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Stress and Workers' Compensation

The recent high profile suicide of Zurich Insurance Group Ltd, Chief Financial Officer, Pierre Wauthier, the tragic death of Moritz Erhardt, a 21-year-old intern at Bank of America Merrill Lynch, the efforts to expand Connecticut Workers' Compensation coverage to cover mental and emotional distress in the aftermath of the Sandy Hook tragedy, and the shootings at the Washington Navy Yard all bring to the forefront the issue of stress and psychiatric issues in the workplace.

Such claims are out of the ordinary and confuse many employers. Adding to the confusion is the variance among state statutes and inconsistencies in case law surrounding such claims.

Typically, psychiatric claims are considered physical-mental, mental-physical or mental-mental. Physical-mental applies when an employee has suffered a physical injury at work and then, as a result of the physical injury, develops a mental injury. A back injury with chronic pain that leads to clinical depression is an example. There is also a growing trend in posttraumatic stress claims.

Mental-physical refers to a psychological condition that arises from work and leads to a physical illness. Stroke and heart attacks induced by workplace stress are examples.

Since there are often other contributing causes to mental injuries, there is a higher standard of proof and it is the job of the adjuster and defense attorney to sort through the causal relationships. Some general guidance culled from case law is that the work-related stress must be of an unusual or abnormal nature, not the everyday stress of the job, or caused by a specific, acute or sudden stressful event.

In a mental-mental injury, the injury arises out of anxiety or fear. Because of the wide possibility of abuse, many states, including Connecticut, exclude benefits for such injuries and those that allow benefits often have strict boundaries. In Connecticut, the exclusion means that the costs incurred by teachers, staff and first responders to the Sandy Hook tragedy, including missed work and psychological care, are not eligible for Workers' Compensation. While a fund was created to fill this void, fund raising has fell far short of the goal. Labor unions and some legislators have looked to expand the law, but the issue is complex.

Another issue is defining mental injury. The American Psychiatric Association's 'Diagnostic and Statistical Manual of Mental Disorders' (D.S.M.) has been the bible for verifying or disproving mental injuries; yet, its recent revision has stirred unprecedented questioning about specific diagnoses and the scientific basis of the entire enterprise. However, it is generally believed, in the absence of a clear alternative, patients will continue to be diagnosed with D.S.M. categories as a guide, and insurance companies will reimburse with such diagnoses in mind.

While stress and psychiatric claims are difficult to prove and represent a small percentage of claims, they can be costly to defend and challenging to manage. Technology that enables people to be accessible 24/7, the constant mantra of "doing more with less," the lingering effects of the recession, fear of job loss, the decrease in funding for mental health programs, and the presence of workplace bullying all give rise to a growing number of stress-related compensation claims in the workplace.

Regardless of whether or not the situation manifests itself as a Workers' Compensation claim, studies have found that workplaces tend to be better at dealing with stress that arises from a single traumatic incident. Chronic problems, stemming from problems with workplace organization and relationships, are deep-rooted and when allowed to go unchecked adversely affect productivity, morale, the emotional health of workers and the financial health of the company.

A recent study in the September Journal of Occupational and Environmental Medicine, official publication of the American College of Occupational and Environmental Medicine (ACOEM) finds the sum total of negative working conditions is related to depressive symptoms. The economic consequences are tangible. In one World Health Organization study researchers ranked the most costly health conditions (including direct and indirect costs.) Depression ranked first, and anxiety ranked fifth - with obesity, arthritis, and back and neck pain in between.

It's a difficult issue and many companies don't know what to do; by default they do nothing. The solution begins with good hiring practices and proper background checks. Then, be alert to signs of stress among employees, and solicit input from employees and managers on this issue. By projecting a respect for mental health issues, employers can begin to diminish the negative stigmas that lead to concealment, festering, lost productivity and possibly worse outcomes.