Medicare Set-Asides (MSAs) continue to frustrate parties resolving workers’ compensation (WC) claims. For many, the MSA is the last major hurdle to a closed file. Sometimes, the hurdle involves an MSA report from a non-legal third-party vendor that does not seem to make sense based on the facts of the case. Other times, it is the federal government’s response to a request from the settling parties that it review an MSA report which causes the frustration. The fact that the WC claim in question may be a denied WC claim only serves to intensify that frustration. The purpose of this article is to separate fact from fiction when it comes to MSAs in denied WC claims. In short, MSAs are not needed when an employer/insurance carrier (E/C) has not accepted and does not accept responsibility for a claimant’s future medical expenses as a part of resolving the claim. Asking the Centers for Medicare & Medicaid Services (CMS) to review and approve your $0 MSA though is problematic as we all know. 2017 is the right time to find an alternate risk transfer solution that creates efficiencies in your claims handling process. After reading this article, your goal should be to review your current process and think about the time and money being spent on denied WC claims. Instead of the problems associated with CMS reviewing $0 MSA proposals, you could instead close the file faster by relying on a legal opinion from a lawyer experienced in MSA issues. All parties in the WC system would capitalize on a more streamlined system if they believe this one basic fact: FACT: Medicare’s recovery rights under the Medicare Secondary Payer (MSP) Act are not automatic. The MSP Act does not grant Medicare unlimited recovery rights. It does not even grant Medicare automatic recovery rights. Instead, two things must happen for Medicare’s recovery rights to ripen: 1) a primary plan or payer must accept responsibility for a claimant’s medical expenses; and 2) that responsibility must be evidenced by a judgment, a compromise for release or other means. Unless both occur, Medicare does not have recovery rights under the MSP, period. That also means that it does not have a right to have an MSA funded to pay for a claimant’s future medical care. In the event of a WC claim denied from the outset and the E/C never accepts responsibility for future medicals, the MSP Act is not triggered. FICTION:  The MSP Act requires MSAs. Nowhere in the MSP Act does it mention MSAs, Medicare Set-Asides or even future medical expenses. What it does say is that Medicare won’t pay for a beneficiary’s medical expenses where payment has been made under a workers’ compensation plan. 42 U.S.C. § 1395y(b)(2)(A)(ii). An MSA gets funded to pay for those future medical expenses a claimant anticipates incurring down the road which the E/C already paid for in the settlement. While the law does prohibit Medicare from making payment for those expenses with one exception, it does not obligate anyone to use an MSA to ensure Medicare does not pay those same items, services or expenses previously paid for by the E/C in the WC award. FACT: An MSA might be appropriate for anyone, not just current Medicare beneficiaries. While the MSP Act contemplates that Medicare will not pay for a Medicare beneficiary’s medical expenses when payment has already been made under a WC plan, other scenarios are conceivable. First, a claimant may not yet be Medicare enrolled but could be close. Those in the MSP industry refer to these individuals as having a “reasonable expectation” of Medicare enrollment. Typically, the time frame in play here is 30 months from settlement. So, you will see MSA issues arise if the claimant falls within this period of “reasonable expectation.” But an MSA could also be an issue for other claimants. Since the MSP Act prohibits Medicare from making payment where payment has been made, an argument exists that the issue would need to be examined for a much larger pool of claimants. In any WC settlement, it’s possible that the E/C is paying for future medical expenses. The MSP Act prohibits Medicare from paying when payment has been made under a WC plan. 42 U.S.C. § 1395y(b)(2)(A)(ii). The claimant could take the proceeds and get on Medicare at some point post-settlement. See also: 25 Axioms Of Medical Care In The Workers Compensation System   Let’s assume that happens five (5) years after settlement. If the claimant still has money remaining for future medicals from the WC award, the statute would prohibit Medicare from paying for his future medicals that were paid for in the WC award. Now that the claimant is a Medicare beneficiary and has money remaining for that specific purpose, the law would kick in. To comply with the law, the claimant should spend down his remaining future medical proceeds on injury-related care otherwise covered by Medicare before billing Medicare. Of course, all that presumes that the claim was accepted and the E/C paid future medical dollars to the claimant as part of the WC award. When a WC claim is denied and ultimately “clinchered” on a doubtful and disputed basis, no future medical dollars change hands since the E/C does not accept responsibility for future medicals. Thus, no MSA would be needed, and you would simply want to document the file appropriately. FICTION: When future medical expenses are expected to be incurred, an MSA must be funded. Future medical expenses ≠ MSA funding in every case. Only when Medicare’s right of recovery is triggered would an MSA need to be funded. So, those future medicals must be related to the compensable claim for the MSA to need to be funded. Even then, there are options available other than funding an MSA (such as obtaining a legal opinion) to comply with the law stating that Medicare will not pay where payment has been made under a WC plan. 42 U.S.C. § 1395y(b)(2)(A)(ii). FACT: A denied WC claim represents a compromise situation as opposed to a commutation under the federal regulations. Medicare explains the distinction in its regulations. A commutation occurs when the amount of the WC award is intended to compensate the claimant for all future medicals required because of the work-related injury or disease. 42 C.F.R. § 411.46(a). According to Medicare, “a lump-sum compromise settlement is deemed to be a workers’ compensation payment for Medicare purposes, even if the settlement agreement stipulates that there is no liability under the workers’ compensation law or plan.” 42 C.F.R. § 411.46(b)(1). This regulation is titled "Lump-Sum Compromise Settlement." So, denied WC claims must be compromise situations, not commutations, under Medicare’s own regulations. FICTION: The CMS WCMSA Reference Guide is the only place to look for how CMS handles future medical expenses. While most will point to the WCMSA Reference Guide as the definitive statement about future medical expenses, it represents unofficial guidance from CMS on the issue. Official guidance can be found in the code of federal regulations. 42 C.F.R. §411.46. There, CMS discusses the differences between future medicals in commutation cases versus compromise cases. Since a denied WC claim would be considered a compromise case, the regulations should be the first place to start when examining the MSA issue in a denied WC claim. FACT: The regulations, like the statute itself, do not address MSAs. Hard to believe, but this is true. Both the statute and all regulations promulgated by CMS in support of the statute fail to mention MSAs or Medicare Set-Asides even once. Since the regulations are what provide us with any federal administrative agency’s official statutory interpretation, it is accurate to say that no substantive legal standard exists today when it comes to MSAs, even in WC. 42 U.S.C. §§ 1395hh(a)(1), (2). FICTION: The regulations address future medicals for commutation cases exactly how they address future medicals for compromise cases. CMS’s own regulations treat compromise cases much differently than commutations. With respect to commutations, CMS advises “If a lump-sum compensation award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment.” 42 C.F.R. § 411.46(a). Commutations are paid out (presumably) at 100 cents on the dollar. Thus, this regulation highlights the law which says that Medicare will not pay where payment has been made under a WC plan. 42 U.S.C. § 1395y(b)(2)(A)(ii). Again, if the E/C is paying dollars for future medicals, then Medicare won’t pay for those same items, services or expenses. See also: How Politics Drives Up Your MSA Costs   CMS treats compromise cases differently. With respect to future medical expenses in compromise cases, CMS advises, “(1) Basic rule. Except as specified in paragraph (d)(2) of this section, if a lump-sum compromise settlement forecloses the possibility of future payment of workers' compensation benefits, medical expenses incurred after the date of the settlement are payable under Medicare. (2) Exception. If the settlement agreement allocates certain amounts for specific future medical services, Medicare does not pay for those services until medical expenses related to the injury or disease equal the amount of the lump-sum settlement allocated to future medical expenses.” 42 C.F.R. § 411.46(d). Very different result in a compromise claim as compared to a commuted claim. Denied WC claims would be considered compromise claims, no matter who you ask. In those cases, CMS tells us that its basic rule is that CMS pays future medicals, except where an allocation for future medicals exists. When an allocation exists, then the claimant should spend down and exhaust before Medicare will pay. The rules for denied WC claims are different from the rules for accepted WC claims, whether CMS and its contractor admit it or not when it is reviewing the $0 MSA proposal for your denied WC claim. FACT: Submitting MSAs is a voluntary process. Remembering that the statute and regulations are both silent about MSAs, we can look to the CMS WCMSA Reference Guide. There, CMS tells us, “There are no statutory or regulatory provisions requiring that you submit a WCMSA amount proposal to CMS for review.” CMS WCMSA Reference Guide v2.5, Section 1.0 (April 4, 2016). FICTION: CMS workload review thresholds provide safe harbors for those cases failing to meet threshold. This is perhaps the biggest fiction about MSAs in the WC industry. While CMS is willing to review certain MSA proposals, it does not have the resources to review everything. Thus, it imposes certain workload review thresholds based on a claimant’s Medicare enrollment status and the gross WC award which help its contractor to determine which cases to review and which to not review. If the case fails to meet the threshold, it does not mean that the parties can ignore the MSA issue. Medicare specifically counsels otherwise. CMS says, “These thresholds are created based on CMS’ workload, and are not intended to indicate that claimants may settle below the threshold with impunity. Claimants must still consider Medicare’s interests in all WC cases and ensure that Medicare pays secondary to WC in such cases.” CMS WCMSA Reference Guide v2.5, Section 8.1 (April 4, 2016). CMS goes on to say, “Regardless of the low dollar threshold, Medicare beneficiaries should always consider Medicare’s interest in all WC cases and ensure that Medicare is secondary to WC.” CMS WCMSA Reference Guide v2.5, Section 14.0 (April 4, 2016). The same holds true in the event of a denied WC claim. While Medicare would not be willing to review a $0 MSA proposal in a denied WC claim when the matter fails to meet threshold, the parties should still ensure the files are documented appropriately with evidence that Medicare’s recovery rights under the MSP Act were never triggered in that case. FACT: CMS is willing to review a $0 MSA proposal. Not only will CMS review it, CMS provides an example of the letter you will get in return if it approves your $0 MSA proposal. See CMS WCMSA Reference Guide v2.5, Appendix 5 – Sample Letters April 4, 2016). You might be interested to know that this conclusion, just like the conclusion in any other approval letter, is not considered final by Medicare unless or until you provide Medicare with a copy of your final executed WC settlement agreement. FICTION: It takes CMS the same amount of time to review a $0 MSA proposal as it does any other MSA proposal. You might have experienced this. You submit a $0 MSA proposal to Medicare, but instead of an approval letter, you receive a development request seeking additional documentation related to medicals or evidence that the E/C never accepted responsibility for medical expenses. Despite your best efforts, it seems that you’re destined to either receive a development request or a close out letter, forcing you to start the process over again. While CMS has a stated goal of reviewing a matter within 45 to 60 days, it seems $0 MSA proposals take longer, sometimes much longer, to review and approve. FACT: Once you’ve voluntarily asked CMS to review your $0 MSA, you’ve agreed to play by CMS’ own rules. Medicare is clear with its expectation here. “If you choose to use CMS’ WCMSA review process, the Agency requests that you comply with CMS’ established policies and procedures.” CMS WCMSA Reference Guide v2.5, Section 1.0 (April 4, 2016). So, if you believe a claim is denied properly under your state law, temper your expectations if you ask CMS to review and approve a $0 MSA proposal in the case. By agreeing to bring CMS into the process and ask for its approval, you have relinquished control of the matter, and are subject to the policies and procedures CMS establishes and changes from time to time. Remember also that no WCMSA appeals process exists. “When CMS does not believe that a proposed set-aside adequately protects Medicare’s interests, and thus makes a determination of a different amount than originally proposed, there is no formal appeals process.” CMS WCMSA Reference Guide v2.5, Section 16.0 (April 4, 2016). While CMS does have a limited re-review process, it only applies when: 1) you believe CMS’ determination contains obvious mistakes; or 2) you have additional evidence, not previously considered by CMS, which was dated prior to the submission date of the original proposal. CMS WCMSA Reference Guide v2.5, Section 16.0 (April 4, 2016). Make absolutely sure you are willing to open that door. Once you’ve asked CMS to review, it’s a door that is quite difficult to close. FICTION: The MSP Act always preempts state law with respect to future medical expenses. This one might be surprising, but it’s false. There are at least three examples of cases where the court concludes that state law dictates Medicare’s recovery rights in an MSP situation, not vice versa. In Bradley v. Sebelius, 621 F.3d 1330 (11th Cir. 2010), the Court concluded that Medicare’s recovery right was limited to that portion of the award which had been allocated to medical expenses. The allocation was based on a Florida state probate court’s allocation of a wrongful death settlement between claims of the survivors and the claims of the estate. In Caldera v. The Insurance Company of the State of Pennsylvania, 716 F.3d 861 (5th Cir. 2013), the Court concluded that the MSP does not go as far as to eviscerate all state law limitations on workers’ compensation payments. Recently, the Court in CIGA v. Burwell, 2017 U.S. Dist. LEXIS 1681 (decided January 5, 2017) concluded that state law creates Medicare’s recovery rights based on concepts of what is compensable versus what is not compensable. The law does not allow Medicare to recover conditional payments for items deemed unrelated to the compensable WC claim, even when bundled together with at least one code that was accepted by the E/C as compensable. This case calls into serious question CMS’ recovery practices under the MSP Act. More examples exist. The moral here is that Medicare’s recovery rights and the need to take certain actions with respect to MSAs originate from your state law granting property rights to parties in the first place based on issues of compensibility. FACT: Medicare is not a party to the WC claim; instead, it’s the most important potential “lienholder” to consider when resolving the WC claim. Some think that Medicare must approve the MSA to validate the settlement. Medicare is not a party to the settlement. The parties to the settlement are the injured worker, the employer and (perhaps) its insurance carrier or TPA. Medicare does not have the power to accept an offer on behalf of the claimant. Medicare does not have the power to extend an offer to settle on behalf of the E/C. Medicare is not a party to your WC settlement. Likewise, Medicare does not have the authority to approve a settlement once struck. That is the job of the workers’ compensation industrial commission or board in your state. Asking Medicare to review your MSA proposal is a voluntary step in Medicare’s eyes, and you should also consider it to be voluntary. If your state industrial board or commission mistakenly believes it is required to submit MSAs to CMS for review and approval or makes that a condition of its approval, it falls on you to educate members why that is not the case. 2017 is the right time to consider alternate forms of “considering and protecting” Medicare’s interests, including legal opinions. The MSP Act is in place to help ensure that the Medicare program will be around long term. MSAs are created as a way to comply with the law enacted to ensure the longevity of the Medicare program. That being said, it does not mean that Medicare has a right on every settlement to an MSA. And on denied WC claims, it really means that Medicare never has a right to an MSA. See also: The Looming $20 Billion MSA Train Wreck: Welcome Aboard   FICTION: MSA vendors who only review medical records when calculating MSAs provide accurate conclusions that align with the legal requirements of the MSP Act. You’ve likely had a report like this. Claim has been denied in full. No medicals or indemnity has been paid. The E/C hires one of its approval MSA panel members to calculate an MSA. In its report, the non-legal vendor concludes that an MSA of $X is needed since the claimant is expected to incur future medical expenses. What these non-legal vendors might not realize is that future medicals under the MSP Act are both a medical obligation as well as a legal obligation to address. This is where most non-legal MSA vendors fall short. Their team of nurses are charged with reviewing medicals and calculating an MSA. The report that results is less that of an MSA and more along the lines of a medical cost projection. This report, when it involves a denied WC claim, bears no relation to the actual legal position taken by the E/C. As discussed above, MSAs for those cases should always be $0 since Medicare’s right of recovery never ripens under the law. But, understand that those same non-legal MSA vendors may not be able to arrive at that conclusion. Citing and relying on the law in its MSA report comes dangerously close to the line when it comes to the issue of the unauthorized practice of law. Non-legal MSA vendors cannot issue legal opinions on MSA issues. They can issue reports based on their experience and knowledge of MSA issues involving CMS, but cannot provide those as a legal opinion unless the vendor is also a law firm that practices law. This might explain why those MSA reports say the proper MSA figure is $X when everyone on the file knows it should be $0 since the WC claim was denied. FACT: Instead of asking CMS to review and approve a $0 MSA allocation (when thresholds are met), consider obtaining a legal opinion from a lawyer experienced in the MSP Act. Wouldn’t it be great if we knew with certainty that CMS would agree with our $0 MSA proposal at first glance? That would alleviate a lot (but not all) of the frustration with the current system. Unfortunately, we never know that up front. In fact, as soon as you voluntarily ask CMS to review the MSA, you have lost all control of the claim. Chances are good you will receive in return either a development letter asking for more information supporting your assertion that a $0 MSA is appropriate, or you will receive a counter-higher letter. Neither result is good for the file. Now, how many times has that happened to you over the past 12-24 months? Instead of playing CMS’ WCMSA review game, you can choose to not play by obtaining a legal opinion instead from a lawyer who has experience addressing MSA issues. You gain all the same benefits you get from CMS approving the WCMSA (i.e., ability to close the file with confidence, complete risk transfer on the future medical issue, etc.) without involving the federal government. If you had the choice, would you voluntarily ask the federal government to audit your tax return for accuracy? I didn’t think so. WCMSAs are the same. Why ask it to audit your WCMSA conclusion for accuracy when perfectly valid alternates exist and you can avoid federal scrutiny? It just doesn’t make sense in 2017. Do you know how Albert Einstein defined ‘insanity’? He said, “Insanity is doing the same thing over and over again expecting different results.” Parties who continue to ask CMS to review and approve its $0 MSAs, in this author’s opinion, engage in just that type of activity. You can’t expect CMS to approve your $0 MSA simply because you want it to or even because it is legally appropriate for them to do so. CMS’ track record proves that. Instead, you should hire a lawyer to provide you with a legal opinion that protects you in the future in the unlikely event that CMS comes calling with its hand out. Cattie, P.L.L.C. is a law firm that has experience with MSA issues, including how to protect parties from the federal government when a WC claim has been denied. I’d be happy to consult with you at your convenience about your claim and how a legal opinion from my law firm can be used in lieu of CMS approval of your MSA. The firm is actively accepting new cases now. For more information, please email cattielawpllc@gmail.com.

Billions of dollars of investment are flowing into startups focusing on insurtech. From the viewpoint of investors, anything that has to do with using technology in the insurance industry can be labeled insurtech. For incumbent insurers, however, this broad term is unfortunately not very useful for coming to an understanding of the many start-ups focused on the sector. Novarica has proposed a framework called the “ABCs of InsurTech” to help insurers differentiate between Analytics Arms Dealers, Beneficial Bots, Creative Carriers and Digital Distributors. The first two categories, which are focused on helping insurers transform and compete, are likely to have a greater impact on incumbent insurers in the short term than the direct competitors to existing carriers and distributors. But the latter two categories will offer useful examples of how to operate a digital insurer that will be copied by successful incumbents as they transform themselves. See also: Top 10 Insurtech Trends for 2017   Analytics Arms Dealers include start-ups like Carpe Data, Praedicat, and Tyche, focused on selling data and analytical capabilities to insurers to help them compete more effectively. These companies are not participating in the marketplace directly, but selling tools to those who do. The dramatic growth in the accessibility and sheer volume of third-party data, combined with the increased power of analytical tools and big data technologies, is changing the way insurers operate. The combination of predictive modeling combined with straight-through processing is making the business of insurance more effective and efficient in areas ranging from pricing, to underwriting, to claims. Analytics Arms Dealers represent an opportunity and a threat to incumbent insurers: an opportunity if an insurer is able to leverage new capabilities effectively before their peers, and a threat if they are not able to. “Beneficial Bots” is a generic term that covers emerging technologies like drones, the Internet of Things, and blockchain, which have the potential to disrupt many industries, or at least transform operations within them. The term encompasses not only the technologies themselves, but the companies bringing them to the insurance industry, like Human Condition Safety, Meshify, and PrecisionHawk. Like Analytics Arms Dealers, Beneficial Bot providers are primarily selling tools to incumbent insurers, as opposed to competing with them directly. These emerging technologies have the potential to bring about dramatic changes in costs and capabilities, in the process forcing re-evaluation of business models and opening new potentials. Also like with Analytics Arms Dealers, insurers need to understand the potential value of these new capabilities better and leverage them faster and more effectively than their competitors. Creative Carriers are start-ups that believe that by leveraging massive amounts of third-party data, powerful analytics, and digital communications, they can create a new way to create and sell insurance. In many cases, they are taking an “Outside In” approach by starting with the desired customer experience and building their operation backwards from there. Some Creative Carriers, like Trov and Slice Lab, are focused on offering innovative products. Others, like Lemonade or Oscar, are selling a traditional product through a more customer-centric sales and service experience. These companies, while unlikely to pose a direct threat to most incumbent insurers (due to a lack of resources and what will likely be an eventual realization that the business of insurance is more complicated than they imagine), can serve as useful examples for incumbents to follow in how they approach the customer experience. Some may be acquired by incumbent insurers, but even the ones that ultimately are unsuccessful may still provide the industry with valuable lessons on how to serve customers more effectively with new capabilities. Digital Distributors are agencies, brokerages, or aggregators, with a good user interface and a digital-focused customer experience model. From the incumbent insurer point of view, Digital Distributors are hardly disruptive at all. They get the most press and a disproportionate amount of investment because they are the easiest to understand. Digital Distributors like CoverHound, PolicyGenius, and Zenefits may compete with existing channels, and may require insurers to streamline operations in order to access the markets they’ve aggregated. But they, like any other intermediary, are selling insurance underwritten by carriers. Working with a Digital Distributor is not really all that different from working with a traditional distributor. Over time, expect distributors to learn lessosn from Digital Distributors about customer convenience, digital marketing, and service, and those lessons will reshape the way most distributors operate. In that sense, Digital Distributors are similar to Creative Carriers. And while some may reach critical mass or thrive as independent concerns, most will either be acquired by traditional players or fail. Insurers need to sift through the hype over InsureTech in order to make an informed decision about how, or whether, to engage with start-ups. Digital Distributors and Creative Carriers mostly offer distractions and confuse the market. Analytics Arms Dealers, on the other hand, can advance pricing, underwriting, and claims, while Beneficial Bots bring entirely new possibilities to the insurance business. Insurers looking to thrive in the future should consider what engaging with the right kind of InsureTech startups can do for them. See also: Which Rules Should Insurtech Break?   Of course, there will always be some risk involved when engaging with start-ups, most of which eventually fail. But if insurers apply an underwriting mindset to engaging with this world—in other words, realize that a small number of hits may pay for the losses—it may become a more attractive proposition. In any case, there are great opportunities to learn, and potentially even greater risks to remaining ignorant of new approaches and capabilities.

The first Out Front Ideas with Kimberly and Mark webinar of 2017 provided our thoughts on the 20 Workers’ Compensation Issues to Watch in 2017. What follows is a summary of the issues discussed: 1. Election Impact The Department of Labor under President Obama had made it clear that they felt state workers’ compensation systems needed reform and they were prepared to recommend minimum benefit standards to the states. Trump’s recommendation for Secretary of Labor has been a vocal opponent of many federal labor regulations. For now, any talk of the Federal Government getting involved in state workers’ compensation issues seems to be on hold. However, one issue that could involve the federal government is related to potential costs being shifted from workers’ compensation to social security disability. Efforts to preserve the solvency of social security could result in action intended to limit this cost shifting. 2. Healthcare Reform Regardless of which side of the aisle we find ourselves, surveys have shown that most Americans believe the Affordable Care Act is not working as it was originally intended or as well as they would like. A few things are clear, access to health insurance does not dictate better health. If care remains unaffordable, people will not access care for themselves or their family. Healthcare is increasingly complex and accessing the right care at the right time remains a struggle for the general public. We are challenged to advance the approach of well care when, in fact, we remain largely a sick-care system. While we wait to see how the GOP evolves health reform, we are hopeful that efforts underway to shift from fee-for-service to value-based and outcomes-focused care will continue to advance. We hope healthcare suppliers will continue to advance population health wellness as much as they focus on chronic disease. Kimberly George views this as the single most important issue to watch in 2017. 3. OSHA Another potential impact of the election results is the direction OSHA may take in 2017 and beyond. In recent years, employers have complained that OSHA was more focused on enforcement than education and training. In fact, OSHA did shift resources out of education into enforcement. Recent OSHA policies such as the publicly-accessible online database and restrictions on post-injury drug testing were met with significant resistance from the employer community. OSHA falls under the Department of Labor and, as mentioned before, the expectation is that the Department of Labor will have a new direction under the Trump administration. 4. ADA/FMLA During the Obama administration, we saw an increase in enforcement actions and also broadening of regulations that placed more burdens on the employer. Leave-of-absence regulations have become increasingly more complex over the past eight years. ADA accommodation requests were initially related to ergonomics and transitional work accommodations following an illness or injury. Today, they have become more complex, including everything from bringing service animals into the workplace, allergies and noise accommodations to establishing work-from-home accommodations. The list goes on and on. What constitutes a “covered” disability has evolved and employers are tasked with ensuring compliance. Under the Trump administration, the Feds are less likely to pursue actions that would expand existing boundaries of the law. 5. Rates and Premiums One of the interesting things about workers’ compensation market cycles is that they are generally driven by changes in competition more than changes in exposures. If you look at claims costs over the last 20 years, they have steadily increased, yet premiums during this same period have gone up and down. During the January 1 renewal cycle, rates trended flat or slightly down compared to expiring premiums. There are some problem states that saw higher rates, including California, New York, Illinois and Florida. The declining rates compared to increasing claims costs have caused A.M. Best, Fitch and others to issue a negative outlook on workers’ compensation. It is expected that this hyper-competitive market cycle is going to end soon as the new entrants into the marketplace start to see the long-tail losses from their business hitting the books. See also: 25 Axioms Of Medical Care In The Workers Compensation System   6. Long-Tail Exposures One of the things that make workers’ compensation such a challenge for employers and carriers is the long-tail nature of the claims. “Long tail” means that premiums collected today must cover losses for years to come. The claims tail is an issue to watch because of the impact it has on both carriers and employers in terms of cost of insurance today and future reserves. The biggest driver of increasing claims-tail costs are advances in medical science. Better medicine means life expectancies are getting longer. This increases the exposures for lifetime indemnity and medical benefits. In addition, new drugs and treatments almost always cost more than what they are replacing, especially when you consider the cost difference between brand name drugs and generic medication. Prosthetics are so much more advanced today than they were 10 years ago, but they also cost significantly more. 7. State Legislative Agendas We expect to see new workers’ compensation legislation established in at least four states during 2017: Florida Last year, the Florida Supreme Court tossed out multiple elements of their workers’ compensation statutes as unconstitutional, which caused a significant increase in claims costs and premium rates. There will be bills introduced to address these issues. Illinois Last year, and again this year, Illinois Governor Rauner has made workers’ compensation reform a key element in his job-growth agenda. He is calling for medical fee schedule reductions, higher causation standards for conditions to be found compensable, and legislation to reverse court decisions that have expanded benefits. New York New York is another state where reform efforts stalled last year. Employers are pushing for limits on the time for an employee to reach maximum medical improvement, which triggers the 10-year cap on indemnity benefits. California Every year the legislature passes bills to reverse recent reforms, and with few exceptions the Governor has vetoed those bills. There will inevitably be more reform bills introduced in 2017, so we will see what those bills address and whether the Governor will approve any of them. Options to Workers’ Compensation In 2016, we saw efforts to push for options to workers’ compensation stall. Legislation in Tennessee and South Carolina did not move forward, and the Oklahoma Option was found unconstitutional by the State Supreme Court. There is talk of a Texas-style opt-out bill being introduced in Florida in 2017. This bill would make workers’ compensation optional. There are also rumors about an option bill being reintroduced in Tennessee. It remains to be seen if there is enough momentum in either state to move this legislation forward. 8. Treatment Guidelines Workers’ compensation stakeholders have become very familiar with medical treatment and return-to-work guidelines, along with evidence-based medicine. Payers and managed-care suppliers work diligently to embed guidelines in their systems for nurses and claims adjusters to improve efficiency with access to the guides and workflow for their colleagues. States have implemented a variety of guideline solutions, which include creating unique formularies and treatment guides, and also adopting industry-available workers’ compensation guidelines. The lack of guideline consensus across stakeholders including physicians, regulators, payers, and suppliers is an ongoing challenge to the system. 9. Constitutional Challenges In 2016, elements of the workers’ compensation statutes in five states were found to be unconstitutional by such states’ respective Supreme Court. Among the issues found unconstitutional in 2016 were:

• Caps on temporary total disability benefits
• Exclusion of coverage for certain farm workers
• Caps on attorney fees
• Time limits for filing cumulative trauma clams
• Use of current edition of AMA guidelines for impairment ratings

When an aspect of the law is found unconstitutional, that change goes back to when the law was enacted. In Florida, the rulings changed the laws governing years of existing claims, significantly increasing the exposure on such claims retroactively. This created unanticipated liabilities for carriers and self-insured employers. The success of attorneys in challenging these statutes provides a road map for attorneys in other states to pursue similar challenges. 10. Mental Health The notion that workers are not impacted by mental illness when a work injury occurs or that mental health is always separate from workers’ compensation is an increasing challenge for the industry. Mental health is among the top 3-5 reasons for short term disability absences across white and blue collar workers, mental health crosses industry verticals. More than ever employers understand that lack of mental health care impacts productivity, regardless of how an injury or illness occurred. Ways in which employers are addressing mental health and workers’ compensation include promoting EAP and behavioral health programs for employees regardless of how an injury or illness develops. One challenging aspect of this issue is the fact that many states significantly limit or completely prohibit workers’ compensation benefits for mental injuries without any physical cause. There will be more discussions in the future about the need to revisit laws around the country dealing with mental injuries. 11. Impaired Workforce After the November elections, eight states and DC allow for recreational use of marijuana. This means around one in five people live in a state where recreational marijuana is now legal. For employers, this means the reality that a percentage of your workforce is likely impaired. Years ago many employers stopped doing pre-employment drug testing because they could not get enough applicants to pass to fill their jobs. New OSHA regulations from 2016 seek to significantly limit the use of post-injury drug testing, which further inhibits employers looking to maintain a drug-free workplace policy. The answers to this issue is very challenging. Drug testing for marijuana always focused on whether the drug was present in the system because it was illegal. It can be detected in the system 30 days after use, but showing presence of the drug does not show impairment. This is an area where the science needs to catch up with social reality. We need an established standard for what constitutes impairment when it comes to marijuana. See also: How Should Workers’ Compensation Evolve?   12. Alternatives to Opioids for Chronic Pain For a number of years, there has been significant focus on reducing prescription opioid use in workers’ compensation. With President Obama supporting awareness of the opioid epidemic in 2016, the management of opioids and opioid-related deaths became a household topic across America. In 2017, we believe there will be greater emphasis on the options outside of opioids for both acute and chronic pain. Admitting patients into functional restoration programs and multi-disciplinary integrated pain management programs have proven successful ways to eliminate opioid use. Meditation, exercise, mindfulness, yoga, and cognitive behavioral therapy have also shown success. In the quest to offer non-opioid treatment options in workers’ compensation, one of the challenges is coverage. Insurers have been quick to pay for opioids and hesitant to pay for alternative treatments. One-size-fits-all approaches to care will not work for these patients. Treatment is outside of guidelines and requires coordination and care, rather than simply approving or denying treatment. 2017 should be our year to improve functionality for patients currently on opioids and alternative treatments must be considered. 13. Occupational Disease We know that exposure to certain substances in the workplace can lead to diseases such as cancer. It can take years after the exposure for these diseases to manifest themselves. Yet most statutes only cover certain defined diseases and, in many states, the statute of limitations for reporting a claim is less than the manifestation period for the disease. This creates a hole in the coverage for these diseases. This is an issue we are going to see in more courts around the nation, as these diseases continue to manifest themselves over time. Medical science is becoming more precise in identifying the sources of these diseases, and, as this happens, workers’ compensation statutes will need to be amended to provide better coverage for those workers who contract such diseases. The opposite end of the spectrum when it comes to occupational disease coverage are the presumption laws that impact police, firefighters and other first responders. There are currently 34 states with various presumption laws covering a variety of cancers, diseases of the heart and lungs, and certain blood-borne diseases. Opponents of these bills argue that the science does not support an increased risk for disease due to the occupation alone and that these claims should be subject to the same causation standards as other occupational disease claims. 14. Transparency with Workers How many times have you heard an injured worker say they didn’t understand the information that was provided to them? Often times injured workers retain attorneys simply because they are confused and do not feel like anyone is there to help them. Many of us in the industry believe the pendulum has swung too far towards the process of workers’ compensation instead of taking care of the injured worker. There was great industry momentum in 2016 with advocacy-based claims models. In 2017, look for ways in which the advocacy discussion evolves into transparency discussions. Transparency is helping the injured worker be a good consumer within the workers’ compensation arena, helping them understand the process, and providing them the best available information to make proper decisions. 15. Insurance Talent Gap We know that a significant percentage of the workforce in the insurance industry is expected to retire in the next 10 years. The pipeline of workers to replace these retiring employees is insufficient. To address this, we need a multi-faceted approach that includes working with colleges in developing risk management education and a focus on talent attraction and recruitment. Training programs need to continue to be refined so that the knowledge of retiring employees can be passed on. Finally, employee retention is also a concern. Employers need to be more flexible with working arrangements to compete with other occupations that allow for flexible hours and work-from-home options. 16. Workers’ Compensation’s Public Image There is growing effort underway to promote the good in our industry. Everyday our companies and our colleagues are making the right decisions and helping people in their time of need. Yet, we also have such a long way to go in the area of public relations. We need to talk more about the good we do in helping injured workers regain their quality of life. This will not only help with the stakeholders in the system, but will go a long way with recruiting the next generation into our field. Workers’ compensation is about taking care of people and it is very meaningful work. Let’s all focus on improving workers’ compensation’s reputation this year. 17. The Evolution of Workers’ Compensation In the last year, several industry groups have had discussions on how workers’ compensation should evolve to better meet the needs of today’s workforce. The threat of federal intervention was the driving force behind much of these discussions. With that threat on hold for now, it is important that the industry take this opportunity to continue these discussions while we can control the agenda. If change is needed, then we want to be the ones working with legislators and regulators to draft those changes. 18. Machine Learning and Artificial Intelligence Predictive analytics have been around for over 10 years. Claims professionals began using predictive analytics to identify the claims that had a propensity for adverse development. Other models evolved to address litigation, sports medicine care opportunities and return-to-work goals. It is safe to say that nearly all payers have predictive models today and probably just as likely that there is little published data on the outcomes associated with these models. In 2017, we believe the conversation will shift to machine learning. What payers have evolved or are building new claims systems to address artificial intelligence and machine learning? Should all claims be handled by a claims adjuster? Do interventions on every claims impact the ultimate exposure or are we at a point in the industry where processing a claim should be as easy as a warranty or auto claim? There is tremendous untapped potential in this area. See also: Healthcare Reform’s Effects on Workers’ Compensation   19. External Disruptors Looking to the future, there are many areas where external disruptors could have a significant impact on workers’ compensation. Mark Walls feels this is the biggest issue for the industry to watch in 2017. Many large employers have been looking at the merits of a 24-hour healthcare model. With medical making up close to 60% of workers’ compensation costs, what happens if that element is removed from the system? Changing retail buying habits are also having an impact on workers’ compensation. Retailers are closing stores and going out of business. With more Americans doing their shopping online, what is the future for the retail industry? Finally, automation is a reality that has potential to be a significant disruptor. The manufacturing and distribution industry has seen significant job loss due to automation. Think of all the jobs in the trucking, shipping and transportation industry that could be lost to self-driving vehicles. Automation could be the ultimate disruptor for the workers’ compensation industry. 20. Innovation in Action While the insurance industry is traditionally not known for innovation, we are certainly hearing more about innovative solutions. Digital health, insurtech, med tech, machine learning, and automation are all terms we are becoming familiar with and each brings its own value to workers’ compensation. As the innovations come to fruition in the marketplace, we will be focused on understanding the value of the innovation. Is the innovation going to improve the experience of the user or is it designed for internal processes and workflow? Will the solution drive efficiency and speed to decision or process improvements? How will quality, compliance and outcomes be impacted and measured? To listen to the complete webinar, click on this link.

Each year, the cyber security industry faces new types of threats as cybercriminals evolve their approach toward accessing organizations’ data. For 2017, the security experts at Symantec have taken a close look at the trends we can expect to see this year and in the years ahead. Given the consistently changing security landscape, it’s important to take a moment and determine where the security industry needs to focus attention. We’ll continue to see a shift toward the modern workplace as businesses allow employees to introduce new technologies such as wearables, virtual reality and IoT-connected devices onto the network while supporting a rapidly dispersed workforce made possible by cloud applications and solutions. Enterprises will need to shift their focus from safeguarding endpoint devices toward protecting users and information across all applications and services. Here’s a list of cyber security threats in 2017 as predicted by the Symantec cyber security team. 1. Connected cars will be taken for ransom As cars start to have connected capabilities, it is only a matter of time until we see an automobile hack on a large scale. This could include cars being held for ransom, self-driving cars being hacked to obtain their location for hijacking, unauthorized surveillance and intelligence gathering, or other automobile-focused threats. This will also lead to a question of liability between the software vendor and automobile manufacturer, which will have long-term implications on the future of connected cars. See also: Best Practices in Cyber Security   2. IoT devices will increasingly penetrate the enterprise Beyond looking simply at computers and mobile devices for vulnerabilities, incident response teams will need to consider thermostats and other connected devices as jumping points into the network. Similar to how printer servers were used for attacks several years ago, nearly everything in an enterprise is now connected to the internet and will need to be protected. 3. Increased IoT DDoS attacks The Dyn attack in October demonstrated the vast number of IoT devices that don’t have security on them and are tremendously vulnerable to attacks. As more IoT devices are installed in the mass market, the risk of security breach will increase. Once insecure devices are in the market, it becomes almost impossible to fix the issue without recalling them or issuing security updates. Given that this lack of security will continue for the foreseeable future, the number of IoT attacks will only increase as well. 4. Ransomware will attack the cloud Given the significant shift towards cloud-based storage and services, the cloud is becoming a very lucrative target for attacks. The cloud is not protected by firewalls or more traditional security measures, so there will be a shift in where enterprises need to defend their data. Cloud attacks could result in multi-million dollar damages and loss of critical data, so the need to defend it will become even more crucial. 5. Threats from AI will only continue to grow In 2017, artificial intelligence or AI will only continue to grow - Forrester predicts investment in Artificial Intelligence will grow 300 percent next year alone. With this growth comes new, powerful insights for businesses to tap, and an increased collaboration between humans and machines. From a security standpoint, this expansion will impact organizations in more ways than one – including endpoints and mechanisms in the cloud. 6. Machine Learning to cause widespread threats As new forms of machine learning and AI continue to enter the market, enterprises will need to invest in solutions that have the capabilities to collect and analyze data from the countless endpoints and attack sensors across different organizations, industries and geographies. These solutions will prove to be instrumental in teaching machines how to operate on the front lines of a global battle that changes every day, minute by minute. 7. Rogue nation states will finance themselves by stealing money There is a dangerous possibility that rogue nation states could align with organized crime for their personal gain, such as what we saw in the SWIFT attacks. This could result in down time for countries’ political, military or financial systems. 8. Fileless malware will increase. Fileless infections – those written directly onto a computer’s RAM without using files of any kind – are difficult to detect and often elude intrusion prevention and antivirus programs. This type of attack increased throughout 2016 and will continue to gain prominence in 2017, most likely through PowerShell attacks. 9. SSL abuse will lead to increased phishing sites using HTTPS The rise in popularity of free Secure Sockets Layer or SSL certifications paired with Google’s recent initiative to label HTTP-only sites as unsafe will weaken security standards, driving potential spear-phishing or malware programs due to malicious search engine optimization practices. See also: Paradigm Shift on Cyber Security   10. Drones will be used for espionage and explosive attacks This could be seen in 2017, but is more likely to occur further down the road. By 2025, we can expect to see “dronejacking,” which will intercept drone signals and redirect drones for the attacker’s benefit. Given this possibility, we can also expect to see anti-drone hacking technology being developed to control these devices’ GPS and other important systems. You can find the original article here.

"When it comes to assets, a growing number of people are increasingly satisfied with having access to these assets, rather than owning them." -- Transpay.com

There is no doubt that the hot topic for 2017 and beyond will be the growth of the so-called sharing economy. The reason for this growth is simple: Instead of owning assets, people are increasingly electing to access them. But that's not the end of the story. Exacerbating this access over ownership mentality is the rapid growth in mobile technology. This allows online platforms, like WeGoLook, to use powerful mobile apps to facilitate the new emphasis on access. The idea of owning assets, popularized by the consumption habits of baby boomers, is now slowly losing its appeal. The assets you do own can now work for you, and ultimately earn you supplemental income. And people are comfortable with this. A recent PwC study found that 60 percent or people believe the statement that "access is the new ownership." What implications does this have for insurers? Great question. But first, let's discuss the idea behind the sharing economy. See also: Breakthroughs in Managing (and Insuring) Tangible Assets   Access to Assets? The concept of access over ownership, also known as collaborative consumption or the access economy, is simply the idea of sharing resources. Due to advances in mobile technology, sharing assets (homes, cars, labor, consumer items) is structured through the use of online platforms and mobile apps (Uber, Airbnb, WeGoLook, etc.). The sharing economy allows consumers, and businesses, the opportunity to use assets on an as-needed basis instead of purchasing and managing them. Is Sharing Better Than Owning? It's certainly becoming more popular. A recent survey found that 72 percent of adults are expected to participate in the sharing economy over the next two years. Further, PwC estimates that by 2025, the sharing economy will be a $300 billion dollar industry. So why are people choosing to access rather than own? The Downsides of Ownership While owning assets may portray some degree of success, prestige, and affluence, it also means depreciation, maintenance, and storage. Depending on the asset -- boat, fancy car, vacation property, etc. -- you have to use that asset frequently to make it worth its value. And so often, this isn't the case. Consider that both cars and boats sit unused 95 percent of the time. That's massive underused capacity and waste! Think of something expensive you bought years ago that you've used a fraction of the time? Yea, we are all guilty of this! But fortunately, people are changing their ways. A study by Frost & Sullivan estimates that the number of participants in car-sharing ventures in North America will rise to 9 million by 2020. Considering that almost any asset can be shared, the possibilities are endless. Can the Insurance Industry Jump On Board? Many have argued that the insurance industry needs to innovative its old business practices. Whether or not they're right, there is some truth to the idea that all industries need to adapt to the sharing economy phenomenon. Insurance carriers have already experienced the massive shift to mobile tech with the insurtech revolution. Now, the consumption emphasis on access is gaining momentum. Here's a statistic to blow your socks off: 90% of millennials don't have insurance. This should be a siren song to insurance industry insiders. There is a huge gap that needs to be filled! See also: What Millennials Demand as Customers   Many insurtech companies like Lemonade, Friendsurance, and MetroMile, are offering access to shared insurance pools or time-limited policies. These companies are embracing access, and are killing it! Insurtech as a whole has attracted more than $5 billion in investment since 2011. On the policy side of the equation, similar rethinking needs to occur. Since consumers are increasingly electing to share their assets instead of owning them, traditional insurance packages don't apply. Indeed, many insurers have developed niche specific policies for ride-sharing, car-sharing, and home-sharing. But, many have not. Rising to the Challenge The truth is, the sharing economy and its emphasis on access can no longer be an afterthought. The sharing economy demands a fresh look at the traditional way risk management and insurance packages are offered to consumers. As more consumers access goods and services online, an exciting challenge and opportunity are presented to insurance companies. How will you react?

Disrupters and the disrupted get all the attention these days. But do you know who never seems to make big headlines? Brands that have been around for 100-plus years. Such businesses definitely could have been disrupted, yet they are still growing and innovating and, most importantly, remain highly respected. This notion struck me during the winter holidays at a moment when I found myself simultaneously gift shopping (online), watching TV and brushing my teeth. Yes, I know that sounds weird, but here are the three brands that may consciously or unconsciously have mastered the art of disruption avoidance:

1. Hallmark
2. National Geographic
3. Arm & Hammer

I dropped into my local Hallmark store shortly thereafter to buy some greeting cards and peruse the gift selection. If you step back and look at what the stores sell, it may seem like a hodgepodge. In addition to greeting cards, these shops tend to stock kitschy mugs, eye-catching jewelry, stylish scarves and home goods and lots of knickknacks. See also: Insurance Disruption? Evolution Is Better   But when I took a closer look, I found myself tearing up at nearly every turn. Why? These “products” were actually vehicles for messages that hit people in the heart. On the surface, the company appears to be in the greeting card and gift business, though that is not how the company defines its “why.” The company defines it as: “Making the world a more caring place by helping each other laugh, love, heal, say thanks and make meaningful connections with others.” Now that’s an enduring mission! Back home, despite many TV channel choices, I have a hard time finding programs that are appealing. Nevertheless, one evening my husband and I stumbled upon a fascinating show about Mars. It was not only informative but gripped us and made us feel as though we were actually visiting the Red Planet. I was curious about who produced the program. Then I saw the little yellow rectangle and knew it was National Geographic. I remember collecting that magazine as a kid. I had hundreds of them. Today, viewed the company through the eyes of someone who examines business innovation and disruption, it would seem that the magazine might have become obsolete, as people now get their information in various other ways. Many magazines have gone out of business or have been bought and sold because of this trend. But National Geographic is still on newsstands. If print media is so much less relevant today than, say, 50 years ago, how has National Geographic survived since 1888? Let’s consider one last brand. As I was shopping for toothpaste recently, I realized that the Arm & Hammer logo is virtually unchanged from when I was a kid. Back then, like now, I hated the taste of baking soda but knew that it was something that made everything smell clean. There are plenty of other brands of baking soda, and even generic brands that are no different in terms of ingredients. Yet Arm & Hammer is clearly the most recognized brand, and it’s been the cornerstone of manufacturer Church & Dwight’s success since the mid-1800s. Over the years, that company has figured out how to use baking soda in everything from laundry detergent to kitty litter. But it’s not really about the baking soda; it’s about the lasting brand and unchanged mission to further cleanliness and hygiene. There are four shared traits among these brands:

• They are all more than 100 years old and still growing.
• They are products that continually attract new entrants while worrying competitors.
• Their logos have not really changed at all over the years.
• Their original product is still thriving in its original form.

See also: How to Be Disruptive in Emerging Markets   What can we learn from this? Old, growing companies that don’t make headlines and don’t get disrupted are excellent at defining their purpose as something much deeper than just the product they originally sold. What’s more, there is no other company in the space better known for that unique purpose. How many companies can we say that about in the insurance and finance industries?

Lifelong learning has been shown to benefit employees and employers. Insurance pros with a penchant for learning often earn more money and have better long-term career prospects. In exchange, employers get smart, productive workers who are eager to try new things and share their expertise with colleagues. Here are four ways to foster continuous education and lifelong learning among your staff. For employees, the benefits of lifelong learning are clear and documented – better employment prospects, higher salary and greater job satisfaction. Research shows happier employees are more productive employees, but for employers, the benefits of prioritizing lifelong learning go beyond a bump in efficiency. For lifelong learners, a natural curiosity is second nature. They’re the employees who are most likely to embrace a new technology, get behind a new process and keep the rest of their teams up to date on industry changes. They’re the employees who can change your company culture and invigorate innovation. A growing need for learning As the entire insurance industry grapples with the impending talent gap, attracting and retaining employees who know the industry and are eager to keep up with new developments will be more important than ever. In the next two years, more than 25 percent of the industry will reach or be close to retirement age. Without a formal structure for training and passing on institutional knowledge, veteran workers will leave take key information with them for good when they walk out the door for the last time. See also: Better Way to Think About Leadership   Fostering on-the-job learning is an important first step in realizing the benefits of an informed, knowledgeable team of employees. The good news is 73 percent of workers consider themselves to be lifelong learners, according to a survey from the Pew Research Center. Many employees want to learn more, they’re just waiting for a cue from their employers. Here are four ways organizations can encourage employees to become lifelong learners. 1. Support formal learning On-the-job training cannot be an afterthought. At far too many organizations, a focus on keeping skills sharp and mastering processes stops once employees are officially on the books. Organizations spend a staggering 50 times more on recruitment than they do on training, according to Deloitte. Official training has to be more than a boring PowerPoint presentation everyone suffers through a few times a year. Industry designations are another effective way of keeping employees up to speed in targeted areas. Employees who receive designations from The Institutes say they are better able to add value to their roles at their organizations. It’s also a built-in opportunity to network and share knowledge with other people pursuing their CPCU, AINS or other designation. 2. Focus on culture The research from Pew also found that nearly 90 percent of professional learners cite their workplace, dedicated off-site facilities, or conferences as places where they most commonly learn. Growing a culture where learning is encouraged is essential. Staying current on industry developments and seeking out opportunities to attend conferences and learn more about their specialties should be a stated part of everyone’s job. Supporting a culture of learning doesn’t have to be an expensive or time-consuming commitment. A quick lunch meeting where a few employees recap a webinar they recently took in or share their thoughts on an insurance industry book they just read are great places to start. It can even be as simple as subscribing to a few industry publications and putting them in breakrooms and other common areas. 3. Lead by example Execs and managers need to practice what they preach when it comes to lifelong learning. This shouldn’t be too difficult – research suggests a willingness to learn is the number one indicator of executive success. When frontline employees see their bosses and other company leaders taking the time to prioritize learning, it sends a message that growing your knowledge base is valued – and a good way to advance your career. It can be as simple as a manager sending an email encouraging everyone to read a relevant news article that came out recently. 4. Encourage social learning There are lots of ways to boost employees’ knowledge of industry information and best practices. Designations, webinars, conferences and newsletters are all great ways to continue to learn more about claims, underwriting, customer service or a number of other industry topics throughout your career. But what about information specific to your organization? That institutional knowledge that is dissipating as insurance vets retire is often the most valuable information to a team. Creating a mentoring program between more experienced workers and fresh faces at your organization is one of the most effective ways to recapture this crucial institutional knowledge. See also: 2 Heads Are Better Than 1, Right?   Giving less experienced employees a chance to share his or her skills with a more experienced worker, so-called reverse mentoring, has also been shown to be beneficial to both groups. In addition to actually sharing key info, a mentor program where different co-workers are regularly sitting down to talk about what they’ve learned and how it’s informed how they work is a great way to create that culture of continuous education. How do you foster lifelong learning at your organization or in your department? Leave your best tip in the comments section below. Or, learn more about the most popular designations from The Institutes and enroll your teams today.

Each new year affords an opportunity for introspection about ways to improve ourselves. As Oprah Winfrey put it, “Cheers to a new year and another chance for us to get it right.” The same hopeful notion applies to organizations and industries as well as individuals, though commercial resolutions have less to do with dieting and flossing and more with promoting productivity and providing excellent service. Liability insurers gauge productivity—the effective use of resources—using detailed statistics, such as allocated loss adjustment expenses (“ALAE,” the sum of legal fees, court costs, expert witnesses, among other payments that do not go to the injured party). But a higher than desired ratio of ALAE to total payments is only a symptom. Bringing it back under control requires getting to its root causes. “Excellent service” is a more difficult goal to measure, but both goals result from practiced behaviors, repeated daily, and are not the consequences of slogans or aspirations, any more than losing ten pounds happens by joining a gym without making it a habit to actually use it. As a friendly outsider to the industry, I have observed behaviors that build value in insurance organizations. I humbly offer several suggestions for resolutions in 2017 to encourage such behaviors. Opportunities for early collaboration Sometimes the industry shoots itself in the foot. Assume a multi-unit residential development that is showing its age—cracked and settling foundations, leaking windows, dry rot, mold, you name it. A lawsuit is filed naming all the usual suspects: developer, architect, general contractor, multiple layers of subcontractors, and certificates of insurance saying every party upstream is an additional insured. Reservations of rights letters are flying like swallows to San Capistrano. Depositions begin, with a dozen law firms seated at the table, only two of which are asking or objecting to questions. Months/years later, a court-appointed special master sits everyone down and untangles the Gordian knot of coverage/indemnity obligations, and the case settles, after multiple experts are hired and reach predictably conflicting views. If we know how the eventual outcome will be reached, why not skip to the chase? Discovery need not run its all-consuming course before insurers can negotiate allocations, with or without a neutral doula. Then a small defense team can negotiate directly with the plaintiffs. See also: The Need to Educate on General Liability   Early collaboration in multi-party litigation can be a shortcut to case resolution. Resolve to actively look for such opportunities. The firm necessity of “soft” skills Insurance may be a financial product, but it is delivered by a service industry. The industry and regulatory agencies require training in the basic actuarial and risk management skills, but there are few training programs in the so-called "soft skills" such as clear, objective writing, and interacting well with the public. A well-written file note that states the objective reasons for a claims decision may never see the light of day, but when a carrier is sued for bad faith the case may turn on the jury’s reading of that little bit of prose. In 2017, resolve to emphasize the soft skills during training programs, along with the arithmetic. The “stitch in time” Most insurers and lawyers follow Abraham Lincoln’s advice: “Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough.” Yet, cases that clearly should settle within their first month or two wait until the proverbial eve of trial to resolve. Why? In my view the reason isn’t a lack of interest on either side of the case caption to settle—both sides know that there is better than a 95% chance that the case will ultimately settle—it’s a lack of information. Too often we think, wrongly, that the only way to get the information needed to settle a case is through painstaking and expensive formal discovery. As with that gym membership that lays fallow, we know where we need to be, but don’t take the steps to get there. There are “stitches in time that save nine.” They involve far less exertion than a week of depositions. Here are two that I believe insurers should require within the first month of most cases: first, meet with the insured at his/her place of business, and second, meet with opposing counsel at his/her office. Meeting face-to-face with the insured helps establish rapport. Having the meeting at the insured’s office gives counsel an opportunity to see how the insured’s files are organized and to assess whether early reconnaissance of electronic files by an e-discovery paralegal or vendor is warranted. (It may also be required by court rules.) Equally important: it shows respect. The lawyer is serving the client, not the reverse. An early, in-person meeting with opposing counsel can lead to an informal production of crucial records and agreements to postpone depositions in favor of an early mediation. Holding the meeting at the other side’s office also demonstrates confidence—Daniel in the lions’ den—and allows defense counsel a peek at how well organized and staffed the opponent is or isn’t. Thus, another suggested resolution for 2017 is to ask defense counsel during the initial discussions in a case to hold those two meetings. The telephone—more than a desk accessory The telephone is the least expensive and often the most effective discovery tool ever invented. Insurers and counsel should become reacquainted with the phone as a first means of communication, not a last resort. Emails create a written record, but not a real, free-flowing discussion. Insurers and law firms should train younger colleagues about how to build connections and obtain information by phone, and if a confirming email needs to follow the discussion a lot of phones can do that, too. See also: What to Expect on Management Liability   Recognizing individuals’ strengths Those who “get it right,” as Oprah said, use different paths and skills. While we’re busy adopting behaviors that encourage productivity and excellence and making them standard practices, it’s important to remember that people don’t come in a “standard” model. Some are wizards at settling cases, others have phenomenal case evaluation abilities; some are very analytical, others very intuitive. A final resolution for 2017 is to recognize the unique abilities that each person brings to the group’s advancement, and to put those abilities to use where they are most needed. Here’s to a productive and excellent New Year!