Mental Injury

Rising Workplace Stress Has Big Impact on Comp

In a trend that shows no sign of reversing, American workers are reporting higher levels of stress, which contributes to injuries and illness and hinders recovery.
By: | January 26, 2015 • 4 min read
Topics: Claims | Workers' Comp

Eight out of every ten American workers report being stressed by at least one thing at work, according to a study by Nieslen, a market research firm. Long commutes, too-heavy workloads coupled with stagnant pay, and poor work-life balance account for the top stress-inducers.

Advertisement




The impact of poor mental health on physical recovery is well-known in the workers’ comp world, but as stress and anxiety become bigger issues in the workforce, it’s worth taking a longer look at how high levels of stress affect claims, and what employers can do to mitigate those effects.

States vary in how they approach claims of mental or psychological injuries at work, but by and large they are not compensable.

The employee bears the burden of proving that their mental condition — usually anxiety or depression — rose directly out of some extraordinary circumstance of their employment; normal workplace demands are not deemed sufficient reasons for a claim.

“Stress has a negative impact on overall health and return to work outcomes, and a growing body of evidence supports that.” — Trey Gillespie, senior director, workers’ compensation, Property Casualty Insurers Association of America

“There’s a lot of variance, but most states don’t recognize any form of mental-mental dynamic in terms of a compensable workers’ comp claim,” said Trey Gillespie, senior director, workers’ compensation at the Property Casualty Insurers Association of America.

“Typical work-related stresses, in terms of getting work done and dealing with bosses and co-workers, are generally not a basis for a claim.”

“There are circumstances in which an employee can be compensated for workplace stress, but there are a lot of ‘buts’,” said Bruce Wood, vice president and associate general counsel, American Insurance Association. “States have erected speed bumps or barriers that a claimant would have to pass to be compensated.”

Those speed bumps include higher evidentiary standards for compensability.

Employees must present a preponderance of evidence that clearly and convincingly establishes their work environment as the primary cause for their psychiatric condition — a tall order when other stress-inducing factors like personal finances or troubles at home come into play.

In most states, in order for a mental condition to be compensable, it must be accompanied by some sort of physical injury.

But again, proving that mental stress led to a physical disorder — such as a heart attack, high blood pressure, or other cardiovascular condition — can be difficult.

That’s why these types ‘mental-physical’ claims are not common, but could see an uptick if U.S. workers continue to report high levels of stress connected to unreasonable workloads or long hours.

Specific Exceptions

Some states make exceptions for causes involving PTSD or depression stemming from either experiencing or witnessing a traumatic injury. Connecticut, for example, strictly prohibits mental-mental claims with no physical component, but is seeking legislative amendments to its workers’ compensation act after the Sandy Hook school shootings in 2012.

“Teachers and first responders came upon a horrific scene, and may face PTSD or other emotional distress,” Wood said.

“There’s an attempt to change the law to eliminate the prohibition on mental-mental, or to specifically state that where a trauma is witnessed, that trauma constitutes a physical component of a valid claim.”

Even where mental stress does not constitute a compensable claim, everyday pressures and anxiety nonetheless worsen the outlook of a purely physical claim.

“If a worker has an injury and is trying to get back to their norm, meaning getting back to work in some capacity and back to their usual routine, anything that delays that recovery can trigger some psychological conditions,” said Deirdre Doyle, vice president of quality and continuing education at Procura, a Healthcare Solutions company. “That could be stress, anxiety, depression or all three.”

Doyle also said she believes workers’ comp payers will see more mental health issues as secondary diagnoses on claims going forward.

“Stress has a negative impact on overall health and return to work outcomes, and a growing body of evidence supports that,” Gillespie said.

The good news is that, while stress-free work environments may never be the norm, employers are becoming more receptive to employees’ mental health needs.

Advertisement




“There’s been a trend for the past 20 years or so in which employers fully understand how day-to-day work environment affects performance and also length of time off due to injury,” Gillespie said.

“There are proactive movements in human resources departments to create environments where employees feel valued, and to not set an adversarial tone if a worker becomes injured.”

However stress comes into play during a claim, whether as a contributing factor to or result of a physical condition, it’s clear that employers and their workers’ comp providers can improve outcomes and save dollars by recognizing the mental component of an injury early and attentively.

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Lead Story

Improving the Claims Experience

Insureds and carriers agree that more communication can address common claims complaints.
By: | January 10, 2018 • 7 min read

Carriers today often argue that buying their insurance product is about much more than financial indemnity and peace of mind.

Advertisement




Many insurers include a variety of risk management services and resources in their packages to position themselves as true risk partners who help clients build resiliency and prevent losses in the first place.

That’s all well and good. No company wants to experience a loss, after all. But even with the added value of all those services, the core purpose of insurance is to reimburse loss, and policyholders pay premiums because they expect delivery on that promise.

At the end of the day, nothing else matters if your insurer can’t or won’t pay your claim, and the quality of the claims experience is ultimately the barometer by which insureds will judge their insurer.

Why, then, is the process not smoother? Insureds want more transparency and faster claims payment, but claims examiners are often overburdened and disconnected from the original policy. Where does the disconnect come from, and how can it be bridged?

Both sides of the insurer-insured equation may be responsible.

Susan Hiteshew, senior manager of global insurance and risk management, Under Armor Inc.

“One of the difficult things in our industry is that oftentimes insureds don’t call their insurer until they have a claim,” said Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“It’s important to leverage all of the other value that insurers offer through mid-term touchpoints and open communication. This can help build the insurer-insured partnership so that when a claim materializes, the relationships are already established and the claim can be resolved quickly and fairly.”

“My experience has been that claims executives are often in the background until there is an issue that needs addressing with the policyholder,” said Dan Holden, manager of corporate risk and insurance for Daimler Trucks North America.

“This is unfortunate because the claims department essentially writes the checks and they should certainly be involved in the day to day operations of the policyholders in designing polices that mitigate claims.

“By being in the shadows they often miss the opportunity to strengthen the relationship with policyholders.”

Communication Breakdown

Communication barriers may stem from internal separation between claims and underwriting teams. Prior to signing a contract and throughout a policy cycle, underwriters are often in contact with insureds to keep tabs on any changes in their risk profile and to help connect clients with risk engineering resources. Claims professionals are often left out of the loop, as if they have no proactive role to play in the insured-insurer relationship.

“Claims operates on their side of the house, ready to jump in, assist and manage when the loss occurs, and underwriting operates in their silo assessing the risk story,” Hiteshew said.
“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.”

Both insureds and claims professionals agree that most disputes could be solved faster or avoided completely if claims decision-makers interacted with policyholders early and often — not just when a loss occurs.

“Claims and underwriting need to be in lock-step to collectively provide maximum value to insureds, whether or not losses occur.” – Susan Hiteshew, senior manager of global insurance and risk management for Under Armour Inc.

“Communication is critically important and in my opinion, should take place prior to binding business and well before a claim comes in the door,” said David Crowe, senior vice president, claims, Berkshire Hathaway Specialty Insurance.

“In my experience, the vast majority of disputes boil down to lack of communication and most disputes ultimately are resolved when the claim decision-maker gets involved directly.”

Talent and Resource Shortage

Another contributing factor to fractured communication could be claims adjuster workload and turnover. Claims adjusting is stressful work to begin with.

Advertisement




Adjusters normally deal with a high volume of cases, and each case can be emotionally draining. The customer on the other side is, after all, dealing with a loss and struggling to return to business as usual. At some TPAs, adjuster turnover can exceed 25 percent.

“This is a difficult time for claims organizations to find talent who want to be in this business long-term, and claims organizations need to invest in their employees if they’re going to have any success in retaining them,” said Patrick Walsh, executive vice president of York Risk Services Group.

The claims field — like the insurance industry as a whole — is also strained by a talent crunch. There may not be enough qualified candidates to take the place of examiners looking to retire in the next ten years.

“One of the biggest challenges facing the claims industry is a growing shortage of talent,” said Scott Rogers, president, National Accounts, Sedgwick. “This shortage is due to a combination of the number of claims professionals expected to retire in the coming years and an underdeveloped pipeline of talent in our marketplace.

“The lack of investment in ensuring a positive work environment, training, and technology for claims professionals is finally catching up to the industry.”

The pool of adjusters gets stretched even thinner in the aftermath of catastrophes — especially when a string of catastrophes occurs, as they did in the U.S in the third quarter of 2017.

“From an industry perspective, Harvey, Irma and Maria reminded us of the limitations on resources available when multiple catastrophes occur in close succession,” said Crowe.

“From independent and/or CAT adjusters to building consultants, restoration companies and contractors, resources became thin once Irma made landfall.”

Is Tech the Solution?

This is where Insurtech may help things. Automation of some processes could free up time for claims professionals, resulting in faster deployment of adjusters where they’re needed most and, ultimately, speedier claims payment.

“There is some really exciting work being done with artificial intelligence and blockchain technologies that could yield a meaningful ROI to both insureds and insurers,” Hiteshew said.

“The claim set-up process and coverage validation on some claims could be automated, which could allow adjusters to focus their work on more complex losses, expedite claim resolution and payment as well.”

Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Predictive modeling and analytics can also help claims examiners prioritize tasks and maximize productivity by flagging high-risk claims.

“We use our data to identify claims with the possibility of exceeding a specified high dollar amount in total incurred costs,” Rogers said. “If the model predicts that a claim will become a large loss, the claim is redirected to our complex claims unit. This allows us to focus appropriate resources that impact key areas like return to work.”

“York has implemented a number of models that are focused on helping the claims professional take action when it’s really required and that will have a positive impact on the claim experience,” Walsh said.

“We’ve implemented centers of excellence where our experts provide additional support and direction so claim professionals aren’t getting deluged with a bunch of predictive model alerts that they don’t understand.”

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners.” — Dan Holden, manager, Corporate Risk & Insurance, Daimler Trucks North America

Many technology platforms focused on claims management include client portals meant to improve the customer experience by facilitating claim submission and communication with examiners.

“With convenient, easy-to-use applications, claimants can send important documents and photos to their claims professionals, thereby accelerating the claims process. They can designate their communication preferences, whether it’s email, text message, etc.,” Sedgwick’s Rogers said. “Additionally, rules can be established that direct workflow and send real time notifications when triggered by specific claim events.”

However, many in the industry don’t expect technology to revolutionize claims management any time soon, and are quick to point out its downsides. Those include even less personal interaction and deteriorating customer service.

While they acknowledge that Insurtech has the potential to simplify and speed up the claims workflow, they emphasize that insurance is a “people business” and the key to improving the claims process lies in better, more proactive communication and strengthening of the insurer-insured relationship.

Additionally, automation is often a double-edged sword in terms of making work easier for the claims examiner.

“Technology can certainly expedite the claims process, but that could also lead to even more cases being heaped on examiners,” Holden said.

“So while the intent is to make things more streamlined for claims staff, the byproduct is that management assumes that examiners can now handle more files. If management carries that assumption too far, you risk diminishing returns and examiner burnout.”

Advertisement




By further taking real people out of the equation and reducing personal interaction, Holden says technology also contributes to deteriorating customer service.

“When I started more than 30 years ago as a claims examiner, I asked a few of the seasoned examiners what they felt had changed since they began their own careers 30 year earlier. Their answer was unanimous: a decline in customer service,” Holden said.

“It fell to the wayside to be replaced by faster, more impersonal methodologies.”

Insurtech may improve customer satisfaction for simpler claims, allowing policyholders to upload images with the click of a button, automating claim valuation and fast-tracking payment. But for complex claims, where the value of an insurance policy really comes into play, tech may do more harm than good.

“Technology is an important tool and allows for more timely payment and processing of claims, but it is not THE answer,” BHSI’s Crowe said. “Behind all of the technology is people.” &

Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]