Workers compensation insurers face significant challenges ensuring their comp claimants continue to receive the care and benefits they need in the aftermath of a disaster, particularly as their own employees struggle with the effects of natural catastrophes, experts say.
The 2019 hurricane season officially began Saturday, but the United States has already experienced a number of natural catastrophes this year, from more than 500 tornados reported in the month of May to severe flooding across the Midwest, according to the National Weather Service.
“Preparedness is key,” said Mark Lechowicz, chief compliance officer at Rolling Meadows, Illinois-based third-party claim administrator Gallagher Bassett Services Inc. “If an employer or carrier has claimants that are impacted, there can be multiple obstacles that need to be overcome.”
In 2017, the personal lines program at Boston-based Liberty Mutual Insurance Co. reached out to the workers compensation claims staff as they were preparing their customers about approaching hurricanes in the Atlantic. This led the claims group to think about what more they could do to protect injured workers and workers comp policyholders ahead of these storms, said Doug Anderson, vice president and regional manager of workers compensation claims for Liberty Mutual Insurance and Helmsman Management Services LLC in Hoffman Estates, Illinois. This led to the development of Liberty Mutual’s workers compensation weather playbook, which helps the company identify injured workers who may be in the path of a storm, determine if they live in areas that have been hit after the storm passes through and allows them to proactively plan for any issues that may prevent the worker from receiving the services the employee needs.
“Whether it’s proactive or after the fact, we identify the injured worker, provide that info to the case managers … reach out to the injured workers, the employers, the attorney if there happens to be attorney representation,” said Mr. Anderson.
The playbook has case managers run through the list, first checking to see that the injured worker is safe, whether they were affected by the event, whether they have the ability to receive their indemnity checks, have their medications and are able to travel to scheduled appointments or procedures, he said.
With the May tornados this year, claims professionals reached out to more than 400 injured workers to make sure they could still receive their benefits, make it to medical appointments and fill their prescriptions, he said.
With massive flooding situations, like those experienced in Houston in 2017 after Hurricane Harvey, insurers need to be prepared for shuttered courthouses, their own flooded field offices and an inability of claims handlers to do their work, said Mr. Lechowicz. This can affect an insurer or third-party administrator’s ability to comply with regulatory requirements such as electronic data interchange filing in a timely manner, which can result in fines or penalties, or perform independent medical examinations or deliver benefits within required time frames, he said.
In Texas, the state’s workers compensation insurance commissioner, Ryan Brennan, prepared for this possibility before Harvey and Irma hit. He issued an emergency declaration waiving penalties for insurers and TPAs, restrictions for claimants seeking emergency and nonemergency care in non-network facilities, extended deadlines for medical examinations and authorized payments to pharmacies for up to a 90-day supply of prescriptions, said Lisa Anne Bickford, Sacramento, California-based director of workers compensation government relations at Coventry Workers’ Comp Services. Florida followed Texas’ lead and has since issued similar bulletins when hurricanes were expected to make landfall in the Sunshine State.
Generally, regulators do not make any allowances for such events, which is why the commissioners’ bulletins in Texas and Florida specifically waiving penalties in advance is so significant, said Mr. Lechowicz.
One of the biggest challenges Austin-based Texas Mutual Insurance Co. faced after the 2017 hurricanes was ensuring that injured workers had the means and ability to receive their weekly benefit checks, which required staff to call every worker residing in an affected area to see if they could receive a paper check, and if not, set up a direct deposit for them, said Kim Haugaard, senior vice president of policyholder services.
Another challenge Texas Mutual encountered during Hurricane Harvey was determining how to accommodate injured workers who had been working in modified duty positions, but no longer had an immediate place of employment to return to, which the insurer handled by continuing to pay the workers and monitor their medical and employment status, he said.
“Communication is key to any disaster planning,” Mr. Haugaard said. “During Hurricane Harvey … we redistributed claim assignments and workflows from employees who were directly impacted by the hurricane. We also closely followed (Texas Department of Insurance) bulletins to ensure that we had an understanding of any imminent issues that may arise.”
In Davenport, Iowa, which endured record-breaking flooding in early May, attorney Peter Thill of Betty, Neuman & McMahon PLC said that claims handlers should have multiple methods to reach an injured worker, including alternate mailing addresses, emails and alternate phone numbers.
Mr. Thill, a workers compensation defense attorney whose clients may have injured workers affected by the recent floods, said field nurse case managers should also be assigned to meet with displaced workers to ensure that both medical and indemnity benefits are still being received during the emergency situation.
This article was first published by Business Insurance.