Posts Tagged ‘iraq’

(Cannon) Fodder for a Friday: The Fate of Foreign Interpreters in Iraq

Friday, December 18th, 2009

How would you like a job that pays $12,000 a year, where 1 percent of the workforce is killed annually and hundreds of others are seriously maimed? I didn’t think so. You would probably take a pass on working for Titan Corporation (now part of L-3) as an interpreter for the U.S. armed forces in Iraq. The L-3 website promises that “as a member of the L-3 Communications team, you will be exposed to the most exciting career adventures situated on the cutting edge of technology.” Alas, it’s not just the technology that is cutting edge. The roadside bombs cut pretty deeply, too.
We read in the Los Angeles Times about the sad fate of translators in Iraq. There are about 8,000 in all. Over the five year period from 2003 to 2008, 360 were killed. Those who were lucky enough to survive were often shipped to Jordan for treatment. The workers comp benefits fell under the Defense Base Act and were administered by AIG, among others. (See our previous blog here.) According to some of the wounded, they were offered a stark choice: accept a proposed settlement (which absolved the insurer of any future costs) or be shipped back to Iraq, where retaliation and death awaited former employees of the U.S.
The Times article describes the life of Malek Hadi, an Iraqi national who lost a leg and several fingers in a roadside bombing. He now struggles to survive in Arlington, Texas. At first, he was unable to collect any benefits:

Internal AIG documents indicate that a claims examiner withheld Hadi’s benefits in an effort to force him to accept the lump sum. Hadi was “clearly entitled” to benefits, a different AIG examiner wrote in a memo dated August 2008. The company had not paid because the previous examiner “was trying to get the claimant to decide whether to settle his claim,” the memo said.

Malik now receives the maximum monthly disability benefit – a whopping $612 per month. He has been diagnosed with post-traumatic stress syndrome, but AIG has refused to cover any treatments. Perhaps they are waiting for a second opinion from the company shrink? Meanwhile, Malik will just have to deal with it!
Former insiders at AIG describe how the game is played:

“If you’re missing one piece of documentation, you got denied,” said Colleen Driscoll, who oversaw the handling of interpreters’ insurance claims for L-3. “These guys get murdered coming and going to work, and AIG turns them down because they don’t have a letter from the insurgents.”

Driscoll, a former United Nations refugee official, left L-3 in 2007. She said the cause was a dispute with company executives over treatment of injured interpreters.

She and another former L-3 official, Jennifer Armstrong, said their experience suggested that 10% to 20% of the company’s Iraqi workers who should have received benefits were denied.

AIG stock is currently trading at the equivalent of about $1.40 a share. It would be nice to think that this was the market’s judgment on the way things are being handled in Iraq, but that, of course, has nothing to do with it. The market, not exactly known for its humanitarian concerns, is punishing AIG for financial – not ethical – sins. Indeed, the market might well approve of the way the injured, the maimed and the dead are being squeezed in this mockery of a benefits program. After all, indemnity and medical expenditures are being kept as low as possible and that can only help support AIG’s battered bottom line.

AIG in Iraq: A Cruel Way to Make a Buck

Tuesday, April 21st, 2009

AIG has been in the news mostly for its ingenious method of losing money: insuring the riskiest possible financial transactions and tanking after these risks go bad. But give the biggest insurance company in the world some credit. They still know how to make money the old fashioned way: collecting premiums and denying claims. To be sure, this strategy is not easy to do in the states, where public scrutiny is never more than a phone call away. But it works rather effectively in Iraq.
T. Christian Miller from Propublica and Doug Smith from the LA Times have described in great detail how AIG transformed Iraq into a business opportunity with an enormous upside. AIG is the predominant workers comp carrier in the war-torn country, insuring civilian workers. When these workers are injured – and the injuries can be devastating – AIG has routinely denied their claims for basic medical care, artificial limbs and desparately needed counseling for post-traumatic stress syndrome. More than 1,400 civilian workers have died and 31,000 have been wounded or injured in the two war zones.
Insurers have collected more than $1.5 billion in premiums paid by U.S. taxpayers and have earned nearly $600 million in profit, according to congressional investigators. That’s nearly 40 percent profit after expenses – an unheard of loss ratio in the states.
Collect and Deny
The AIG strategy is deceptively simple: first, charge exorbitant fees for premiums, roughly 100 percent of a worker’s pay. (Don’t feel sorry for the companies paying these premiums; they are fully reimbursed by taxpayers.) Then, accept all the small claims and fight almost any claim involving lost time (more than four days of disability). Delay, delay, delay. Never make a payment until ordered to do so by a court.
The denial rate on serious claims is pretty astonishing: about 44 percent. How could you argue that any injury – let alone a serious one – is not work-related, as civilian employees are in Iraq for one purpose, supporting the war effort? In addition, fully half the claims for PTSD are denied. All this in the context of a war where catastrophic injuries are all too common and legitimate PTSD is as prevalent as cuts in a glass factory. How many state-side workers have watched co-workers blown to pieces by roadside bombs? Do you think that such incidents might qualify as PTSD?
AIG used the argument of extremely high-risk working conditions to boost the premiums. Then they turned around and used the strategy of denial to boost profits. Who says capitalism is dead?
I suppose you could argue that this reporting is just piling on poor AIG.The behemoth just cannot catch a PR break. Oh, well, dear reader, don’t waste too much energy feeling sorry for AIG. After all, you are paying for AIG big time: in the bailout that exceeds $200 billion; in the war-based premiums that generate profits nearing 40 percent; and in all likelihood, in the social costs of caring for devastated civilian employees, who have so much difficulty accessing the comp benefits to which they are entitled.
AIG may not know diddly about the risk in risky financial vehicles, but they certainly know how to make money in conventional comp insurance. Of course, it helps that the injured workers are so invisible, like obscure figures in a desert sand storm, struggling blindly to find some kind of shelter in a harsh and unsympathetic world.

Return to work and disabled vets

Wednesday, March 12th, 2008

The Iraq and Afghanistan theaters of war represent the largest deployment of civilian soldiers since WWII. Of the 1.5 million troops that have served, approximately one in every four is a National Guard member or a Reservist. While the Uniformed Services Employment and Reemployment Rights Act offers legal job protections, the road back will not be an easy one for many veterans. Many have suffered profound and life-changing physical injuries; many also face less obvious wounds – Iraq and Afghanistan Veterans of America estimate that about one in three Iraq veterans will face a serious psychological injury, such as depression, anxiety, or PTSD:

These psychological injuries exact a severe toll on military families. Rates of marital stress, substance abuse, and suicide have all increased. Twenty percent of married troops in Iraq say they are planning a divorce. Tens of thousands of Iraq and Afghanistan veterans have been treated for drug or alcohol abuse. And the current Army suicide rate is the highest it has been in 26 years. One of the goals of any disability program is to help the injured party to recover and to return to their normal lives, including return to work. This is true whether the injury occurred in the workplace, at home, or on the battlefield. Work is not only vital for economic security, for most of us it is also a core part of our identity, an integral part of our lives. A good return to work program can be restorative on a financial, emotional, and psychological plane. Both in the short term and over the longer term, employers will play a vital role in helping veterans readjust to civilian life. This requires that employers have awareness of the many challenges that veterans face and the willingness to provide the resources to support a successful transition.
Enter the Workplace Warrior Think Tank, a coming together of The Disability Management Employer Coalition, several of the nation’s premier insurers, employers, and military and veteran participants with the purpose of helping veterans to ease the transition from the war to the workplace. The group examined challenges and opportunities facing returning employees and identified employer-based resources and strategies. The end product is a useful guide for employers, Workplace Warriors: The Corporate Response to Deployment and Reintegration Highlighting Best Practices in Human Resources and Disability Management (PDF). The guide includes a list of best practice recommendations to help returning vets reintegrate in the workplace. These include such things as celebrating the employee’s return to the workplace, recapping changes that occurred while he/she was gone, and training supervisors to be aware of certain red flags that might indicate a problem. The group also emphasizes that the availability of effective EAP services can be critical to successfully helping veterans to face the many psychological problems that are common in the aftermath of war service.
It’s great to hear about the efforts of the think tank and their recommendations for employers – please help to distribute the guide and raise the issue because as the report notes, “Repercussions and delayed effects of the war experience will be felt in the workplace for decades to come.” Hopefully, this will be the first step in many by leaders in our industry to dedicate resources and attention to this important issue.
For more information and resources:
The Corporate Response to Deployment and Reintegration – this is the full report from Workplace Warriors, available through DMEC.
Wounded Warriors is a blog that collects veterans coverage from the McClatchy Washington Bureau, McClatchy Newspapers, and other sources. It’s a good source of news for items that affect returning vets and their families.
Resources for returning veterans and their families – from the Substance Abuse and Mental Health Administration.
Veterans and Military Health – from MedlinePlus
Iraq and Afghanistan Veterans of America – since 2004, the nation’s first and largest group dedicated to the Troops and Veterans of the wars in Iraq and Afghanistan, and the civilian supporters of those Troops and Veterans.

Workers’ Comp in Iraq

Monday, June 13th, 2005

A fascinating article by staff writer T. Christian Miller in today’s Los Angeles Times (registration required) focuses on the cost of providing workers comp insurance to non-military employees in Iraq. Under a WW II era program called the Defense Base Act, private insurers charge the government for comp premiums. These private carriers are at risk only for the non-combat related injuries, illnesses and deaths. The government reimburses the carriers for all combat-related incidents, plus a 15% admin fee. Overall, costs for comp in Iraq are somewhere around $ 1 billion, but no one seems to know for sure.
Currently, two carriers dominate the market: AIG and ACE. The Pentagon is talking about awarding all the business to a single carrier, in order to contain the escalating costs. The counter argument seeks a continuation of the “free market approach.” I’m not sure how “free” the current market is and as for the rates, they appear to be headed in the wrong direction.
Comp in Iraq
There are about 30,000 Americans and third-country nationals and more than 40,000 Iraqis working on U.S. contracts in Iraq. To date, about 300 contractors have been killed and 2,700 injured. When the program began, insurance rates ran between $4 and $8 per hundred dollars of payroll. Now they are up to $20 per hundred — a pretty hefty rate by most measures.
Salaries in Iraq, as you would expect, are much higher than those in the states. It’s not unusual for workers to pull down $100,000. (The pay is good, but you would have to characterize the working conditions as marginal.) Comp premiums at the $20 rate would average about $20,000 per employee — a very high rate indeed. Because of the high salaries, death claims are averaging between $1.2 and $1.8 million — significantly higher than death claims for workers in the states.
How do rates for insurance in Iraq compare to other locations in the world? Here’s one striking example cited by Christian: In Colombia, a contractor flying helicopters in support of State Department drug interdiction programs is charged at $3.87 per $100 of payroll — less than a truck driver in the states. In Iraq, however, a contractor flying helicopters runs $90 per $100, with comp payments almost the equal of payroll (only iron workers above the 6th floor reach anywhere near comparable rates in the states). Keep in mind that if the helicopter pilot dies in a combat-related incident, the carrier is not on for the loss. The carriers respond by saying they have to establish these high rates, because even if they are eventually reimbursed for a combat-related incident, it could take several years to actually get the money and there is no guarantee that the government will accept the liability.
Conventional Cost Control, Unconventional Conditions
Employers in the states have learned the hard way that the best way to control comp costs is to contain losses. Cost containment means committing to good safety programs and setting up a system for immediately responding to injuries. You need to establish a relationship with an occupational medical provider and set up a comprehensive return-to-work program that uses temporary modified duty to speed recovery. That’s all well and good stateside, but I have to wonder how well that kind of a system will work in Iraq. Is anyone motivated to implement modified duty? Do employees really want to go back to work, or would they prefer to collect 2/3 of their (inflated) average weekly wage at a safe distance from the turmoil? If you were an Iraqi national, would you risk your life going back to work on temporary modified duty? With U.S. taxpayers ultimately footing the bill, does anyone over there really care if an injured employee goes back to work? When you think about it this way, you wonder why carriers would want any of the risk.
Where’s OSHA?
I wonder what OSHA would say about the working conditions in Iraq. (Given the reduced number of inspectors, they probably haven’t gotten there yet.) Under the General Duty Clause, employers must provide a workplace free from the risk of injury and illness. How does Iraq stack up? As a spokesman for one of the carriers stated, in response to questions about the high rates, “it’s 130 degrees. There is a lot of dust. There is a lack of hospitals.” Not to mention the fact that strangers are constantly trying to kidnap or kill you. Stress claim, anyone?
Ubiquitous AIG
It is indeed interesting to find AIG in the middle of this high-risk mess. Just as they were challenged by New York Attorney General Elliot Spitzer for “risk transfer” transactions that apparently involved no risk at all, it appears that here in Iraq they are collecting possibly inflated premiums where, once again, a substantial portion of the risk lies with others (you and me, to be exact).
Ultimately, my sympathies here are with the workers. I can hardly imagine a more difficult place to work. Here in America it’s rare to dress for work with a prayer that you will survive another day (rare but certainly not unheard of). In Iraq, every breath in that hot, dusty place is accompanied by just such a prayer. Here’s wishing a safe return to our civilians and a lasting peace for the Iraqi people themselves.