Column: Workers' Comp

Integration Ramps Up

By: | May 6, 2015 • 2 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at Read more of his columns and features.

Employer interest in grouping the management of workers’ compensation, nonoccupational disability and employee absence is spreading. The Affordable Care Act, amendments to the Americans with Disabilities Act, employee leave mandates and employer cost-reduction measures are all factors driving the trend.

Some larger employers with more ample risk management resources realized years ago the value of viewing employee health and wellness, disability management and claims administration through one lens.

These trendsetters understood that they faced productivity losses and increased health care costs when employees are ill or absent, regardless of whether the cause is a work-related injury, a nonoccupational disability or the need to care for family members.

They were also quicker to garner synergies by collaboratively administering some programs traditionally handled by human resources or risk management departments.

Now we’re seeing brokers that traditionally provided property/casualty services competing with benefits service consultants to advise clients looking to improve employee health and wellness.

But now a trend to comprehensively evaluate the management of short- and long-term disability offerings, workers’ comp, Family and Medical Leave Act, and ADA compliance is spreading among middle-market employers as well.

They are growing increasingly interested in managing employee absences and medical costs — no matter if the cause is rooted in workers’ comp claims, nonoccupational disabilities, or leave laws like the FMLA.

Recognizing the trend, brokers, third-party administrators and insurers are now offering products and services to middle market employers that want to link management of these areas.


Now we’re seeing brokers that traditionally provided property/casualty services competing with benefits service consultants to advise clients looking to improve employee health and wellness.

As those employers move forward to further health and wellness goals they are asking how they might incorporate their workers’ comp program and claims management strategies.

Overall, though, many employers still manage occupational and nonoccupational disabilities in silos.

Thus, they miss opportunities to identify employees at risk for future lost work time.

It’s common for some claimants to cross over, utilizing both occupational and nonoccupational disability systems, according to a February 2015 report from the Integrated Benefits Institute.

IBI President Thomas Parry said he sees more employers now sharing information across the silos, rather than creating a single organizational unit to manage everything.

Broad-based and well-publicized federal regulatory change is spurring the practice of shared management or shared information.

The Affordable Care Act is designed to promote opportunities to gain from wellness and prevention initiatives that impact injury and illness, whether the cause is occupational or not.

Similarly, increased ADA, FMLA and other leave and accommodation law mandates cut across both areas.

And during the recession, many employers cut their risk or disability staffs and now need practices for efficiently managing claims using less human resources.

Those that underwrite their risks and consult on them have taken notice.


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RIMS 2015

Changing Third Party Administrators Requires Careful Navigation

One company’s changing of TPAs provided valuable and unexpected risk management lessons for others to glean from.
By: | April 13, 2015 • 3 min read
Changing TPAS Ceniceros

Changing third party administrators provides an opportune time for employers to improve their vendor service instructions and request additional workers’ compensation claims data for satisfying needs not addressed by their legacy TPA.


“With the new TPA you are the golden child,” Linda Hoenshel, senior claims manager risk management for HD Supply told the Risk and Insurance Management Society Inc.’s annual conference held April 26-29 in New Orleans.

TPAs will work to meet a new customer’s requests if it is within their means to do so, she added.

“You don’t just one day think you are going to change TPAs and everything falls in line,” Paulette Harris-Rogers, director risk management for HD Supply

But there are also many transition timeline and budgetary issues for employers wanting to change TPAs to address.

“You don’t just one day think you are going to change TPAs and everything falls in line,” said Paulette Harris-Rogers, director, risk management for HD Supply, a company with 15,000 employees and 700 locations.

HD Supply changed TPAs in 2012 and took advantage of the transition to ask its new vendor for information it didn’t previously receive, such as litigated claims data. It plans to use the information to evaluate the performance of defense firms it contracts with as well as the plaintiffs’ attorneys it faces.

One of the biggest considerations for employers is whether to change TPAs at renewal time for their workers’ comp insurance policy or during an “off cycle,” Harris-Rogers said. Factors such as insurer involvement, workers’ comp program size and complexity, and claims frequency, will impact that decision.

For HD Supply, it didn’t make sense to change TPAs during renewal time.

Many TPAs will need 90 days to get a new program running, Harris-Rogers said. Meanwhile, a legacy TPA contract may require the employer to provide a 60-day termination notice. But a transition timeline of 60 days likely won’t provide the legacy TPA sufficient time to fulfill its duties.

The legacy TPA will need time to manage its arrangements with the employer’s insurer, which will have its own timeline and needs for practices like system mapping and claim test runs.

“It’s true, the new TPA can take 90 days to work a program and get you started, Harris-Rogers said. “However, the legacy TPA needs considerably more time. Sixty days is not enough. So if you are thinking you are going to serve a notice of cancellation to your TPA in 60 days, that is fine, but there is a lot of work that needs to be done before that time.”

Other considerations include a review of medical-provider arrangements to help ensure employees’ existing providers will not be cut off mid-treatment, notification of the employers’ payroll and financial departments, and a need to hold claims reviews with two TPAs.

There are also costs to consider such as expenses paid simultaneously to two TPAs, including fees for continuing to access data maintained by the legacy TPA and charges for the legacy organization to run off existing claims.

Changing TPAs other than at renewal time may cause the insurer to conduct a collateral review or charge a fee for a mid-term change. The claims closure rate may also drop at first, because the new TPA’s adjusters are not familiar with the employer’s claims.


But when transitioning to a new service provider, employers can benefit from the resources some TPAs have invested in technology and risk systems that provide report reviews and claims trend analysis.

It’s a great time to fill existing claims information gaps or address requests for information demanded by upper management, the speakers said.

“If there is anything out there that you think you want, now is the time to ask,” Hoenshel said. “If the answer is no, ask again. You never know what can open up.”

Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at Read more of his columns and features.
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Sponsored: Liberty International Underwriters

Making the Marine Industry SAFE

A new initiative to help marine clients address safety risks leverages a customized, expertised approach.
By: | May 8, 2015 • 5 min read

When it comes to marine based businesses there is no one-size-fits-all safety approach. The challenges faced by operators are much more complex than land based businesses.

The most successful marine operators understand that success is dependent on developing custom safety programs and then continually monitoring, training and adapting.

After all, it’s not just dollars at stake but the lives of dedicated crew and employees.

The LIU SAFE Program: Flexible, Pragmatic and Results Driven

Given these high stakes, LIU Marine is launching a new initiative to help clients proactively identify and address potential safety risks. The LIU SAFE Program is offered to clients as a value added service.

Richard Falcinelli, vice president, LIU Marine Risk Engineering

Richard Falcinelli, vice president, LIU Marine Risk Engineering

“The LIU SAFE program goes beyond traditional loss control. Using specialized risk assessment tools, our risk engineers function as consultants who gather and analyze information to identify potential opportunities for improvement. We then make recommendations customized for the client’s business but that also leverage our knowledge of industry best practices,” said Richard Falcinelli, vice president, LIU Marine Risk Engineering.

It’s the combination of deep expertise, extensive industry knowledge and a global perspective that enables LIU Marine to uniquely address their client’s safety challenges. Long experience has shown the LIU Risk Engineering team that a rigid process will not be successful. The wide variety of operations and safety challenges faced by marine companies simply cannot be addressed with a one-size-fits-all approach.

Therefore, the LIU SAFE program is defined by five core principles that form the basis of each project.

“Our underwriters, risk engineers and claims professionals leverage their years spent as master mariners, surveyors and attorneys to utilize the best project approach to address each client’s unique challenges,” said Falcinelli.


The LIU SAFE Program in Action

When your primary business is transporting dry and liquid bulk cargo throughout the nation’s complex inland river system, safety is always a top concern.

The risks to crew, vessels and cargo are myriad and constantly changing due to weather, water conditions and many other factors.

SCF Marine, a St. Louis-based inland river tug and barge transportation company and part of the Inland River Services business unit of SEACOR Holdings Inc., understands what it takes to operate successfully in these conditions. The company strives for a zero incident operating environment and invests significant time and money in pursuit of that goal.

SponsoredContent_LIUBut when it comes to marine safety, all experienced mariners know that no one person or company has all the answers. So in an effort to continually find ways to improve, SCF management approached McGriff, Seibels & Williams, its marine broker, to see if LIU Marine would be willing to provide their input through an operational review and risk assessment.

The goal of the engagement was clear: SCF wanted to confirm that it was getting the best return possible on its significant investment in safety management.

Using the LIU SAFE framework, LIU’s Risk Engineers began by sending SCF a detailed document request. The requested information covered many aspects of the SCF operation, including recruiting and hiring practices, navigation standards, watch standing procedures, vessel maintenance standards and more.

Following several weeks of document review the LIU team drafted its preliminary report. Next, LIU organized a collaborative meeting at SCF’s headquarters with all of the latter’s senior staff, along with McGriff brokers and LIU underwriters. Each SCF manager gave an overview of their area of responsibility and LIU’s preliminary findings were reviewed in depth. The day ended with a site visit and vessel tour.

“We sent our follow-up report after the meeting and McGriff let us know that it was well received by SCF,” Falcinelli said. “SCF is so focused on safety; we are confident that they will use the information gained from this exercise to further benefit their employees and stakeholders.”

“It was probably one of the most comprehensive efforts that I’ve ever seen undertaken by a carrier’s loss control team,” said Baxter Southern, executive vice president at McGriff, which also is based in St. Louis. “Through the collaborative efforts of all three parties, it was determined that SCF had the right approach and implementation. The process generated some excellent new concepts for implementation as the company grows.”

In addition to the benefits of these new concepts, LIU gained a much deeper understanding of SCF’s operations and is better positioned to provide ongoing loss control support.

“Effective safety management is about being focused and continuously improving, which requires complete commitment from top management,” Falcinelli added. “SCF obviously is on a quest for safety excellence with zero incidents as the goal, and has passed that philosophy down to its entire workforce.”

“SCF’s commitment to the process along with LIU’s expertise was certainly impressive and a key reason for the successful outcome,” Southern concluded.

There are many other ways that the SAFE program can help clients address safety risks. To learn more about how your company could benefit, contact your broker or LIU Marine.

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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