With advanced planning, employee benefits can help sustain the overall wellbeing of your workforce before, during and after a natural disaster.

Persistent action on legislative compliance is critical to your organization. But compliance goes beyond filing specific paperwork by specific deadlines. It means understanding how laws and regulations apply to your employee benefits offerings and how to minimize the costs associated with noncompliance in order to maximize your organization's resources to ensure continuous operations, attracting and engaging employees, and overall organizational wellbeing.

Compliance Continuity is a monthly publication designed to help your organization sustain the total wellbeing and engagement of your workforce, pursue your business goals, and help you achieve better results by providing ongoing benefits and HR compliance guidance, key considerations, and action steps. While your best is finite, your better is never finished. Natural disasters, such as hurricanes, flooding, forest fires, ice storms, and volcanic eruptions can result in evacuations, work stoppages, and other disruptions that impact your employees. At such times, employee benefits can play a powerful role in sustaining the overall wellbeing of your workforce. However, the most effective continuity plan requires preparation well ahead of any disaster to be impactful. Below, we offer key planning areas.

  1. Communicate. Communicate. Communicate. An organization should have a plan in place to communicate with employees before, during, and after a disaster occurs. Information employees need in advance may include reminders about filling prescriptions and how to obtain contact information for their health plans. Employees should also be informed of how the organization will communicate with them, such as via text or phone message. During a disaster, employers should ensure that spouses and children can also access information on health insurance coverage and health providers. Often, employers will provide that information to employees on their intranet sites, but spouses and children cannot access those sites, so external webpages or mobile apps would be advantageous. After a disaster, it is important to make sure that employees know that their employer-sponsored benefits are there to support them. For example, employee assistance programs (EAPs) that provide mental health counseling sessions are often valuable resources after disasters, and letting employees know about the benefits and how to use them can significantly help employee overall wellbeing after a disaster. What is your organization's benefits communication plan in case of a disaster?

  2. Lift. Waive. Permit. In addition to reminding employees to obtain necessary prescriptions in advance of known upcoming natural disasters, employers may wish to take steps to work with their insurers and third party administrators to make sure that prescriptions can be filled regardless of the normal mechanisms to control prescriptions, such as "too soon to refill" restrictions for recurrent medications. For example, if an employee is able to obtain a three-month supply of a medication and the disaster would potentially hinder that employee's ability to obtain the medication on a timely basis after the disaster, a plan restriction could be lifted to allow the employee to refill the medication early to ensure that sufficient doses are on hand after the disaster. Plans may also waive restrictions requiring prescriptions to be filled by mail order. Wide-spread disasters can impact not only the ability for prescriptions to be filled, but also for mail to be delivered, so lifting such restrictions would allow plan members to obtain their medications through local pharmacies. Employers should also have methods, such as social media, text messaging, or webpages, to communicate waivers of restrictions. What mechanism does your organization have in place to work with your insurer or third party administrator to obtain waivers of restrictions that would inhibit plan members from obtaining necessary medications in times of disaster?

  3. Remove. Authorize. Establish. In the immediate wake of a disaster, medical and dental care can be two of the most important benefits offered by an employer; however, mechanisms in place to control costs, such as tiered networks and preauthorization penalties, may not be appropriate in such times. Indeed, in times of disaster, state departments of insurance often encourage insurers to waive penalties and restrictions for individuals obtaining necessary emergency and nonemergency health and dental services out of network. Insurers may waive prior authorization requirements for acute medical care and behavioral health services and may authorize nonemergency out-of-network services at an in-network level when in-network services are not available because of a disruption caused by a natural disaster. Employers with self-insured medical benefits should work with their third party administrators to obtain similar waivers. In addition, employers may also wish to establish systems to communicate with employees on how to find operational locations (e.g., a hospital with emergency power running) to obtain health care. What steps can your organization take to remove barriers to appropriate health care in times of disaster?

  4. Install. Develop. Assist. According to the Federal Emergency Management Agency (FEMA), approximately 44% of all power outages are caused by storm-related events. Power outages can impact your staff, your physical space, your operating and information systems, and your services. Thus, you need a plan for how all should be addressed during and after a disaster. With regard to systems, which may impact your communication with employees, consider how a loss of power will disturb your phones and internet access, and what alternatives should be in place. For example, your organization may wish to install at least one landline telephone, develop a plan for server or internet access with backup power outside of the affected area, and install surge protectors for all-important equipment. How would a loss of power impact your ability to assist your employees during a natural disaster?

  5. Continue. Compensate. Claim. Many organizations can be physically impacted by a widespread natural disaster and forced to close business operations for an extended period of time. Others may be forced to close because they cannot obtain electricity or raw materials. Some businesses choose to continue to pay their workers during such business disruptions even though they are not obligated to do so. For those employers, there may be a benefit in the form of tax breaks. For example, the U.S. Disaster Tax Relief and Airport and Airway Extension Act of 2017 (the Relief Act) signed into law on September 29, 2017 provided a broad array of relief measures aimed at assisting in the recovery efforts for both individuals and businesses affected by Hurricanes Harvey, Irma, and Maria. The Relief Act was expanded to include those impacted by the California wildfires. One key aspect of the Relief Act was a tax credit for 40% of qualified wages (up to $6,000) paid during business disruptions due to those disasters. What consideration has your organization given to whether it can continue wages in case of a business disruption due to a disaster and, therefore, claim tax relief?

This is a preview of Compliance Continuity. For five more considerations regarding Disaster Planning, contact your Gallagher representative or click here to subscribe and receive the full version of Compliance Continuity.

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Compliance is a series of actions, not a final destination. As a trusted advisor, Gallagher has developed this Compliance Continuity series to help you pursue a path through employee benefits compliance issues as part of an overall continuing compliance plan. Employers should carefully evaluate their health and welfare plans to determine if they are in compliance with both federal and state law. If you have any questions about one or more of the compliance destinations listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support employers in their compliance efforts, please contact your Gallagher representative.

The intent of this analysis is to provide you with general information. It does not necessarily fully address all your organization's specific issues. It should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be addressed by your organization's general counsel or an attorney who specializes in this practice area.