Commercial Risk & Employee Benefits:

The extreme flooding caused by atmospheric river storms in California and the total destruction caused by the recent EF-4 tornado in Mississippi both (unfortunately) serve as important reminders of how severe weather events can impact entire communities.  

Organizations and employers face a myriad of challenges when they’re forced to manage the aftermath of wildfires, hurricanes, floods, and storms. Not the least of which can inflate overhead costs and challenge key areas, such as talent acquisition and retention, workers’ compensation, benefits, and communications.  

5 KEY IMPACTS ON EMPLOYEES AND EMPLOYERS

We’ve all seen the type of damage extreme weather events can have on both property and infrastructure. But these widespread disasters can also create challenges around the mobility and availability of the U.S. workforce.

1. Remote Workers

With more than 60% of U.S. employers offering remote work arrangements, more employees than ever before now work from home and from all over the country. So as the potential for more natural disasters to strike everywhere, individuals are at risk of suffering property damage that can disrupt their lives, their ability to work from home offices, and in turn, their productivity.  

In-person employees also face challenges. Particularly when roads and mass transit in hard hit areas are impassable and driving bans make commuting to work impossible after a natural disaster. 

2. Challenging Communications  

Often during disasters, utilities, internet, and cell phone service can be out. During Hurricane Ian, for example, more than 2.7 million businesses and residences lost power. So not only is reaching employees in hard-hit areas after a catastrophe challenging, but so is re-establishing connectivity for any employees located in surrounding areas impacted by the outages. 

Businesses may be forced to seek technological solutions that can help re-establish lines of communication between them and their employees and/or customers for a period of time. 

3. Loss of Labor  

More severe natural disasters can cause so much devastation, that it can take months, even years, to repair homes and rebuild communities. This can mean that workers (and potential candidates for work) in affected areas who have lost everything they own have to relocate, either temporarily or permanently, further stressing the availability of local talent and employers’ already challenged acquisition and retention efforts.

4. Increasing Workers’ Compensation Exposure  

Despite loss-prevention practices, natural disasters can present increased exposure to workers’ compensation claims and losses, particularly if:

1. essential workers are injured during clean-up and recovery from the natural disaster or weather event at the workplace
2. remote employees are injured while working from home during the disaster
3. an injured employee who is already out of work on workers’ compensation cannot travel to scheduled treatments due to impassable roads, delaying full recovery and return to work and raising the possibility of a larger loss. 

5. Added Benefits Administration  

According to The Federal Reserve, more than a 25% of employees are either unable to pay their monthly bills or can’t afford to pay for a $400 financial emergency. In the wake of a natural disaster when out-of-pocket costs are high, employees may need financial assistance to recover. Employers, in turn, can help facilitate access to the financial benefits they offer as quickly as possible, so that impacted employees can deal with the damage and emotional trauma caused by the disaster – and get back on their feet sooner. 

Time to think about disaster recovery planning?

Recent extreme weather events highlight the absolute necessity of disaster recovery planning. Work with your insurance professionals to make sure your action plan addresses the needs of employees, as well as the demands of your business.

In September, Hurricane Ian devastated southwest Florida. In December, a “bomb cyclone” buried Buffalo, New York in about four feet of snow that collapsed buildings, caused power outages, and left people out in the cold. For months, atmospheric river storms inundated California with flooding, mudslides, and landslides that threatened millions. And, most recently, an EF-4 tornado decimated an entire town in Mississippi. 

While natural disasters can shut down businesses and destroy property, they can also seriously impact the personal lives of your employees. Fortunately, the benefits many organizations offer employees can not only help those directly impacted recover, but they can also help retain them over the long haul.  

BENEFITS THAT CAN HELP EMPLOYEES IMPACTED BY CATASTROPHIC WEATHER EVENTS 

To help them physically:

Medical Insurance
If employees have been physically injured during a natural disaster, health plans can cover all or part of necessary medical services needed to treat broken bones, burns, concussions, or other health issues they may have suffered due to the damaging weather. 

Telemedicine
Injured employees (who are not suffering from a life-threatening injury) can get quick and easy medical attention virtually with a health professional even if impassable roads prevent them from leaving their house or immediate community. And because telemedicine options typically cost less, that can minimize expenses.  

Short- and Long-Term Disability
If an employee suffers extensive injuries during a natural disaster and is under doctor’s orders not to work for a certain amount of time, short-term or long-term disability policies can pay a part of their salary while they recover. Eligibility for these benefits and waiting periods may apply, so it’s best if employees contact their provider. 

To help them financially: 

Employee Assistance Funds
Many organizations have created a nonprofit entity for tax-advantaged special funds to support colleagues in times of crisis and financial hardship caused by situations like the COVID-19 pandemic, hurricanes, and other natural disasters. Both leaders and employees can contribute to these funds to help their fellow employees in their time of need. In addition, some organizations allow employees to donate their accumulated time off to an affected employee who may need to take extended time off from work and still get paid. 

Flexible Spending Accounts (Dependent and Health)
To pay for out-of-pocket medical costs incurred as the result of a natural disaster, affected employees may tap their flexible spending accounts to pay for prescriptions, copayments, physical therapy, and possible dependent care expenses that are needed to fully recover. 

Retirement Plans
To help pay for rebuilding a home or finding temporary housing, employees may be able take a loan or hardship withdrawal against their retirement account or get financial counseling from retirement benefits providers. 

Life Insurance
One of the sad realities of natural disasters is that they often take lives. If an employee (or one of their family members) dies in a storm, and they are covered by a life insurance policy as part of their benefit options, remind them how to report a claim with your insurance provider. The financial support provided by the life insurance benefits can help cover funeral costs and assist employees and their families with making necessary future plans. 

To help them emotionally: 

Employee Assistance Program (EAP)
The services provided by an EAP can be particularly helpful for employees recovering from a natural disaster. In many cases, it can offer services for emotional and mental health counseling for those suffering from shock, grief, and uncertainty. Plus, they often provide access to financial consultations, discounts on legal fees, home services, and more. 

Paid Time Off (PTO)
Of course, the trauma of losing a loved one or a home in one of these catastrophic weather events can be debilitating. So, if an employee is unable to work, needs time to recover mentally, or to clean out a flooded basement, salvage belongings, meet with insurance claims reps, or search for missing family members after a natural disaster, paid leave benefits can help by providing income during that time. Reach out to affected employees and remind them of your organization’s PTO policies and how much time they may be eligible to use to take care of personal matters. 

Flexibility
After a weather disaster, it may be difficult for some employees to get to work due to mass transit shutdowns, closed roads, and disruption of communication methods. Consider offering the flexibility to adjust work schedules and deadlines for activities, such as benefits enrollment, retirement plan contributions, and other time-sensitive tasks. 

FMLA
The Family and Medical Leave Act (FMLA) is designed to help employees balance work and family life by allowing them to take reasonable unpaid leave for certain reasons. So, for example, if an employee suffers a physical or mental injury in a natural disaster that leaves them unable to perform their job, or if an employee is required to care for a spouse, child, or parent with a serious health condition, remind them of their rights under this law. 

Command Center
Setting up an area, either physically or online, for affected employees to get useful information in one place can help ease the burden of managing multiple tasks they may have to handle. Consider things, such as: 

• Contact information for insurance carries to get help filing claims 
• Guidance about completing FEMA documentation 
• Assistance finding trusted contractors to help rebuild 
• Tips for avoiding common scams that occur after disasters hit 
• Information about community or federal relief efforts