Pandemics seem to be the topic of the month. Risk Management’s July issue contains an article by Darrell Knapp on Avian Flu: Bracing for a Pandemic, which analyzes the potential effects of a pandemic on various lines of insurance, along with action steps that insurers should take to mitigate risk. Essentially, the article states that a pandemic would strain but not break the system, although there could be an uptick in the numbers of failed insurers, particularly those specializing in lines most directly affected.
The Society of Actuaries assesses the state of readiness for handling a pandemic in a series of articles and white papers. And in the May issue of HR Magazine, Nancy Hatch Woodward discusses discusses the effects that a pandemic could have on the workplace.
“According to HHS, employers should reasonably expect an absenteeism rate of up to 40 percent in the middle of a severe pandemic as employees fall ill or die, leave work to care for family members, deal with grief from the loss of loved ones, look after their children (if schools close) or are just too scared to come to work.
In addition, your employees could be placed in quarantine. Or the transportation systems they count on to get to work may shut down. “The absenteeism rate will include everyone—including your leadership,” warns Donaghy.
Companies must decide the minimum number of people they will need to keep their operations running, says Dr. Myles Druckman, vice president of medical assistance for International SOS in Trevose, Pa., which provides medical assistance, international health care and security services. Some employers may even want to consider closing down during the pandemic. But most companies don’t have that luxury.”
Compensability issues
Little of the literature specifically addresses workers compensation risks. If a worker catches the flu from a coworker, would that be a compensable illness? Not likely, since “ordinary diseases of life” are not generally compensable, unless the nature of a worker’s specific responsibilities increased the exposure, and the illness can be determined as arising “out of and in the course of employment” such as in the case of a health care worker. In an article in Insurance Journal, Robert Meder also points to workers stationed overseas and traveling workers as being potential points of exposure. Knapp’s article also notes that there will be an average of ” … three weeks of work missed by all survivors, whether they have been infected or not, due to a combination of illness, caring for ill individuals and voluntary or involuntary quarantine,” and suggests that the increased number of employees working from home would pose a challenge for compensability determinations.
Most authors agree on two things: with a pandemic, it is not a question of “if” but “when” and – insurers and employers alike – we should all have better emergency plans in place. Instead of tucking a murder mystery or the latest Stephen King book in your suitcase for vacation reading, catch up on the latest pandemic literature – truth is likely to be scarier than fiction.
More on the topic:
Flu Wiki
United we Fall: Preparing for the Next Pandemic
Avian Flu: Unprepared for What Isn’t Coming?
Preparing for Avian Flu
