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

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

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