Nineteen things employers can expect in 2022
Part 2 (8 -19)

8. Marijuana will remain a hot issue in workers' compensation

   While there has been some action around a federal change in marijuana's status as a Schedule 1 drug (a discussion draft of The Cannabis Administration and Opportunity Act was released in August 2021) and overwhelming public support for the change, its path forward in 2022 is uncertain. However, more states will likely legalize cannabis in some form in 2022. Under the patchwork of state laws, the workers comp industry is struggling with the use and reimbursement of marijuana for medical purposes. Many state reimbursement policies are driven by case law rather than administrative rules and regulations.

   Another disconcerting trend for employers is a growing number of regulations that discourage or even prohibit drug testing of employees for marijuana. Again, the regulations vary significantly by jurisdiction.

   Employer takeaway: A report from the National Institute for Occupational Safety and Health (NIOSH) breaks down where cannabis is reimbursable in workers comp, where it's not, and how employers should conduct themselves in states where the law doesn't say either way. Staying abreast of evolving laws and cases, ensuring drug policies are up-to-date and compliant, a clearly defined policy on how marijuana will be addressed in the workplace, and training managers to identify the signs of impairment are necessary to ensure the safety of all workers and decrease the likelihood of adverse employment actions.

9. More legislation on telemedicine and cautious expansion

   More than 1,000 bills were filed in 2021 to expand access to telemedicine. In workers compensation, all states except for Arkansas now allow telemedicine to be used in some capacity. While it had a huge surge at the start of the pandemic, utilization rates ebb and flow with COVID rates - when COVID rises, telemedicine services increase. The industry still struggles with defining the appropriate type of treatments and visits that can be conducted virtually, technological concerns, and provider education as well as how much a telemedicine appointment should cost compared to an in-person visit. Anecdotally, it has been most successful in physical therapy consulting, virtual functional restoration, and mental health counseling.

   Employer takeaway: The primary goal of telemedicine is to improve outcomes with speedier access to care, expand access to specialists, consistent follow-up, quicker return to work, and reduced costs. Many employers and insurers are proceeding cautiously, taking the time to evaluate the outcomes of cases that shifted to telehealth, obtain employee feedback, and determine where telehealth is a good fit. A recent study by the Workers Compensation Research Institute (WCRI) notes that if telemedicine is used for the initial evaluation and management service, there will be a much higher percentage of follow-up visits by telemedicine.

10. An increased focus on Total Worker Health (TWH)

    It's well documented that anxiety, depression, stress, alcoholism, and overdoses have increased during the pandemic. While workers' comp coverage for behavioral health issues is complex, employers and insurers recognize that they can delay recovery from physical injuries, lead to substance abuse, and contribute to the risk of workplace violence and workplace accidents. According to McKinsey, "in both government and commercially insured populations, around 60 percent of healthcare spend is attributable to the roughly 23 percent of the population diagnosed with behavioral health conditions."

    Employer takeaway: Employers have seen the impact that well-being, previously considered a personal issue, can have on productivity and are embracing the concept of TWH. According to the National Institute for Occupational Safety and Health (NIOSH), TWH is defined as workplace policies, programs, and practices that integrate protection from work-related safety and health hazards with promotion of injury and illness prevention efforts to advance worker well-being. Not only are work practices designed to be safe, but they are also designed around workers' physical and psychological well-being. While effective strategies will vary by industry and workplace, the key is making well-being a core value.

11. Revisions to NLRB Joint Employer Rule and possibly independent contractor classification

    The National Labor Relations Board (NLRB) plans to issue proposed rulemaking in February 2022 to revise the standard for determining whether two businesses are joint employers under the National Labor Relations Act. It's expected that this will make it easier for workers to be considered employees of more than one entity for labor relations purposes, along the lines of Browning-Ferris, or even more employee-friendly. The rule can affect host employers, staffing agencies, franchisor-franchisee arrangements, multiple employers working on a construction site, and more.

    In 2021, the DOL officially withdrew a Trump-era rule which would have made it easier for businesses to classify workers as independent contractors rather than employees. There is no new rule and the DOL has reverted to its traditional way of analyzing several factors to consider whether a worker is an independent contractor or employee, moving toward characterizing more workers as employees. The NLRB announced in late December it will reconsider the standard for determining whether employees are independent contractors or employees.

    Employee takeaway: While no immediate action is needed until the rule is finalized, it's a good idea to review contracts with staffing agencies, focusing on the right to control employment terms and conditions. Similarly, staffing agencies should review their contractual arrangements. Contract language is a key factor in determining joint employer status. Also, expect movements that will make it more difficult to classify workers as independent contractors.

12. Programmed inspections related to preventing heat-related illnesses

    During a National Safety Council (NSC) webinar, an OSHA official announced that programmed inspections related to preventing heat-related illnesses are expected to begin this summer. The programmed inspections will target indoor and outdoor settings "where heat is a concern." The agency will have "heat-priority days" when the heat index exceeds 80° F. For more information.

    Employer takeaway: A handful of state OSHA plans have or are in the process of issuing heat- related standards. Federal OSHA is implementing an enforcement initiative on heat-related hazards, developing a National Emphasis Program, and launched a rule-making process to develop a standard. Employers should evaluate how they will be affected.

13. NPRM on lockout/tagout

    OSHA is expected to issue a NPRM on updating its standard on lockout/tagout (1910.147) early this year. The standard was issued in 1989 and has remained mostly static. While the technology for protecting workers from machinery shut down for service or hazardous energy has advanced, OSHA has not updated the standard to include approval for computer-based safety devices and has seen an increase in requests for variances. The existing standard creates problems for manufacturers and employers who want to incorporate sensors in equipment.

    Employer takeaway: This standard is consistently among the top ten standards cited by OSHA and often in the top five. It behooves employers to review the notice carefully.

14. Rates will remain low, but safety remains front and center

    The workers compensation insurance market remained profitable in 2021 despite premium declines and worries about COVID-19. Although rates are low, successful companies have maintained a focus on managing risks. Employees, prospective candidates, vendors, and customers judge organizations by the way they are protecting the workforce. Reputation risks related to safety and health are inescapable. With the severe labor shortage, employers must focus on prevention of injuries and returning injured workers to work to reduce the strain on existing workers and maintain productivity. The sizable infrastructure bill will lead to more construction and heavy industry jobs, which are a source of more workers compensation claims.

    Employer takeaway: Several studies have found that new workers are most at risk to get hurt, regardless of the industry, often in the first months of employment. Newness is a more significant factor than youth. Their injury vulnerability has been attributed to lack of familiarity with job tasks, inability to handle unexpected events, poor risk perception, and fear of asking questions or reporting injuries. Hands-on training, including orientation and reinforcement, is paramount as well as assigning appropriate tasks, daily hazard awareness reviews, effective supervision, and a robust safety culture.

15. Uncertainty surrounds claims cost drivers

    Wages and medical care are the drivers of work comp cost. A NCCI study found that increases in the price for physician care and hospital outpatient care had the largest impact in 2021. These were not driven by inflationary pressures, but by changes to reimbursement rules and rates for medical services set by Centers for Medicare and Medicaid Services (CMS) that went into effect at the start of 2021. However, the removal of around 300 musculoskeletal-related services from the inpatient-only list (IPO) was halted in November, except CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint), and their corresponding anesthesia codes. Workers compensation pharmacy costs continued to decline during the pandemic, reflecting a steady reduction in opioid use. One area to continue to watch, however, is the topicals class. As opioid prescribing has decreased, costly alternatives for pain management have come into vogue.

    Employer takeaway: Legislators are starting to play catch up on issues that were put on hold because of the pandemic. New fee schedules are being introduced, drug formularies are proposed, and there is a renewed focus on drug costs. Medicare set-asides, costs of catastrophic (mega) claims, and general inflationary trends are also concerns. While the bills did not pass, one particularly troubling development in 2021 was an effort to erode an employer's ability to direct medical care in both Colorado and California, which would have a huge impact on workers' compensation.

16. Natural disasters will continue to wreak havoc

    The country has seen its share of devastation this year from the polar-vertex in February to wildfires in the summer and fall, and the recent tornadoes in the South and Mid-West. While the laws vary by state as to whether natural disaster-related injuries are compensable under worker' compensation statutes, most states cover first responders and workplace injuries during disaster recovery. In other situations, the neutral risk doctrine or positional risk doctrine may apply. To be compensable, an injury or death must arise out of and in the course of employment, but the risk of that job must be greater than that to which others of the public are exposed.

    Employer takeaway: Investigations into the deadly tornedoes in Kentucky may provide some lessons. Workers have already filed a lawsuit against a candle factory where eight workers died, alleging that managers threatened to fire employees who wanted to leave before the storm hit. According to OSHA documents, the company did have an emergency action plan and trained employees. It's unclear if workers' comp claims have been filed and if the lawsuit could be dismissed because of the exclusive remedy of workers' comp. But the larger question is whether the company can be liable for a natural disaster. While extreme weather injuries do not fit easily within the framework of workers' compensation, neither did the pandemic. In addition to the business disruption, the possibilities of reputational damage are huge.

    Staying ahead of environmental risks requires continued vigilance. Organizations need to cast wider nets to identify changing, new, and emerging risks as well as a playbook for responding to crises. Environmental, social, and governance (ESG) programs are gaining traction. At its core, ESG analysis identifies and gauges risks to corporate sustainability, as well as a company's ability to address, minimize, and mitigate such risks.

17. Cyberattacks will be a continuous threat

    Cyberattacks no longer impact just the IT environment. As operations become more digital and connectivity increases, employees, equipment, and production capacity are at risk. Every sector of the economy, from energy to healthcare to manufacturing, faces regular cybersecurity threats from increasingly sophisticated criminals. Further, despite the benefits of remote work, it creates security vulnerabilities that can leave a company's data open to malicious attack. Many expect the cybersecurity insurance market will continue to harden and insurers will require more cyber security controls.

    Employer takeaway: Understanding and addressing security-based safety risks requires collaboration between your EHS, IT, and operations team. Together, they must develop best practices, assess vulnerabilities, look for security gaps, monitor results, and develop best practices. Ransomware risks should be factored into risk management governance.

18. Digital transformation will continue

    One of the few silver linings of the pandemic was the incredible acceleration in the pace of technology adoption. AI, robotics, drones, wearables, sensors, IoT, apps, and more continue to gain traction in workplace safety. Digital technologies are also transforming safety data collection to real-time and transforming the way insurers manage claims. Stakeholders, be it employees or customers, expect to have access to information whenever they need it. Yet, the tech landscape is complex and comes with implementation and adoption challenges. Legacy systems, cost, privacy issues, employee resistance, and data analysis capabilities can be barriers.

    Employer takeaway: There's no shortage of technology available, but there's no playbook for determining the best fit. Every business needs a long-term tech strategy that will help it achieve specific goals. It also requires looking at employee skills differently. Many leading companies no longer focus on "roles" but on the skills needed to drive workflows and maintain a competitive advantage. Providing employees with varied, adaptive, and critical skills so they acquire cross-functional knowledge and training opens multiple opportunities for career development and boosts corporate resiliency.

19. Renewed focus on common issues

    Some issues just seem to be a constant in workers compensation. Here are a few that may warrant renewed focus:

    • Distracted driving - According to the BLS, motor vehicle crashes are the first or second leading cause of workplace fatalities in every major industry group. And it's not just an issue for truck, bus, or taxi drivers. 57% of workers who died in 2018 were not employed in motor vehicle operator jobs.
    • Aging workforce - BLS data shows that the proportion of workers over the age of 55 is expected to increase to nearly 25% of the working population by 2024. Falls and musculoskeletal injuries are most common. While older workers have fewer injuries, they often require more time to heal, underscoring the need for a well-planned return to work program.
    • Workplace violence - While there is some regulatory movement - new requirements for workplace violence for any organization that is accredited through The Joint Commission (TJC) became effective this month and OSHA is preparing to convene a Small Business Regulatory Enforcement Fairness Act panel on the topic of workplace violence in healthcare and social assistance, it remains largely on the shoulders of employers to prepare for any type of workplace violence.