Absence Management

Technology’s Role in Managing Employee Absences

Tools are available to help employers improve claim intake, workforce planning, clinical care and return-to-work strategies.
By: | October 5, 2015 • 5 min read

The 24th annual National Workers’ Compensation and Disability Conference® and Expo takes place Nov. 11-13 at the Mandalay Bay Resort and Casino in Las Vegas. The conference is produced by LRP Publications, which publishes Risk & Insurance®. For more information, visit www.wcconference.com.

You might not think that an employee’s absence for just a few days could raise concern for an employer. But all absences are not created equally.


There is workers’ comp, short- and long-term disability, Family and Medical Leave Act, and other types of absences. Some are planned, others are not. Some are paid, some unpaid. Some are associated with job protection benefits, others are not. There are state and federal regulations that may apply.

Employers need to understand when each should be employed and make sure they have fair and consistent practices in administering their leave programs.

“There is a misconception that absence management is easy. It is not,” said Keith Nelson, vice president and head of group insurance program delivery for Aetna Life Insurance Co. “Absence management is very complex.”

As Nelson explains, even a single day of absence may involve multiple types of leave and can impact different components of an organization in many different ways.

“We’ve got state mandated leaves such as those under workers’ comp, and state family and medical leave laws, that run concurrently with FMLA leaves,” he says. “There are now even a growing number of municipal leaves being added into the equation for employers to administer.”

WCconf_24thAnnualNelson will discuss the complexities of leaves and how employers can use technology to improve claim intake, workforce planning, clinical care, and return-to-work strategies.

His session, Technology Tools for Managing Disabilities and Absences, takes place Thursday, Nov. 12 from 10:45 a.m. to noon.

Effects on Personnel

“An employee might be out for one day, but that day of absence could apply to 15 or 16 different benefits,” Nelson said.

“Some have different start dates or end dates. The employee may have been approved for one benefit but denied for another on the same day. In my experience, many key stakeholders don’t fully understand those nuisances. There’s a concurrency component of absence management.”

An employee’s absence may affect people within an organization differently, depending on the role of the person. Each may have a different awareness of which type of leave benefit applies to the employee’s absence request.

“An employee might be out for one day, but that day of absence could apply to 15 or 16 different benefits.” — Keith Nelson, vice president and head of group insurance program delivery, Aetna Life Insurance Co.

“From the employee’s perspective, they don’t know all the benefits available to them or the differences,” Nelson said. “The only thing some of them can say is ‘I’m injured or ill,’ whether it happened at work or not, and ‘I need to be off of work.’”

Absence, he explains, is very personal to each individual. The concerns change from one person to another throughout the company.

“As you go up the organization, the interests are very different,” he said. “For the supervisor, it is ‘do I have a full staff at work?’”

Plant managers, human resources personnel, and the company’s CEO all have other concerns about an employee’s absence. Where one department is concerned about the effects on productivity, another may be more interested in finding out how and why the injury/illness occurred.

“Employers want to protect their employees from injuries or safety incidents. They are really all about mitigating safety risks and putting prevention in place,” Nelson said. “From the economic side of a workers’ comp accident, not only is the employer funding the lost wages for an employee who is away from work, but also likely funding the legal expenses, the medical expenses, and all kinds of claim-related expenses such as temporary labor expenses.”

“Different rules of compensability apply in different states. Moreover, employers may offer different types of disability plans for different groups of employees,” Nelson said. “The same can be said for leave of absence policies that are offered to different groups of employees. The overarching impact is the same: ‘Do I have a full workforce or not?’”

The one common link among each department is the need for information about the absence.


With technology, each department within an organization has access to information about an employee’s leave in the form best applicable to the needs. Personnel can better understand the overall picture of absences with a good technology platform.

“It enables effective information exchange,” Nelson said. “There is a whole new level of sophistication in the workforce, and employers/providers have a new appetite for information. That’s the big picture of what the session is all about — learning how technology can assist employers to administer effective absence management programs.”

Employers are required to use fair and consistent practices when applying the various types of leaves. Through technology, various facets within an organization can have a clear understanding of the rules and regulations.

“The industry is changing,” Nelson said. “There are new regulations all the time, new types of benefits, emerging paid sick and paid family leave. From a workers’ comp perspective, there is medical only and true lost time claims, but it’s still the same individual. How does it work? How do all constituents stay informed?”


The privacy aspect of an employee’s absence is another concern that can be addressed through technology. For example, workers’ comp has different protocols for sharing claim information than is routinely used for disability and state or federal leaves. The circumstances dictate what can be shared with an employer.

Failing to ensure fair and consistent practices can lead to regulatory scrutiny, legal action, and other financial liability. Technology can help reduce the complexities of absence management, minimize inconsistencies, and ultimately, mitigate risks.

Nancy Grover is the president of NMG Consulting and the Editor of Workers' Compensation Report, a publication of our parent company, LRP Publications. She can be reached at [email protected]
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Employee Benefits

Rising Health Care Costs Concern Businesses

Few organizations are strategically planning for ways to curtail rising health care costs.
By: | September 14, 2015 • 4 min read
Stack of American dollar bills and a caduceus

Rising health care costs are a top risk organizations fear, according to the “2015 Business Risk Survey” by the Graham Co.

A majority of the 300 respondents reported taking adequate measures to mitigate the risk, but insurance professionals are not so sure.

Ken Ewell, president and COO, Graham Co.

Ken Ewell, president and COO, Graham Co.

Health care costs have “exceeded inflation by two or three times. This is what keeps business owners up at night,” said Ken Ewell, Graham Co. president and COO. “This thing has been going on for a long, long time, and now with the Affordable Care Act and all the regulatory guidelines, red tape, penalties, it’s a little bit scary.”

Bill Ziebell, north central region executive vice president for Arthur J. Gallagher & Co., agreed.

In Gallagher’s recently released “2015 Benefits Strategy & Benchmarking Survey,” 90 percent of 3,000 respondents reported an increase in health care costs last year, and 25 percent saw double-digit increases.

Of course, rising health care cost concerns are nothing new. “Health care costs started to creep in around the late ’80s, early ’90s and it just stayed there,” said Ewell, who attributed the problem to policy failures from both parties in Washington.

But the concerns now seem intractable, he said. “People are realizing it’s not going away. The Affordable Care Act was not a silver bullet. And just the contrary, they’re inundated now with regulatory and reporting requirements.”

Many employers, said John Kirke, president of employee benefits and health risk management at IMA, hoped the ACA would reduce costs. “But,” he said, “it has not. There is more regulation, but there is nothing to do with cost controls inside ACA.”

Few businesses appear to be responding effectively to rising health care costs.

Ziebell said that nearly all survey respondents (91 percent) did not have “a written, forward-thinking plan for their comp and benefits.”

“Instead, they’re relying on the same strategies they’ve been using forever … cost shifting to their employees [and] shopping the carriers. … With the mergers and consolidation on the carrier side, that’s a runway that’s coming to an end real quickly.

Few businesses appear to be responding effectively to rising health care costs.

In addition, he noted that more than one-third of the survey respondents (35 percent) were unsure if their plans will be affected by the Cadillac tax in 2018.

“People are very tactical, very short-sighted on these things right now,” he said.

Still, some employers are reviewing options and thinking strategically.

IMA’s Kirke said his “best performer” clients are thinking creatively about cost strategies and population risk strategies. Some are breaking their health care into individual components — claims, pharmacy, care management, customer service — and shopping them separately.

“They are lifting the veil on the components of what I call ‘big box buying’ … and having a much more ‘precision purchasing’ view. It’s a lot of work, but we are finding value in the deconstruction of that big box,” Kirke said.

Others are setting their own prices by “being a price maker instead of a price taker,” he said. “They are reaping incredible value and lower prices by setting the price inside their plan and plan documents, and reimbursing at a level far lower than what we’ve seen in the market.”

And some are using advanced data analysis to deliver the care their employees need, reducing unnecessary costs while at the same time adding services employees want.

Ewell said some of his clients are embracing a more holistic approach, moving beyond traditional wellness targets to offer assistance in addressing emotional and financial issues, which can be the root causes of stress-related illnesses.

Others are using data to make more informed choices among sometimes huge price disparities among medical technology providers. And many have seen the benefit of offering a variety of plans, as well as health savings accounts and health reimbursement accounts.

It’s important for companies to be proactive and think strategically.

“People not only chose what was best for them, but they felt good about being educated, making their own decision, and knowing that next year they can look at it again,” Ewell said.

It’s important for companies to be proactive and think strategically.

“The ones that are doing well are the ones that are putting the necessary focus on the strategies overall for their company and that look at their human capital as something that is as important as their growth strategy,” said Ziebell.

He also recommended that companies evaluate workforce demographics as a first step toward creating a strategic and holistic plan.

Kirke has similar advice. “We want them to act with a strategic plan, not to be so reactive. We want them to think big. Three years out, five years out,” he said.

Ewell said organizations must “become as educated as possible about what the alternatives are to just taking it on the chin and having higher costs. … Align yourself with professionals who do this everyday and find a broker or some other professional who can give advice on a broad range of issues related to health care costs and help guide you through the process.”

The silver lining to all this is that approaching the problem strategically, creatively and proactively can not only minimize that risk, but turn it into a business advantage.

“Without question,” Kirke said, “these moves will absolutely lower operating costs and improve margin inside P&Ls.”

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]
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Sponsored: Liberty International Underwriters

A Wake up Call for Any Company That Touches Food

With costly outbreaks on the rise, don't let product recalls and contamination spoil your business.
By: | October 1, 2015 • 5 min read

It’s not easy to be in the food industry these days.

First, there is tougher regulation. On August 30, 2015, the Food Safety Modernization Act (FSMA) required companies to file planning paperwork for Preventive Controls for Human Food. The final FSMA rules take effect on August 30, 2016.

Next, increases in food recalls, some deadly, are on the rise. In early September, 9,000 cases of frozen corn were pulled from shelves after a listeria scare. A few days later, a salmonella outbreak in cucumbers imported from Mexico resulted in one death, while sickening hundreds of consumers nationwide.

Courts are getting tougher, too, as owners/executives in particularly egregious cases involving consumer deaths have been prosecuted criminally, with one receiving a recommendation for a life sentence.

Finally, advances in science – including whole-genome sequencing technology, which maps DNA of microbes to more easily pinpoint precisely where contamination occurs – can expose every player in the supply chain to potential losses and lawsuits.

“Few companies have the balance sheet or brand loyalty to survive a serious recall. Outbreaks, new regulations, prosecutions and science have made purchasing product recall and contamination insurance literally an act of survival for companies of all ages and sizes,” said Jane McCarthy, Senior Vice President of Global Crisis Management at Liberty International Underwriters (LIU), who has over 30 years of industry experience.

Working with growers, processors, manufacturers, importers, shippers, packagers, distributors, wholesalers or retailers, LIU’s policy provides indemnity to pay for losses a company might incur from a recall, including logistic expenses, lost income and access to crisis management and public relations consultants.

Legislation tightens on food-related companies

LIU_SponsoredContentPassed in 2011, the FSMA gives the Food and Drug Administration a far more proactive weapon in the war on tainted food, as the focus shifts to prevention combined with the FDA’s newfound authority to close businesses that aren’t complying with FSMA rules and regulations.

In addition to the August 30, 2015 deadline for filing paperwork for preventive controls, as part of the law, all companies need to be registered if they do anything with food in the United States, or a company is a foreign entity bringing food into the U.S.

“It’s the law and every regulation and benchmark has to be met,” McCarthy said. “The FDA will shut someone down if they don’t think a company is handling a food product properly. With these new rules and regulations, the whole industry has to change.”

With LIU’s product contamination policy, companies have 24/7 access to pre-loss consultancy through red24, one of the world’s leading security consultants and global crisis management consultancies. For example, they’ll work with clients to best prepare them to meet the FDA’s 48-hour response deadline should a food contamination or product recall incident occur.

Costly outbreaks on the rise

LIU_SponsoredContentAccording to a Wall Street Journal article, food recalls from 2012 to 2014 increased more than five times compared to the total number of recalls from the prior eight years combined. The Journal also reported that foodborne illness is often never formally reported, so about 48 million Americans, or one in six, get sick each year from food. The CDC estimates 128,000 hospitalizations and 3,000 deaths from tainted food.

Food contaminations happen in two main categories: allergens (peanuts, etc.) and pathogens (bacteria). There were four listeria outbreaks in 2014 alone, compared with one in each year from 2011 to 2013. Listeria is a particularly tricky and virulent pathogen that continues to survive and blossom, even in refrigerated environments. Listeria does not impact the appearance, taste or smell of food it invades, so a company in the food industry can only confirm contamination through testing or, unfortunately, once a customer becomes ill.

“Listeria is one of the worst nightmares. Not only is it deadly, but once it gets into a plant, it’s very difficult to eradicate,” said industry veteran Meg Sutton, LIU’s Senior Claim Officer. “It sneaks into drains and crevices that you thought were clean. Attempts to clean those drains and crevices, if done improperly, can result in aerosolizing the listeria and spreading it throughout the facility. In some cases, companies are forced to shut down the plant for extended periods of time, resulting in significant business interruption and loss of revenue.”

Courts get tough on deadly cases

LIU_SponsoredContentWith the increase and severity of food contamination recalls rising, the courts are getting tougher too. The food industry was rocked last month by a recommended life sentence for the ex-CEO of a peanut manufacturing company following a multiple-felony conviction for knowingly selling tainted peanut butter that ended up killing nine people.

“The judge ended up sentencing him to 28 years in federal prison, still the harshest penalty ever in a case of food contamination. While our policy won’t cover your defense if you’ve committed a crime, the penalty is another wake up call for the food industry that executives at the highest levels will be held accountable,” McCarthy said.

Science boosts detection, transparency

LIU_SponsoredContentAdvances in DNA mapping are on the rise. “Before this technology, people would say, ‘It wasn’t us! Prove it!’ and that was pretty much impossible,” McCarthy said. “Those days are gone now.”

By using today’s scientific methods to trace back to the source (grocery store, restaurant, wholesaler, etc.), experts can determine the production facility or farm that originated the food or food additive. They can swab the facility for DNA matches and pinpoint the contamination.

Considering those four prime drivers, it’s not surprising that interest in food product recall and contamination coverage from companies of all sizes is gaining momentum.

“We don’t want them to just buy our insurance,” McCarthy said. “We want them to be better for it with us as their partner by making sure they have the right coverage in place and improving their business from a health, safety and compliance standpoint.”

Liberty International Underwriters is the marketing name for the broker-distributed specialty lines business operations of Liberty Mutual Insurance. Certain coverage may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds and insureds are therefore not protected by such funds. This literature is a summary only and does not include all terms, conditions, or exclusions of the coverage described. Please refer to the actual policy issued for complete details of coverage and exclusions.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Liberty International Underwriters. The editorial staff of Risk & Insurance had no role in its preparation.

LIU is part of the Global Specialty Division of Liberty Mutual Insurance.
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