the traditional group product mindset, which features things like limited or in most cases no underwriting, no health questions. Very flexible rates and benefits, a focus on technology, specifically benefit administration platforms and HRAS (human resources activity systems). So that began what we’re still very much in now, which is technology companies driving a lot of how these products function. And instead of seeing carriers asking these systems to configure themselves to their product, carriers are taking another approach, designing products around the existing systems today so that they have an easier time getting to market and selling these at the employer level. So it’s really a wild time on the carrier side. I spent 12 years there myself in account management and then five years in product development. So I’ve seen all areas of this business, working with all the stakeholders.
As we emerge from the pandemic, and I’m being really optimistic here that we’re going to emerge and learn from what we’re seeing in the great resignation or what I’ve also heard called the great reshuffle, which I think I like a little bit more. Carriers really need to start taking an introspective look at what employees and employers value and start to shift their product design and features to accommodate the next generation of the workforce. So that’s really been the focus on where these trends we’re going to talk about is today.
Rebecca Driskill: Yeah. I feel like we’re seeing that from a talent retention point of view and also just a caring for the workforce point of view. It seems like there’s a lot of interest from employers to do something different or make a mark. Does that feel accurate?
Christin Kuretich: Absolutely. I think that employers, without question, have to look at their workforce and say, “What am I going to be able to provide to my employees that makes them want to stay, besides just happiness in their job? How can I expand that? How can I make sure they’re paid well? That their benefits package is comprehensive? And now, does that look like what it used to look like?” What types of benefits are going to start mattering or are currently mattering to employees that really weren’t on the radar as strongly two or three years ago?
Rebecca Driskill: Right. So I’m excited, you’re going to share some of what you’re predicting as the top five trends in supplemental benefits products. I do want to just pause and say that we are not really going to get too much into the product design in this episode, right? Well, we’re actually going to try to do a series and we’ll do a follow-up episode with more specifics on product design, but for this one we’re talking through what those top five trends are. Does that sound right?
Christin Kuretich: Yes. And I think those could be some really interesting episodes as we talk about different components of how we can design products around these topics. But yeah, for now, we’ll keep it at a high level.
Rebecca Driskill: Okay, great. So let’s just get started. What tops the list?
Christin Kuretich: Oh, well, this is not going to surprise you or probably any other listeners at all, but it’s been a focus on mental and behavioral health and wellness. So as we, I think, can all agree, especially over the last two years plus, there’s been a real shift in how we talk and think about mental health. And we can thank people like Simone Biles and Naomi Osaka, just a couple names in the sports arena who have been really outspoken about how mental health has impacted their performance, making tough decisions like choosing to not participate in specific Olympic events because of how Simone’s mental health was impacting her at that time. I think that was such a powerful thing not only for the world, the global stage she was on, but in my mind, I think that’s really important for up-and-coming generations in the workforce to hear and see leaders like that be honest and authentic about how mental health impacts them.
And looking at it not just as, “Well, I’m struggling with my mental health, so now I’m in that category and I’m there forever,” but instead looking at it as a continuum. And I think that as we start to shift our perspective around how mental health can impact folks at different times and not just be a diagnosis of a mental illness, but that our own mental health continues to shift and evolve similarly to our physical health. We could have a cold or the flu and be down for the count for a bit. But it doesn't mean that we’re not going to bounce back. So I think, thinking about that category of health in a new way is going to be something that really needs to impact employers and how they look at benefits.
So we’ve seen traditionally from a wellness perspective there’s certainly, I’ll say, probably a decade or more that we’ve seen wellness plans. So you get—in fact, we have something similar here at Milliman where we’ve got your biometric screenings, and you might have a step challenge to make sure you get your 10,000 steps and focus really on physical health, and that’s been great. But what we’re starting to see now is a little bit of a recoil from that perspective.
So, if we think about employers putting in these wellness programs, could they shift some of that to broaden it from a mental and behavioral health standpoint instead? So I think we’re going to start seeing—and we already have seen—employers engage with companies like Ginger, who recently merged with Headspace, which is a meditation app I think—meditation has become a really big thing over the last couple of years. But there’s a lot of similar companies like Ginger that are offering comprehensive mental health support through a PEPM model at the employer level. And these types of resources, I think, are going to start at the top of the list for potential hires when they’re looking at how do I choose where I want to work? What are they offering from a mental health perspective?
Rebecca Driskill: Yeah. I’m actually in the middle of a 28-day meditation challenge. So I feel like everybody I talk to right now is doing some kind of focus or is trying to put some focus on mental health, especially given the past 22 months or so. And I’m the daughter of a psychologist and I feel pretty strongly that mental health treatment can do a lot of good. Have you been seeing any demand from carriers for this kind of product yet, or do you think it’s still bubbling to the surface?
Christin Kuretich: We’ve definitely seen some, and by the way, congratulations on your 28 days of meditation.
Rebecca Driskill: It’s very fun actually. It’s fun.
Christin Kuretich: It is, actually. It doesn't take a lot of extra time, and it can really make an impact on your day and your stress levels. It’s kind of amazing. But yeah, specific to voluntary benefits, I would say from what I’ve seen in the market, and I even experienced this on the—when I was the product developer at a carrier. Over the last, call it three to five years, we’ve seen an increase in carriers who are adding provisions or changing definitions. Sometimes it can be as simple as just changing the definition within a contract that will allow those benefits to be paid out, inclusive of mental health conditions. So that can also typically include substance use disorder, and we’ll see it traditionally within products like hospital indemnity. Which makes sense. If you go to the hospital, you want to make sure that you’re covered for not only physical illnesses but also anything that might be impacting your mental health. But even in products like accident, where somebody has a severe accident, PTSD is a real thing that could be associated with that trauma. And so introducing some coverage in that area is one new, creative way to look at it. But we’ve also seen movement even more recently in the critical illness category to add specific mental illnesses. And for example, a couple of these have been severe depressive disorder or obsessive compulsive disorder. Those products, for those not super familiar with supplemental benefits, do typically cover things like cancer, heart attack, stroke, ALS, Alzheimer’s, multiple sclerosis. So you think about those critical illness categories. Introducing three to five mental illnesses to be added to that list is a real shift, and I think a really important change in how we view those products. So to me, this is a really important time as an industry. I think we’re at the start of a new path where we can begin to imagine new products and benefits in this realm. And for me personally, one of my dreams would be to help a carrier bring a stand-alone mental health supplemental product to market. I really think that’s what’s needed, and that could bring meaningful change to that category of health.
Rebecca Driskill: I think you should get on that. I’m totally supportive. Let’s do it. So I wanted to move on to the number two trend, as we’ve talked about mental health, what would you say is number two in terms of emerging trends in supplemental benefits?
Christin Kuretich: Well, this one is very attached to the mental health umbrella. It combines two of the critical concerns which are facing the working generations now, which is mental health and stress, and what we’ve all probably heard of in recent years, something called the silver tsunami. So in eight years, or by 2030, all Baby Boomers are going to be at least 65 years old. And with the Boomers being such a large generation, life expectancy continuing to increase, and the lack of long-term care insurance resources or even guidance in today’s world, what we’re seeing is the emergence of the informal caregiver. And some of you listening to the podcast might be raising your hand right now, saying, "That is me." And if you are, kudos, because I think what we find is many of the informal caregivers don't even realize that they’re caregivers, or they wouldn’t put themselves in that category if they were asked. This is an area of health that’s very personal to me, as I spent many years caring for my husband, through two cancer diagnoses. He’s a two-time colon cancer survivor. He will be 14 years cancer-free in March, by the way.
Rebecca Driskill: Christin, I’m so happy to hear that, that’s wonderful.
Christin Kuretich: Shortly after that, I spent four years as co-guardian for my father, who suffered from dementia. So when I was going through both of those separate scenarios, it wasn’t until I was really in the thick of it that I realized, “Oh my gosh, I’m a caregiver. I’m an actual caregiver.” I don't know that I would have categorized myself in that way, but when you're in the thick of it, when you start to feel the impact that that stress has on you, both personally and professionally. Even though, as I said, my husband is cancer-free, he’s still hospitalized every so often due to complications from all his past surgeries. And that actually happened just a couple of weeks ago over New Year’s Eve. So the caregiver badge gets dusted off every so often for me still.
Rebecca Driskill: So when we’re talking about caregiving, this is beyond your typical parenting—caregiving, parenting duties, is that right?
Christin Kuretich: Right. So what we’re talking about here, and I certainly don't want to downplay parenting duties, especially over the last couple of years. We know parents have been squeezed and stressed, no question. But this is really moving into that category where, whether it’s a child, a parent, a spouse, a sibling. and even, in some cases, a lot of the companies that we’re seeing emerge in this area are willing to provide this service even if you’re caring for your neighbor or a friend. So it doesn't even have to be an immediate family member.
Because you think about the number of Americans who fit into this caregiving category, it’s estimated that there are about 53 million of us providing unpaid care for relatives or friends. So not only can this be a huge strain financially, but going back to our discussion on mental health, you think about the cumulative effects of stress and burnout, those are just beginning to be understood right now as it relates to caregiving.
So, from an employer’s perspective, they may not even know the people who are on their teams that are caring for loved ones, but they can probably see it in things like absenteeism and presenteeism. And cumulatively, that impact of stress on their work and their demeanor, we’ve really got to do better as a society in recognizing needs and providing support. And I think that’s something that’s top of mind for employers right now. So we are seeing companies whose specific mission it is to provide caregiver support to those folks in that situation through either an employer relationship or something related—administered through their health plan.
So what I would love to see happen in the supplemental benefits space is either some carriers start to plug in their solution with a caregiving company like this, or think about how they might be able to provide caregiver-type benefits within the products that we sell today. So that, I think, is a really important theme to focus on for product development this year.
Rebecca Driskill: Great, so these first two trends have really focused on supporting employees with their current family and mental health situations—but the next supplemental benefit trend is more forward-looking, with a focus on family planning, is that right?
Christin Kuretich: Absolutely, yeah. So that’s a great segue, Rebecca.
Rebecca Driskill: I tried. I tried.
Christin Kuretich: No, excellent. So for this one, and this is really cool, it’s, again, something totally new that shouldn’t have necessarily been off the radar, but I’m excited about the movement that we’re seeing in this category. And that is around fertility and family planning benefits. So you might be familiar if you’re listening with companies like Carrot or Progyny. These are companies who provide fertility benefits or in some cases a type of insurance that’s offered by employers to their employees who may be struggling with infertility, or perhaps they’re planning a family through surrogacy or IVF, many of which have not traditionally been covered under health insurance.
So it really hasn’t gotten a lot of attention historically in the employer space. And I think we’re seeing movement on the healthcare side to provide more benefits there. So looking at the supplemental side, we’ve seen carriers who are actually starting to include fertility benefits in their products, which is super cool. You can have something like an indemnity benefit or maybe a lump sum payout for a trigger that’s based on either infertility itself or services related to family planning. And it’s, to me, not outside the realm of what these products are intended to do at their core, which is provide a financial cushion for health needs that fall outside of your high-deductible plan, your PPOs, your HMOs. We all know that today’s deductibles are certainly not what they were 10 years ago, and we also, I think, all know the stat that most Americans don't have $500 in savings for an unexpected medical bill. So when you put those two things together, a product like this just makes sense. And all we’re doing is introducing a new category to allow you to claim some of those benefits.
Rebecca Driskill: Got it. And have you started to see any interest for this one? Or is it more of an emerging topic of conversation?
Christin Kuretich: Yeah. I would definitely put it in the nascent stage. We have seen in the supplemental benefits space a couple of carriers look at this category of health for inclusion in their benefits. So, to me, one or two or three carriers looking at this is the start, is kind of a rumble. And then we see how that builds from there. But on the employer side, certainly I think we’re seeing demand for coverage in this area. And I don't know that it’s specific to a certain industry, a certain geography. I think this can apply all across the board. So this is something that is also kind of an optimistic thing to talk about, too. It is hard to talk about struggling with building your family. And if women who are listening have struggled with infertility, that is one of the most devastating things you can go through. And so to be able to have not only a financial cushion but maybe access to new resources, it just kind of changes the conversation.
Rebecca Driskill: Yeah, it sounds like in many of these products, one of the goals is to reduce these barriers for things that maybe can be unattainable to employees, whether it’s fertility planning or caregiving or mental health or mental barriers and financial barriers, I suppose.
Christin Kuretich: You’re 100% right. I mean, the birth of these products was really to do exactly that, to say can we remove the financial barrier that would prevent somebody from being able to either pay for the treatment that they need, or pursue a different type of treatment that’s not covered by health insurance? So whether that’s experimental treatment in maybe the cancer world or something like this that’s not traditionally provided in the same way. So yep, totally spot-on.
Rebecca Driskill: All right. Number four on your list of trends is a bit of a departure from what we’ve been talking about in that it’s not in the human realm. Tell me what number four is.
Christin Kuretich: I love the way you said it, because depending on who you are, and I definitely put myself in this category, pets are kind of human-adjacent, so a lot of us our fur-babies are our children. So I don't think it’s a surprise that number four on the list is pet insurance. The pandemic saw pet adoptions just skyrocket. I think we all remember seeing the footage of the shelters that were just emptied of their pets, because people were so, so desperate for that pet affection and some companionship. We were all stuck at home and we wanted some unconditional love. And that’s really where that pet love came from. So, Rebecca, do you have any pets?
Rebecca Driskill: It’s funny, my family is in the midst of this very big debate about whether a cat or a dog is a better fit for our family. So I solicit opinions. I am open to being swayed in either direction.
Christin Kuretich: Can I ask if you have an opinion? Are you leaning one way or the other?
Rebecca Driskill: No, it’s really funny, I am leaning toward—I think a cat would be a lot easier, and this would be our first family pet. But I’m kind of leaning toward a dog for the emotional—to your earlier point, that connection and companionship and emotional components. Do you have any pets? You must.
Christin Kuretich: Oh, I do. Yeah. And actually, I mean, you want to talk about pets being attached to you, so I have a four-year-old Vizsla, which for those of you who know, they’re kind of that copper color, like cinnamon-colored dog. They’re hunting dogs. His name is Harris, and this morning he refused to get out of bed. So he has this new thing where he wants me to make the bed with him in it. So there’s just a Harris-sized lump under my perfectly made bed. So that tells you a little about my level of attachment to my dog. Rebecca Driskill: That’s amazing.
Christin Kuretich: Oh, thank you. And I know that that’s—I am certainly not alone. That is how so many people feel about their fur-babies. So with the increase in pet ownership, and then you think about some of the generational things that are at play in the workplace. So Millennials have already shifted their childbearing years to later in life. We know that to be true. That’s what the statistics tell us. And at this point, it looks like Gen Z, it looks like they might follow the same trajectory. So without human babies to protect right away, and these generations are in the workplace, where does their mind go as far as insurance and coverage? It might go to doggies, kitties, bunnies, birdies, and their health needs.
So pet insurance is certainly not new. But as a property and casualty product, which is the chassis that it’s on, and I struggled with that at first because I thought, “Well, my pet is not my property. They’re my child. Shouldn’t this be an accident and health product?” But it was typically offered on an individual basis, often direct to the consumer, like your vet. You might see a brochure for a company like TruPanion sitting on the shelf saying, “Hey, you’ve got to pay for your pet’s x-ray. Do you want to get pet insurance?” which goes against every insurance rule we have as far as buying it when you know you have the need. But they’ve got that setup at the vet, traditionally.
It has been offered at the employer, but for those of you that have been in the benefits enrollment space, we’ve always had this joke that, well, you don't want your product all the way down at the bottom of the list, after pet insurance. Because when we are all going through our annual enrollment, along the side you’re going to see the list of all the benefits available to you. And typically pet insurance is kind of right at the bottom. It’s the last thing. And the reason that that joke resonates well is because it’s just an afterthought. It’s, “Oh yeah, pet insurance. Do you need that? Who cares?”
So what we’re starting to see is a shift not only in how we think about pet insurance, but going back to what I talked about right in the beginning about this market moving more toward the group space or thinking about these benefits offered at the group level through the employer, offering pet insurance as a group-type product, which means limited underwriting or no underwriting. A lot of flexibility in the rates and benefits, some different portability options, and if you keep it or not, once you stop working there. So that gives brokers and employers a lot more flexibility than they have today.
Rebecca Driskill: So we are—let’s see, we’re at number five, rounding out the list of trends. What do you think is this final trend that we can expect to see in the supplemental benefits market going into 2022?
Christin Kuretich: I wanted to round out the list with this, because this has certainly been, from a client perspective, one of the biggest things we’ve gotten asked about on my team as far as product design goes. And that is this idea of just blowing up the traditional categories of supplemental benefits. So we have accident insurance. We have hospital insurance, critical illness, disability. And instead of kind of keeping them narrowly focused in each of those categories, we shift the focus to diagnosis codes or ICD-10 codes. And then you compile a list of covered triggers that just break apart the guardrails that we’ve typically seen in supplemental benefits.
Some folks will refer to this as the Brella concept. They were the first company to introduce this idea as its own product. And they cover, I think, it’s 13,000 different conditions. But what’s unique here is not that it covers new things, necessarily. In some cases, it might. But the new and different thing is the way that it’s viewing the list of the coverage from the lens of the out-of-pocket pain points that employees face. So you might look at a product like this and see it structured by severity. So if I go to the ER and I’ve cut my finger and I get stitches, obviously that’s not a fun experience. But I’m also not walking out with a $5,000 bill. But if I am admitted to the hospital because of maybe a cancer diagnosis or a heart condition, I’m going to spend some time there. There’s going to be a lot of expensive tests that are run on me, and I’m probably looking at some ongoing treatment. So that bill coming my way is a lot different than the one getting stitches at the ER. So it’s looking at appropriate payouts based on what your financial impact is going to be. Which is exactly, to go back to something we said earlier, that’s the whole reason these products exist. It’s why they were designed in the first place. So we already know that there’s a big lack of understanding. Even though these products have existed for so long, there’s still lack of understanding on the consumers’ part about what these products do and how they interplay.
In my product background, I’ve been part of some research and focus groups where I’ve sat behind that mirror and listened to people describe what they think this is and give comments about how they feel about their health insurance. And it’s so clear that unless somebody has faced a health crisis and had to fork over that deductible all at once, that $5,000 family deductible in one fell swoop, they haven’t really felt the pain when you have an actual health crisis.
Just recently, when my husband and I were in the ER on New Year’s Eve, something happened to us that has never happened before in the 50-plus times we’ve been there. A woman wheeled in a computer while my husband had not been treated yet, not been given any pain meds, we were still just getting settled in the ER and waiting to be seen. Here comes somebody who asks us how do we plan to pay for today’s services? The services that had not yet been given. And my husband was in agony. And I thought, “Well, I’m here with him and that’s great. I can deal with this. I’ve got all the information, I’ve got our insurance card, I can handle this.” But what if he came in by himself, which many, many people do. Not everybody comes in with a family member or advocate. How can you ask the person who’s suffering, “How do you plan to pay for this?” before they’ve even gotten any relief? I think that’s a very tough situation, and it just was a big wakeup call reminder for me about the importance of the work that we do in the supplemental benefits space. Because yes, if you need to pay for your deductible all at once, if somebody’s sitting there saying, “Hey, here’s what your hospital bill is going to look like,” which apparently this is what’s happening now in some hospitals, you’ve got to be prepared. And I’m thankful that I can pay for my deductible, but that’s not the case for a lot, a lot of people, and especially the markets that these products are intended to help focus on is those folks who do not have $5,000, $10,000 sitting there waiting to pay a medical bill. So this was really, I think, poignant to go through and kind of remind ourselves about the work that we do.
Rebecca Driskill: Yeah. Thank you for sharing your personal story. I think I said earlier that you have a holistic view of the products and the market, but you’ve really experienced all sides from both a practitioner and also from the personal side. So I just thank you for being open to talking about it. And I’m curious, as you’re approaching your work going into the future, how do you have this personal and professional experience inform the future work that you do?
Christin Kuretich: Yeah, no, I think that’s a very important question. And for me, as I look back through the predictions we just went through, all the trends, the theme for me is what I hope carriers have at the top of their minds as they think about their new portfolios or products that they want to expand into. Look at our markets and our customers with fresh eyes. We have all just lived through a pandemic together. And we’re not quite out of it yet. How can we build meaningful benefits and find new ways to cover the people we serve? What needs have been illuminated for us over these last couple of years? And what’s important to employers and employees? That’s why I’m in this business, and it’s what makes me so passionate about helping my clients.
Rebecca Driskill: Christin, thank you so much for joining me. This was a great conversation and a really interesting list of trends. For our listeners, if you want to learn more about supplemental benefits and trends in the market, you can visit Milliman.com/research, or find more information about the work Christin is doing on LinkedIn at Milliman Supplemental and Specialty Research. You’ve been listening to Critical Point, presented by Milliman. If you enjoyed this episode, please rate us five stars on Apple Podcasts, or share the episode with your colleagues and friends. We’ll see you next time.