Employers paying hundreds of dollars per employee for backup care benefits may be getting far less value than they think.
That is the assertion of Greg Crisci, pictured, head of employer programs at Upwards, a Los Angeles-based platform that connects families and childcare providers and has spent the past six years building an employer-facing care benefits business.
It is important to note that Upwards sells its own backup care product and positions it explicitly as an alternative to the incumbent credit model operated by the firms Crisci criticizes, including the two largest providers who chose not to refute claims when approached by Insurance Business Benefits US.
"These backup care programs are incentivized, number one, so that the credits aren't used," Crisci said. "And then if they are used, they're actually incentivized to use an out-of-network provider because they make more money."
Insurance Business Benefits US put Crisci's specific financial criticisms - across six detailed claims covering credit expiration, out-of-network fee structures, margin incentives, utilization disparities, employee copays, and the narrow framing of backup care as a product category - to both Bright Horizons and Care.com. Bright Horizons did not address any of the six questions. Care.com did not respond ahead of publication.
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Backup care is the safety net that kicks in when a nanny cancels, a daycare closes, or a shift changes without warning and has been dominated by the two major providers for more than 30 years; although there are others.
The backup care benefit model is commonly credit-based and the problem, Crisci argues, is how those credits work. A typical credit costs between $350 and $425. When credits go unused at the end of the benefit year, they expire and the value flows back to the vendor, not the employer and not the employee.
"These companies have built multimillion-dollar businesses because their margins only get better when somebody does not use the benefit that they're selling," he said.
The math becomes more complicated when employees go out of network - meaning they use a friend, family member, or neighbor for care rather than a provider in the vendor's network. When that happens, Crisci says the employer is typically billed for half a credit (approximately $200), while the employee receives a reimbursement of only around $100. The remaining $100 per claim goes to the backup care vendor as a processing fee.
Crisci says that in one employer that he analyzed, most of the credits used were out of network.
"The promise that [an unspecified] backup care company made to the employer was, I have a network - when your employees have a challenge, come to me," he said. "But 91 percent were out of network. And when things are out of network, the backup care provider's margins are better."
There is also a copay dimension that is often overlooked. Employees who pay an hourly or daily copay on top of the employer-funded credit means that the true all-in cost per care day can exceed $448 when employer and employee contributions are combined.
Crisci also argues that copay structures act as a barrier for lower-wage and frontline workers - the employees backup care is ostensibly designed to support - and that those workers frequently need care outside standard business hours, further limiting their ability to use in-network options.
"When you dig into the data, you find that most of those employees actually need care after normal traditional hours," he said. "The credits are really designed for absenteeism - they're supposed to drive frontline workers to be able to make it in. But it ends up being your more top 20 percent who actually use them."
When Insurance Business Benefits US presented Crisci's criticisms in detail, Bright Horizons did not engage with any of the specific financial questions.
In a statement, the company said: "Our multi-generational Back-Up Care solution helps employees address unexpected disruptions across child care, adult care, pet care, and other family responsibilities. The program helps save more than 1 million workdays annually, reducing absenteeism and increasing productivity. Back-up care is one part of a broader range of services Bright Horizons offers to support families and learners across life stages, including full-service child care, college counseling, and workforce education. Employer-sponsored benefits like these can bring support within reach for employees across an organization, including frontline workers."
The statement makes no reference to credit expiration policies, out-of-network fee structures, margin incentives, copay arrangements, or utilization data across income levels - the specific subjects of the six questions put to the company. Care.com did not respond to a request for comment.
If the two largest providers in the space are unwilling to explain their fee structures in plain terms when asked directly, brokers may find the same reticence in renewal conversations.
Crisci said benefits brokers can play a decisive role in surfacing these costs but only if they start asking the right questions of incumbent vendors at renewal. He outlined what he believes every broker and plan sponsor should raise:
"I wish more HR leaders asked these when they compare backup care providers," he said. "They rarely get asked, but they make a real difference to what employers and employees actually get."
The issue resonates particularly sharply at a moment when employers are under significant cost pressure. Healthcare costs continue to rise, and plan sponsors are increasingly asking brokers to demonstrate the return on every benefits dollar.
"Advocate for rollover credits, advocate for no copay, advocate for full dollar straight to the provider," Crisci said.
Crisci's broader message to brokers is about sequencing, not simply switching vendors. He advocates for employers to begin with what Upwards calls a navigator program - a concierge layer that helps employees find childcare, eldercare, or pet care, whether for the day or on a permanent basis - before committing to any paid credit program.
"Don't just put in a backup care because everybody's doing it," he said. "First, use a navigator program. Let the navigation program decide and tell you what are people searching for - where is their actual problem."
The navigator data, he says, often reveals that the more acute need is not backup care at all; it is permanent, full-time care that employees cannot afford or find.
"When somebody actually has solid permanent care that they can afford and that's reliable, you don't need backup care," he said. "You're only needing backup care because you don't have quality full-time care."
Crisci said Upwards has reviewed more than 30 benefit RFPs and the pattern holds across employers of varying sizes and industries. "I am the coupon dad - I don't pay full price for anything," he said. "And I now see that there can be situations where 100 to 200 percent of what should go to the employee is just going back to fees. It's a multimillion-dollar industry that's built off of expiring, disincentive credits. Let's change that."
