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  • 5 factors for fifteen - A solid grasp of past and present industry trends can help you prepare for challenges ahead. Sedgwick’s thought leaders are helping clients by forecasting five primary factors that will impact our industry this year. Learn more.
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DOL-spouse-blogOn February 25, 2015, the U.S. Department of Labor (DOL) issued new rules revising the regulatory definition of “spouse” under the Family and Medical Leave Act of 1993 (FMLA), which entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons.

What prompted this change? Previously the definition of spouse for purposes of FMLA was based on the state where the employee resides and, because it is a federal law, it relied on the definition of marriage under the Defense of Marriage Act (DOMA), which defined a marriage as being between one man and one woman. In the U.S. Supreme Court’s decision in United States v. Windsor, the court struck down this definition under DOMA as unconstitutional. However, FMLA regulations maintained the state of residence rule for defining a spouse. This left multi-state employers with the burden of keeping up with the ever-changing same-sex marriage landscape at the state level to ensure employees, needing leave to care for their same-sex spouse, were being afforded the protections of the FMLA based on their state of residence.

Following the Windsor decision, President Obama instructed all federal agencies, like the DOL, to review any relevant statutes and implement that decision. Therefore, the DOL announced its revision of the definition of spouse under FMLA regulations on February 25. The revised definition becomes effective on March, 27, 2015, as follows:

Spouse, as defined in the statute, means a husband or wife. For purposes of this definition, husband or wife refers to the other person with whom an individual entered into marriage as defined or recognized under state law for purposes of marriage in the State in which the marriage was entered into or, in the case of a marriage entered into outside of any State, if the marriage is valid in the place where entered into and could have been entered into in at least one State. This definition includes an individual in a same-sex or common law marriage that either:

(1) Was entered into in a State that recognizes such marriages; or

(2) If entered into outside of any State, is valid in the place where entered into and could have been entered into in at least one State.”

What does this mean for employers who are subject to FMLA? Most significantly, the administration of leaves for same-sex spouses will be less burdensome as employers will not have to keep track of whether a same-sex marriage is legal where the employee resides but rather only if the marriage was legal in the state where it was entered into or as the DOL refers to as the “place of celebration.”

The DOL announcement on the new rules is available here.

Things employers need to consider as a result of this change:

  • Update FMLA policies if they currently include a detailed definition of spouse.
  • Use caution in requiring proof of same-sex marriage if you do not require proof of marriage for opposite-sex spouses for purposes of taking leave.
  • Train supervisors or anyone involved in the FMLA process of the change in definition as some employees will be entitled to FMLA protection where they were not in the past.
  • Remember this change does not impact state leave laws that provide leave for Domestic Partners or Civil Union partners. While the employee would not be eligible to take leave under FMLA (only applies to legal same-sex marriages), they still may be allowed leave under state law.
  • If you outsource your leave administration to a third party, ensure the third party is in compliance with this change.

Do you have additional questions regarding this change? If so I would be happy to answer them. Feel free to leave a response in the comments section or send me an email.

Sharon Andrus, Director National Technical Compliance, Disability Administration

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Dave North, president and CEO of SedgwickI spoke with Robert Wilson at WorkersCompensation.com last month about the upcoming ABA Midwinter Conference where I will deliver the keynote address. Bob asked me what I thought would be important future trends for the workers’ compensation industry. As I told Bob in his blog, “Trying to predict the future by looking at a rear view mirror is complicated and often misleading.” I really believe that we must be looking forward and thinking of innovative ways to address the issues we face today.

The majority of people attending the ABA conference practice law in some form. Legislative change and reform, maybe more so than anything happening in 2015 and the next three to five years, will impact the lives of people who went to work and by the end of the day suffered some type of injury that changed their livelihood. Sedgwick has been focused on how we can make a difference to improve the laws and the processes so that everyone receives the best outcome. I often say our colleagues at Sedgwick are focused on making people whole again.

One initiative that I am very proud of is Sedgwick’s role in the Association for Responsible Alternatives to Workers’ Compensation (ARAWC). Sedgwick is a founding member of this organization whose main objectives are (but not limited to):

  • Delivering better medical outcomes and higher process satisfaction for injured workers without the cost and burden of traditional workers’ compensation.
  • Driving state economic development through the attraction of employer savings.

Sedgwick’s Chris Mandel is leading our efforts on this front and recently wrote an excellent blog outlining the legislative and industry objectives of ARAWC; I would encourage you to read the complete post.

At the conference, I also will address the changes in the law profession and how I see it mirroring some of the same challenges in the medical world. I am very interested to talk to those of you attending and, for those who are not, I encourage you to leave your thoughts here on our blog or reach us on Twitter @Sedgwick and let me know what you think the biggest challenges are in relation to the law and workers’ compensation.

I appreciate the work Bob Wilson and everyone involved with the ABA Midwinter Conference has put in leading up to the conference this week. I encourage you to learn more about the conference and if you can’t come this year think about next year. As Bob said, Naples, FL is probably better than just about anywhere you have been the last three months.

Dave North, President and CEO

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ID-10093552-healthcare-consolidation-cultureConsolidation of hospitals and health systems may have hit an all-time high as health reform and market forces continue to drive mergers and acquisitions. It is important for healthcare organizations to address the cultures that exist in different facilities during the consolidation process. There is a clear relationship between the culture of an organization and its performance. The norms, values and beliefs of culture also have a big impact on behaviors that support, or do not support, a safe environment in which to provide patient care.

The time to begin assessing organizational culture begins with the due diligence process. In addition to looking at financials, facilities and properties, bylaws, human resources, insurance, etc., there is an opportunity to assess vision and strategy, overall corporate culture and, more specifically, safety culture. Leaders should begin planning to merge cultures as early as they plan to merge finances and assets. If they fail to do so, conflicting cultures can, at best, delay a successful merger and, at worst, contribute to a work environment that is unsafe and unreliable. This has implications for the patients receiving healthcare services, as well as the providers and staff delivering them.

A central question to ask is, “What culture do we need to achieve the goals of our merged healthcare organization?” Many organizations seek to implement a culture of respect, one that is safe, and fosters learning and growth. Once identified, leadership must support the creation of that culture. The following steps can help shape the desired culture:

  1. Start with a baseline. Collect the most recent employee and provider satisfaction surveys, patient experience of care surveys and culture of safety surveys for the organizations being consolidated. The results may be very different for each one. Lean what’s best about each one and what needs improvement. Understanding the current state is key to setting goals for the desired future state.
  2. Plan to create the “consolidated” culture. Engage clinical leaders, executives and managers in planning for culture change with alignment of mission and vision. Some organizations hold an offsite retreat for this process. Identify approaches for communicating expectations, modeling behaviors and celebrating successes.
  3. Employ relationship management. Use leadership walkrounds or other forums to build trust. Talk to providers and staff at various levels in the merged organization, gain their perspective, involve them in planning and reinforce their commitment to the organization.
  4. Implement culture change strategies. Leaders and managers must be relentless in communicating and reinforcing the message about the vision for the merged organization’s culture. Allow for flexibility in meeting established goals. Provide rewards in the form of approval and recognition – honor those exemplifying the values being shaped and the culture being melded.

Planning to address organizational culture early on in the merger and acquisition process can mean the difference between thriving in the new world of healthcare and merely surviving in it.

Kathy Shostek, RN, ARM, FASHRM, CPHRM, CPPS, Sr. Healthcare Risk Management Consultant

 

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product-recallYou have done all that you can. You have been diligent in your R&D, engineering, testing, manufacturing and quality control. Sales and Marketing are excited and ready. You have vetted instruction manuals and labels. You have even involved Legal. Your product enters the marketplace with confidence and you see growth, brand recognition and, of course, increased revenue.

The product is a success, all you hoped for has occurred. But then an issue arises. It starts as a single complaint, and you believe it to be an isolated incident. Then another complaint and the numbers continue to grow. Inquiries and notices arrive from consumer groups, lawyers, and now the press is involved. Government regulators are the next to inquire. Confidence turns to angst as a “product recall” is now ordered. With the near-constant barrage of internal and external inquiries to address, you feel some relief with the knowledge that you have the best broker, insurance policies, crisis management plan and claims management team available. But do you?

You may have a commercial general liability policy, and even a product liability policy, but very importantly, product recall is generally excluded from both forms. Specific policy wording varies, but the meaning and intent are the same; the policy excludes “…the costs of recalling, removing, repairing, reconditioning or replacing any product or any of its parts.” Are you certain of your coverage? Product recall coverage is available either as an extension of your product liability policy, or as a standalone policy. Consult and verify with your agent or broker that you have the appropriate coverage for your risk.

It is not overstatement to say that a product recall can be a business-ending event. Associated costs can be enormous, well beyond the apparent expenses, e.g. shipping, refunds, etc. Claims may arise for:

  • Customers’ business interruption losses
  • Claims for product removal and replacement
  • Customers’ claims for lost profits and opportunities, and their loss of brand recognition

Additional concerns involving the actual recall process include:

  • Additional staffing to cover the recall program
  • Legal costs and expenses to respond to litigation and/or regulatory agencies
  • Specialized communication expenses to respond to media inquiries
  • Consultants to assist in brand protection and restoration

And there is your time. Product recall events require senior staff involvement, attention to detail, planning, implementing and monitoring the process. Distractions caused by the ongoing process impair other company operations as even uninvolved staff is affected. Internal communication advising employees of the plan and process will maintain confidence in management and the company and are important to stability and long-term success.

The design and execution of a crisis management plan is critical to the continued present and future success of the company:

  • Design crisis management processes
  • Notification and response
  • Team resources structure and response
  • Plan maintenance timelines documents responsibilities
  • Communication and coordination
  • Open and action status updates and tracking
  • Deactivation process
  • Training and executing the crisis management plan

Bottom line: be certain of your coverage. With any new product or initiative, involve insurance professionals early in the discussion. Your agent or broker can assist in available coverage options, and Sedgwick can assist in discussing associated risks. Our claims team, which includes legal and claims specialists, can assist in a review of policy wording or advise of similar risks and real-life situations they have experienced. Sedgwick also can team up with a client to develop a sound crisis management plan in the event a recall is required, including partnering with a client’s public relations team to assist in reputation management response. This information can be invaluable in your assessment and planning process, and potentially save you from an uninsured loss.

Mario Rodriquez, Director National Technical Compliance

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zohydro-approvedOn January 30, 2015 the Food and Drug Administration (FDA) approved a reformulated version of Zohydro ER (a long-acting, single-entity hydrocodone product) that is designed to possess abuse-deterrent properties. When the FDA originally approved the medication in October 2013, it was one of the more controversial medication approvals in some time. Yet, despite the objection of over 28 state attorney generals, addiction treatment providers and even the FDA’s own advisory committee, the medication Zohydro ER came to the market in March of 2014.

The new abuse-deterrent formulation is designed to prevent someone from crushing the medication and therefore extracting a large dose of medication to be administered for immediate use as opposed to the long acting effect it was designed for. Zogenix, the manufacturer of Zohydro, developed this new formulation in order to combat the negative image originally created by hydrocodone products. In addition they had to keep up with another long-acting hydrocodone competitor product which just recently came to the market and is already formulated with abuse-deterrent properties, Hysingla (Purdue Pharma).

While abuse-deterrent formulations are helpful in preventing a small population of abusers from inappropriate use, the further addition of more high-cost, long-acting narcotics such as these into the market continues to be a concern for our pharmacy team.

Preventing abuse

What needs to remain in focus is that just because a medication cannot be crushed and abused, doesn’t mean risk for abuse and overdose, and a need for patient safety, do not exist. These high-cost medications do nothing to ensure or prevent a patient from becoming addicted to pain medications, from diverting or misusing, and they do not represent a promising option for getting claimants back to work.

At Sedgwick, we work hard to see that the injured workers we service get appropriate care so they can return to work as soon as possible. These new opioid medication approvals, while they may deter abusers, can also serve to distract us from the real conversations of patient safety, wellbeing, and improved patient function that we continue to have with providers every day. Our complex pharmacy management and pharmacy utilization review teams, made up of knowledgeable pharmacists and nurses as well as an in-house physician, will continue to work hard to address the inappropriate utilization of long-term (and short-term), high-cost opioids such as these. Sedgwick is committed to continue to advocate for clinical solutions that are safe, appropriate and likely to get patients back to work as soon as possible. I would welcome your thoughts on preventing abuse of narcotics.

Paul M. Peak, PharmD, Pharmacist, Complex Pharmacy Management

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ARAWC-screenLast year I highlighted the mission and objectives of the newly minted Association for Responsible Alternatives to Workers’ Compensation (ARAWC) organization that was established by a collaborative group of employers and their provider partners. With Sedgwick as a founding member of this organization, I can report that we moved quickly to stand up the association, hire experienced staff, lobbyists and others with expertise in passing legislation. We are putting in so much effort on behalf of U.S. employers to ensure this organization stays focused and delivers on its mission.

Before I give you the really good news, here is a recap of the central issue. Workers’ compensation is dictated by separate statutes in every state. Only Texas and Oklahoma offer the freedom to “opt out” of the statute, and in each case, the way this is practiced is quite different. In the case of Texas, opting out is known as “nonsubscription” and has been around for more than 100 years. Practitioners have achieved dramatic cost savings and better outcomes for many claims. Over time, nonsubscribers also often experience significant reductions in frequency and length of disability. All of these outcomes are what we work hard to help our clients achieve, but we are often frustrated by the statutory requirements of many states that bring bureaucracy and controversy to the resolution of many claims.

Back in 2013, the state of Oklahoma enacted new workers’ compensation legislation in SB 1062, which allows any employer to exit, or opt-out of, the state’s statutory workers’ compensation system. While not exactly like nonsubscription in Texas, this new statute is a significant move forward in giving employers more options in how they respond to and finance employee injuries and related benefits. Regardless of the mechanical operations in the free market alternatives to WC, the key focus is ensuring injured employees are treated respectfully and compensated fairly in the aftermath of on-the-job injury. Just as there are significant differences between what Oklahoma has done and what has been in place in Texas for over 100 years, there are state-specific opportunities to improve the financing for and response to employee injuries in many other states.

Where Oklahoma’s SB 1062 offers Oklahoma employers that choose to opt-out of the state system the opportunity to substantially reduce work-injury costs and avoid both the statutory system’s extensive regulation and litigation risk, similar goals for other states are being established by the leaders of ARAWC for the benefit of both employers and employees. Two key statistics reflect a clear basis for why Oklahoma changed and improved their approach to employee injuries:

  • Oklahoma employers cited that WC cost was the #1 reason they were either leaving the state or adding jobs at facilities located in other states such as Texas
  • 2012 NCCI statistics showed Oklahoma loss costs to be 225% higher than neighboring states

Currently, all but these two states effectively mandate workers’ compensation insurance as the sole option for employers to cover employee injuries. ARAWC’s mission is to expand the delivery of better medical outcomes to injured workers by allowing employer choice in other states. Experience under these alternative employee injury benefit platforms has proven to dramatically reduce employee injury costs, while achieving higher employee satisfaction and substantial economic development. Over the past two decades, Texas nonsubscribers have achieved better medical outcomes for hundreds of thousands of injured workers, and saved billions of dollars on occupational injury costs. While ARAWC is not necessarily taking the Texas model forward into other states, it will leverage learning from over 100 years of having options in Texas and what emerges from the changes from Oklahoma’s new statute to drive a strategy for process improvements and lower costs in selected states where change is overdue.

The key core benefits that ARAWC is seeking in these states include, but won’t necessarily be limited to:

  • Delivering better medical outcomes and higher process satisfaction for injured workers without the cost and burden of traditional workers’ compensation
  • Driving state economic development through the attraction of employer savings

Providing employers more choice in financing and responding to employee injuries can positively impact employees, employers and healthcare providers. Experience supports that competition to traditional workers’ compensation insurance can reduce premium rates and improve services. Enabling choice of program design increases employers’ participation in the process, which allows them to hold all service providers accountable for results and outcomes. It also enables employees to access medical providers that do not accept workers’ compensation clients because of low fee schedules and paperwork required. In the absence of statutory mandates, responsible employers create high-quality benefit plans for occupational injuries, enabling improved access to better medical talent leading to higher employee satisfaction, better medical outcomes and lower claims cost.

The member companies of ARAWC aspire to refocus state-based mandates in response to growing gaps in quality medical care, efficient risk financing, effective return to work and other gaps in many current systems. Some of the other expected benefits of ARAWC’s strategy are expected to be:

  • Improved workplace safety and training supporting injury prevention
  • Expanded access to quality medical providers giving exceptional care
  • Opportunity for expanded benefits through custom-designed plans
  • Opportunity for reduced waiting periods for wage replacement with greater benefits
  • More expedient medical treatment and more immediate referral to specialized medical treatment to enhance recovery
  • Early identification of potentially complicating medical conditions and securing appropriate medical treatment to aid recovery
  • Improved communications with injured workers to address benefit questions and assist early return to work

I am happy to bring further news that the strategic plan is moving along nicely, including the identification of the first two target states for option legislation. In fact, on February 12th, a bill was introduced in the Tennessee legislature by Senator Mark Green that will bring a version of the option to Tennessee employers soon if passed by the legislature and signed by the governor. If achieved this year, the speed of change will have accelerated dramatically since it took approximately four years to move similar legislation in Oklahoma.

Several other states continue to be vetted for prioritized change efforts. Even better, we have assisted in drafting legislation in the first state, secured a highly respected bill sponsor, gained the endorsing support of major employer players in the state and begun the formal process of socializing and educating key stakeholders instrumental to passing new legislation in the state. While this state’s legislative session is relatively short, things are moving quickly enough to believe that there is a good chance of getting some form of the bill passed this year. Considering the three to four years it took to pass the bill in Oklahoma, this would be an amazing result if achieved.

As you can see, ARAWC is already fulfilling its mission funded by its current members. Active membership recruitment remains a priority; the nature of this beast is that it will take some time to achieve WC legislative change in the many states that will clearly benefit from giving employers an option that aims to achieve the type of results seen in Texas and hoped for in Oklahoma. More to come soon.

Chris Mandel, SVP, Strategic Solutions

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CDC-chart_measles-cases-616pxThe current measles outbreak has received major news coverage in the United States because this highly contagious disease – declared eliminated in the U.S. in 2000 after decades of childhood vaccine efforts – has begun to spread again.

In January alone, the number of measles cases in the U.S. climbed to 102, almost twice the number for the whole of 2012; in 2014, there were 644 cases of measles, the most reported in 20 years.

What is measles?
Measles is an acute viral respiratory illness characterized by fever, cough, nasal congestion and conjunctivitis followed by a rash. The rash usually appears approximately 14 days after a person is exposed and spreads from the head to the trunk and then to the lower extremities, although some immune-compromised people do not develop the rash.  The incubation period ranges from 7 to 21 days and patients are considered to be contagious from 4 days before to 4 days after the rash appears.  Accordingly, it is recommended that infected people be isolated for four days after they develop a rash.

Measles can be a serious disease for people of all ages, especially those with other underlying medical conditions. Common complications include bacterial middle-ear infection and pneumonia.

There is no specific antiviral therapy for measles, so the medical care provided is supportive and to help relieve symptoms and address possible complications.

How is it spread?
The measles virus lives in the nose and throat mucus of an affected person and it is transmitted to others by direct contact with infectious droplets or by airborne spread when an infected person breathes, coughs or sneezes.  This virus can remain infectious for up to two hours on a surface or in the air after the infected person leaves an area.

Although it is not certain how this year’s multi-state outbreak began, it is assumed that an infected person traveling from outside the U.S. visited the Disneyland theme parks in Orange County, California and spread the disease to others.

The Centers for Disease Control (CDC) estimates there are about 20 million cases of measles worldwide each year, and in 2013 almost 145,700 people died from the highly infectious disease.

CDC-measles-map_multi-state-outbreaks

Is measles compensable under workers’ compensation?
While measles is a public health issue, this disease will not generally be viewed as compensable under workers’ compensation because the exact exposure would be very difficult to pinpoint to the workplace. In fact, most employees are at no greater risk of being exposed to measles at work than they would be out and about in the general population.

Other risks and some things employers can do
Risk managers and safety professionals must consider other risks to their organizations due to a measles outbreak and develop the appropriate responses in advance.

  • Encourage employees to stay at home to avoid spreading illness if sick or believe that they have been exposed to measles. Measles is so contagious that if one person has it, approximately 90%of the people close to that person who are not immune will also become infected.
  • Familiarize yourself and your employees with the signs and symptoms of measles. Because the prevalence of measles has been low since the vaccine was introduced, many may not have encountered a case of measles in their lifetime.
  • Encourage vaccination.The majority of people who have contracted measles were unvaccinated. Although immunization against measles has resulted in a contentious political debate over the past few days, vaccines are proven to provide protection against disease outbreaks at home or abroad.

Organizations at high risk to be impacted by a measles outbreak include healthcare facilities, first responders, schools, public transportation and those with personnel who travel to areas of the world that have an active outbreak of measles.

Healthcare professionals are on the frontlines of disease management and it is important that regardless of presumptive immunity status, respiratory protection consistent with airborne infection control precautions is used.

Finally, the following lessons learned as healthcare providers prepared for Ebola have relevance for measles:

  • Infection controls should be exercised as soon as there is a clinical suspicion of an illness or illnesses that can be spread from an infected patient;
  • A patient’s travel history must be taken into consideration when people present with an illness.

Click here for additional information posted by the CDC on measles.

Desiree Tolbert, Director, National Technical Compliance

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building_blocks-successImportant things in life are not easily reduced to 10 steps. Nevertheless, this article pro­vides a list of 10 key elements to achieving long-term success in risk management from someone who has spent more than 25 years striving to carve out the most satisfying career possible, while trying to never lose sight of the bigger picture. To be clear, I’ve made plenty of mistakes, but tried to learn from each of them. While a basic tenet of good life learning, I don’t enumerate this principle in the list of 10 as it is one of hundreds of general principles we hopefully learn and adopt along our career journeys.

The 10 topics covered are those I believe deserve the most emphasis and which will have the most impact on your career as it moves along the spectrum of accomplishments and contributions. In essence, you can‘t lose when keeping these elements in mind as you develop the tactical and strategic approach to managing your career. Yes, I strongly urge you to have both a strategic (long-term) and tactical (short-term) plan for what you want out of a career in risk management. As a lifelong initiative, it deserves that kind of attention, care and feeding. It is no less important than the performance you deliver to each employer each year of your service.

I want to share with you a few critical things recently posted by Jack Welch, former CEO of General Electric (now head of the Jack Welch Management Institute). These are his list of career pitfalls for all seeking success in business. It offers a great supplement to this series on risk leader success. Here they are:

  • Misfiring on performance or values — overcommitting and under-delivering
  • Resistance to change — failing to embrace new ideas
  • Being a problem identifier vs. a problem solver
  • Winning over your boss but not your business peer group
  • Always worrying about your next career move versus focusing on the present
  • Running for office – it’s totally transparent to everyone but you!
  • Self-importance — exhibiting a humorless, rigid attitude
  • Lacking the courage and conviction to push back on the system
  • Forgetting to develop your own succession plan for when you get promoted
  • Complacency — you’ve stopped growing

So combined with Welch’s pitfalls to avoid, here are the building blocks to risk leader success. I hope you find them helpful as you navigate your career path in our exciting industry. To read the full article, click here.

  1. Many good places to start: Breaking into a career in risk management isn’t exclusive to those inside the industry. Risk leaders come from all stripes, with a large variety of different starting points.
  2. Educational strategy: In thinking about your continued education, consider what group of skills and knowledge make risk managers successful. In my experience, those skills include various levels of acumen in finance, law, audit, compliance and operations.
  3. Industry background: The new risk management realm requires greater breadth of knowledge to be successful. Broad understanding is gained by spending time in the trenches, building relationships with those in many areas of the enterprise and learning from mentors who can pave the way.
  4. Getting involved outside the organization: While showing leadership internally is job one, demonstrating leadership in the broader discipline is also important to long-term success. Getting involved beyond their own organizations allows risk managers to have leadership experiences that deepen knowledge and hone political skills to higher levels.
  5. Racking up creditable points with senior managers: The points risk managers offer up are not always creditable “points” in the eyes of senior managers. To be so, they should be tied to the things that matter most to the organization and that can be traced, at least indirectly, to mission accomplishment.
  6. Establishing yourself as essential to others’ success: Risk management stakeholders can’t succeed without the right risk strategy and, most particularly, the right risk leader who understands their priorities and knows how to build relationships of mutual benefit.
  7. Developing the bench: While all managers are expected to develop their employees, this aspect of management is harder in risk management than in many other disciplines or functions, if only due to the often smaller-sized teams that are the reality for the majority of risk leaders.
  8. Supplement value preservation with value creation: While it is certainly true that protecting and preserving is job one for risk leaders, the bigger opportunity for this profession is helping others understand what it means to exploit risk for gain.
  9. Advance the profession by finding or creating personal vision: By crafting risk strategy, framework and models around the continuously evolving needs of a firm, a risk leader’s vision for risk management will take shape. As it is successfully implemented, this vision will also drive the risk profession forward, through benchmarking, networking and professional external collaborations.
  10. Give back: Giving back to the next generation and to communities and nonprofit organizations (some of which can’t afford the cost of risk expertise, e.g., churches and civic organizations) is essential to developing a well-rounded leader and person.

Chris Mandel, SVP, Strategic Solutions

Full article first published on IRMI.com and is reproduced with permission. Copyright 2015, International Risk Management Institute, Inc.

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As employers and individuals look for alternatives to smoking tobacco, the use of e-cigarettes is on the rise. Unified Investigations & Sciences, part of Sedgwick’s family of companies, recently took a closer look at the emerging risks associated with these devices.

UIS_e-cig

Fires caused by malfunctioning e-cigarettes are on the rise

By now, most people are familiar with electronic cigarettes, or e-cig. This rapidly advancing technology first came from an invention in China in 2003 by Hon Lik. The basic design has remained virtually unchanged; however, the accessory market has driven e-cig sales to a whole new level. As of November 2014, the e-cig market in the U.S. alone was over $1 billion and continuing to grow due to its attractiveness to younger users and those who want to quit smoking traditional cigarettes.

The e-cig has been marketed as a safer alternative to traditional cigarettes and for those looking to avoid the harmful effects of traditional cigarettes. However, in addition to the inherent health dangers of e-cig, here is another harmful factor emerging related to these devices. If you can’t guess, it’s a fire hazard. A majority of you have probably never heard of the fire hazard e-cigs have the potential to cause. When you take into consideration the number of units sold throughout the U.S. from product-specific dealers to street corner convenience stores, the probability of e-cig failures increases every day.

The simplicity of these devices makes them more alluring for their perceived convenience, portability and charging methods (USB). According to a white paper published by the U.S. Federal Emergency Management Agency (FEMA), 80% of e-cig fires occur while charging. Documentation has shown fires resulting from charging e-cigs in vehicles, homes, bars, convenience stores and numerous businesses (by employees). The risk of loss to the business is much greater when the aspect of lost time comes into play.

When you stop and think about someone charging an e-cig, whose equipment and electricity are being used to charge the device? If it is at a place of business – your workplace – they are using company equipment and power for personal use which may result in a fire, especially if left unattended for an extended period of time. This makes no difference as to how new the e-cig is or how well it has been maintained.

The most prominent failure observed has been from battery venting (like an explosion). When this occurs, pieces of the e-cig and battery can be discharged in different directions creating more than one fire, especially in the presence of lightweight combustible material. This leads to not only a fire hazard but personal injury risk, as well. The fire hazard stemming from this failure event can be very minimal or catastrophic for varying factors. The risk of high-level damage and lost time in the business environment is much greater considering the place, people and equipment involved. The result of one of these devices malfunctioning is shown in the photos above.

This instance (see above right) occurred while operating a motor vehicle. Now imagine if this was your office building.

The bottom line is there is an increase in the number of fires and accidents resulting from e-cigarettes. As an employer, you should look at your policies regarding their proper use, if at all, in the workplace. Where does the risk lie – to those in the workplace as well as to property – if a fire occurs?

No matter where the e-cig is charging or how many eyes may be upon it, the potential for these devices to fail and become ignition sources is always present. If you have questions about preventive steps or how you should approach e-cig use in your office, please let us know.

Mathew Cooper, IAAI-CFI, Senior Investigator
Unified Investigations & Sciences | a Sedgwick company

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Sedgwick forecasts top risk and productivity management trends

As the leading global provider of technology-enabled claims and productivity management solutions, Sedgwick helps clients prepare for difficult changes, look for new ways to control costs, and ultimately improve outcomes. I am pleased to introduce our 5 factors for fifteen, forecasting major industry trends that we believe you should watch in 2015.

We are committed to helping our clients prepare for this year and beyond by highlighting emerging trends and risks likely impacting their businesses and their people. Technology and healthcare advancements, changing workforce demographics and legislative, political and climate changes, among other factors, contribute to the challenges we expect this year. It’s important for us to stay at the forefront of these shifts so we can continue achieving the best outcomes for our clients and their employees and stakeholders.

The key trends that Sedgwick’s thought leaders believe will most significantly affect employers in 2015 include:

1) Redefining healthcare

  • An evolving U.S. healthcare market
  • Patient engagement
  • Mental health

2) Technological advances

  • User-centric solutions
  • Hyper-connectivity
  • Cyber risk

3) Market and economic forces

  • Economic improvements
  • Focusing on the customer experience
  • Political landscape

4) Workforce challenges

  • Integration
  • The growing need to groom new adjusters
  • Diversity and inclusion

5) Weathering disasters

  • Addressing resiliency
  • Understanding exposures
  • Preparing for the ripple effect of climate change

We predict that the aforementioned issues will be significant in 2015 and join other industry experts in closely monitoring the legislative impact of the recent shift in power in the U.S. Senate—and the potential political impact of the 2016 presidential election—on the Affordable Care Act.

For more on the 5 factors for fifteen and Sedgwick’s perspective, visit sedgwick.com/5forfifteen and follow our blog for ongoing thought leadership.

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Dave North, President and CEO