EPIC Risk Advisory Bulletin
Volume 1, Issue 14
The global COVID-19 (coronavirus) pandemic remains both dynamic and fluid. We continue to see unprecedented disruptions at home and abroad. In this issue, we take a focused look at:
- General Information on Coronavirus
- Supply Chain and Business Risks
- U.S. Borders Open for Truck Traffic
- Federal Motor Carrier Safety Administration Updates Hour of Service Rules
- Insurance Products and Coverage Information
- Potential Liability Issues Lurking in FFCRA
- Hyperactive Hurricane Season May Be Approaching
- Hospitality Market Update
- Legislation and Litigation Roundup
- Human Resources and Employee Benefits
- Telehealth: Here to Stay?
- Insights from Across the Firm
Additional Benefit Offerings
Are there any new value-added benefits you are considering that could help address employee needs specific to the pandemic? Take Survey
Wellness
Have you shifted any of your wellness initiatives to a virtual approach, and are you considering any new programs or a new communication approach? Take Survey
Assessing Financial Risk
Do you have the ability to assess financial risk to your health and welfare plans as a result of the pandemic, and what changes have you made related to cost-sharing and budgeting for medical and prescription drug expenses? Take Survey
General Information on Coronavirus
The best sources overall for timely information on the coronavirus pandemic remain the Centers for Disease Control (CDC), the World Health Organization (WHO) and Occupational Safety and Health Administration (OSHA).
EPIC continues to compile resources to aid in understanding the impact of the pandemic on employers, their workforces and the management of risk.
Supply Chain & Business Risks
U.S. Borders Open for Truck Traffic
The Department of Homeland Security extended its decision to partially close non-essential travel through June 22, 2020. Truck travel, which continues to be deemed essential, is permitted to cross both the northern and southern borders in the U.S.
In its declaration, the U.S. Customs and Border Protection (CBP) outlined examples of essential travel, which include the following:
- U.S. citizens and lawful permanent residents returning to the U.S.
- Individuals traveling for medical purposes, to attend educational institutions, to work in the U.S., or for emergency and public health purposes
- Individuals engaged in lawful cross-border trade, official government travel or diplomatic travel
- Members of the U.S. Armed Forces, and spouses and children of members of U.S. Armed Forces returning to the U.S.
- Individuals engaged in military-related travel or operations
For more information about declarations and developments affecting transportation and trade, contact your EPIC broker.
Federal Motor Carrier Safety Administration (FMCSA) Updates Hour of Service Rules
On May 14, the FMCSA published a final rule that updated existing hours of service rules for commercial motor vehicle drivers. The final rule offered four key revisions from previous versions. In it, the FMCS will:
- Increase flexibility for meeting the existing 30-minute break rule by requiring a break after eight hours of consecutive driving and will allow the break to be satisfied by a driver using “on-duty” as opposed to “not driving” status.
- Modify the sleeper-berth exception to allow drivers to split their required off-duty period of ten hours into two segments – an 8/2 split or a 7/3 split. Neither period may count against the driver’s 14-hour driving window.
- Modify the adverse driving conditions exception by extending the maximum driving window that is permissible for drivers by an additional two hours.
- Change the short-haul exception available to certain commercial drivers by lengthening the drivers’ maximum on-duty period from 12 to 14 hours, and extending the distance limit within which the driver may operation from 100 air miles to 150 air miles.
Rule changes do not increase driving time and will continue to prevent commercial motor vehicle operators from driving for more than eight consecutive hours without at least a 30-minute break. The new hours of service rule will have an implementation date of 120 days after publication in the Federal Registrar.
Insurance Products & Coverage
Potential Liability Issues Lurking in the FFCRA
The Families First Coronavirus Act (FFCRA) was one of the first pieces of legislation passed by Congress to provide aid to the American people suffering from the detrimental effects of the coronavirus pandemic. It requires certain employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to coronavirus.
While the Act was intended to provide relief, it has already generated many areas of concern for potential litigation. An early suit came from an Eastern Airlines employee who requested flexibility in hours to care for her son, was denied and later, terminated. Then, the State of New York sued the U.S. Department of Labor (DOL), challenging that the DOL’s interpretation of the FFCRA unlawfully narrows workers’ eligibility for emergency family leave and paid sick leave guaranteed by the FFCRA.
There has been both concern and confusion over the Act. In response, the DOL has released guidance, which EPIC previously discussed.
Leaves under the FFCRA are only available to employees working for companies that have work available. If a company is unable to open due to restrictions in that area, their employees are not eligible for leave. Since the FFCRA effective date was April 1, the greatest opportunity for litigation could come from employees that were terminated either before the April 1 effective date and who were forced to file for unemployment (which does not come with health insurance coverage), or from employees who were laid-off while on leave (which is permitted if the employee would have been laid-off).
Employees and employers alike should also be aware of the fact that the expanded family and medical leave provisions of the FFCRA coordinate with FMLA during the 2020 calendar year. An employee who has already taken 12 weeks of FMLA would therefore not be eligible for additional protected emergency family medical leave through the FFCRA.
What should companies do to avoid potential litigation?
Companies can take common sense measures to guard against lawsuits. Working with legal counsel to determine how the FFCRA affects a business is a good first step. Additionally, FMLA, Paid Time Off and Leave of Absence policies should be updated and internal processes for managers, employees and vendors should be created to track and document leaves, eligibility and leave payments.
Businesses should communicate clearly with employees about what is expected of them and should document all requested leaves appropriately. Routing FFCRA-related leave requests to a central location can reduce potential misinformation and miscommunication.
What potential liability issues does this law create?
When leave laws are enacted, employers often have months, if not years, notice before they are effective. The FFCRA was passed and enacted within a matter of days. While the DOL provided a 30-day grace period for non-compliance, employers and vendors who serve them scrambled to prepare for compliance.
Additional aspects creating potential confusion include the following questions around recordkeeping, insurance coverage, and earnings calculations:
- Do existing leave and disability vendors manage leave requests or must it be fulfilled in house?
- Do payroll vendors have the ability to track emergency paid sick leave and emergency paid family leave payouts so employers can file them against quarterly payroll tax filings?
- Will health insurance companies continue to provide coverage to non-active employees as required by the law?
- Are employers able to accurately calculate eligible earnings for hourly employees not previously eligible for any leaves?
Additional Considerations for Employers
Employers must still consider compliance with the ADA and other laws when faced with an FFCRA-related request for leave or remote work. Determining how many employees may be eligible for FFCRA leaves and resultant workforce change projections must also be accommodated by employers.
From a cash flow perspective, smaller employers could face catastrophic effects from the cost of the expanded benefits provided by the FFCRA. Even though payments are reimbursable, most industries are seeing decreased revenues due to coronavirus, and many smaller businesses do not have the cash resources or lines of credit available to larger companies.
Employers grappling with accommodating the leave requirements of the FFCRA should reach out to their EPIC broker for more information.
Hyperactive Hurricane Season Requires Pre-Planning
Warm waters in the Atlantic and a lower than usual likelihood for the occurrence of an El Nino means strong hurricanes may be more likely in 2020. The National Oceanic and Atmospheric Association (NOAA) is predicting an especially active hurricane season this year, similar to the season in 2005, which produced 28 storms, including the disastrous Hurricane Katrina. NOAA’s predicted forecast of 13 to 19 named storms with winds of 39 mph or higher, includes six to 10 storms that could turn into hurricanes. An average hurricane season produces 12 named storms, of which six become hurricanes.
FEMA is encouraging local and state officials, as well as individuals, to begin planning early in light of coronavirus. This includes taking into account additional measures such as being well stocked with protective items such as PPE and hand sanitizer, and the need to practice social distancing to stay safe in the event of evacuation.
There are steps that can be taken before and after a hurricane to minimize loss. Those items include the following.
Before a Hurricane
Before a hurricane hits, consider doing the following:
- Inspect roofs and clear away debris
- Inspect and repair sign and stack supports, guy wires and anchors
- Inspect and repair weak window and door latches
- Protect windows from flying debris
- Move important records to locations protected from wind, debris and rain
- Fill all above ground tanks to capacity with product or water
- Anchor structures, such as cranes, that may move in high winds
- Fill fuel tanks of emergency equipment
- Assemble and maintain emergency supplies at a secure location
After a Hurricane
After a hurricane is over, consider taking the following steps.
- Survey facilities for damage and take photographs
- Look for safety hazards and report them to proper authorities
- Restore fire protection systems
- Contact key personnel and notify contractors to begin repairs
- Cover broken windows and torn roof coverings
- Clean roof drains and remove debris
Businesses and individuals are encouraged to create an emergency preparedness plan for the hurricane season that accounts for coronavirus. While businesses are currently focused on business interruption and other coverages, now is not the time to overlook property and casualty coverage to ensure adequate protection is in place for the duration of the hurricane season.
For a complete pre and post-hurricane preparedness checklist, contact your EPIC broker for more information.
The State of the Hospitality Insurance Market
It is no secret that the Hospitality industry has been especially hard hit during the coronavirus crisis. Many hotels, restaurants and bars have closed their doors, and many will never reopen them.
In addition to significantly reduced traffic, many businesses in the hospitality sector are facing rising insurance premiums. Carriers are cutting back significantly on the capacity they will provide, and others are pulling out of the Hospitality space completely. A myriad of business interruption claims, as well as fears of business downturns, vandalism to empty facilities, and waves of new coronavirus cases contributes to this reality, which adds up to a hardening insurance marketplace.
A ray of hope for the hospitality industry comes in an April Skift Research report, which found that more consumers are now planning to increase their travel spending in the next 12 months than had been planning to do so in February. In fact, a study from MMGY and the U.S. Travel Association found that nearly 40 percent of Americans say they plan to take a domestic vacation in the next six months.
Still, the biggest challenge to a full recovery for the hospitality industry may not be the rising insurance premiums, but getting patrons back in the door. Consumers want to travel again; they just don’t feel safe doing so. It will take time to overcome the psychological effects of coronavirus. Merchants in the hospitality industry can use this time to plan a safe return to operations with confidence and safety.
In the midst of all this trouble, some businesses, like Burger Lounge, are finding success by reinventing themselves. It went from being a dine-in establishment to a corner store serving to-go meals curbside and make-at-home meals. Other establishments are staying alive by taking advantage of relaxed liquor laws across the nation that allows them to earn revenue in new ways.
For more information and consultation about your specific situation, please contact your EPIC broker.
Read the full Hospitality Market Report
Legislation and Litigation Roundup
The passage of another week has brought forth more legislation from city, county and state governmental bodies, as well as litigation. Here is a rundown of recent news stories of interest.
News of Note
- French Court Orders AXA to Pay Restaurant’s COVID-19 Business Interruption Loss, Insurance Journal, May 22
- Insurance groups push taxpayer-funded pandemic backstop, Business Insurance, May 21
- America’s patchwork pandemic is fraying even further, The Atlantic, May 20
- State of Coronavirus and Insurance, Managed Healthcare Executive, May 20
- Tens or 100s of billions? Insurers consult crystal balls on coronavirus costs, Reuters, May 4
HR & Employee Benefits Insights
Is Telemedicine Here to Stay?
Telehealth is not new; however, the coronavirus pandemic has pushed it from the fringes into the mainstream of the American healthcare market. With restrictions in place on visiting doctors’ offices and hospitals, and the need to minimize face-to-face contact, telemedicine has become a critical way for people to receive healthcare.
Before the pandemic, some telehealth platforms saw less than 30 hours per day from all users. Now, that number has soared to 25,000 hours. Overall, the experience seems to be positive for many Americans. Will this new trend continue beyond the pandemic?
One factor that will need to be considered is how insurance markets will respond. Before the pandemic, telehealth visits were often not covered in the same way that in-person visits were. Now that some states, like Massachusetts, are requiring insurers to pay equally for telehealth visits as they would in-person visits, the future of their coverage from an insurance perspective, is unclear.
One factor that could influence the way insurers respond is how demand looks after the pandemic is over. If demand remains high, it could be a positive signal to insurers to include payments for telehealth visitors in their plans. However, demand could be determined by coverage.
Contact your EPIC broker with questions related to telehealth.
Insights From Across the Firm
EPIC’s thought leaders have written numerous articles on matters relating to coronavirus, all of which are available on EPIC’s website. Those articles include:
- Liquor Laws Relaxed but Hospitality Should Proceed With Caution, May 20
- EPIC Client Showcase: Burger Lounge, May 20
- Unrealized Potential: Missed Sales and Profit Protection, May 19
Conclusion
Our understanding of coronavirus and its impact around the world continues to evolve at a rapid pace. This newsletter briefly touches on issues that businesses may want to consider as they approach their response to novel coronavirus. More topics will be considered in future issues as our understanding of the virus and its impact continues to evolve. Please reach out to your EPIC broker for more information.
For all of EPIC’s coronavirus coverage, visit epicbrokers.com/coronavirus
Disclaimer: This has been provided as an informational resource for EPIC clients and business partners. It is intended to provide general guidance on potential exposures and is not intended to provide medical advice or address medical concerns or specific risk circumstances. Due to the dynamic nature of infectious diseases, EPIC cannot be held liable for the guidance provided. We strongly encourage readers to seek additional safety, medical and epidemiological information from credible sources such as the Centers for Disease Control and Prevention and the World Health Organization. Regarding insurance coverage questions, whether coverage applies or a policy will respond to any risk or circumstance is subject to the specific terms and conditions of the policies and contracts at issue and underwriter determinations.
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