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Risk Insider: Terri Rhodes

Absence and Disability Forecast

By: | January 29, 2018 • 4 min read
Terri L. Rhodes is CEO of the Disability Management Employer Coalition. Terri was an Absence and Disability Management Consultant for Mercer, and also served as Director of Absence and Disability for Health Net and Corporate IDM Program Manager for Abbott Laboratories.

Each year, I write about the trends and forecasts I see coming for the absence and disability management field for the upcoming year. This year’s forecast complements the trends I highlighted for 2017. As predicted, we did not see much change, if any, in leave laws at the federal level in 2017; however, we continued to see paid family and sick leave regulation at the state and municipal levels. We did see some traction on the Americans with Disabilities Act (ADA) with the Severson v. Heartland Woodcraft, Inc. case, but unless more courts rule in the same way, this case likely won’t be a game changer.

Here are the four trends I predict we’ll continue to see in 2018.

Paid Family Leave

Attracting and retaining the best talent continues to be top of mind for organizations, so more employers will offer paid family leave for competitive reasons and because of state and local regulations. We could also see a boost from the recently signed federal tax bill. Employers can receive a partial tax credit for wage benefits paid to employees during leave taken under the FMLA and other specified reasons. The provision of the tax law has numerous conditions and only lasts through 2019 unless renewed by Congress, but it could encourage the private sector trend toward more and richer paid leave.

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State and local governments will continue to expand mandated leave in 2018. Two examples are New York and Washington. Starting on Jan. 1, New York employees who meet time-on-the-job requirements can receive eight weeks of paid leave. This leave entitlement increases to 12 weeks in 2021.

Starting in 2020, Washington will be taking another run at mandated paid family leave and will be the fifth state in the nation to offer paid family and medical leave benefits to workers and employers. The program, which promises to be the most generous, will be funded by premiums paid by both employees and employers and will be administered by the Employment Security Department (ESD).

We think other state and local governments will follow Washington State’s lead to add or enhance mandated leave.

Workplace Mental Health

There is a growing understanding at all levels of society that effectively addressing mental health issues is necessary to enhance individual well-being. It’s also becoming clear that effective mental health screening and treatment is important in lowering costs for employers. Depression, stress, and other mental health issues are major concerns for employers as these conditions tend to be in the top three reasons for absence; pregnancy is number one, and musculoskeletal problems is second.

We hope to see less stigma as the year progresses. The good news is that attitudes are changing. Millennials, for example, are much more likely to acknowledge mental health concerns and seek assistance, according to the 2017 DMEC Pulse Survey conducted last fall on workplace mental health. This means stigma attached to mental illness will likely recede. In 2018, more employers will recognize the importance of identifying employees who want to receive assistance and provide them with resources to get their jobs and careers on track.

Strengthened Processes

Many employers have absence management policies and processes in place. Not all are as strong and efficient as they could be. 2018 will see a focus on strengthening them to achieve greater cost savings and more consistent compliance. Technology will play a large role as employers continue to invest in software and other innovations.

Training and education will also take center stage as an avenue to increase performance and productivity. The Certified Leave Management Specialist (CLMS) designation and the new supervisor training for FMLA and ADA, to be released later this year by DMEC, offer easy access to resources for employers and vendors alike. Both employers and employees understand the value in skill building, productivity enhancement, and increased employment opportunities, making these programs a win-win for organizations.

Technology

Artificial Intelligence (AI) is embedded in our lives, whether we like it or not. So, it makes sense that AI has made its way into absence management as well.

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Integrated absence management (IAM) systems have used AI to identify trends and risks that drive absence and disability costs. We need technology to continue to help us streamline work processes, sort data, look for trends, benchmark, and measure the success of our IAM programs. A number of large employers have demonstrated these technologies’ ROI can be significant. There are also a number of software solutions that track and manage absence available to employers who self manage absence, replacing tedious spreadsheets and sticky note reminders.

In 2018, employers and employees will lose some of the fear of AI as a threat that will usher in a job-destroying dystopia. Rather, we will increasingly view human-computer collaboration as a high-touch/high-tech partnership. Data technologies can do the heavy lifting necessary to drive efficiency and lower costs. But only people can show compassion for employees who are on a leave of absence. That’s not only the right thing to do; it’s also the smart thing to do as employees treated with respect and dignity are less likely to look to litigation and other avenues to meet their needs. As AI and other technologies advance in 2018, so will an emphasis on hiring and training for the “soft skills” increasingly valued in every profession.

More from Risk & Insurance

More from Risk & Insurance

Cyber Resilience

No, Seriously. You Need a Comprehensive Cyber Incident Response Plan Before It’s Too Late.

Awareness of cyber risk is increasing, but some companies may be neglecting to prepare adequate response plans that could save them millions. 
By: | June 1, 2018 • 7 min read

To minimize the financial and reputational damage from a cyber attack, it is absolutely critical that businesses have a cyber incident response plan.

“Sadly, not all yet do,” said David Legassick, head of life sciences, tech and cyber, CNA Hardy.

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In the event of a breach, a company must be able to quickly identify and contain the problem, assess the level of impact, communicate internally and externally, recover where possible any lost data or functionality needed to resume business operations and act quickly to manage potential reputational risk.

This can only be achieved with help from the right external experts and the design and practice of a well-honed internal response.

The first step a company must take, said Legassick, is to understand its cyber exposures through asset identification, classification, risk assessment and protection measures, both technological and human.

According to Raf Sanchez, international breach response manager, Beazley, cyber-response plans should be flexible and applicable to a wide range of incidents, “not just a list of consecutive steps.”

They also should bring together key stakeholders and specify end goals.

Jason J. Hogg, CEO, Aon Cyber Solutions

With bad actors becoming increasingly sophisticated and often acting in groups, attack vectors can hit companies from multiple angles simultaneously, meaning a holistic approach is essential, agreed Jason J. Hogg, CEO, Aon Cyber Solutions.

“Collaboration is key — you have to take silos down and work in a cross-functional manner.”

This means assembling a response team including individuals from IT, legal, operations, risk management, HR, finance and the board — each of whom must be well drilled in their responsibilities in the event of a breach.

“You can’t pick your players on the day of the game,” said Hogg. “Response times are critical, so speed and timing are of the essence. You should also have a very clear communication plan to keep the CEO and board of directors informed of recommended courses of action and timing expectations.”

People on the incident response team must have sufficient technical skills and access to critical third parties to be able to make decisions and move to contain incidents fast. Knowledge of the company’s data and network topology is also key, said Legassick.

“Perhaps most important of all,” he added, “is to capture in detail how, when, where and why an incident occurred so there is a feedback loop that ensures each threat makes the cyber defense stronger.”

Cyber insurance can play a key role by providing a range of experts such as forensic analysts to help manage a cyber breach quickly and effectively (as well as PR and legal help). However, the learning process should begin before a breach occurs.

Practice Makes Perfect

“Any incident response plan is only as strong as the practice that goes into it,” explained Mike Peters, vice president, IT, RIMS — who also conducts stress testing through his firm Sentinel Cyber Defense Advisors.

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Unless companies have an ethical hacker or certified information security officer on board who can conduct sophisticated simulated attacks, Peters recommended they hire third-party experts to test their networks for weaknesses, remediate these issues and retest again for vulnerabilities that haven’t been patched or have newly appeared.

“You need to plan for every type of threat that’s out there,” he added.

Hogg agreed that bringing third parties in to conduct tests brings “fresh thinking, best practice and cross-pollination of learnings from testing plans across a multitude of industries and enterprises.”

“Collaboration is key — you have to take silos down and work in a cross-functional manner.” — Jason J. Hogg, CEO, Aon Cyber Solutions

Legassick added that companies should test their plans at least annually, updating procedures whenever there is a significant change in business activity, technology or location.

“As companies expand, cyber security is not always front of mind, but new operations and territories all expose a company to new risks.”

For smaller companies that might not have the resources or the expertise to develop an internal cyber response plan from whole cloth, some carriers offer their own cyber risk resources online.

Evan Fenaroli, an underwriting product manager with the Philadelphia Insurance Companies (PHLY), said his company hosts an eRiskHub, which gives PHLY clients a place to start looking for cyber event response answers.

That includes access to a pool of attorneys who can guide company executives in creating a plan.

“It’s something at the highest level that needs to be a priority,” Fenaroli said. For those just getting started, Fenaroli provided a checklist for consideration:

  • Purchase cyber insurance, read the policy and understand its notice requirements.
  • Work with an attorney to develop a cyber event response plan that you can customize to your business.
  • Identify stakeholders within the company who will own the plan and its execution.
  • Find outside forensics experts that the company can call in an emergency.
  • Identify a public relations expert who can be called in the case of an event that could be leaked to the press or otherwise become newsworthy.

“When all of these things fall into place, the outcome is far better in that there isn’t a panic,” said Fenaroli, who, like others, recommends the plan be tested at least annually.

Cyber’s Physical Threat

With the digital and physical worlds converging due to the rise of the Internet of Things, Hogg reminded companies: “You can’t just test in the virtual world — testing physical end-point security is critical too.”

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How that testing is communicated to underwriters should also be a key focus, said Rich DePiero, head of cyber, North America, Swiss Re Corporate Solutions.

Don’t just report on what went well; it’s far more believable for an underwriter to hear what didn’t go well, he said.

“If I hear a client say it is perfect and then I look at some of the results of the responses to breaches last year, there is a disconnect. Help us understand what you learned and what you worked out. You want things to fail during these incident response tests, because that is how we learn,” he explained.

“Bringing in these outside firms, detailing what they learned and defining roles and responsibilities in the event of an incident is really the best practice, and we are seeing more and more companies do that.”

Support from the Board

Good cyber protection is built around a combination of process, technology, learning and people. While not every cyber incident needs to be reported to the boardroom, senior management has a key role in creating a culture of planning and risk awareness.

David Legassick, head of life sciences, tech and cyber, CNA Hardy

“Cyber is a boardroom risk. If it is not taken seriously at boardroom level, you are more than likely to suffer a network breach,” Legassick said.

However, getting board buy-in or buy-in from the C-suite is not always easy.

“C-suite executives often put off testing crisis plans as they get in the way of the day job. The irony here is obvious given how disruptive an incident can be,” said Sanchez.

“The C-suite must demonstrate its support for incident response planning and that it expects staff at all levels of the organization to play their part in recovering from serious incidents.”

“What these people need from the board is support,” said Jill Salmon, New York-based vice president, head of cyber/tech/MPL, Berkshire Hathaway Specialty Insurance.

“I don’t know that the information security folks are looking for direction from the board as much as they are looking for support from a resources standpoint and a visibility standpoint.

“They’ve got to be aware of what they need and they need to have the money to be able to build it up to that level,” she said.

Without that support, according to Legassick, failure to empower and encourage the IT team to manage cyber threats holistically through integration with the rest of the organization, particularly risk managers, becomes a common mistake.

He also warned that “blame culture” can prevent staff from escalating problems to management in a timely manner.

Collaboration and Communication

Given that cyber incident response truly is a team effort, it is therefore essential that a culture of collaboration, preparation and practice is embedded from the top down.

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One of the biggest tripping points for companies — and an area that has done the most damage from a reputational perspective — is in how quickly and effectively the company communicates to the public in the aftermath of a cyber event.

Salmon said of all the cyber incident response plans she has seen, the companies that have impressed her most are those that have written mock press releases and rehearsed how they are going to respond to the media in the aftermath of an event.

“We have seen so many companies trip up in that regard,” she said. “There have been examples of companies taking too long and then not explaining why it took them so long. It’s like any other crisis — the way that you are communicating it to the public is really important.” &

Antony Ireland is a London-based financial journalist. He can be reached at [email protected] Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at [email protected]