Tag Archives: workers comp

State of Mental Health in the Workplace

Discussions around the impact of mental health and well-being in the workplace are frequent Out Front Ideas with Kimberly and Mark topics. May is Mental Health Awareness Month, so we are offering our thoughts on the current state of mental health in the workplace.

Even before the pandemic, benefits managers were adapting employee benefits to better equip employees and plan members with mental health resources. However, as the work from home assignments continued and social isolation set in, employers became even more aware of the impact of mental health and well-being on productivity, absence and performance. With a greater emphasis on employee well-being, we hope programs initiated during the pandemic will continue to support improved access to care and will break down the stigma related to mental health.

Employers took advantage of employee resource groups (ERGs), either existing or newly implemented, to foster peer interaction, open conversation and joint problem-solving related to issues that have an impact on their personal and professional lives because of the pandemic. Group collaborations focused on important topics at that time with employees, such as home school successes, caring for an ill family member, loneliness and depression, challenges with family and positivity sharing, to name a few. Many found the sessions to be an excellent way to bring positivity and support into their life and provide a break from the hectic pace of working at home. As companies create back-to-office and hybrid workforce models, ERGs continue to be a priority to ensure all who want to can participate.

Access to care has been a long-standing challenge for those seeking mental health care. Reimbursement rates, timely appointments and limited provider options are some of the issues the industry is working to solve. Previously, while telehealth visits were growing for triage of minor medical and follow-up appointments, there was slow adoption for teletherapy and telepsychiatry. Fortunately, telemedicine was a saving grace for many aspects of healthcare during the pandemic, and mental health care saw a boon. Employers and network partners are now offering multiple options for telemedicine and improved coordination between employee assistance programs (EAPs) and online therapy platforms for mental health care. Phone calls, video conferencing and texting are becoming an integral part of the therapist-patient relationship. With less social connection, this has found success for many in the workforce — and their families. Organizations are now offering various programs, including adult, family and teen counseling.

The Center for Workplace Mental Health is an important resource for all employers. The entirety of its work focuses on helping employers create a more supportive work environment and advance health policies at their organization. They have created a mental health toolkit for Mental Health Awareness Month, which includes topics such as promoting resiliency for people and the organization; promoting self-care; and addressing isolation and loneliness. These programs (and others) can be easily integrated into your company culture to reduce stigma, promote well-being and provide an environment where employees and leaders both care and thrive.

See also: The Long Haul for Mental Health at Work

From a workers’ compensation claims perspective, mental health has always been a complication lurking in the background. The industry tended to ignore the issue because of a combination of stigma and outright resistance. Claims where the injured workers never fully recovered probably had a significant untreated mental health component. Thankfully, that is changing; it is now widely recognized that all chronic pain has a significant mental health component, and, if you fail to address this, it will increase claims cost and lead to poorer outcomes. Multidisciplinary pain management programs now spend as much time on mental health as they do physical health. 

Laws are also changing to make it easier to pursue psychological injuries under workers’ compensation. More states are allowing “mental-mental” claims, which are psychological injuries with no physical injuries. In addition, one of the leading workers’ compensation legislative initiatives for several years has been the expansion of first responder presumption laws, which are primarily focused on post-traumatic stress. In the past, the threshold for a mental health injury was a “usual and extraordinary” experience. That threshold was used to deny very real traumatic situations that first responders encounter because the situations were “usual” aspects of their job. While these traumatic situations may have been expected, there is nothing ordinary about responding to severe accident scenes, seeing your partner shot or having someone die in your arms. In certain ways, public entities created the path to these presumption laws by denying such claims rather than focusing on getting the injured worker the treatment they needed. Public entity employers are now reporting that they are seeing an increasing number of PTSD claims with no corresponding physical injuries being filed under workers’ compensation.

Managing Absences for Disability Insurance

As our research has consistently shown, value-added services are increasingly one of the top areas of interest among customers, and one area of growing interest is integrated absence management for disability insurance. (We discussed this growing trend in a webinar with the Standard, a leading insurer that has provided integrated disability and absence management to their customers for a long time. You can watch a replay of the webinar here.)

Because apps and interfaces are now designed through a customer-first approach, not a product-first approach, there is a profound shift in how disability claims can be filed and leaves of absence requested, making the process straightforward despite all the regulatory nuances.

Employers are looking to their insurance companies or third-party administrators (TPAs) who manage their disability programs to provide an intuitive, digital platform where they can easily submit a leave request, view their time remaining and upload or download any necessary documentation to have their leave or claim approved.

Insurance companies and TPAs with a digital solution that provides integrated disability and absence management are well-positioned to address this significant market need, while providing customers with a single point of contact for their benefits, avoiding duplication and simplifying the employee experience.

See also: Long-Term Disability in the Time of COVID-19

Simplifying the Increasing Complexity of the Leave Landscape

It’s hard to talk about the leave of absence landscape without using the word “complexity.” It’s increasingly difficult to stay on top of federal and state paid and unpaid leave laws, and there’s no sign of the complexity diminishing, with new regulations in the works.

The transition to remote working is adding an additional layer of complexity, with employees scattered across the country working from home, expanding the number of state regulations that must be managed.

As Lincoln Dirks, a senior compliance analyst for absence management at the Standard, put it during the webinar, “You take the already complex aspect of dealing with federal, state and municipal leaves in a given state, and then you multiply that by 50. The issue becomes that no two of these states run their programs in even close to a similar manner. Rules, regulations, processes, procedures all vary by state.”

This complex landscape, though, has created a significant market demand for absence management – making it the big trend for 2021! Employer customers need it because spreadsheets and sticky notes aren’t getting it done. And, increasingly, insurance companies are expanding their offerings to include it as an integrated value-added service, differentiating them in the market.

The Value-Added Service Opportunity for Insurers

These trends offer a significant opportunity for insurers to expand their offerings with an integrated disability insurance and absence management solution that their customers are seeking.

Watch the entire webinar and hear from the Standard on how they’ve elevated corporate programs with their integrated disability and management offering on the Majesco website.

Workers Comp Trends for Technology in 2021

One year after the start of the COVID-19 pandemic, Mitchell International conducted its annual survey of about 100 workers’ compensation professionals to determine how technology use changed in the industry during the pandemic and how those changes will continue. The survey found:

Technology use is increasing in the workers’ compensation industry  

  • Predictive analytics and telemedicine stood out, showing that the industry rapidly increased the pace of adoption – or the desire to adopt – those technologies during the pandemic.
  • More than half of organizations report implementing telemedicine since the pandemic began, and respondents ranked telemedicine (35%) and predictive analytics (35%) as the technologies that will have the largest influence on the industry in the next five to 10 years. 
  • Claims providers are facing pandemic-related challenges and are using technology to help overcome them. Almost one-quarter (22%) of respondents ranked adapting to pandemic-related challenges as the top obstacle their organization faces today, and 40% said they believe the pandemic is the leading driver of technology adoption.
  • Despite the technology changes in 2020, the workers’ compensation industry still has an opportunity to introduce automation into the claims process. Only 23% of respondents said that their organization uses straight-through processing for 50% or more of the medical bills they manage.

Telemedicine had the most substantial impact (35%) of all technologies implemented in 2020

  • As expected, most respondents reported that telemedicine had the most substantial impact (35%) of the technologies they implemented in 2020.
  • Survey respondents also indicated that they believe both telemedicine (35%) and predictive analytics (35%) are the technologies that will have the most significant influence in the workers’ compensation industry in the next five to 10 years, compared with other listed technologies. 
  • The majority of respondents said the best application of telemedicine is or will be for provider visits (54%), followed by nurse case management (26%) and triage (21%)
  • Mobile placed at a distant third (8.5%). 

These findings aren’t too surprising, as telemedicine, predictive analytics and mobile technologies have been key focus areas in workers’ compensation for years. Prior to the pandemic, 32% of people who responded to a similar survey in February 2020 said they thought telemedicine would have the biggest impact on the industry in the future and ranked artificial intelligence and predictive analytics as the next most potentially effective technologies.

See also: Covering for a Gap in Workers Comp Data

It’s clear that telemedicine has been crucial in helping to deliver care to injured employees during the pandemic. With innovation and the addition of other technologies, such as wearables, telemedicine has the potential for broader uses in the industry and could serve a more vital purpose in helping improve claim outcomes for injured employees.

The workers’ compensation industry will see increased demand for predictive analytics 

  • Respondents list claim triage as the most popular future application of predictive analytics (35%,) followed by severity or reserving (35%), intelligent decisioning and adjuster guidance (24%) and claim automation (22%)

Indeed, these applications of predictive analytics and more will be vital for efficient and effective workers’ compensation claims processing in the years to come. From triage to automation, predictive analytics can help claims organizations get the right information at the right time to make informed and intelligent claim decisions.

Changes and pressures from the COVID-19 pandemic are the primary driver of new technology adoption

  • While 40% of respondents noted the pandemic as the top driver for change, claims organizations are still looking to solve challenges that existed before the pandemic began
  • Respondents rated efficiency (22%) as the second top driver of technology adoption, followed closely by cost containment (20%)

The workers’ compensation industry still has a significant opportunity for automation

  • Despite the rapid rate of technology adoption in the past year, less than a quarter of respondents (23%) said they automate 50% or more of workers’ compensation medical bills using straight-through processing.
  • 22% of respondents said they process 25% or fewer of their bills automatically. 
  • Even fewer respondents said their organization processes workers’ compensation claims automatically, with only 16% saying they use straight-through process automation for 10% or more of their claims, and about a quarter (24%) said they only automatically process 0-5% of claims.

Typically, an efficient workflow passes 60% to 70% of medical bills through without human intervention, and it is clear the industry still has much opportunity to reach this level of automation. Straight-through processing offers many benefits, including removing repeatable tasks from adjusters’ workloads, boosting consistency and freeing employees up to have more time to focus on complex claims that need extra scrutiny and care to help achieve better outcomes. 

While we may never achieve full automation of all workers’ compensation claims—unlike other lines of insurance, some workers’ compensation claims will always require a level of human touch. There are plenty of opportunities to boost automation now and in the future using rules engines, artificial intelligence like predictive analytics and more. As technologies become more advanced in the years to come, claims organizations will need to think about how they can strike the right balance and implement the appropriate level of automation that allows them to spend their time focusing on the claims that need special attention.  

See also: Optimizing Care with AI in Workers Comp Claims

Survey demographics

Mitchell surveyed nearly 100 workers’ compensation professionals at a range of companies, including insurance carriers, third-party administrators, public entities, managed care and risk management organizations, and brokers. The majority of respondents (75%) had 10 or more years of experience in the workers’ compensation industry.

You can find the full report based on Mitchell’s 2021 survey here.

Bring Certainty to Remote Injury Claims

The working world is changing. Even before the COVID-19 pandemic, remote work was gaining popularity as employees sought greater flexibility and as advances in telecommuting removed barriers. Some employers even offered work-from-home options as an incentive to attract and retain top talent, save money and sharpen their competitive edge. 

Since the pandemic, remote work has become a fact of life, and, like it or not, it’s here to stay. Even with vaccinations on the rise and many watching the horizon for a return to “normal” — or to the office — many workers will never return to a physical worksite. Employers who acknowledge the shift are developing and implementing plans to provide continued work-from-home options.

But what does this change mean for your organization when a worker gets hurt on the job?

It may seem that working from home would provide employees with a safe environment and low risk of injury, but, in truth, employers won’t always know what specific hazards exist in every worker’s home. The reality is that injuries occur all the time in any environment, at home just as they do in a conventional workplace.  

Evaluate

Workers’ compensation claims for injuries sustained in the home can and should be evaluated the same as any other industrial claim — but they still present their own unique challenges. While every state has its own laws and interpretations, compensable claims generally have these things in common: the injury must be work-related; it must have occurred in the course and scope of employment; and the injury or accident must arise out of job-related activities. A proper investigation can provide the details needed to make an accurate determination and ensure the appropriate benefits are administered.

There is no requirement that an injury must occur at a place of employment outside the home — such as a worksite, factory, warehouse or office — for a workers’ compensation claim to be compensable. What is required is to establish whether it arose out of employment (AOE) or the course of employment (COE). The goal of a compensability investigation is to establish if the reported injury occurred, if it occurred in the course and scope of employment or if it was non-industrial.

See also: Pressure to Innovate Shifts Priorities

AOE/COE Compensability Determination

To be eligible to receive workers’ compensation benefits — including medical treatments, disability benefits, vocational rehabilitation and death benefits — an injury or illness must have arisen out of employment (AOE) and occurred during the course of employment (COE).  

As a general rule, if an employee deviates from work activities benefiting their employer to activities for a personal benefit, any injury occurring during such deviation is generally not considered within the course and scope of employment and is therefore not covered. But once the employee returns from the deviation to work-related tasks for the benefit of the business, any injury that occurs after that point is typically covered. 

However, there are nuances when considering the work-from-home environment. Take lunch, for example. When an employee leaves the office for lunch, compensability is typically more straightforward for injuries sustained while away from the workplace. But when an at-home employee trips and falls while walking to the refrigerator for lunch, the question may be somewhat less clear-cut. 

Investigative Solutions

It is crucial to conduct an investigation early on in any claim to document the facts, gather/secure any potential evidence and identify any potential third-party liability. The investigation will seek to determine if an accident or incident occurred, if an injury was sustained, whether anything unusual or unexpected occurred and whether the incident caused or aggravated a medical condition. 

While an accident at a job site or office may benefit from reliable witnesses or security footage, at-home employees are often working alone and unsupervised. This means injury incidents often occur without reliable witnesses to corroborate accounts. 

Recorded Statement

Obtaining recorded statements is a key technique for thorough remote injury investigations. At-home injuries are often unwitnessed (or potential witnesses are likely family members), so investigators will assess the credibility of the claimant and any witnesses and secure their recorded statements. Investigations must rely heavily on claimant and witness statements bolstered by medical records, scene inspections and other investigative solutions.

Here are some critical details an investigator will verify:

  • The time and date of the incident
  • Whether the incident occurred within the employee’s routine working hours
  • The activity that preceded the injury
  • Exactly what work was being done at the time of the injury
  • The mechanism and nature of the injury 
  • Medical history and claim history

Confirming when the in-home worker took breaks and other corresponding details about their daily routine are also important pieces. In addition to determining whether the employee was legitimately working for the employer at the time of the injury, investigators will inquire further to ascertain if the employee was solely engaged in work-related activities or if there were any other activity or distractions involved. If a reported injury arose from playing with the dog between calls or consuming alcohol while listening to a training, these may be valid reasons to deny the claim. 

See also: Long-Haul COVID-19 Claims and WC

Subrogation Investigation

Subrogation potential can also be complicated with a remote employee injury. What if your employee’s injury was caused by a roommate or landlord negligence? Or, imagine that a claimant reports she sustained an injury at her home workstation as a result of a broken chair. It’s then essential to obtain all needed information about the chair, any prior complaints or defects, litigation involving the manufacturer and other facts required for a potential subrogation claim.

Make a Plan

Create policies and procedures specific to your telecommuting employees. Work-from-home agreements can help ensure everyone understands expectations around creating a safe environment and guidelines for the reporting of an injury and the investigation of a claim.

How Social Inflation Affects Liability Costs

Social inflation is a term you frequently hear in risk management these days. It refers to a public, anti-establishment sentiment that has a far-reaching impact on businesses and the insurance industry. Last year, Out Front Ideas with Kimberly and Mark discussed the impacts of social inflation with a panel of experts. Our guests were: 

  • Mark Bennett, vice president of large casualty claims for Safety National
  • Oliver Krejs, partner for Taylor Anderson
  • Aref Jabbour, senior consultant for Trial Behavior Consulting
  • Andrew Pauley, government affairs counsel for the National Association of Mutual Insurance Companies (NAMIC)

Jury Trials

While only 5% of lawsuits result in a jury trial, knowing the potential outcome for a defendant shapes the future of underwriting and pricing risks in the industry. Because of the impact on rising costs, it is critical to explore what is causing the public to shift sympathy in support of the plaintiff.

Over the last five to six years, we have seen a steady increase in awards by juries. We have also witnessed an increase in the number of cases going to trial, especially in cases valued up to $1 million.

What is happening with liability juries to drive these large reports? One of our experts breaks down the major areas of concern.

  • The perception of the value of money has changed since the financial crisis. Juries believe that defendants can pay out larger sums of money to a plaintiff. Much of this is based around our daily exposure in the media to larger verdicts, desensitizing the public and making such verdicts appear more common and acceptable. Juries also believe defendants should pay even if there is substantial evidence they were not at fault, because the plaintiff deserves compensation. 
  • Media outlets and social media are affecting public opinion. Anyone with a social media account can attest that ideas expressed there are more extreme and less filtered than what someone would be willing to say in person. These publicly expressed ideas become validated in people’s minds, which are hard to change. For example, we are seeing an increase in jury awards against police officers, even in cases where the evidence supports that the officer acted appropriately. There is a true struggle to overcome these types of societal prejudices as media-based opinions become more prolific. 

Bad Faith, Litigation Financing and Other Challenges

Expansion of bad faith claims, litigation financing and the statute of limitations also challenge insurers. One of our guests summarized these issues: 

  • Bad Faith — The original intention of bad faith was to hold an insurer responsible when particularly egregious acts have been committed and when a worker has been intentionally put in harm’s way. However, some states have lowered the standards for claims. Insurers can get hit with punitive damages after one minor claim. Often, the claim can simply result from missing a statutory deadline, so no one was harmed, but the claim is used to punish the insurer. One of the most common effects of bad faith litigation is added costs to the system. Florida, for example, has long been known as one of the most challenging jurisdictions for insurers in the context of bad faith, and vehicle owners recently paid $1.2 billion in added costs based on outcomes of bad faith litigation. 
  • Litigation Financing — This has become a regulatory vacuum where companies or individuals finance litigation in exchange for a percentage of the settlement/verdict. This results in longer litigation and more cases going to trial, and can also create a conflict of interest among parties. It creates a major concern for expansive litigation and furthers the need to investigate the motivations behind these cases. We see more instances of hedge funds getting involved simply because of the return on investment it provides them. These situations don’t always mean the plaintiff will be better off. For example, in one case in New York, the plaintiff was allowed to borrow $27,000, and the case settled five years later for $150,000. The lending company took $100,000, the attorneys took the rest, leaving $111 for the plaintiff.
  • Statute of Limitations — The guidelines for when a claim can be filed have been changing rapidly on a state-by-state basis due to loosening laws across the country. These changing laws significantly affect public entities, school districts or other institutions, specifically relating to the ability of a claim to be filed retroactively in a childhood sexual assault case or abuse claim. Some states have expanded the limitations beyond expiration dates, some allow for a period of discoverability and some allow for a lookback period. California, for example, passed a law allowing for a lookback period that extends the time a file can be claimed up to five years. The law has extended previous claims of viability from the age of 26 to the age of 40. However, the court’s interpretation will determine whether these claims can be filed based on current policies. 

Litigation Solutions

Although we often cannot avoid litigation, there are measures we can use to prevent excessive jury awards. While none of these guarantee a favorable outcome, our guests suggest them as a general approach.

  • Change how cases are worked up from the beginning. A specific case that came out of Texas’ fifth circuit sought to change a law to closely mirror a direct action state like Louisiana, allowing the layers below an insurer to settle out and fund the case, leaving the excess carriers above them with the obligation to defend the case. Litigation changes like this will result in excess carriers having to completely adjust due to changing defense costs and exposures. Understanding how to educate the jury, providing expert testimony and getting all parties on the same page will need to be in the basic setup of a case.  
  • Advocate for early intervention and get all parties on the same page. Before litigation begins, you should ask yourself what your discovery process looks like. Are you interviewing all potential witnesses and figuring out what the fact pattern may look like? Do you know the answers to questions that the jury may seek later on in trial? Do you have the facts that will allow you to empower the jury? Ensure that there is a consistent message and always take more of an anticipatory approach than a reactive one.
  • Educate the jury on what is reasonable and factual. Because of social inflation’s impact on a jury’s prejudice, it is imperative to empower jury members with facts and reason. For example, do you know what the jury views as a reasonable award that would properly compensate the injured? In hospital charges, billings are often inflated up to 300% to 600% higher than what the facilities regularly accept from insurance companies. 

See also: Insurance Outlook for 2021

Legislative Solutions

Tort reform is a key element in combatting these rising jury awards. Stakeholders need to educate legislators on the societal costs of these large awards. This is no easy path. Businesses need to get involved with state and local bar associations and work with PACs on legislative efforts. 

The awards being seen today are from accidents that happened several years ago. That means the industry is probably looking at several more years of accident year combined ratios above 100% before rates are adequate for the reality of the exposures being faced.