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9 Months on: COVID and Workers’ Comp

The COVID-19 pandemic has been with us for over nine months now, with no end in sight. During this time, we conducted several Out Front Ideas COVID-19 Briefing webinars and The Path Forward virtual conference. These educational events were designed to provide risk managers and others in the industry with a better understanding of how COVID-19 was hitting our industry. As more time passes, the impact on workers’ compensation is becoming more evident. However, we are still in the early stages of developing claims, and it will be some time before we have clarity on the full impact.

What has changed? Frankly, everything—how the industry handles claims, the types of claims submitted, how medical treatment is provided, staffing models, and the list goes on. Today’s workers’ compensation is different from what it was before the pandemic started, and it is not likely to revert to the exact model we had before March 2020. 

Defining Workers’ Compensation

First and foremost, the definition of a workers’ compensation claim has been fundamentally changed. When workers’ compensation started over 100 years ago, it was to cover traumatic workplace accidents, things that happened at a specific date, time and place. 

Over time, workers’ compensation expanded to cover occupational diseases. These diseases could be traced to exposures that were particular to the workplace and associated risks — a chronic disorder caused by work activities or environmental conditions in the workplace. In many states, workers’ compensation expanded to cover injuries occurring gradually. As a result, repetitive trauma/continuous trauma claims are now a significant cause of injuries and workers’ compensation claims in some states. 

Front and center today are infectious diseases. Workers’ compensation was not designed to cover a global pandemic. But claims for an infectious disease could be covered under workers’ compensation if there was an increased risk due to employment, and there was documentation of exposure and a diagnosis. Tens of thousands of workers’ compensation claims for COVID-19 have been covered nationally under this standard. And now we have states enacting presumptions that COVID-19 is work-related for specific occupations. These presumptions fundamentally change one of the basic tenets of workers’ compensation, the burden of proof. Typically, the affected employee would be responsible for proving that exposure happened in the workplace and that the employee is at higher risk for exposure than the public. With presumptions, employers are left responsible for proving that exposure did not occur in the workplace, which can be extremely difficult.

With these changes, one of the more frequently asked questions in the industry is, does COVID open the door for future infectious disease coverage under workers’ compensation? We participated in a Southern Association of Workers’ Compensation Association (SAWCA) regulatory roundtable discussion earlier this year, and the consensus from the panel was, yes, that door is now open.

Reinsurance

Workers’ compensation is a statutory coverage. Carriers cannot exclude specific causes of loss like other insurance coverages can. After the 9/11 terrorist attacks, the reinsurance market responded by excluding terrorism from workers’ compensation treaties. Now we see reinsurers exclude infectious disease and pandemic from coverage. Because the carriers writing the coverage cannot exclude that risk, carriers are left exposed to unlimited liabilities. There has been talk of a federal pandemic reinsurance program, similar to the Terrorism Risk Insurance Act (TRIA) with terrorism. But those talks are very preliminary. 

See also: Companies’ Biggest Unrecognized Risk

Payroll

Tied closely to the workers’ compensation industry is employer payroll. Fewer people working means fewer premiums, and the payroll in certain sectors is down significantly. The question is, when will this bounce back? Recently, the CEO of one of the largest hotel chains in the world said it would be at least 2023 before the company returned to 2019 occupancy levels. Major airlines are predicting decreased demand through at least 2022. 

But the impact is going beyond the travel industry. As many office buildings around the nation remain mostly unoccupied, all the ancillary businesses around those buildings are affected — restaurants, retailers, dry cleaners, parking garages, etc. Brick and mortar retailers that were already struggling are facing an increasing challenge. Thousands of businesses will ultimately close forever. 

When will the economy bounce back? When will we see 2019 employment levels again? Those are two huge unknowns facing the workers’ compensation industry. 

Claims Volume

Because fewer people are working in some industries, there are fewer claims. In April 2020, third-party administrators (TPAs) reported that their claims volume was down close to 50%. While that volume is bouncing back, it remains below 2019 levels. 

This decrease in claims hurts all workers’ compensation industry vendors that depend on volume, including TPAs, medical networks, medical providers, case managers and even defense attorneys. This reduced revenue may eventually lead to more industry consolidation. 

Not all claim volume is down. First responder claims are increasing more than ever before, with both the pandemic and civil unrest resulting in thousands of new injuries. Healthcare industry claims are up, as well. Some retailers, including supermarkets and big box stores, have expanded their payroll to keep up with demand. Trucking, shipping and delivery businesses have also expanded payrolls. 

Catastrophic injury claims have not decreased during the pandemic because the types of industries where there are higher incidences of such claims have kept working, such as construction, trucking and public entities. Violent attacks against first responders have also increased with the civil unrest around the nation. 

Data Accuracy

The foundation of the insurance industry is the law of large numbers and predictability. Years of accumulated data is analyzed by actuaries to determine the expected claims for the future. How has COVID-19 changed this? Unquestionably, there has been delayed medical treatment and extended disability on existing claims. The big question is, to what degree? It will take years for this change to flow through actuarial development triangles.

The pandemic has likely affected the benchmarks you used to measure your workers’ compensation programs. Employers need to reset their starting point when evaluating the effectiveness of their loss prevention and claims handling programs. 

COVID-19 Claims

As time passes, we are starting to understand better the types of claims the industry is seeing from COVID-19.

Safety National’s data shows the most affected industry group, as expected, is healthcare. However, closely behind healthcare is first responders, with police officers, firefighters and paramedics. According to the National Fraternal Order of Police, 247 law enforcement officers have died from COVID-19 through the end of October. The public entity piece is missing from the bureaus’ analysis because most of these entities are self-insured.

At this time, Safety National’s data also shows that the total number of death claims reported for employees below age 55 is almost the same as for employees over age 65. However, there are 48 times as many claims in the under-55 age group.

Sedgwick has handled over 45,000 COVID-19 workers’ compensation claims for clients. 78% of those are closed, with an average paid of $1,050. 54% of the claims had no payments made. 

Healthcare accounted for 57% of Sedgwick’s COVID-19 claims, with public entity, retail, services and food/beverage rounding out the top industry groups. 

Sedgwick claims show almost an equal distribution of claims by age group between 30 and 40 years old, up to over 60 years old. However, the average incurred in the over-60 age group is close to double any other age group. Over 71% of the death claims were for employees 51 or older. 

Overall, most of the COVID-19 claims by the workers’ compensation industry are relatively minor. However, death claims and claims with extended ICU hospital stays can have total incurred values over $1 million. 

One big question is, how will these claims develop? Will we see continued medical complications develop? Will we see permanent partial and permanent total disability claims?

See also: 4 Post-COVID-19 Trends for Insurers

The Path Forward

One way in which the workers’ compensation industry has adapted to the pandemic environment is with the increased use of telemedicine. Sedgwick still sees telemedicine on over 10% of claims. Before COVID-19, telemedicine utilization was on less than 1% of claims. 

Return to work has been a more significant challenge with business restrictions, which could increase costs on existing claims. Sedgwick data showed a 21% increase in TTD paid on active claims from March-September compared with 2019. 

Finally, carriers have to develop new models to estimate their potential exposure to future pandemics. Without question, COVID-19 will continue to affect the workers’ compensation industry significantly into 2021 and beyond.

Kimberly George with Sedgwick and Mark Walls with Safety National host the “Out Front Ideas” educational series. You can view their archived sessions here.

Impact of COVID-19 on Workers’ Comp

Since starting the Out Front Ideas COVID-19 Briefing Webinar Series just a couple of weeks ago, we have been receiving questions from our listeners regarding COVID-19 and how it is changing the landscape of workers’ compensation. With daily changes in regulations occurring across the country, we wanted to answer the most pertinent questions affecting how we handle claims moving forward. 

Three industry experts joined us for our special edition Out Front Ideas COVID-19 Briefing Webinar Series to answer audience questions regarding the impact of COVID-19 on workers’ compensation:

  • Max Koonce – chief claims officer, Sedgwick
  • Nina McIlree, MD – vice president, medical management, Zurich North America
  • Thomas Robinson – co-author, Larson’s Workers’ Compensation Law

What does the term “presumption” refer to in workers’ compensation law?

Presumptions are mechanisms in workers’ compensation law used to switch the burden of proof in claims. Instead of the injured worker needing to prove the injury occurred in the course and scope of their employment, these presumptions state that the illness or injury is presumed to have occurred while on the job. Some presumption laws were already in place, but mainly applied to firefighters and first responders who filed claims related to heart and lung diseases, and sometimes cancer where exposure could have occurred on the job.

In the instance of COVID-19, presumptions are changing on a state-by-state basis. Several states, through either legislation or executive orders, have enacted presumptions relating to COVID-19 occurring in first responders and healthcare workers. Illinois has embraced a presumption that covers all essential business employees who could be at risk of exposure, and other states are looking at similar legislation. 

How do these presumptions define healthcare workers?

A big problem with these presumption orders is that they are often vague. Some define healthcare workers as those on the front lines treating infected patients. Other orders simply refer to “healthcare workers” and could apply to a wide variety of people employed in the healthcare system who may have no exposures to patients. Unfortunately, this lack of definition in new statutes is confusing.

See also: Sustainability in the Time of Coronavirus?  

Are presumptions rebuttable? Is it difficult for an employer to prove that an employee contracted COVID-19 somewhere other than the workplace?

While not impossible, it will be challenging, especially because the goal of presumption laws is to shift the burden of proof to the employer. However, if a fact finder can prove that exposure to the virus came from someone else (e.g., someone was showing symptoms in their household), the employer may be able to file a rebuttal. 

How does the industry handle new COVID-19 claims?

At the foundation of workers’ compensation, we determine each claim based on the merit of each case. That said, are legislative changes in presumptions necessary for cases like healthcare employees who have faced exposure to multiple patients with the virus? Healthcare workers are typically at higher risk anyway, so we already see a higher frequency of claims from their industry.

The current crisis also changes the investigative process for claims examiners. Their process has become much more detailed for COVID-19 claims, including contact tracing and testing to prove positives. In all presumptions, there is more entitlement for specific groups of employees, which creates inequity in claims, when other employees may be just at as much at risk. 

Are the testing and quarantining periods covered within a workers’ compensation claim?

This coverage varies by jurisdiction, but some have required this to be covered under workers’ compensation. Some jurisdictions require the testing and quarantine to be covered under workers’ compensation, even if the employee ultimately is shown not to have COVID-19.

What industries are filing COVID-19 claims?

Healthcare represents the highest percentage of claims, including food service within the healthcare industry. Public entities are also seeing a large number of claims due to first responders. Combined, these industries cover about 65% to 70% of COVID-19 claims. The rest of the claims are coming from essential industries, like grocery stores, where employees cannot practice shelter in place or social distancing. There were also a few early exposure claims from the transportation industry, like airlines, but, with travel regulations in place, those have now almost entirely dropped off.

What is an employer’s liability claim?

When workers’ compensation was initially crafted, employees gave up their right to civil litigation for workplace injuries in exchange for guaranteed no-fault benefits. Under this agreement, workers’ compensation is the “exclusive remedy” for employees who suffer a workplace injury. Employer’s liability is the potential exception to this exclusive remedy. Under very narrow circumstances, certain states allow an injured employee to pursue civil litigation, alleging that the actions of the employer created a situation where the injury was “substantially certain” to occur. In regards to COVID-19, there has been some litigation filed alleging the employer did not provide proper protective equipment and knew employees risked exposure.

If we release an injured worker for modified work, but work isn’t available because of current conditions, do examiners continue temporary transitional employment (TTE)?

Because every state has its own workers’ compensation laws, the answer varies. Some states will insist that benefits be continued for a light-duty release even when an employer has no control over whether a business is currently operating due to current regulations. With a full-duty release, when many businesses are closed currently, the employee would collect unemployment in lieu of workers’ compensation benefits. Continuation of healthcare benefits for injured employees is the most crucial consideration currently, so we can encourage a return to work when businesses do reopen. 

Is workers’ compensation litigation continuing given the current crisis?

State agencies are trying to manage litigation in a few different ways. Some states are using virtual or telephonic processes to work through settlement hearings. Others are using an alternative notarization process, where you can see all members signing necessary documents. The remaining states are using limited staff to process documents needed for litigation to work through the process. There are state agency matrices designed to inform clients and examiners what methods they are using and whether they are currently operating. There is a prioritization of resolutions currently because the public is facing so many uncertainties in their daily lives.

See also: What Comes After the Coronavirus  

When does an employer need to report a claim involving COVID-19 to its carrier or claims administrator?

The best practice is always to report it as you would with any other work-related illness. If an employee says he has been exposed to the virus on the job and wants to file a claim, file it. Consider the future of not filing a COVID-19 claim. For example, does it leave you responsible if you did not take the necessary steps to file a claim, and OSHA gets involved, or an employee decides to file a suit? What if the employee can prove she made a clear statement about being exposed to the virus while on the job?

To listen to the full Out Front Ideas with Kimberly and Mark webinar on this topic, click here. Stay tuned for more from the Out Front Ideas COVID-19 Briefing Webinar Series, every Tuesday in April. View the full list of coming topics here.

Insurtech: Revolution, Evolution or Hype?

Artificial Intelligence (AI), machine learning, the Internet of Things (IoT), blockchain, robotics, quantum computing — the terminology of technology is staggering enough, let alone understanding what it is and how to use it. While some of the advances in technology are more noise than anything useful, many of these developments can be quite valuable for our industry — especially in claims management and risk control.

Fortunately, there are experts with a good understanding of insurtech and how we can make it meaningful for our companies and our injured workers. Three of them helped us break down the latest technological developments and provided insights into how they can benefit the workers’ compensation system during our most recent Out Front Ideas webinar:

  • Guy Fraker, chief innovation officer for Insurance Thought Leadership
  • Jason Landrum, global chief information officer for Sedgwick Claims Management Services
  • Peter Miller, CPCU, president and CEO of The Institutes/Risk and Insurance Knowledge Group.

What Is Insurtech?

Simply put, insurtech is using technology to improve efficiencies and provide a better customer experience in the insurance industry. Many startup companies have entered this space in the last few years, although the majority are not as helpful as they may first appear. Companies come out with apps or, as our speakers said, shiny new toys that drive user experience and seem really cool but do not add value. One speaker said many companies offer solutions to problems that do not exist.

The more mature, robust companies — those with an actual product that covers the life cycle of the value chain or a significant gap in it — are in the minority but have the most potential to make a difference. They offer strategic and comprehensive solutions. There are not too many organizations with this capability, so there are tremendous opportunities.

The right technology, when properly deployed, has the capability of making a significant impact. Two of the most meaningful advancements for our industry are machine learning and AI. So what are these terms and how do they differ?

Machine learning is actually an application of AI. Where AI is basically computer-based logic, machine learning uses statistical techniques to allow computer systems to learn from data without being explicitly programmed. From the data, it defines a formula to predict an outcome, thereby making it meaningful.

See also: Insurtech Ecosystem: Who Will Eat Whom?  

Some TPAs and carriers are using this technology to quickly flag claims that could be in danger of adverse development. The computer takes a claim, runs it against data on other claims and can determine if it is likely to become severe. As soon as the machine learning model detects something different about a claim — something a human would not be able to identify as a potentially huge loss — it alerts the claims manager to intervene and manage it more carefully. The effect is to drive the outcomes of claims in a more positive way.

For injured workers, technology is being leveraged to provide apps that provide easy access to claim information. Injured workers can find out where they are in each step of the process without having to call the adjuster.

In the consumer market, AI and machine learning are being used to apply natural language processing and determine what the person is actually saying or asking a computer. Think Alexa or Google Home. Our speakers predict it will soon become commonplace for humans to interact easily with machines.

Implementing this technology may seem overwhelming to organizations, especially if they try to adopt it on a large-scale basis. Instead, companies should have a narrowly defined plan and seek real solutions.

Industry Initiative and Blockchain

One of the exciting potential uses of newer technology in our industry is something called the RiskBlock Alliance. This not-for-profit industry consortium is meant to provide a framework that the industry owns: a standardized way of looking at data. It is based on three technologies:

  1. The Internet of Things
  2. Blockchain
  3. Data analytics

The confluence of these technologies is profound. In a nutshell, the IoT is the network of electronic devices that can digitally capture and exchange data. Blockchain enables the storage of this data along with rule sets. It can execute automated instructions based on the data and the rules applied to it. It also allows for data sharing among organizations in a secure way. A couple of examples demonstrate the significant savings and benefits to the industry:

  1. Proof of coverage. For example, a short-haul trucking company must provide proof of insurance for every load each driver takes; approximately eight hauls per day, per driver. It adds up to about 200,000 times each day that proof of coverage must be executed. There are different insurers involved with each load. It takes the company about 30 minutes to get a proof of insurance for each load. However, using the sharable platform of blockchain means the proof of insurance per load can be available in a matter of milliseconds.
  2. Sharing policy information when subrogation comes into the equation. Say there is an auto accident between two vehicles, each with a different insurance carrier. Initially, both insurers start paying the insureds while they sort through the details to see who is at fault. Once fault is established, payment between the two carriers must be settled. Right now, this is done manually at an estimated annual cost of $300 million to the industry. Using blockchain, the policy information could be housed in a secure environment and the settlement done instantly. Putting policy information in an automated process on an aggregate basis could save tremendous amounts of money and time.

Challenges and Opportunities

While there are some challenges in implementing new technologies, there are also many opportunities. Many of the more rote tasks of handling claims can be done faster by technology, freeing claims managers to provide the human touch that is so necessary in so many workers’ compensation claims. Spending more time with injured workers, showing them concern and empathy, results in better outcomes for them and lower costs for payers.

One challenge is the need for data standardization, something RiskBlock is targeting. This could level the playing field and provide opportunities for smaller insurers to grow more quickly.
Incorporating aspects of insurtech into the daily workflow can be challenging, especially because there are so many innovations and ideas at play. It is important to try to harness that enthusiasm and apply it to a framework that captures the best ideas and develops them into solutions.

Another potential challenge is that our industry is so heavily regulated, and regulated differently in each jurisdiction. That means that some insurtech solutions may work in one area but not another. Caution is required before jumping on something that may not be workable.

One challenge that can be easily overcome is changing the mindset that implementing new technology requires many people. It does not. Moving into the insurtech space is best done in a constrained way, with just two or three people involved. As one speaker said, “It’s not about thinking outside the box. It’s about building the box.” Every game-changing organization like Microsoft and Facebook started with a team of just three or four people.

See also: Key Challenges on AI, Machine Learning  

From a healthcare standpoint, one of the best opportunities from insurtech is the ability to get in front of pain, which can also be referred to as pre-pain or pre-hab. As healthcare technology advances, we will be able to help workers and their families understand what to expect in terms of pain before they undergo surgery, for example. We can help them be better prepared, facilitating better and shorter recoveries.

The Future

With the maturation of insurtech companies, our experts expect the number of startups will slow in the next couple of years. Instead, existing companies will return with innovations.

The tremendous amount of data available in the future will help level the playing field between larger and smaller carriers. This is because the smaller carriers will be able to participate in data sharing initiatives to have access to analytics way beyond what their own data could provide. Data aggregation insurtech companies are going directly to the source for data, such as partnering with auto manufacturers to access data from their onboard computer systems.

Insurtech will also allow pharmacists to match DNA to prescriptions to determine if they are feasible. Also, robotics can be used to handle riskier or repetitive tasks. Rather than replacing workers, the technology allows them to engage in more meaningful responsibilities. Using AI to process routine, medical-only claims may even result in eliminating some steps. We may find straight-through processing can be done quickly and efficiently.

One of the most exciting uses of new technology is to eliminate losses by removing risks. Insurtech can be used to detect when and how certain actions will likely lead to injuries, allowing humans to set up systems to prevent those conditions. The ability to avoid losses would truly transform our industry.

Workers’ Comp in the Year 2030

At the WCRI Annual Issues & Research Conference, Dr. Richard Victor, former CEO of WCRI and currently a senior fellow with Sedgwick Institute, discussed his views of workers’ compensation in the future.

The workers’ compensation system was a compromise between labor and business designed to provide no-fault benefits in an environment that gave exclusive remedy protections to employers. Over the years, there have been ebbs and flows to the system in an effort to maintain balance. There is a constant struggle to balance benefits to workers with the costs of the system paid by employers.

In the past, when the workers’ compensation system got out of balance, it was due to actions from those within the system. That is something the system could correct with regulatory change. However, right now, there are things happening outside of the workers’ compensation system that could significantly affect it and cause a rethinking of the grand bargain.

Emerging labor shortages

Retiring baby boomers will cause labor shortages in healthcare and the insurance industry, which will delay claims and medical care. This will ultimately increase claims costs.

See also: The State of Workers’ Compensation  

In addition, a stronger economy is ultimately going to lead to a severe labor shortage. When you pair the aging workforce and people retiring with a growing job market, you end up with not enough qualified applicants to fill the positions. Employers have to relax their hiring standards. This leads to unqualified applicants being hired. These people will likely have higher accident rates.

Changes in the non-occupational health system

As workers see their out-of-pocket health insurance costs rise, it becomes more attractive to try to shift illness and injury episodes into the workers’ compensation system. Richard feels that this shifting will result in a 25% increase in workers’ compensation claims by 2030. With soft tissue injuries, it would be very easy for the worker to indicate the injury happened at work instead of at home. Disproving that would be very challenging for employers. Higher deductibles will greatly encourage workers to look for these cost-shifting possibilities.

Millions of workers losing health insurance

The number of uninsured workers is expected to decrease significantly as elements of the Affordable Care Act are repealed or weakened. These uninsured workers are also highly encouraged to shift their treatment into the workers’ compensation system. Richard estimates a 15% increase in workers’ compensation claims due to this.

Aging workforce

The injury rates for the older workers is higher than for younger workers. As the U.S. workforce ages, we will see higher injury rates across the employee population.

Federal immigration policies and practices

Limiting the flow of immigrants into the U.S. at a time there is a labor shortage will only compound the problem. The only way to grow our workforce to keep up with the demand is with immigrants. All of the growth in the labor force going forward is projected to come from immigrants.

Roughly 15% of all healthcare workers in the U.S. are foreign-born. If we discourage immigration into this country, Richard feels it could cause a labor shortage in the healthcare industry.

It does not even take a change in policy to see a change in immigration flow. After the Brexit vote there was a significant reduction in European nurses registering to work in the U.K. This is even though there had yet to be a policy change in the country.

See also: Healthcare Reform’s Effects on Workers’ Compensation

Conclusions

Taking all of the outside factors into consideration, Richard estimates a 55% increase in the number of workers’ compensation claims by the year 2030. When you add in medical inflation the costs of the workers’ compensation system could triple by 2030 with no change in indemnity benefit levels.

With this significant increase in costs, there will be questions about the continued viability of workers’ compensation. What is the solution? Are there viable options to traditional workers’ compensation? ERISA-style plans like the opt out in Texas have been widely criticized for providing inadequate protections for injured workers. Union carveout plans only apply to a very small sector of the workforce. Could we see workers’ compensation claims organizations become accountable to both employers and workers, with employees having the ability to choose which claims organization they want to use?

5 Trends for Employers to Watch in 2018

Advanced planning and preparation, strategic global thinking, shifts in legislative landscapes and sound technology investments are on the minds of most industry leaders as we move into 2018. As an extension of its own thought leadership program, Sedgwick has identified key trends that are likely to affect risk management and benefit decisions in the coming year.

To stay on top of issues that may affect our clients and industry partners throughout the year, we took a close look at internal research and colleague observations, external exploration and employer discussions and in-depth market monitoring of current and emerging risks. We will continue to watch and offer our projections on these potentially defining movements, classified into five categories:

  • Compounding global risks
  • Shifting tide of policy
  • Bridging the gaps
  • Leveraging interdisciplinary care
  • Improving experience through technology

Compounding global risks. An unusually high number of natural disasters in 2017 underscored the need for organizations to have a strong disaster recovery plan in place. Establishing strategic partnerships that can support an effective business continuity plan is critical. Preparation and action must occur before, during and after a catastrophe if an organization is going to recover and resume operations in a timely manner.

Additionally, the continuing threat and prevalence of emerging risks are expected to push the boundaries of organizational resources and resiliency. Cyber threats like data intrusion and ransomware are evolving and multiplying as the global economy becomes increasingly connected. As we continue to see terrorism, both international and domestic, in the headlines, it underscores the need to prepare and protect our people and property.

During these turbulent times, society’s reliance on first responders as a line of defense against risks of all types becomes even more critical. Caring for first responders’ overall physical and mental health is one way communities and businesses can increase preparedness for debilitating crises. Several states have taken up legislation aimed at increasing coverage for first responders. Organizations can anticipate that, as coverage grows, so will the need for specialized claims, managed care and disability services.

See also: Industry Trends for 2017  

Shifting tide of policy. Businesses can look for leave programs to expand in response to demand from their own employee populations, faced with the need to care for their own health and the welfare of their families. Parental leave, caregiver leave and other paid leave programs are on the rise; several states have already introduced new family-friendly paid leave bills, and others are clarifying and expanding regulations for leave benefits. This trend is expected to continue as the population shifts.

More than ever, vigilance is needed for employers to maintain compliance with continuing changes in the Americans with Disabilities Act, Family and Medical Leave Act and other connected federal, state and municipal laws. Throughout 2018, organizations can expect regulatory complexity to increase and fines and litigation to be a looming threat for non-compliance. Many organizations are facing policy changes and compliance demands with a renewed willingness to collaborate across disability, leave of absence and workers’ compensation teams.

It is impossible for organizations not to feel the impact of the prescription drug crisis on their workforces. The costs – personally and financially – of the misuse and abuse of opioids place undue burdens on society. Governmental agencies, pharmacy retailers and employers continue to look for ways to take back control through such means as legislation, drug formularies and first-fill limitations.

Bridging the gaps. Throughout 2018, organizations will seek new ways to bridge gaps in knowledge and services based on evolving needs and preferences of consumers. Organizations are joining in the race toward on-demand, self-service innovation to provide immediate resources to those in need. The infusion of machine learning and artificial intelligence is advancing many capabilities by automatically sifting through mountains of data, allowing service providers to detect patterns faster and formulate valuable insights to improve the quality of the customer experience.

Organizations are also seeking new ways to bridge diversity gaps. Different generations and populations have different needs when considering health concerns, technology, communication preferences and resources. We must address changing demographics within the workforce and determine how to better adapt practices to accommodate and support differences.

Focusing on the claims industry specifically, insurance carriers, third party administrators and self-administered employers must broaden the knowledge and capabilities of today’s claims professional. As seasoned professionals begin to retire, bridging the talent gap becomes increasingly important. Training of claims professionals must expand beyond the traditional claims process. Claims organizations must look holistically at how examiners are addressing the needs of their clients and consumers and how their part in the process affects the bigger picture.

Leveraging interdisciplinary care. The movement toward a whole health approach increases trust and engagement and places less influence on individual providers in favor of a more holistic, consensus view of treatments and interventions. As more employers embrace principles of advocacy, empathy and responsiveness, they are using centralized support to link teams and resources with a common focus on quality care. With this shift, organizations look forward to continued improvement in the consumer experience and stronger physical, emotional and financial health for employees.

We are seeing more businesses embrace integrated programs as a means to address the shared challenges of healthcare, return to work and compliance. In addition, the importance of data connectivity within organizations and across providers will grow as organizations work to avoid information gaps, optimize care and avoid potential dangers.

Interdisciplinary cooperation is also important as a means for exploring alternatives for pain management. Organizations can anticipate more collaboration between employers, physicians, claims specialists and patients as they move away from long-term drug prescriptions, looking instead toward alternative therapies and weaning techniques to help injured workers regain their health and productivity without the risk of addiction.

See also: 3 Technology Trends Worth Watching  

Improving experience through technology. Technology helps employers engage workers throughout their recovery, maintaining a stronger connection while they are away from work and making the process easier for them to understand. Better communication and improved access to on-demand care can help improve the claims experience, and increased consumer satisfaction is leading to accelerated outcomes and better overall health.

Telemedicine and other remote access offerings are still on the rise and evolving as other “tele” services are added to the mix. Eliminating some of the barriers of distance and time, these resources are connecting patients with the right providers for initial and follow-up treatments for minor injuries and illnesses, as well as support resources throughout the claims process. Chatbots and avatars are becoming more prevalent as support and service options for all lines of business. The industry is even seeing potential for these tools as virtual health coaches for workers’ compensation, disability and wellness programs.

Employers can also expect to see the claims industry reach the next level of decision optimization and use technology to deploy intervention strategies in real time. Analytics will influence next-generation methods for addressing all types of claims and be used to predict those that will become complex or incur large liability losses, anticipating care and pharmacy needs, prescribing appropriate steps toward resolution and facilitating return to work.

While the year ahead may bring challenges, it also brings a renewed sense of hope and excitement. As these and other trends materialize and develop, those who have anticipated and planned ahead will be in a position to capitalize on opportunities as they arise. Sedgwick will continue to guide our clients and the broader industry by tracking topics and trends like these that may affect employees, customers and businesses.

To read more, visit Sedgwick’s Navigating 2018 webpage.