SAN FRANCISCO — The extent to which poor employee health conditions can exacerbate the frequency and severity of both health insurance and workers compensation claims should motivate deeper collaboration between benefit administrators and risk managers, experts say.
The percentage of workers compensation claims incurred in 2009 with comorbidity diagnoses — including diabetes, hypertension and obesity — was nearly three times higher than it had been just 10 years prior, according to the most recent research on the topic published by the Boca Raton, Fla.-based National Council on Compensation Insurance Inc., the national ratings organization for workers compensation insurance.
On average, workers comp claims filed by employees with underlying health conditions result in twice the medical costs associated with otherwise comparable claims, according to NCCI's research.
“We're starting to see some significant costs on the property/casualty side of the house that are driven by the health and wellness of an employee population,” Mike Butler, president and CEO of Flood & Peterson Insurance Inc., said Tuesday during a presentation at the 2014 Integrated Benefits Institute Annual Forum in San Francisco.
Apart from the dollar cost of the claims themselves, Mr. Butler cited the potential for treatable employee health conditions to unnecessarily inflate an employer's workers comp experience modification, which would not only result in higher insurance premiums but also could jeopardize the company's ability to secure contracted work.
“From a property/casualty standpoint, we're being forced to talk to our clients about the wellness and health of their employees, because we know the magnifying effect an unhealthy worker population can have on workers comp costs,” Mr. Butler said.
However, while the body of evidence linking employee health with workers compensation claims, worksite safety and other business-related risks continues to grow, many employers have yet to establish a collaborative relationship between their benefits administration and risk management departments, experts say.
“If you're in benefits, improving employee health and productivity is intuitive, but it's not intuitive to the risk management side of your business,” Karen Curran, director of health risk management at Denver-based Pinnacol Assurance, the state-chartered workers comp insurer in Colorado, said during the presentation on Tuesday. “Employers need to break down the silos and treat taking care of their employees as a team objective.”