This is the second part of a six part series of articles discussing insurance coverage for claims that can be brought against individuals or companies because of the use of Social Media websites. Additional articles in this series can be found here: Part 1 and Part 3.This article discusses coverages potentially triggered under Coverage B — Personal and Advertising Injury and any applicable exclusions.
Personal Injury Offenses Covered In Commercial General Liability And Homeowners Policies
Most Commercial General Liability policies contain Coverage Part B that provides coverage for personal and advertising injury. Some homeowner and renters policies, but not all, provide coverage for personal injury. Carefully review the policy to determine if it does provide personal injury coverage. If not, then coverage must still be analyzed under Coverage Part A for bodily injury coverage, which will be discussed in part three of this series.
The definition of "personal injury" is typically:
13. "Personal and advertising injury" means injury including consequential "bodily injury" arising out of one or more of the following offenses:
a. False arrest, detention or imprisonment;
b. Malicious prosecution;
c. The wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling or premises that a person occupies committed by or on behalf of an owner, landlord, or lessor;
d. Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services;
e. Oral or written publication, in any manner, of material that violates a person's right of privacy;
f. The use of another's advertising idea in your "advertisement" or
g. Infringing upon another's copyright, trade dress, or slogan in your "advertisement."
The policy may contain additional offenses or endorsement that modifies the definition of "personal injury." However, typically only subsections d (libel/slander) and e (invasion of privacy) are typically implicated when a claim is presented for claims related to social media.
To trigger "personal injury" coverage, the complaint must arguably allege a claim that constitutes at least one of the offenses listed in the policy. The policy does not provide coverage for other torts alleged in the complaint that do not constitute specifically enumerated offenses contained in the definition of "personal injury," but that may bear some similarity to those offenses listed in the policy. There is no coverage if the complaint does not allege or the plaintiff does not recover for an enumerated offense.
Like many others I was glued to the TV set in my hotel room waiting for the news from the US Supreme Court about the Patient Protection and Affordable Care Act Mandate. I had predicted it would be rejected under the Commerce rules (i.e., which did happen), but I was surprised that it was upheld in terms of the Tax rules. Although presented by the Administration as anything but a tax when passed, their arguments at the US Supreme Court caught traction with the justices leading to a victory for the Administration. It truly was a surprise, and in the words of Gomer Pyle "Surprise, surprise, surprise!"
Once the dust settles I also believe that it will be a pleasant surprise for all of us. Without the mandate, our attempts at health care reform were destined for failure under the Patient Protection and Affordable Care Act reform bill. "Hall Passes" to some hurt everyone. Unless everyone is included in the reformed system (i.e., universality), the likely outcome for Patient Protection and Affordable Care Act is dismal. I don't agree with everything that is in the bill in the first place, but it does include several serious attempts at trying to get a control on our escalating health care costs. Without this our country is faced with a serious economic challenge. I dislike being told what to do by the government, but sometimes I don't want to do what I should do.
What will the near-term impact be?
- Escalated implementation of exchanges and move to a new way of getting coverage
- Most likely higher near term costs as carriers reveal their uncertainty of the future costs
- Higher provider costs as providers become increasingly concerned about the burgeoning Medicaid population as many more are transitioned to Medicaid coverage
- Expansion of existing initiatives to reduce the cost of care and improve quality (e.g., the Oregon Coordinated Care Organizations, ACOs, and other value based reimbursement initiatives)
- Increased scrutiny by employers whether they should terminate their plans, particularly in industries with significant part-time employees
- Increased exporting of manufacturing to other countries to minimize costs
- Greater focus by the hospital community to validate their capacity and potentially reduce resources to improve cost effectiveness
- Increased transition to self-funded programs to avoid some of the requirements of the Patient Protection and Affordable Care Act Mandate
The Supreme Court has decided that the individual mandate to purchase health insurance is a form of tax, therefore constitutional. Click here to read a Wall Street Journal report on this. As we all know much of the rest of Obamacare hinged on that mandate. It is law.
This ruling does not surprise me. I predicted in a blog post on January 27, 2012, that The Patient Protection and Affordable Care Act would not be repealed by the Supreme Court. I was correct. I won't spend words here on why I had doubts about repeal of the individual mandate. Click here to read that post.
Let me also refer you to a blog post I made on March 30, 2012. The drift was that no matter whether The Patient Protection and Affordable Care Act is overturned or not, we have a huge spending problem in the United States.
That post gave a link to an article written by Shannon Brownlee and Brian Klepper. They wrote, "Yet whatever the court decides, we will still be stuck with a problem that this contentious law was not likely to solve on its own: an out of control health care industry that threatens the stability of the U.S. economy and the federal government's ability to deal with our long-term debt."
Further, they say, "It is hard to overstate the gravity of the situation. A 2008 study by the consulting firm PricewaterhouseCoopers estimated that more than half of all health care expenditures provide no value — meaning we spend more than double what we should. In today's dollars, that waste represents an extra $1.5 trillion a year."
Let me emphasize this point ... half of health care dollars provide no value. That did not surprise me either as I watched that waste occurring every day for decades as I managed health benefits for large corporations.
Between now and the year 2025, consumer discretionary income will shrink dramatically unless health care costs are reigned in. That will impact nearly all companies' top line. Today, the biggest competitor of companies that produce or sell consumer products and services is rising health care spending. It is significantly impacting companies' sales today, but in a nearly invisible way. This is a huge strategic issue for corporations. Many CEOs are looking at how their own company's health costs are rising but may not be forecasting the impact on sales going forward.
I have been advising corporate executive committees and corporate executives of this impact on top line growth for over ten years. I wish I had been wrong, but my predictions on this are coming true too. This will not fix itself.
In our last segment, we discussed how important the "Pre-Claim" process was to your bottom line relating to some policies and procedures that should be in place before you sustain your next Workers' Compensation claim.
The fourth step in the "4P" plan is known as the Post-Claim step. At this stage, you should be asking yourself this question, "What policies and procedures should we have in place when we have our next Workers' Comp claim?"
Most everyone knows that when you have your next Workers' Compensation claim, you must report it immediately to your insurance carrier. One thing you may want to keep in mind is that some states, such as Florida, are considered "fee scheduled" states. This means that for any medical service that is performed that is deemed to be a Workers' Compensation injury, the medical facility can only charge you the state-mandated fees based upon the type of injury. These fees are typically much less then they would charge for a non-Workers' Compensation injury. Bottom line, make sure you let the medical facility know that you're filing a Workers' Compensation claim, and be certain they charge you the lower Workers' Compensation fees from the fee schedule.
In the event of a claim, the employer can have a dramatic positive impact on the cost of their claims — reducing the claim by as much as 70% — by making sure they have collected the proper documentation and provided it to the carrier claims adjuster within the first seven days of a claim.
New promising trends in managing population health are emerging.
Our 20-year experiment with modern day corporate sponsored health and wellness has not saved money.* While some people have been helped by it ... no doubt ... in the end it has not been effective in controlling health costs. The facts on this have been known for several years yet many Human Resources managers have clung to the notion that health and wellness will eventually turn their spending trends down if they can just find the right mix of incentives, communications, prizes, games, or whatever.
I've been speaking on this topic for years. Last week I gave a speech in front of an audience of corporate benefit managers and something surprising happened. For the first time much, or even most, of the audience agreed!
This is really good news as it paves the way for getting past trying to implement solutions that don't work and start doing things that DO work. What does work? Micromanaging the outlier population in plans, i.e., the 6-8% of plan members who are spending 80% of plan dollars.
There is much confusion about who the outliers are. It's not averages that are important but rather distributions. Using averages in population health matters is a fallacy-rich proposition. Actuaries understand that well. Distribution analyses reveals outliers.
Let me explain by an example. Benefit executives tell me they are devoted to managing their diabetes cases because the average diabetic spends about $30k per year.
That $30k figure is kind of correct, but not really.
In an attempt to bring some finality to the issues presented in the Valdez decision (at least for the time being), the California Court of Appeal recently addressed the admissibility of non-Medical Provider Network (MPN) reports.
In their May 29, 2012 decision (Elayne Valdez v. WCAB and Warehouse Demo Services, 2012 Cal. App. Unpub. LEXIS 4023), the Court of Appeal reversed a Workers' Compensation Appeals Board holding that precludes the use of non-Medical Provider Network treating physician reports. They concluded that "If the Legislature intended to exclude all non-MPN medical reports, the Legislature could have said so; it did not."
In reaching their decision, the court partially dissected Labor Code § 4616 to address what they believe is the true intent behind the establishment of Medical Provider Networks. In particular, they focused attention on Labor Code § 4616.6, which discusses the limitation of additional examinations beyond that which is found in Labor Code § 4616.4. § 4616.4 describes in detail the process of obtaining independent medical examinations after the applicant has sought out second and third opinion examinations upon disagreement with treatment recommendations or medical determinations of the primary treating physician.
The court also focused on the Tenet decision (Tenet/Centinela Hosp. Medical Ctr. v. Workers' Comp. Appeals Bd. (2000) 80 Cal.App.4th 1041) and argued that the case does not imply that the applicant cannot select someone outside the Medical Provider Network to serve as the primary treating physician. They concluded that Tenet does not support the conclusion that "[a]ccordingly, the non-MPN reports are inadmissible to determine an applicant's eligibility for compensation." Valdez, supra, 2012 Cal. App. Unpub. LEXIS 4023, 15.
In sum the Valdez decision annulled the lower court ruling and remanded the case back to the lower court for further proceedings. On its face, this seems like a huge victory for the applicant. But is it really? Did the Court of Appeal provide us with any information we did not already know? The original Valdez decision focused on the attempts of one applicant to bring in non-Medical Provider Network reporting to the claim, despite being provided with the opportunity for treatment within the Medical Provider Network. The Court of Appeals appears to expand the original Valdez findings. Regardless, if non-Medical Provider Network reports are to be permitted, then the defense against these reports simply shifts focus.
In preparation for this article, I found out that my colleague Michael D. Peabody of Bradford & Barthel's Tarzana office was in the process of litigating a nearly identical case I was working on that involved non-Medical Provider Network care.
In both cases, the applicant was participating in an established Medical Provider Network and was receiving care from a Medical Provider Network physician. In both cases, this promptly ended when the applicant obtained representation. Treatment promptly started with a non-Medical Provider Network physician.
We are both litigating the admissibility of these reports for purposes of further medical discovery, settlement, and for consideration and review by the Workers' Compensation Appeals Board should our cases go all the way to trial. We both are ultimately asking for the judge to either find the reports inadmissible, or have applicant's attorney to agree that payment will be the responsibility of the applicant.
On my current case, applicant's attorney has demanded I notify my client to re-start benefits and to allow treatment with his selected physician in light of this decision. I informed him I would be doing no such thing. As our case is nearing the end of litigation, my strategy and thoughts can be mentioned here.
Everyone is waiting for the US Supreme Court's decision on the individual health care mandate anticipated the week of June 25, 2012. The hype is considerable, and the average individual is trying to figure out what this means. Experts disagree what the outcome will be. This articles tries to summarize some of the likely results of the decision.
I personally believe the mandate will be rejected by the Court, although it isn't an obvious outcome. If rejected, this will have an impact on health care reform as currently defined. It is important that everyone is subject to the same rules so the various situations are consistently handled. For example, if one class of individuals do not have to participate in the reformed system, then the goal of significantly reducing the uninsured and under-insured will not be met. The Patient Protection and Affordable Care Act fails to eliminate the uninsured but takes a significant step towards that goal.
The development of exchanges, the additional rules required for rate filing and associated approvals of rates, the transition to government approved "metallic" plans will slow and perhaps even stop if the mandate is rejected. The benefit of this might be reduced administrative costs and may even result in a spike in health plan earnings as the pressure is relieved.
If the Patient Protection and Affordable Care Act is unraveled a bit, it actually might have a positive impact on the Federal deficit if spending is reduced and related provisions of the Patient Protection and Affordable Care Act are de-funded.
For example, some of the innovation will likely disappear (i.e., Accountable Care Organizations, comparative effectiveness research, electronic medical records, etc.). The Medicaid expansion will likely slow. Employers will reconsider their near term benefit strategies, perhaps taking a more serious look at what they can do to reduce costs in light of the easing of federal oversight.
However, what about the economy? What about the likely impact to the cost of care? One of the frequently ignored reasons why health care reform was so important is the impact on our national economy. The cost of care continues to escalate faster than general inflationary levels. The US health care system continues to be one of the most expensive both in terms of dollars and also as a percentage of Gross Domestic Product.
In our last segment, we discussed how important the "Post-Offer" process was to your bottom line relating to some policies and procedures that should be done with all new hire applicants.
The third step in the "4P" plan is known as the Pre-Claim step. At this stage, you should be asking yourself this question, "Are the policies and procedures we have in place (before we have our next Workers' Comp claim) going to keep us out of hot water?"
One of the first programs successful companies deploy is a Drug-Free Workplace. You do not want to be the "path of least resistance" for a substance abuser to find work at your company.
Studies have shown that those "under the influence" are eight times more likely to have an accident. Don't take that chance. Bottom line, make sure you have your Drug-Free Workplace policy reviewed periodically and made current.
We all know the economy is still trying to get back on its feet. Another strategy to consider that can help insulate you from hiring the proverbial "worm in the apple" is to use a "Temp–to–Perm" strategy. This gives you the ability to see the work ethic of the individual over a period of time to see if you'd like to have them join your company permanently.
In our last segment, we discussed how important the "Pre-Hire" process was to your bottom line relating to various "on-boarding" activities companies should consider when hiring new employees.
The second step in the "4P" plan is known as the "Post-Offer" step. At this stage, you should be asking yourself this question, "What should we be doing after we've offered someone a job?"
That question leads to another very important question: Does your company use a Post Offer Health Questionnaire and a Conditional Offer of Employment letter after you've made an offer of employment?
If your answer was no, please realize you're setting your company up for potentially large losses to your profits. A manufacturing company offered a job to a 34-year-old male without using these two documents which ended up costing them an additional $76,178 in insurance premiums and $2,158,742 in lost revenue.
By having an applicant sign a Conditional Offer of Employment letter before putting them on the job, you at least give yourself time to conduct your background checks that should be done on all applicants. You're putting your new hire on notice of the various procedures you conduct during your hiring process. In having the new hire complete a Medical Health Questionnaire, they are documenting their past medical history that should show any issues that might be a red flag that could keep them from fulfilling their job description safely. You may want to consider having your applicant take a "Physical Abilities Test" to ensure they are able to fulfill all the physical requirements of the job safely.