Wednesday, March 29, 2017

Could Property Casualty Insurers Be the EAP Profession's Ship Coming In?

Certainly, you know that the Property Casualty (P-C) insurance is a world away from Health Insurance and their managed behavioral care partners, correct?

P-C insurers are folks like Lloyds of London, AIG, and Hartford who worry about a fire burning the building down where your EAP office is located. They also worry about things like lawsuits for wrong termination, automobile and truck wrecks, lawsuit payouts for sexual harassment, and workers' compensation payouts when employees prove they have been cheated. Lawsuits for trips and falls, employment practices liability, and theft of tools--yep, they insure against these types of losses too--almost anything other than employee behavioral health.

And workplace violence, when it happens, someone getting shot, and families suing over their grieved relatives...who pays? It's not United Healthcare. It's these big boys with P-C.

Now stick with me on this post.While managed behavioral health care wants one thing from an EAP--assessment and avoidance of access to the employee's insurance afforded by the behavioral health plan if possible, (thanks to an EAP's assessment and short term counseling skills within the core technology), a property casualty insurance company would want everything it could possibly wring out of your EAP in order to target as many behavioral risk exposures as possible in an effort to prevent insurable and compensable losses. (Please read that again and consider the implications.)

Human behavior in the workplace contributes to many liabilities and exposures, and all of these risks are born by insurance premiums. They also come with high deductibles--like $25-$50,000 for a lawsuit associated with sexual harassment.

Back injury and lengthy periods of time out of work, the P-C pays. Sexual harassment by a supervisor? Yes, the P-C pays.

And the $1 million out of court settlement instead of the risk of $5 million in a jury trial? Yes, again, the P-C forks over the cash.

Now imagine a well integrated EAP able to educate supervisors, detect emerging risks, and go anywhere within an organization necessary to engage and discover, educate, and train, assess and consult, and all with the purpose of reducing losses. How much might this sort of "human factors exposures prevention" be worth?

My guess is a lot, because the stakes are enormous. This is could also be a renaissance for EAPs. Am I wrong?

It's time to engage this tremendously financially liquid world of P-C. There are thousands of brokers nationwide. They know nothing about EAPs (other than the # on the back of their own insurance card in the event of an alcohol or psychiatric issue.)

There is a potentially wide-open avenue for EAPs to grow and flourish in ways that have not been seen for quite awhile, I think.

Write me at if you think I am off base about this. I wouldn't have written this much except for one thing. In 1993, I went to one of the most competitive EAP markets in the U.S. (Denver) and I engaged with a property casualty insurance broker there. I trained insurance agents all about EAPs in about three hours so they could offer these tools to customers. A week later, I returned and picked up three checks from three different companies averaging 100 employees each who had never had a comprehensive EAP. No lie.

I then flew to Baltimore, MD to the corporate headquarters of NSF&G Insurance, and within their boardroom made a presentation to talk them into beginning an EAP division and hiring real core tech pros. They listened, but their staff turned over, and I was full time employed at Arlington Hospital, and couldn't do it all myself at the time.. But this opportunity still lingers.

Mark Attridge's (hats off to him) awesome article in the Jan 2017 Journal of Employee Assistance discusses the obvious difference between a free EAP and a for-fee EAP, and the 400% improved utilization that one could expect from the latter. Mark shy's away from calling these managed-care driven programs. This is a disappointment and the elephant in the living room. But his research is solid content for EAPs seeking a new home in the risk world--one where they will be full appreciated. See my 2002 article on this topic here that discusses these issues more directly EAPs Help Limit Behavioral Exposures from the NATIONAL UNDERWRITER INSURANCE MAGAZINE