Hurricane Aftermath

Post-Disaster Impact on Workers’ Comp a Mixed Bag

Employers are urged to proceed with caution when returning to hurricane damaged properties.
By: | September 25, 2017 • 3 min read

In Houston, a region pummeled by Hurricane Harvey in late August, a massive cleanup is underway. The work will take time, and it presents significant risks for the workers tasked with setting things right.

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Ben Gonzalez, spokesperson for the Texas Department of Insurance, will not speculate on the frequency of workers’ comp claims or rates following the disaster. But he said the hurricane has presented serious health and safety hazards for those working on recovery and cleanup.

Those dangers, he said, range from fall and lifting hazards to cuts and lacerations to bites from snakes and insects. He also said that standing flood water poses risks such as exposure to infectious disease, chemicals and accidental electrocutions — all of which have been widely reported by the media.

“Even if extensive damage did not occur at a particular location, worksite conditions may have changed and employees may be doing work outside their regular duties as the try to get businesses ready to open,” he said. This creates potential hazards if businesses fail to take sufficient time to assess the environment and make sure employees have proper training and safety equipment, Gonzalez said.

Travis Vance, counsel in the Charlotte, N.C., office of Fisher Phillips, said it’s not unusual to have a spike in workers’ comp claims and costs after a disaster because employers use their own workers for cleanup instead of hiring a remediation company — a mistake that he has seen lead to insurance payouts in the millions of dollars.

He predicts the scale of the disaster left by Harvey and Irma will cause workers’ comp claims in Texas and Florida to jump by 15 to 20 percent in the next year.

But while many assume rates will spike following a natural disaster, records from past events suggest results can be difficult to predict.

It’s not unusual to have a spike in workers’ comp claims and costs after a disaster because employers use their own workers for cleanup instead of hiring a remediation company.

Workers’ comp rates in Louisiana spiked following the devastation left by Hurricane Katrina in 2005, while other states have reported flat rates and even declines in workers’ comp claims following natural disasters like hurricanes and flooding.

In Louisiana in 2006, a year after Katrina, the state reported a 38 percent increase in the number of workers’ comp claims processed.

But the most recent workers’ comp figures in the state so far do not show a spike in claims as a result of the August 2016 floods that decimated approximately more than 150,000 homes and businesses in the Baton Rouge area.

The state’s year-end 2016 figures actually showed a dip in claims, as well as workers’ comp insurance rates, which have dropped consistently from 2013 to 2016.

At Baton Rouge-based LUBA workers’ comp, a casualty insurance company, the company saw firsthand how post-disaster cleanup could affect workers’ comp since its own offices were under water.

But rather than seeing a jump, the company saw a slight decrease in claims in the year following the floods. Mike DePaul, LUBA’s chief operating officer, said that, in his company’s experience, people were so “focused and mission-driven” during cleanup efforts that the type of careless accidents that can happen to distracted workers just didn’t occur.

Another theory is with so much clean-up work available and people working together to rebuild, there’s less likelihood of employees filing fraudulent claims.

In 2012, Hurricane Sandy’s hit on New Jersey caused an estimated $30 billion in damage. However, according to Karla Bardinas, a spokesperson for the New Jersey Department of Labor and Workforce Development, total workers’ comp filings after Sandy — in 2012, 2013 and 2014 — actually declined compared to 2011.

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The Cambridge, Mass.-based Workers’ Compensation Research Institute found in its post-Katrina research that immediately after the hurricane, there was a dip in medical costs per claim in the New Orleans area, most likely due to a disruption in medical care. The state also saw a decline in the duration of temporary disability after the disasters mainly concentrated in hurricane-affected areas.

Regardless of whether Texas and Florida see rates jump like Katrina or remain flat and drop like they did in post-Sandy New Jersey, Vance said employers and insurers alike should not be complacent, and precautions should be taken to protect workers returning to workplaces that may be in less-than-optimal condition.

Angela Childers is a Chicago-based writer specializing in health care and business management. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

2017 Teddy Awards

The Era of Engagement

The very best workers’ compensation programs are the ones where workers aren’t just the subject of the program, they’re a part of it.
By: | November 1, 2017 • 5 min read

Employee engagement, employee advocacy, employee participation — these are common threads running through the programs we honor this year in the 2017 Theodore Roosevelt Workers’ Compensation and Disability Management Awards, sponsored by PMA Companies.

A panel of judges — including workers’ comp executives who actively engage their own employees — selected this year’s winners on the basis of performance, sustainability, innovation and teamwork. The winners hail from different industries and regions, but all make people part of the solution to unique challenges.

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Valley Health System is all-too keenly aware of the risk of violence in health care settings, running the gamut from disruptive patients to grieving, overwrought family members to mentally unstable active shooters.

Valley Health employs a proactive and comprehensive plan to respond to violent scenarios, involving its Code Atlas Team — 50 members of the clinical staff and security departments who undergo specialized training. Valley Health drills regularly, including intense annual active shooter drills that involve participation from local law enforcement.

The drills are unnerving for many, but the program is making a difference — the health system cut its workplace violence injuries in half in the course of just one year.

“We’re looking at patient safety and employee safety like never before,” said Barbara Schultz, director of employee health and wellness.

At Rochester Regional Health’s five hospitals and six long-term care facilities, a key loss driver was slips and falls. The system’s mandatory safety shoe program saw only moderate take-up, but the reason wasn’t clear.

Rather than force managers to write up non-compliant employees, senior manager of workers’ compensation and employee safety Monica Manske got proactive, using a survey as well as one-on-one communication to suss out the obstacles. After making changes based on the feedback, shoe compliance shot up from 35 percent to 85 percent, contributing to a 42 percent reduction in lost-time claims and a 46 percent reduction in injuries.

For the shoe program, as well as every RRH safety initiative, Manske’s team takes the same approach: engaging employees to teach and encourage safe behaviors rather than punishing them for lapses.

For some of this year’s Teddy winners, success was born of the company’s willingness to make dramatic program changes.

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Delta Air Lines made two ambitious program changes since 2013. First it adopted an employee advocacy model for its disability and leave of absence programs. After tasting success, the company transitioned all lines including workers’ compensation to an integrated absence management program bundled under a single TPA.

While skeptics assume “employee advocacy” means more claims and higher costs, Delta answers with a reality that’s quite the opposite. A year after the transition, Delta reduced open claims from 3,479 to 1,367, with its total incurred amount decreased by $50.1 million — head and shoulders above its projected goals.

For the Massachusetts Port Authority, change meant ending the era of having a self-administered program and partnering with a TPA. It also meant switching from a guaranteed cost program to a self-insured program for a significant segment of its workforce.

Massport’s results make a great argument for embracing change: The organization saved $21 million over the past six years. Freeing up resources allowed Massport to increase focus on safety as well as medical management and chopped its medical costs per claim in half — even while allowing employees to choose their own health care providers.

Risk & Insurance® congratulates the 2017 Teddy Award winners and holds them in high esteem for their tireless commitment to a safe workforce that’s fully engaged in its own care. &

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More coverage of the 2017 Teddy Award Winners and Honorable Mentions:

Advocacy Takes Off: At Delta Air Lines, putting employees first is the right thing to do, for employees and employer alike.

 

Proactive Approach to Employee SafetyThe Valley Health System shifted its philosophy on workers’ compensation, putting employee and patient safety at the forefront.

 

Getting It Right: Better coordination of workers’ compensation risk management spelled success for the Massachusetts Port Authority.

 

Carrots: Not SticksAt Rochester Regional Health, the workers’ comp and safety team champion employee engagement and positive reinforcement.

 

Fit for Duty: Recognizing parallels between athletes and public safety officials, the city of Denver made tailored fitness training part of its safety plan.

 

Triage, Transparency and TeamworkWhen the City of Surprise, Ariz. got proactive about reining in its claims, it also took steps to get employees engaged in making things better for everyone.

A Lesson in Leadership: Shared responsibility, data analysis and a commitment to employees are the hallmarks of Benco Dental’s workers’ comp program.

 

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]