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Benefits Integration

Is Integration the Answer to Compliance?

An integrated approach to employee health can help companies stay on top of regulations.
By: | December 15, 2014 • 5 min read
integration

Addressing worker health has many parts – health care, wellness, disability management and workers’ comp. Managing them as a whole instead of discrete components can help reduce costs while improving outcomes, which is why more and more employers are moving toward an integrated approach to employee health and safety. But streamlining administration of these programs and making decisions that go across the board can also have the added benefit of tightening up regulatory compliance.

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The Americans with Disabilities Act (ADA) – and amendments made in 2008 – present employers with a thorny trail to blaze. Especially after the implementation of the Affordable Care Act, employers are shouldering a greater responsibility for employees’ health and wellness, and rules imposed by the ADA can complicate matters as companies and organizations strive to improve worker health without overstepping boundaries.

The intersection of the ADA with other regulations like the Family and Medical Leave Act (FMLA) and the Pregnancy Discrimination Act (PDA) also creates gray areas for employers when it comes to deciding what benefits an injured or disabled employee is entitled to, if any. In a National Law Review article, labor and employment attorney Melvin Muskovitz called the intersection of ADA, FMLA and workers’ comp issues the “‘Bermuda Triangle’ of employee health-related statutes.”

Leave and benefits provided by workers’ compensation can overlap with what employees may be entitled to under the ADA and FMLA; carriers can benefit from more open communication with administrators of health plans and wellness and safety programs to ensure the right program responds to a request for accommodation or benefits.

One issue they all have in common is “the potential for claims of discrimination or retaliation,” Muskovitz wrote. “An employer must be sure the employee does not suffer any adverse employment action as a result of the leave of absence or condition necessitating the leave.”

“Integration is the only way to go with all these regulations coming at employers,” said Tamara Blow, principal consultant at TYB Global Business Consultants, LLC. “You need all the key players involved.” That includes human resources, safety managers, risk managers, and legal counsel, as well as the payroll department or others in charge of tracking attendance. With multiple perspectives weighing in on decisions, it should be easier to identify where clashes with different statutes could occur.

Take for example the case of Peggy Young, a female UPS delivery worker who sued the company in 2007. When Young became pregnant in 2006, her doctor ordered her not to lift more than 20 pounds; UPS delivery workers sometimes have to lift packages of up to 70 pounds. Young brought the doctor’s note to her supervisor and requested a temporary reassignment, which was denied because pregnancy is not covered under the ADA. She was placed on unpaid leave for the duration of her pregnancy.

Young, whose case is currently being heard by the Supreme Court, argued that UPS violated the PDA, which states that pregnant women must be treated the same, in terms of receipt of benefits, as “others not so affected but similar in their ability or inability to work.” In other words, if UPS provides accommodations for an injured worker with the same physical limitations as Young, she should also receive benefits even though she is not technically disabled.

Could an integrated approach have helped UPS avoid this regulatory tangle?

“Absolutely,” Blow said. “Any HR professional who’s worth their salt knows that the Pregnancy Discrimination Act would be the first to come into play with a pregnant employee.” A cross-functional team that included the legal department might have been able to anticipate potential violations.

“If their system was integrated, they would see that impairments that arise out of being pregnant would qualify as temporary disability covered under the ADA and FMLA,” she said.

Implementation Challenges

For larger employers, though, there are structural hurdles blocking integration. Health care, disability management and workers’ comp tend be viewed as separate programs, so decision-making around them also remains separate.

“Workers’ comp is handled by risk management, which report up to either treasury or general counsel,” said Russell Johnston, casualty president for the Americas at AIG. “Disability benefits and medical tend to be human resources or the administration side. So within larger employers, in terms of their governance model, there are structural disconnects.”

Bringing everyone together from different departments is a time-consuming effort that can also be constrained by office politics, Blow said. “Some departments want to be in charge. They may bash heads over who wants to take this initiative, especially with senior management’s eyes on it.”

Another structural hurdle Johnston pointed to was the way in which companies access these products on the market.

“Larger employers access the workers’ comp market through agents and brokers,” he said. “On the benefits and medical side, agents and brokers tend to be very different from the P/C side. They tend to operate completely separately. And in some cases it’s provided directly by the medical providers to employers.”

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For these reasons, smaller employers have an easier time implementing an integrated approach to employee health. “They don’t have the luxury of having large infrastructure, so decisions are made across the totality of their business,” Johnston said.

Despite the obstacles, larger companies can still benefit in the long run from a unified employee health front because of cost savings. However, Johnston believes it won’t necessarily ease compliance issues.

“I struggle to see where it will make a material impact on the compliance side,” he said. “But is there a compelling reason for employers to look at this and try to implement it? Absolutely.”

Katie Siegel is a staff writer at Risk & Insurance®. She can be reached at ksiegel@lrp.com.
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Seasonal Safety

No Humbug on Safety for This Workplace

The North Pole is one of the safest workplaces in the world, thanks to the top-down leadership style of its internationally recognized CEO.
By: | December 11, 2014 • 5 min read
Santa forklift

If you were to study some of the safest and most successful organizations, you’d see that many of them share a common philosophy: When the CEO takes ownership of the safety program, it sends a message to the entire company that safety is top priority. That universal truth is evident at organizations around the world — including the North Pole.

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North Pole CEO Santa Claus is a stickler for safety, and he knows how to drive results. For the 2014 holiday season, there were only 15 OSHA recordable elf injuries, down 15 percent from last year. There were only two serious lost-time injuries in 2014, both Fleet Management employees, related to a trampling incident involving Donner and Blitzen. (Both reindeer have since received anger management counseling through the organization’s employee assistance program.)

Those injury statistics are quite remarkable, when you consider that the North Pole workforce is more than 10,000 strong, with 80 percent of elves involved in high-hazard work in toy manufacturing, product testing and quality assurance, packaging and warehouse operations.

Always New Challenges

Claus personally chairs the organization’s safety committee, which includes representatives from departments such as Toy Operations, Reindeer Fleet Management, Wish List Fulfillment, Sled Logistics and Sweets Services. Committee members take ownership of safety for their departments, leading weekly training sessions for their teams on job-specific issues such as avoiding slips and falls from spilled hot cocoa, and wearing safety goggles while product testing Nerf guns and using cut-resistant gloves to reduce the paper-cut risk for staff members tasked with opening and filing letters to Santa.

Santa faces unique risk management challenges every year. In the 1960s, a change to the Silly Putty formula caused widespread cases of chemical sensitivity among handlers. In 1996, a dozen product testers working on Tickle Me Elmo had to be treated for Reynaud’s Syndrome.  “We should’ve seen that one coming,” said Claus ruefully, as he explained how stricter vibration protocols were put in place after that season.

The broad range of toys manufactured at the North Pole present a myriad of safety risks to elf workers.

The broad range of toys manufactured at the North Pole present a myriad of safety risks to elf workers.

The increasing trend toward electronic toys has brought its own set of challenges to Claus’ team. Many of the North Pole’s aging elves have been assigned to circuit board assembly because it is less physically demanding work than Big Wheel assembly or operating the Lego molding machines. However, the fine-detail nature of the work has led to complaints of eyestrain, leading Claus to invest heavily in magnifiers to accommodate his elder elves.

Claus is extremely proud of his return to work/stay at work program.  Even elves with mobility issues can pitch in, delivering tools and parts anywhere they’re needed on the factory floor, via R/C Air Hog transport helicopters. Others conduct regular safety inspections enterprise-wide, using small camera equipped hobby drones. When the two workers involved in the reindeer trampling incident were suffering from PTSD, they were assigned to light-duty, low-stress tasks to aid in their recovery, including candy cane testing and topping coworkers’ cocoa with whipped cream. “They were kept at full salary,” explained Claus, “and we were able to put them in jobs that made them smile and made everyone around them smile. Surrounding them in happiness helped them heal from the trauma of that frightening incident.”

Wellness Champion

The most recent additions to the North Pole safety and workers’ comp program were championed by Claus’ wife, Jessica, who has taken on the role of Executive Vice President for Wellness and Ergonomics for the entire organization. Mrs. Claus has organized a required daily stretching program for the beginning of each work day. Everyone participates, even the Jolly old Elf himself. She also leads wildly popular Twister Yoga classes to keep workers limber and alert, and to help manage seasonal stress. Claus is an avid health advocate, sending out newsletters full of healthy holiday tips, including recipes for stevia-sweetened sugar cookies, reminders to replace a few servings of fruitcake with fresh fruit, and warnings about the dangers of excessive eggnog abuse.

Mrs. Claus, who is even more tireless than her globe-trotting husband, also oversees the in-house claims management team, and the on-site nursing staff. Simple injuries such as candy cane splinters are treated right away and elves are back on the job in mere minutes. Nurse case managers fulfil other roles as well, such as suggesting temporary reassignment for elves suffering from tinnitus from high-decibel jingle bells.

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In 2015, Claus is planning on adding new elements to the program. A voluntary biometric testing program is in the works. A spare storage room is being refashioned into a fitness “PlayZone” equipped with two dozen large screen TVs connected to Xbox One and PlayStation Move, and fully stocked with high-action movement games and fitness programs. Mrs. Claus is also working with the in-house design and fabrication teams to develop a new line of elf shoes with fitness-tracker bells to help motivate workers to move more. “Elves thrive on friendly competition,” said the EVP. “I hope to tap into that by developing an app with a leaderboard showing everyone’s steps. Toy-making is all about teamwork and cooperation. This will give each elf a chance to show off and be a star.”

Santa Claus told Risk & Insurance® that while he couldn’t share the actual numbers, the ROI on the North Pole’s safety and workers’ comp investments is off the charts. But Claus said that he and Mrs. Claus are more focused on the real sprit of safety. “Safe and happy elves make safer games and toys,” said Claus. “That means safer kids all over the world. There’s a lot more riding on our safety program than cost control,” he added with a wink of his eye and a twist of his head.

Wishing you a safe and Happy Holiday season from WorkersComp Forum!

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at mkerr@lrp.com
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Sponsored: Healthcare Solutions

The Promise of Technology

A roundtable in Philadelphia explores the power of technology in WC and its potential to take us where we have never been before.
By: | December 10, 2014 • 7 min read

SponsoredContent_HCS
The field of workers’ compensation claims management seems ideally suited as a proving place for the power of technology.

Predictive analytics in the hands of pharmacy and medical management experts can give claims managers the data they need to intervene in troublesome claims. Wearables and other mobile technologies have the potential to give healthcare providers “real-time” reports on the medical condition of injured workers.

Never before have the goals of quick turnaround and transparency in managing claims appeared so tantalizingly achievable.

In the effort to learn more about technology’s potential, in September, Risk & Insurance® partnered with Duluth, Ga.-based Healthcare Solutions to convene an information technology executive roundtable in Philadelphia.

The goal of the roundtable was to explore technology’s promise and to gauge how advancements are serving the industry’s ultimate purpose, getting injured workers safely back to work.

 

Big Data, Transparency and the Economies of Scale

Integration is a word often heard in connection with workers’ compensation claims management. On one hand, it refers to industry consolidation, as investors and larger service providers seek to combine a host of services through mergers and acquisitions.

In another way, integration applies to workers’ compensation data management. As companies merge, technology is allowing previously siloed stores of data to be combined. Access to these new supersets of data, which technology professionals like to call “Big Data,” present a host of opportunities for payers and service providers.

Through accessible exchange systems that give both providers and payers better access to the internal processes of vendors, a service provider can show the payer the status of the claim across a much broader spectrum of services.

SponsoredContent_HCS“One of the things I see with all of this data starting to exchange is the ability to use analytics to predict outcomes, and to implement workflows to intervene.”
–Matthew Landon, Vice President of Analytics, Bunch CareSolutions.

“Any time that we can integrate with a payer across multiple products such as pharmacy, specialty and PPO services, what it does is gives us a better picture of the claim and that helps us to drive better outcomes,” said roundtable participant Chuck Cavaness, chief information officer for Healthcare Solutions.

Integration across multiple product lines also produces economies of scale for the payer, he said.

Big Data, according to the roundtable participants, also provides claims managers an unparalleled perspective on the cases they manage.

“One of the things that excites us as more data is exchanged is the ability to use analytics to predict outcomes, and to implement workflows to intervene,” said roundtable participant Matthew Landon, vice president of analytics with Lakeland, Fla.-based Bunch CareSolutions, A Xerox Company.

Philadelphia roundtable participant Mike Cwynar, vice president of Irvine, Calif.-based Mitchell International, agrees with Landon.

Jerry Poole, President and Chief Executive Officer, Acrometis

Jerry Poole, President and Chief Executive Officer, Acrometis

“We are utilizing technology to consolidate all of the data, to automate as many tasks as we can, and to provide exception-based processing to flag unusual activity where claims professionals can add value,” Cwynar said.

Technology is also enabling the claims management industry to have more productive interactions with medical providers, long considered one of the Holy Grails of better case management.

Philadelphia roundtable participant Jerry Poole, president and CEO of Malvern, Pa-based claims management company Acrometis, said more uniform and accessible information exchange systems are giving medical providers access to see how bills are moving through the claims manager’s process.

“The technology is enabling providers to call in or to visit a portal to figure out what’s happening in the process,” Poole said.

More efficient data storage and communication is also resulting in quicker turnaround times, which is shortening the duration of claims and driving down the overall cost of risk, according to Cwynar.

 

Going Mobile

Another area where technology is moving the industry forward, according to the Philadelphia technology roundtable participants, is mobile technology, which is being used to support adjustors and case managers and is also contributing to quicker return to work and lower costs for payers.

The ability to take a digital tablet to a meeting with an injured worker or a health care provider is allowing case managers to enter data and give feedback on a patient’s condition in real time.

“Our field-based case managers have mobile connectivity to our claims systems that they use while they’re out of the office attending doctor’s appointments, and can enter the data right there into the system, so they’re not having to wait until they are back at the office to enter critical clinical documentation,” said Landon.

Injured workers that use social media, e-mail and the texting function on their mobile phones are staying in better touch with those that are charged with insuring that they are in compliance with their treatment plans.

Wearable devices that provide in-the-moment information about an injured workers’ condition have the potential to recreate what is known in aviation as the “black box,” a device that will record and store the precise physical state of an employee when they were injured. Such a device could also monitor their recovery process.

But as with many technologies, worker and patient privacy also needs to be observed.

“At the end of the day, we need to make sure that we approach technology enhancement that demonstrates value to the client, while ensuring patient advocacy,” Landon said.

Consolidation

As payers and claims managers set out to harness the power of computing in assessing an injured worker’s condition and response to treatment, the cycle of investment in companies that serve the workers’ compensation space is currently playing a significant role.

The trend of private equity investing in companies that can establish one-stop shopping for such services as medical case management, bill review, pharmacy benefit management and fraud forensics has huge potential.

SponsoredContent_HCS“Any time that we can integrate with a payer across multiple products such as pharmacy, specialty and PPO services, what it does is gives us a better picture of the claim and that helps us to drive better outcomes.”
— Chuck Cavaness, Chief Information Officer, Healthcare Solutions.

The challenge now facing the industry, one the information technology roundtable participants are confident it can meet, is integrating those systems. But doing so won’t happen overnight.

“There’s a lot of specialization in the industry today,” said Jerry Poole of Acrometis.

Years ago there was a PT network. Now there’s a surgical implant guy, there’s specialized negotiations, there’s special investigations, said Poole.

The various data needs to be integrated into an overall data set to be used by the carriers to help lower the cost of risk.

“Consolidating all these providers will take standardization of communication pathways and it will likely be led by the vendors,” Poole said.

 

Securing Sensitive Information

Long before hackers turned the cyber defenses of major national retailers inside out, claims management professionals have focused increased attention on the protection of data shared across multiple partners.

Information security safeguards are changing and apply to what technology pros refer to “data at rest,” data that is stored on a particular company’s servers, and “data in flight,” data that is transferred from one user to another.

Michael Cwynar

Michael Cwynar, Vice President, Mitchell International

Mitchell’s Cwynar said carriers want certification that every company their data is being sent to needs to have that information and that both data at rest and data in flight is encrypted.

The roundtable participants agreed that the industry is in a conundrum. Carriers want more help in predictive analytics but are less willing to share the data needed to make those predictions.

And as crucial as avoiding cyber exposures and the corresponding reputational damage is for large, multinational corporations, it is even more acute for smaller companies in the workers’ compensation industry.

Healthcare Solutions’ Cavaness said the millions in loss notification and credit monitoring costs that impact a Target or a Home Depot in the case of a large data theft would devastate many a workers’ compensation service vendor.

“They’d be done in a minute,” Cavaness said.

The barriers to entry in this space are higher now than ever before, continued Cavaness, and companies wishing to do business with large carriers have the burden of proving that its security standards are uncompromising.

In Reality

Workers’ compensation risk management in the United States is by its very nature, complex and demanding. But keep in mind that those charged with managing that risk get better results year after year.

Technology has a proven capability to iron out the system’s inherent complications and take its more mundane tasks off of the shoulders of case adjustors.

The roundtable members agreed that the business goals of a lower cost of risk and an even more productive workforce will follow.
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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 Healthcare Solutions. The editorial staff of Risk & Insurance had no role in its preparation.




Healthcare Solutions serves as a health services company delivering integrated solutions to the property and casualty markets, specializing in workers’ compensation and auto liability/PIP.
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