Reaping the Rewards of Benefits Integration
Discussions at this week’s Disability Management Employer Coalition conference held in New Orleans included measures for keeping employees healthy, injury free, and on the job.
Conference participants also reviewed risk reduction, ease of administration, and cost saving advantages obtained by integrating absence management and disability benefit programs such as workers’ compensation, the Family and Medical Leave Act, and short-term disability offerings.
Proponents say integration makes sense because of overlaps among the range of programs under which workers can be absent and the cost to organizations regardless of the reasons for missed work days.
They also point to potential compliance risks when the administration of programs is segregated and improperly aligned.
“There is hardly any situation where there is just one perfect claim going on,” said Karen English, a partner at Spring Consulting Group. “If someone is [out] on workers’ comp, they are probably on FMLA [and] STD. Then we have all our concurrent leaves going on. So keeping workers’ comp to the side can actually be viewed as a risk to your organization.”
Failing to integrate can lead to lost opportunities, such as the ability to appropriately minimize the amount of time employees spend away from the job by concurrently running FMLA leave with a workers’ compensation absence.
“Just as an example, if you have a workers’ comp claim and that person is out eight weeks for a surgery, if you don’t run it concurrently, you are allowing that employee to come back from that workers’ comp claim and then go out for 12 additional weeks of FMLA time,” said Trina Mouton, manager of disability management and wellness at CenterPoint Energy.
“So it is really advisable to run those concurrently,” Mouton continued. CenterPoint experiences a 2-to-1 return on investment from its efforts, she added.
Employers speaking at the conference cited their gains from integrating programs, although their results are also influenced by several efforts including implementing return-to-work programs.
“We compare ourselves to the hospital industry in terms of [employee restricted-duty days] and lost time,” said Jane Ryan, return to work recovery and claims services at Mayo Clinic. “Our lost time rates are actually lower than the national industry [average] and I think that speaks to the ability we have to keep people at work or return to work early.”
“There is not one silver bullet or only one way to integrate benefits delivery. Every company is so different.” — Karen English, partner, Spring Consulting Group
The paths that employers take to integration and the programs they integrate vary considerably depending on each company’s needs, speakers said.
“There is not one silver bullet or only one way” to integrate benefits delivery, English said. “Every company is so different.”
English will join DMEC’s CEO, Terri Rhodes, in a discussion on how to integrate workers’ comp, disability, and leave programs on Dec. 1, at the National Workers’ Compensation and Disability Conference® & Expo that will also take place in New Orleans.
At the DMEC conference held this week, meanwhile, other discussion topics focused on specific illnesses and corresponding wellness efforts for keeping employees healthy and productive.
Diabetes, for example, impacts employers’ profitability by driving medical costs that are 2.3 times greater than for people without the illness as well as by increasing employee absences and work disruptions.
“There is no question that diabetes affects the bottom line,” said Matthew Ceurvels, director of disability products at Sun Life Financial. “Productivity can be impacted by presenteeism, when an employee is working sub-optimally, by ad-hoc absences, and by long-term absences when employees go out on a disability claim.”
More employer disease management programs focus on diabetes than on other common illnesses like asthma or heart disease, Ceurvels said.
Diabetes care, for example, is a key component of a wellness program CNIC Health Solutions Inc. offers its workers, said Linda Benedict, human resources manager for the third party administrator of employee benefit plans.
CNIC Health Solutions’ employee wellness program’s overall offerings include a recreation center, free access to a CrossFit trainer, encouragement to engage in desk exercises, and online health assessments tied to biometric screenings that provide employees with private information about their individual risk factors.
As part of its health plan, the company also provides free monitoring and testing supplies for diabetes sufferers along with a third-party tracking service for the diabetes testing results.
“We also offer a discount on what the employee pays for their portion of health insurance premiums,” Benedict said. “That is one of the biggest components of our wellness program.”
The discount works as an incentive, providing employees with a 25 percent health care premium reduction, first for participating in the biometric screening, and then as they maintain a certain screening result level.
That led to a 23 percent improvement in employee health risk over one year, as measured by the biometric screenings.
The wellness efforts have improved employee engagement and morale, lowered workers’ comp losses and reduced absenteeism, she said.
“One key metric for us is that in the last year and a half, we have not had one FMLA leave,” Benedict said. “It has really limited FMLA leave for our employees because they are more engaged. They are taking care and looking at their metrics, and sharing them with their physicians. It is really starting to pay off.”
Grow Operations Coming to Terms With Risk
As the legal cannabis industry matures, its crop producers and retail shops are increasingly adopting risk management practices that include greater attention to worker safety.
The expanding size and sophistication of grow operations, greater scrutiny from regulatory agencies, crime, potential labor union involvement, and even workforce-retention concerns, are rapidly driving adoption of safety practices ignored when mom-and-pop size operations dominated.
“I see it happening very quickly,” said Justin S. Moriconi, an attorney at Segal McCambridge Singer & Mahoney who advises marijuana industry clients.
“I have seen a huge uptick in standard operating procedures to deal with issues, such as how much weight one [marijuana grow operation] worker can move at one time.”
The shift is driven in part by the industry’s rapid evolution, as more states allow recreational and medicinal marijuana production and sales.
In some East Coast states, for example, there are only a few legal grow operations, but they are very large, requiring millions of dollars in investment. It’s also a business model increasingly driven by players with multi-state operations.
While such operations don’t typically hire someone with a risk management title, like larger corporations might, they are paying greater attention to insurance purchasing and risk mitigation practices than the smaller operations that dominated the early years of legal cultivation limited to California, Moriconi said.
“When you are dealing with that level of money investment, certainly you are going to be much more attuned to risk management … and making sure everything is going as planned,” he said. “I am seeing a lot of that.”
On the West Coast, Moriconi is witnessing changes as he tours expanding cannabis operations.
A year ago, he toured a grow facility with the walls and floor painted white to boost light reflection that can improve plant yield and thus, the bottom line.
But the paint made for a slippery floor surface for workers tending plants.
“They had done that, not thinking about the production workers walking around this grow operation picking all the dead leaves off, watering the plants, and doing all the things that need to be done to cultivate this product and they were slipping occasionally,” Moriconi said.
During a more recent visit to the same facility Moiconi noticed a slip-resistant floor had been installed, although the slip resistant material remained white.
Jennifer Martin, a cultivation consultant at marijuanapropagation.com, said ergonomics are a key topic she speaks on before industry groups because at many commercial cultivation sites she sees plants on the ground. That forces workers to constantly bend down.
She advises raising the plants on stands to eliminate strained backs while increasing worker productivity.
“Even among younger workers I am seeing knee and back problems from them doing it that way,” Martin said. “So that is the first thing I say when I go in. Not only so the workers won’t be stressed, but so they can do a better job growing the plants because you can see them better when you are looking across [plants] instead of down at them.”
Other risks that grow operation workers face include exposure to chemicals and intense, hot lighting systems.
“Once the unions get involved in this you will have no shortage of claims.” — Justin S. Moriconi, attorney, Segal McCambridge Singer & Mahoney
One emerging workers’ comp risk involves the long hours workers spend hand-trimming leaf matter away from the valuable cannabis buds, several sources said. It is typically a manual job with a potential for repetitive-stress injuries and lacerations.
“I know we have had claims associated with that,” said Jim McMillen, director of safety services at Pinnacol Assurance, a Denver-based insurer of Colorado workers’ comp risks. “Probably the most severe claim we have had with that type operation was an amputation — a finger.”
Unions Stepping In
The spectrum of sophistication among operations means some growers remain primarily focused on the basic task of product production without considering worker safety.
But as more grow operations evolve from bachelor-pad like environments to sophisticated concerns, said Martin, she is seeing greater attention paid to ergonomics and worker comfort.
Risk-mitigation efforts she sees include helping workers with posture, enforcing rest breaks, and hiring masseuses to ease shoulder and wrist strains.
Greater scrutiny from OSHA, state agricultural agencies and state marijuana control boards are helping drive the improvements, Martin said. Like employers in other industries, cannabis operations also adopt safety measures to eliminate employee turnover and retain valuable workers, she added.
Labor union pressures could also drive worker safety improvements. Notably, the 33,000-member United Food and Commercial Workers International Union is recruiting medical marijuana workers under a “Cannabis Workers Rising” program.
Moriconi expects to see the union active in Eastern states, such as Pennsylvania, which are adopting medical marijuana laws and already have an extensive organized labor presence.
In smaller mom-and-pop operations, younger workers may have accepted cash or product as wages and are not likely to report an injury claim, Moriconi said. But that will change.
“Once the unions get involved in this you will have no shortage of claims,” Moriconi said. “They are not going to take product. You will be dealing with different checks and balances to make sure you have the safety and risk management built in.”
The recent murder of a security guard at a Colorado marijuana shop, meanwhile, added to criticisms that increasing retail outlet security measures often focus on protecting the cash-only businesses’ cannabis product and money rather than workers.
But overall, the risks faced by cannabis retail shops generally mirror those experienced at other retail stores with an elevated exposure profile, sources said.
McMillen at Pinnacol likened the risk level to other businesses interacting with the public and handling cash, like liquor stores or taxi cabs.
The approximately 200 marijuana retail dispensaries insured by California State Compensation Insurance Fund report injuries consistent with other businesses classified as retail operations, a SCIF spokeswoman said.
“It was primarily slips, trips and falls,” she said. “In terms of the injuries, it was strains and sprains.”
Electronic Waste Risks Piling Up
The latest electronic devices today may be obsolete by tomorrow. Outdated electronics pose a rapidly growing problem for risk managers. Telecommunications equipment, computers, printers, copiers, mobile devices and other electronics often contain toxic metals such as mercury and lead. Improper disposal of this electronic waste not only harms the environment, it can lead to heavy fines and reputation-damaging publicity.
Federal and state regulators are increasingly concerned about e-waste. Settlements in improper disposal cases have reached into the millions of dollars. Fines aren’t the only risk. Sensitive data inadvertently left on discarded equipment can lead to data breaches.
To avoid potentially serious claims and legal action, risk managers need to understand the risks of e-waste and to develop a strategy for recycling and disposal that complies with local, state and federal regulations.
The Risks Are Rising
E-waste has been piling up at a rate that’s two to three times faster than any other waste stream, according to U.S Environmental Protection Agency estimates. Any product that contains electronic circuitry can eventually become e-waste, and the range of products with embedded electronics grows every day. Because of the toxic materials involved, special care must be taken in disposing of unwanted equipment. Broken devices can leach hazardous materials into the ground and water, creating health risks on the site and neighboring properties.
Despite the environmental dangers, much of our outdated electronics still end up in landfills. Only about 40 percent of consumer electronics were recycled in 2013, according to the EPA. Yet for every million cellphones that are recycled, the EPA estimates that about 35,000 pounds of copper, 772 pounds of silver, 75 pounds of gold and 33 pounds of palladium can be recovered.
While consumers may bring unwanted electronics to local collection sites, corporations must comply with stringent guidelines. The waste must be disposed of properly using vendors with the requisite expertise, certifications and permits. The risk doesn’t end when e-waste is turned over to a disposal vendor. Liabilities for contamination can extend back from the disposal site to the company that discarded the equipment.
Reuse and Recycle
To cut down on e-waste, more companies are seeking to adapt older equipment for reuse. New products feature designs that make it easier to recycle materials and to remove heavy metals for reuse. These strategies conserve valuable resources, reduce the amount of waste and lessen the amount of new equipment that must be purchased.
Effective risk management should focus on minimizing waste, reusing and recycling electronics, managing disposal and complying with regulations at all levels.
For equipment that cannot be reused, companies should work with a disposal vendor that can make sure that their data is protected and that all the applicable environmental regulations are met. Vendors should present evidence of the required permits and certifications. Companies seeking disposal vendors may want to look for two voluntary certifications: the Responsible Recycling (R2) Standard, and the e-Stewards certification.
The U.S. EPA also provides guidance and technical support for firms seeking to implement best practices for e-waste. Under EPA rules for the disposal of items such as batteries, mercury-containing equipment and lamps, e-waste waste typically falls under the category of “universal waste.”
About half the states have enacted their own e-waste laws, and companies that do business in multiple states may have to comply with varying regulations that cover a wider list of materials. Some materials may require handling as hazardous waste according to federal, state and local requirements. U.S. businesses may also be subject to international treaties.
Developing E-Waste Strategies
Companies of all sizes and in all industries should implement e-waste strategies. Effective risk management should focus on minimizing waste, reusing and recycling electronics, managing disposal and complying with regulations at all levels. That’s a complex task that requires understanding which laws and treaties apply to a particular type of waste, keeping proper records and meeting permitting requirements. As part of their insurance program, companies may want to work with an insurer that offers auditing, training and other risk management services tailored for e-waste.
Insurance is an essential part of e-waste risk management. Premises pollution liability policies can provide coverage for environmental risks on a particular site, including remediation when necessary, as well as for exposures arising from transportation of e-waste and disposal at third-party sites. Companies may want to consider policies that provide coverage for their entire business operations, whether on their own premises or at third-party locations. Firms involved in e-waste management may want to consider contractor’s pollution liability coverage for environmental risks at project sites owned by other entities.
The growing challenges of managing e-waste are not only financial but also reputational. Companies that operate in a sustainable manner lower the risks of pollution and associated liabilities, avoid negative publicity stemming from missteps, while building reputations as responsible environmental stewards. Effective electronic waste management strategies help to protect the environment and the company.
This article is an annotated version of the new Chubb advisory, “Electronic Waste: Managing the Environmental and Regulatory Challenges.” To learn more about how to manage and prioritize e-waste risks, download the full advisory on the Chubb website.
This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Chubb. The editorial staff of Risk & Insurance had no role in its preparation.