Let’s Get TRIA Passed Before Holiday Recess

Congress has 43 days — that’s six weeks from tomorrow — to pass a re-extension to the Terrorism Risk Insurance Act (TRIA).

If Congress does not pass the re-extension, a couple things happen.

1) Since terrorism risk is very expensive and difficult to predict, insurers will likely to raise premiums or back out of the market.

2) Workers’ compensation faces limitless liabilities because it must cover work-related terrorism exposure, which could result in premium increases in states where the unthinkable occurs.

The whole point of TRIA is ensuring that terrorism coverage is accessible and affordable by offering a federally-supported backstop.

If you have a problem with the government getting involved in offering insurance, consider that terrorism risk mitigation depends on government security efforts that insurers cannot incentivize. That makes terrorism coverage quite unique.

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…if the trigger and co-share change too much,
there is the risk carriers will bail out of the market.
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As I explain a past blog and my article, The TRIA Challenge,” prices could already be poised for premium increases due to recent foreign policy decisions that leave the nation more vulnerable to terrorist attacks. Companies need terrorism coverage more than ever.

So what’s the hold up?

To oversimplify, some members of Congress would like to see the insurance industry carry more risk by raising the program “trigger,” or when TRIA can take effect, beyond the current $5 million. (The Boston Marathon Bombing did not reach the $5 million threshold so the insurance industry covered it without TRIA.)

Current legislation would also boosts insurers’ co-share, which is currently 15 percent.

That’s like your health insurance company changing its terms and expecting you to pay a higher deductible and higher co-payments.

Therefore, if the trigger and co-share change too much, there is the risk that carriers will bail out of the market.

Terrorism groups are getting bigger and stronger – and they clearly make it known that they want to attack the United States again. Businesses must be ready.

It’s really quite simple. Businesses need affordable terrorism coverage. Therefore, Congress should pass a re-extension to TRIA.

Waiting for My New Rolodex

After spending several days awaiting my new Rolodex, Staples just informed me that I need to wait a little bit longer.

Why on earth am I buying a new Rolodex when office software makes our lives more efficient?

Because having a Rolodex works better for me.

Yes, it’s true. I had two Rolodexes but was convinced that having my contacts in electronic address books was better. So I entered in my contacts and pitched the Rolodexes about 10 years ago.

Electronic address books are not working for me because they force my contacts in a stifling format that does not suit my needs. But this is secondary to the feeling of impending doom if I electronically lose all of my contact information.

When I was a full-time workers’ compensation reporter in the 1990s, my Rolodex cards were color coded. Each type of source, including insurance companies, self-insured employers, vendors, actuaries and others had a magic marker-highlighted color.

It was great because when I was starting to work on an article, I would pull sources by color, line them up on my desk and start contacting each one. When I was waiting for a response, I kept the cards in the front to remind me to re-contact folks if necessary. Can Microsoft do that…?

Times have changed. I have so many different types of clients representing a multitude of specialties and industries that color coding will help me jog my memory. Once again, I will be able to pick out sources by grabbing cards of the same color.

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When I was a full-time workers’ compensation reporter in the 1990s,
my Rolodex cards were color coded.

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My color categories will likely be prospective and current clients and subject matter that include topics including technology, actuarial, workers’ compensation, medical management and others. When a client asks me to do a project, I will be able to pull from my Rolodex cards and off I go.

Yes, maybe it sounds silly considering how much I write about technology. But I know what works for me. I am a tactile person who gets tired of sitting in front of a screen all day. When all contacts have the same format, the ones I am looking for are buried in more easily than 500 names and honestly, I remember details about people more than their names.

Perhaps I just process information differently than others. I still like to read books or pick up a magazine because it is easier on my eyes. I also like to forego email and pick-up the phone and call people. It seems more human and personable.

People laughed when my husband bought me an IBM Selectric, but they now sell for two to three times more. Other people are envious and tell me how they miss the Selectric because there are still tasks better done on the typewriter. (And by the way, I use the Selectric at least once a week.) In fact, typewriters are becoming more popular, thanks to hipsters. They’re also malware-proof.

Given all the security and spying issues that concern companies and consumers, perhaps more people will find themselves unplugging a bit more. Who knows, maybe the Rolodex will make a mini comeback just like typewriters.

Do you secretly miss your Rolodex or never let it go at all? Let me know in the comments section. 

 

 

 

 

 

 

 

Eliminating Physician Drug Selling is a Workers’ Comp Necessity

Physician-dispensed drug prices in Connecticut dropped about 30 percent, yet stayed 30 to 60 percent higher than pharmacy prices, according to study by the Workers Compensation Research Institute (WCRI) announced today.

This study points to a nagging issue in workers’ comp. That is, doctors in many workers’ compensation systems are able to make significant profits selling drugs.

As I covered in a previous blog, doctors should not be playing the role of pharmacist. Period.

The issue as gained a lot of attention in the past three years or so and for good reason. Why is it, when our nation has opioid epidemic, that doctors can sell drugs without oversight?

To make matters worse, as another WCRI study revealed, doctors still have a long way to go in monitoring their patients on opioids, which is contributing to addiction, abuse and death. Put these two realities together and there are still states that allow doctors to sell opioids to patients when chances are, there is little or no patient monitoring.

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Why is it, when our nation has opioid epidemic,
that doctors can sell drugs without oversight?
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Why it is even legal for doctors to sell drugs directly to patients is beyond my comprehension. Doctors generally charge much more than the local pharmacy. And since injured workers (which the exception of Washington state) do not pay any of the tab, they do not have an incentive to obtain drugs at competitive prices.

The argument in favor of physician dispensing is patient accessibility to medication. This is not a concern in most localities.

In California, doctors were forced to accept prices very close to pharmacy prices. WCRI studied that too. It turned out doctors continued to sell drugs – and patients continued to buy them.

The insurance industry is saving money from this change, but when doctors are pressured to make patient visits shorter, how can they monitor drug use, especially of multiple medications?

To learn more about WCRI’s latest study, check out http://www.wcrinet.org/media_info.html.

That’s my two cents. Please share your opinion in the comments section below.  

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Just Thinking: Ebola and Workers’ Compensation

You know you’re a true workers’ comp junkie when you cannot hear the news without considering potential work-related implications.

Not long after Thomas Eric Duncan — the first known person to develop Ebola in the United States — died yesterday, a sheriff’s deputy involved with the case entered a hospital due to potential Ebola symptoms.

Just think of how many workers can be potentially exposed at their jobs should they come into contact with even one person who has Ebola. Medical providers from ambulance attendants, nurses and doctors to contractors, lab workers, police, border patrol officials, flight attendants and cleaning crew could theoretically be unknowingly exposed.

It is already a concern to employees. Nurses in the San Francisco have also expressed apprehension because they have not been properly trained to deal with Ebola. And after the CDC announced yesterday it will monitor passengers for Ebola at five major airports, airplane cleaning crews at LaGuardia Airport went on strike partly because they are concerned about being exposed to Ebola. 

But as I have pondered the potential Ebola crisis, I find myself having more questions than answers. While I personally have confidence there will not be a full blown Ebola epidemic here and I believe that public panic does no good, I do believe that workers will be effected before experts sort out how to combat the disease.

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Just think of how many workers can be potentially exposed at their jobs should they come into contact with even one person who has Ebola.
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My questions go beyond whether workers’ compensation will cover an employee who picks up Ebola during or in the course of employment. In principle, workers’ compensation should cover work-related exposure to Ebola as it does for HIV/AIDS. If for any reason, workers’ comp does not cover it, then there is always the tort system.

And really, many of questions are ultimately not just about Ebola, but any emerging illness that could warrant extra attention.

Below are some of my questions.

Regarding Prevention

  • What kind of workplace safety measures are needed that do not already exist for medical care providers?
  • Is the current personal protective equipment sufficient? The USAID is seeking more comfortable protective clothing. A Spanish doctor who started treatment on a nurse who contracted Ebola said the gear is too short and exposes skin
  • While the CDC and other experts insist that contracting Ebola through the air is highly unlikely, others disagree. Therefore, should workers wear face masks just in case? Viruses, after all, are live organisms that mutate.
     
  • If Ebola requires special training to prevent exposure, which agency will satisfy the workplace information employers need to know? Should employers turn to the Occupational Safety and Health Administration, the National Institute for Occupational Safety and Health (NIOSH), which is part of the Centers for Disease Control (CDC) or the CDC itself?
  • When will this information be available to employers other than hospitals and clinics?

Regarding Ebola Treatment

  • If potential treatment medications are scarce, who will be the lucky ones chosen to receive it?
  • When treatment for Hepatitis C and AIDS costs more than $100,000 per patient, how much will Ebola treatment cost employers and insurers?

Regarding Workers’ Comp Case Management:

  • Knowing medical providers have already suffered from Ebola, do states and case managers need training to deal with any special considerations with Ebola cases?
  • Since Ebola is contracted and can lead to death in about a month – which is often less time than it takes for many workers to file workers’ compensation claims — will employers suddenly get better at encouraging immediate claim filing for better case management?
  • Will Ebola workers’ compensation claims be primarily retrospective?

Pondering Ebola or emerging disease and their effect on workers’ compensation? Please post your questions below. And, if you can answer any of my questions, please share them as well.

If you want to discuss these questions with me for another blog post, please write me at annmarie@lipoldcommunications.com.

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Why the Terrorism Risk Insurance Act is Necessary

Screen Shot 2014-09-10 at 12.44.33 PM 2Tommorow is the 13th anniversary of Sept. 11, 2001, so it is fitting take a look at why the Terrorism Risk Insurance Act of 2002 needs its third re-extension.

I cover this in “The TRIA Challenge,” which was recently published in the Casualty Actuarial Society’s Actuarial Review magazine as the September/October cover story and includes a sidebar on TRIA’s impact on workers’ compensation. TRIA needs to be passed by December 31, 2104 to be extended.

I wrote my article in June — and what a difference the past few months have made in the nation’s concern regarding terrorist attacks by fundamentalist Islam groups.

As reported by The Hill, just yesterday, NBC News poll showed that 47 percent of Americans believe the U.S. is less safe than it was before September 11. That’s a huge difference from the 28 percent who felt that way last year and the two in 10 Americans who had those feelings a year after the 9/11 attacks.

Truly, the last couple months have been disturbing. Given the recent headlines about the terrorist group ISIS (called ISIL by President Obama) and the Israel’s conflict with another terror group, Hamas, and evidence of terrorists using the nation’s permeable southern border for entry, it is a wonder that more Americans are not concerned. (Or are too many Americans just not paying attention?)

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For terrorism coverage, everything from U.S. foreign policy to a watchful security guard can affect the risk of terrorism attacks.
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If you are interested in an explanation of TRIA or want to know the legislative progress, you will find that in my article. My piece also explores the challenge of pricing coverage with little relevant historical data (just like cyber coverage, which I cover in an upcoming article) and frightening actuarial cost estimates for a truck or nuclear bomb in Manhattan.

While there are those who want to reduce the role of government in many areas, the federal government should have a backstop for costs from unthinkable terrorist attacks. Terrorism coverage is the only coverage of which I am aware where the private insurance industry is covering risk when mitigation is mostly left up to government intelligence agencies and law enforcement. That is different from workers’ compensation, where insurers can reward safer workplace practices with the experience modifier or cyber coverage policies that require certain safeguards before selling coverage to organizations.

For terrorism coverage, everything from U.S. foreign policy to a watchful security guard can affect the risk of terrorism attacks. If the insurance industry perceives greater risk, then terrorism insurance prices can spike, and making terrorism courage available and affordable is the whole point behind TRIA. Meanwhile, legislative language has suggested an increase in insurer co-payments for TRIA, which the American Insurance Association opposes.

From an actuarial point of view, I like what Michael Angelina, the vice president of casualty for the American Academy of Actuaries, told me for the article. “If I feel the threat is more likely than prior belief, all else being equal, I am going to increase rates to account for this increase in frequency and additional uncertainty.”

Given that this week’s poll data shows that ordinary Americans feel less safe, it will be interesting to see how the actuarial community reaches its conclusions to develop future rates.

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The Other Reason for Rising Workers’ Comp Premiums

Actuarial ReviewWorkers’ compensation premiums are on the rise with little hint of near-term relief.

To figure out why, workers’ comp experts first look under the hood to check out claim costs.

Claim costs, however, are not going up at an alarming rate. A high unemployment rate means lower risk exposure.

Medical costs are not increasing as much as in the past either. This is despite the opioid epidemic and that workers’ compensation insurers often pay more for the same procedures as health insurers.

But now there is another explanation for why workers’ compensation premiums are rising.

That is, insurers are seeing dismal returns on allowable investment instruments, making it harder for them to offset workers’ compensation costs. As a result, they need to charge higher premiums to remain solvent and profitable.

This is expected to continue as long as investments such as U.S. Treasury yields offer returns running very closely to the inflation rate and are not expected to improve anytime soon. Since insurers purchase long-term bonds, the current yield will hardly help insurers offset some of the costs of writing workers’ compensation insurance in the years ahead.

This is just part of the current workers’ compensation story. To learn more, check out my article, “Workers’ Compensation: Future Turbulence Ahead,” which is the cover story of the May/June issue of the Casualty Actuarial Society’s Actuarial Review magazine.

The article also explains how economic, political and underwriting trends are likely to shape workers’ compensation in the next few years. Think of the article as a workers’ compensation status report.

Enjoy! And, feel free to let me know what you think!

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Can Disability and Accident Coverage Serve as a Workers’ Comp Substitute?

Sometimes I just don’t get it.

An article published today in Insurance Journal, which looks more like a copied Aflac news release than a news article, says that employers who offer accident and disability coverage see reductions in workers’ compensation claims.

What?

Maybe I am naïve, but I thought work-related incidents were why workers’ comp existed in the first place. The article, based on a study of 600 employers, is clearly a marketing tactic to get employers to buy what Aflac offers. But does this approach, even if legal, mean employers and employees are giving up their rights under workers’ comp laws?

I have so many questions. Is it even legal to apply for non-occupational disability coverage for work-related incidents? What is the medical care like? Do the employees get the immediate sports medicine approach to health care with the best doctors? How soon do these workers return to the job?

You don’t see those questions  — or the answers  — in the article. Nor do we know how much the Aflac coverage goes up from higher claim filings. Does anyone have any idea how this works? Please let me know!

Just Own It

Could you imagine how much the world would change if people just took responsibility for their actions?DSC_0070

It would certainly curb insurance costs and improve interpersonal relationships.

A recent interchange with one of my teenage daughters got me thinking about this.

It was a typical parent-teenager discussion, but it could have just as easily been between a conversation between boss and employee or within other relationships.

I asked my daughter to do something. She did not fully do what she was asked.

While trying to attain the answer to why she did not fulfill my request to pick up the glasses from the living room and put them in the dishwasher, her answers – which I would call excuses — led to fruitless and frustrating cross-examination.

Then she asked me, “Mom, what do you want from me?”

I looked at her and said, “I just want you to own it.”

“Own what?” she asked.

“I want you to own that you could have just put the glasses in the dishwasher instead of the ledge of the countertop where the sink is. I want you to own that it was lazy and you were leaving your job for me to finish.”

“Oh,” she said. The omission was acknowledged, thus dissipating all the aforementioned excuses.

Owning our responsibilities comes down to the decisions we make in our everyday lives. Our society is a mess because people do not want to own up to their flaws and mistakes. Too often, we make excuses or try to blame others.

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The best way to reduce health care costs is to prevent,
as much as possible, the need for health care.
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Just think how it affects the high cost of insurance. One of my doctors owned up to me that he made a mistake and he apologized. I accepted it, case closed. We agreed it would be good if more doctors were free to do that without fear of a lawsuit. Fortunately, states are implementing “I’m sorry” legislation so doctors can take responsibility without the apology being grounds for a lawsuit.

Workers’ compensation insurance is “no fault” coverage. It does not matter if the injury was caused by the worker or the employer, the injury is covered, period.

That is good for avoiding tort suits, which workers’ comp was designed to achieve. Employers, however, need to own up to their responsibilities of having safe workplaces, helping workers get their claims filed speedily, assuring the best medical care and offering return-to-work alternatives. This not only because it is the right thing to do, but because it saves money. Injured workers should do their part by following doctor’s instructions and doing their physical therapy exercises, as examples.

Consider rising health insurance costs, which were increasing exponentially long before ObamaCare. My guess is the main reason why health care costs are high is because too many of us are making unhealthy choices.

The best way to reduce health care costs is to prevent, as much as possible, the need for health care. It means working on taking responsibility for our individual choices. Obesity is a prime example. It not only largely explains our nation’s type 2 diabetes epidemic, but also is a co-morbidity that makes it harder to be healthy and recover from injuries, illnesses and surgeries. Sure, there are some who are genetically disadvantaged when it comes to their weight, but honestly, most of us are struggling with our weight — and we are talking about half the American population — because we eat more calories than we use.

Other people struggle with drugs or alcohol abuse. They need to own it before they can recover, and we need to support them.

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It takes courage and character to own responsibility,
but it pays dividends in every part of life.
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Owning it means paying attention to ourselves and making better choices. As I always like to say, friends do not let friends buy pants with elastic waistbands! I refuse to buy larger clothes when the pounds start to creep in. Writer and public relations are sedentary work that keep me sitting behind a computer. So I have to make extra effort to find ways to burn the calories I consume. My FitBit is helping me to realize when I am not active enough. So I take more breaks and find ways to keep active, like fitting in more household chores on a daily basis.

I am also trying to own that I do not always make the best food choices for my body  — especially when I get real busy.

Think about how much disability costs would drop if people owned their part in it. We know there are people on disability not so much because of their physical condition but because of low job availability. It’s easy to sit around and collect a check, but if people decided to own their futures by making positive choices in their health, education and work ethic, they could continue to be productive members of society.

It takes courage and character to own responsibility, but it pays dividends in every part of life. From our relationships to making healthy and active living a priority, all of us have something we need to own to improve our lives. You know what you need to do  —  just own it!

Workers’ Compensation: My Father’s Story

My Dad.

My Dad

My father was an injured worker. This is the first time I have ever written about this publicly. But since his birthday would have been this week, I am thinking about him more.

Dad was a renaissance man. After writing poetry, acting in plays and running cross-country in high school, he found himself loading trucks for a living to support his wife and family.

Though he was an alcoholic, he never allowed it to interfere with his strong work ethic. He never missed a day of work, no matter how sick he was. He was president of his local teamster’s union, but he hated advocating for workers who did not pull their weight.

He was a tough man. And he had these rules for keeping himself tough. He never wore a winter coat in Cleveland’s famously miserable winters until December to get his body used to the cold. He drank hot coffee in the summer to get used to the heat. 

While I was working to complete my journalism degree in the late 1980s, I was unaware that my father had filed a workers’ compensation claim with his self-insured employer. We did not talk much.

I did not know about his claim when I landed my first job at the Ohio Bureau of Workers’ Compensation. By the time I found out, he had been off work for two or three years due to back problems. This was the early 1990s, when the workers’ compensation cost crisis was starting to inspire employers to initiate activities to save unnecessary workers’ comp expenses, such as return to work.

His employer was not enlightened, so dad did not get a return to work opportunity. Instead, he sat home, waiting for the next hearing, the next letter from the attorney…you get the picture.

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To use my dad’s words, he needed to work so he could feel like a man.
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My parents’ divorce was finalized while my father was on workers’ comp. He told me later that not working was an important contributing factor that led to the divorce. He said he did not feel like a real man because he could not provide for his family and eventually, it pervaded his psyche. Ultimately, he ended up on Social Security Disability.

When I started covering workers’ comp full-time as a reporter in Washington. D.C., I did not tell anyone about my dad. My role as a reporter was objectivity, not advocacy. I kept my opinions to myself and kept them from my work. And I did right.

My dad’s experience did not cause me to become an advocate for injured workers in the traditional political sense. The political arguments were too shortsighted to me. I have always felt the best contribution I could make was to objectively report the truth about workers’ compensation for everyone’s benefit. I also try to inform injured workers when I can. To see more, please click here.

For example, one shortsighted political goal of injured worker advocates was to push for employee choice of physician. I had always wished, however, that labor and employer advocates worked together to ensure insured workers got the best medical care as soon as possible.

Dad might of thought it was great at first that he could get a break from work with the stroke of the doctor’s pen. But if he had known what we know now – that the longer a person is off from a work-related incident the harder it would be for he/she to return to their same earnings – he might have been a little more urgent about finding a solution.

We know now that he did not need the choice of physician; he needed an occupational physician to hasten recovery. He did not need a doctor that would sign an order to stay home from work, but one who encouraged him to explore ways he can earn a living with his disability.

My dad did not need a lawyer to fight with his employer so he could be out of work collecting benefits as long as possible. And he certainly did not need to lose a percentage of his benefits to his attorney. We know now that many employees hire attorneys due to lack of communication on the employer’s part. (I have offered advice on how to improve communication about workers’ compensation in previous blogs. To see one of these blogs, click here.)

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What my father did need, however, was an employer who cared about him.
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Back in those days, at least in Cleveland, it was assumed a lawyer was necessary for workers’ comp. If my dad had known he could self-advocate instead, I think he would have done a fine job on his own and saved money in attorneys’ fees. He was always fantastic at advocating for others.

What my father did need, however, was an employer who cared about him. All workers need that. And thankfully, many employers have found that having a culture of caring pays off in many ways. He also needed a return to work opportunity. To use my dad’s words, he needed to work so he could feel like a man.

Years later, dad got cancer and the fateful call to Hospice had been made. I wanted to see him, but I was far along in the pregnancy of my second daughter and was contagious with a sinus infection. There was no easy way to get from Washington, D.C. to Cleveland in the winter so he advised me not to come.

Just one week before my second daughter was born, and four days before dad died, we prayed together and said goodbye. I hung up the phone in tears knowing that someday, when I reach the end of my journey, I will see him again in a better place.

He died just after his 59th birthday.

I don’t think of my dad much when I write about workers’ compensation because his identity to me was being my father, not an injured worker. I think of him, instead, in the totality of the man he was. Seeing what happened to my dad does give me empathy for how workers’ compensation affects everyone associated with work-related incidents. Families, supervisors, co-workers and others are affected as well.

I am grateful that I have seen the workers’  compensation system improve from so many perspectives since dad filed is claim in the late 1980s. I still believe, however, we have a long way to go.