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The emergence of 24-hour coverage.

In an effort to ameliorate the crises in the workers' compensation and health care systems, a number of companies are investigating the use of 24-hour coverage programs. "Essentially, 24-hour coverage is an emerging idea for providing broad-based medical and disability benefits to workers regardless of whether the disability arises in the workplace," says Michael Ammiano, senior vice president of advanced risk management services at Willis Corroon.

However, Mr. Ammiano stresses that 24-hour coverage is a relatively new concept, and encompasses a wide range of approaches. "The 24-hour coverage plans can include medical coverage, workers' compensation, and coverage for accidents, illnesses and diseases," he says. "The 24-hour plans that exist today cover a combination of these coverages. But what we don't yet have is a single disability program that constitutes true, comprehensive coverage."

Implementing a true 24-hour program presents fundamental difficulties for companies. "There are basic differences between health care and workers' compensation programs," says Mr. Ammiano. "For example, providing workers' compensation for employees is compulsory, whereas providing health care coverage isn't." Mr. Ammiano also points out that the two programs have differing methods of payment in regard to deductibles and co-payments. "Administrating the coverage for both the workers' compensation and benefits sides presents a challenge to 24-hour plans," he says. "This entails dealing with two separate disciplines that have different managerial philosophies."

Despite these problems, there are a number of reasons why many companies are looking at 24-hour coverage. "One big reason is that treating workers' compensation and health care separately often results in fragmented delivery systems," says Mr. Ammiano. "This means that since health care benefits and workers' compensation are administered through different programs, gaps and overlaps in coverage often result." In addition, the two separate plans are affected by different forms of regulation. "You've got ERISA regulating the benefits side and 50 different state regulations governing workers' compensation," he says. Mr. Ammiano also states that 24-hour plans would reduce the duplication of administration that results from treating workers' compensation and health benefits as separate programs.

However, Mr. Ammiano reports that legislative changes are necessary to turn the concept of a true 24-hour program into reality. "Some states, such as Florida and Alaska, are looking at ways to do this," he says.
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Title Annotation:26th Annual North Central Regional Conference
Publication:Risk Management
Date:Dec 1, 1992
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