AHEAD OF THE GAME: Employer Information Alerts

The liabilities of the ‘Pokémon Go’ craze

‘Pokémon Go,’ the game that has millions of people roaming around the physical world to capture virtual characters, is potentially the launch of a new era of augmented reality, merging the digital and physical worlds in the mobile gaming revolution. In the first six days of its release, 7.5 million users, 60 percent who use it daily, downloaded the app. The implications for the workplace in terms of security, safety, and bad behavior are many.

It’s easy to spot users. They’ve been called “digital zombies” because their eyes are fixated on their phones, oblivious to their surroundings. The game superimposes a computer-generated image onto the view of the real world as seen through a headset or mobile device.

Participants can easily wander into areas or worksites that are dangerous. An agricultural company reported that a non-employee participant almost fell into a grain elevator chasing a Pokémon creature. And of course, the risks of an employee playing while working or driving for work are significant. Injury and death caused by distracted walking and driving are well documented.

There is also the issue of security – some of the apps that purport to provide help to players or knockoff apps of the game contain malware and there have been reports of phishing. Professionals have called for a ban on the installation of Pokémon Go on corporate-owned, business-only (COBO) devices, and “bring your own device” (BYOD) which have direct access to sensitive corporate information and accounts.

Employers need to recognize the phenomenon and assess their policies to ensure that they adequately address this emerging trend.

Study shows individuals and families are paying more out-of-pocket costs for health care: implications for workers’ comp costs

When the ACA passed, there was much speculation about the impact on workers’ compensation costs. Would there be cost shifting from health insurance plans to workers’ comp or would it enable faster settling of claims since pre-existing conditions would now be covered under the ACA?

A study, “Spending for Hospitalizations Among Nonelderly Adults,” published in JAMA Internal Medicine, indirectly supports the findings of an earlier study by the Workers’ Compensation Research Institute (WCRI), that there are significant levels of cost-shifting toward workers’ comp when it comes to soft tissue injuries and conditions. The JAMA study concludes that more people are now covered by health insurance, but they are paying more out-of-pocket expenses, including deductibles and co-pays.

According to a LexisNexis article, “Does the Affordable Care Act Push Medical Expenses Toward Workers’ Comp Insurers?” the JAMA study does not mention workers’ comp costs, however, “one can extrapolate from the study’s findings that the significant deductibles and copays that many Americans now face will serve as disincentives to shift medical care from the WC arena toward group and individual health insurance plans.”

The authors also suggest that there is tremendous pressure on ACA insurers today and they may push for some sort of formalized set-aside requirement regarding WC settlements, similar to the Medicare setasides.

Takeaway: Workers’ comp claims must arise out of the course and in the scope of employment. In many states, the burden to determine causation of a soft tissue injury and if the medical necessity of treatment falls under workers’ compensation or group health resides solely with the treating physician. This underscores the importance of a relationship with a physician or clinic that understands your business.

Courts and industry stakeholders shifting attitude about reimbursing claims for medical marijuana

Some state medical marijuana laws protect insurers from having to pay for the drug. Where the laws allow payment, there is an apparent shift in attitudes towards its use to combat chronic pain. Connecticut, Maine, Minnesota, and New Mexico have approved workers’ comp reimbursement for the use of medical marijuana. Some carriers defy the order because the drug is still federally classified as an illegal controlled substance.

Judges or hearing administrators are increasingly supporting requests for reimbursements. Physicians, nurses, claims adjusters, and those that influence decisions are more open-minded, although payment decisions based on utilization reviews (UR) are problematic because there are no medical guidelines for medical marijuana.

More employers developing programs to get employees back to work from non-work injuries

A recent article in Business Insurance, “Getting employees back to work from non-work injuries,” notes that companies are rethinking the idea of applying workers’ comp return-to-work (RTW) to their short-term disability programs. Some employers are medically managing short-term disability claims in the same way as workers’ comp claims, by returning employees to modified duty jobs and working with them to progress back to full duty.

While some employers may be concerned that employees with a short-term disability on restricted duty would become a workers’ comp claim, those implementing such a program have not found it to be true. Such a RTW program offers the same benefits as a workers’ comp RTW program – increased productivity, lower costs of retraining or replacing workers, avoiding a disability mindset, and boosting morale.

Another approach pairs mandatory rehabilitation participation policies with vocational rehab programs. Mandatory rehabilitation refers to policies requiring an employee on disability to participate in a rehab plan at the company’s expense, with the failure to comply resulting in a cut in benefits, unless there is good cause. An analysis by Aetna showed that cases involving employees at companies with mandatory policies closed earlier, had few transitions to long-term disability, and had a higher percentage of return to work at modified duties.

Heads up: What to expect

Workers’ comp cycle tightening may mean higher costs for buyers

Most employers have benefited from a stable and competitive market for workers’ comp insurance in recent years. Yet, many industry observers are predicting an increase in underwriting losses in 2017 and beyond, which means less favorable rates for employers. Competitive pressures, higher medical costs, and shifts in the market share of industry leaders are primary cost drivers.

Takeaway: Historically, market cycles are a result of prices moving in reaction to changes in loss ratio. It’s important to realize that the industry has gotten much more sophisticated about risk. When carriers know about the insured, they can make rational pricing decisions at the account level, regardless of the price direction in the larger market. Having a robust workers’ comp program that is vigilant and proactive in reducing injuries and costs is the best protection against rising premiums.

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