Risk Insider: Terri Rhodes

The Struggles of ADA Compliance

By: | July 23, 2015 • 3 min read
Terri L. Rhodes is CEO of the Disability Management Employer Coalition (DMEC). Prior to returning to DMEC, Terri was an Absence and Disability Management Consultant for Mercer delivering strategic absence and disability management solutions to clients of all sizes, Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

Twenty-five years after the passage of the American with Disabilities Act (ADA), employers still struggle with making reasonable accommodation for employees with qualified disabilities. Making accommodations for employees under the original ADA legislation was easier. The ADA Amendments Act of 2009, however, has changed the process for employers, making it more difficult and time consuming.

Many individuals who were not qualified under the original ADA are now qualified and the law currently allows employees to remain off work (indefinite leave) under some circumstances instead of returning to work, which seems counter to the intent of the law. And employers have yet to see clear guidance on this from the EEOC.

Regardless of employer struggles, the purpose of the ADA is clear. The law requires an employer to provide reasonable accommodation to an employee with a disability, unless doing so would cause significant difficulty or expense for the employer (“undue hardship”). An interactive process is mandated to determine if reasonable accommodation can be made for an employee with a qualified disability

Yet, here we are, 25 years after the passage of the ADA, and labor force participation by people with disabilities is actually lower than when this landmark law was passed.

Providing people with disabilities better access to transportation, public and private facilities and — above all — jobs, is something everyone should support. Greater job opportunities permit people to earn money to support themselves and thus diminishes their need for public assistance. Equally important, it affirms the dignity and the sense of self-worth that comes from making valued contributions to society.

Yet, here we are, 25 years after the passage of the ADA, and labor force participation by people with disabilities is actually lower than when this landmark law was passed.

Yet only a small proportion of disabled individuals are able to participate in the workforce. According to an online disability statistics data search tool maintained by Cornell University, 30 years ago 25.1 percent of people between the ages of 21 and 64 who had a work limitation were employed. In 1989, the year before the ADA passed, that proportion reached a high of 28.8 percent.

But by 2014, the percentage of people with a disability who were employed had fallen to 12.9 percent according to a Cornell study.

There are many reasons for the declining labor participation rate of the disabled. Overall labor participation has fallen, with especially large declines among older white males. But there is little doubt those with disabilities still face particular challenges in obtaining and maintaining a job.

As disability and absence management professionals, we have a special role to play in helping ensure they do. We need to do even more to educate colleagues and the larger public about disabilities, including those driven by behavioral health factors.

We need to work closer with those in other departments in our organizations to develop effective programs that not only comply with the law, but truly advance the goal of finding and keeping the best person for a particular position. And we need to make sure we’re doing all we can to keep pace with the creative and effective leave initiatives taking place in workplaces across the country.

Accommodating disabled workers is good for employees. It’s good for employers. And, most important, it’s the right thing to do. Twenty-five years after the passage of the ADA, there’s still a lot of work to do.

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Health Care Reform

Brokers Expect More ACA Business

The recent Supreme Court ruling has lifted some doubts for employers.
By: | July 21, 2015 • 3 min read
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Now that the Supreme Court has cleared up a major question regarding federal subsidies permitted under the Affordable Care Act in its King vs. Burwell decision, some brokers and employee benefits consultants are expecting employers to seek more strategic advice.

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“It provides absolute clarity that these are the federal rules we will be living under for the foreseeable future at least,” said Sean Waggoner, executive vice president, Alliant Insurance Services.

“We’ve gone from a [pre-ACA] environment where we brokered and placed insurance contracts,” he said. “Now, we are spending a lot more time consulting with clients on operational changes to their businesses based on this.”

Karin Landry, managing partner, Spring Consulting, said the ACA offers “an opportunity for the broker/consultant that wants to change and evolve and become an ACA expert, but it’s probably less business for those that don’t want to change and evolve.”

Karin Landry, managing partner, Spring Consulting

Karin Landry, managing partner, Spring Consulting

Some brokers, she said, are seeking to minimize their involvement with health care because of the law’s complexity. Others are selling their businesses or merging with another organization that offers the expertise.

As for employers, larger organizations have been prepared to comply with all of the law’s requirements, while some smaller and mid-size companies “have been taking more of a wait-and-see attitude. … I think most people feel like it’s here to stay and they have to deal with it and move forward and develop their strategies accordingly.”

“The mid-size employers who have not had a strong broker/consulting relationship,” she said, “will now need one for sure.”

Jim Winkler, chief innovation officer, Aon Health, said the “uncertainty as we awaited the Supreme Court ruling meant employers did not make significant changes to their plans for the last year or two. We now anticipate that we will see those types of changes.”

“The most immediate and pressing need, for many employers, is to come up with a more compelling strategy for their non-Medicare-eligible retirees.”
— Jim Winkler,  chief innovation officer, Aon Health

Winkler said the “most immediate and pressing need for many employers is to come up with a more compelling strategy for their non-Medicare-eligible retirees.”

For employers that provide health care benefits to retirees under the age of 65, they must account for the future value of such benefits on their balance sheet, he said. With the High Court upholding the constitutionality of subsidies available via marketplace exchanges in the states, employers may opt to change from a defined-benefit medical plan to a defined-contribution plan.

Offering a set monetary amount to be used for health care on the exchange instead of offering an employer-based plan provides more plan choices for former employees — and possibly at a lower cost than their contribution to their current employer plan, Winkler said.

It also allows employers to cap their spending at a designated amount each year, Winkler said.

“I’ve worked on several of those projects already,” Alliant’s Waggoner agreed. “It creates pretty significant bottom line results for the client.”

He said the ACA’s prohibition on pre-existing condition exclusions and flattened rating table makes it easier for older adults to purchase health care plans, especially with the help of federal subsidies.

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Doug Luick, area senior vice president, health and welfare consulting, Arthur J. Gallagher & Co., said that one utility electric cooperative recently made the decision to sunset its early retiree medical provision, which was “almost a handcuff around them,” as it resulted in high claims exposure, limited benefit plans and ever-increasing costs.

As of 2016, he said, the organization will fund health reimbursement accounts (HRAs) for retirees instead, allowing them to purchase their own health care benefits via the exchanges.

Winkler noted that with the assurance that subsidies are available, employers may begin to help part-time or seasonal employees access the public exchanges to access health benefits.

“Those employees have been living outside the insurance system,” he said.

Anne Freedman is managing editor of Risk & Insurance. She can be reached at [email protected]
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Sponsored: Starr Companies

A Global Perspective

Political risk is on the rise in an increasingly unsteady world.
By: | August 3, 2015 • 5 min read
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As any traveler knows, the world is full of uncertainty and dangerous places, where the challenges of simply trying to run a profitable business far from home are complicated by even greater risks, such as political violence, civil unrest, credit risk, corruption, expropriation of private assets by the government, and more.

Anyone doubting this need only take a look at current events. Some 70 percent of the world’s nations currently have serious corruption problems throughout their governmental and civil service framework. Nearly 40 percent of all nations are experiencing some form of significant civil unrest. Signs of economic distress are everywhere, from falling oil prices to Eurozone debt crises to economic slowdown in China.

Despite such geopolitical risks, the world still needs its businesses to continue running amid dangers that range from warfare and terrorism to punishing economic conditions caused by international sanctions, to simple graft and hostility toward foreigners.

For global and multinational companies, keeping an eye on their political risk profile is as important as handling worker safety, environmental impact, products liability, or any other insurable risk. Thankfully, political risk exposures are insurable as well, and Starr Companies is there to provide its clients with robust political risk insurance coverage, a suite of unique support services that truly is second to none, and the ability to educate clients on how to manage their political risk.

Political risk hazards generally fall into one of the following categories:

Breach of Contract and Non-Honoring of Financial Obligations

Starr_BrandedContentThese related hazards involve the failure of a local actor to uphold their contractual or financial obligations to a foreign investor, and the inability or unwillingness of local authorities to intercede on the foreign investor’s behalf. This is perhaps the most common form of political risk hazard, as it is a major problem in any environment where there is substantial economic instability and/or corruption.

Confiscation of Property

Also known as “expropriation,” “ownership risk” and “nationalization,” this is when a government seizes property or assets without compensating the owners for them. An overt example of expropriation would be a revolutionary government seizing an office building or a factory belonging to a foreign-owned corporation. An example of creeping expropriation would be a series of successive events by a government to gradually deprive an investor of their property rights.

Regulatory Changes

This is when the local laws change in such a way as to constrict foreign investors’ economic activity in some way. It could range from creeping expropriation to changing taxation or labor laws that might simply make it far less profitable or far less efficient for a foreign entity to operate in a local jurisdiction.

Inconvertability of Currency

Also known as “transfer risk,” this is when a government takes action to prevent the conversion of local currency to another form of currency, making it difficult or impossible for foreign investors to transfer their profits elsewhere. This tends to happen in countries undergoing some kind of political crisis, like when Zaire—now the Democratic Republic of Congo—declared a new national currency in 1980.

Political Violence

Starr_BrandedContentProperty or income losses stemming from violence committed for political purposes, including, but not limited to declared and undeclared warfare, hostile actions taken by foreign or international forces, civil war, revolution, insurrection and civil strife (politically motivated terrorism or sabotage).

Kidnap and Ransom

Political violence might also manifest itself as a kidnap, ransom and extortion hazard, but that is typically covered by a separate, specialized policy.

To protect against these risks, insurers can provide comprehensive and custom-tailored political risk solutions, which at a client’s request can be broadened to cover investment contract repudiation, currency inconvertibility and political violence. Such policies typically last for periods of 5 to 10 years. Protected assets for this coverage include fixed assets (e.g., a factory, farm, warehouse or office), mobile assets (e.g., harvested natural resources, raw or manufactured inventory or mobile equipment), leased assets (e.g., aircraft, watercraft or construction vehicles) and investment interests in assets abroad (e.g., money dedicated to funding a foreign project, held in a host country bank and subject to expropriation).

Kidnap & ransom coverage protects company personnel and family by providing financial reimbursement for such an event. Depending on the insurer, some K&R programs also provide independent expert consultancy before and after a potential act of kidnapping, ransom or extortion.

Starr_BrandedContentGreat insurance coverage isn’t enough to adequately protect against political risk, however. Businesses need extra support to stay on top of their exposures, and to know what the latest geopolitical developments are.

 

Starr Companies, for example, does this through Global Risk Intelligence, a specialized team of political risk experts with long-standing backgrounds in national intelligence and international affairs. GRI delivers to Starr clients a unique risk advisory service that spans the gamut of commercial property & casualty exposures. GRI also produces two assets that are extremely helpful. The first is the Executive Intelligence Brief, a world-class monthly analysis of ongoing geopolitical developments (especially in emerging markets) available exclusively to a carefully selected readership of top executives. The second is the Global Risk Matrix, a quarterly ranking of the overall political security risk of every country on the planet.

The world’s geopolitical landscape is changing at a remarkable pace, with new risks and uncertainties arising in even the unlikeliest of places. And yet, as business becomes ever more globalized, insurers can provide their clients with tailored coverage to absorb the losses that stem from political turmoil. By finding the right insurer, with the financial strength to cover their risks as well as the analytical acumen to help turn risk into opportunity, businesses can create partners in prosperity anywhere in the world.

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




Starr Companies is a global commercial insurance and financial services organization that provides innovative risk management solutions.
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