Hoteliers Are Trying To Cope With Spikes In Employee-Related Insurance Expenses

NATIONAL REPORT— Employee-related insurance costs, and specifically healthcare benefits and workers’ compensation, have been spiraling upward for some time, and while that trend may have an effect on every industry across the United States, the hotel industry seems to be suffering from it more than most. The good news, however, is that there are ways for hotel firms to head off most of the costs and keep them under control. Las Vegas-based Caesars Entertainment seems to understand the problem with rising insurance costs. Lance Ewing, the company’s vp of risk management, said he knows the hotel industry is somewhat unique when it comes to claims and explained that much of the reason for that revolves around the fact that hotels are 24-hour-a-day businesses with employees exposed to the greater public the entire time. As a result, airborne pathogens are rampant, leading to a higher incidence of illness among employees. To help counter the associated rising health insurance and worker compensation costs, Ewing said Caesars has chosen some unique solutions that have collectively emerged from the company’s holistic preventative philosophy. “We believe we offer our employees equitable benefits and great opportunities to participate in things like wellness programs, weight loss programs and smoking cessation programs,” he explained. “We look at the whole employee. We look at nutrition, for instance, because overweight individuals have more pressure on their backs, so when they’re lifting that bed, injuries could occur.” “There’s a very large percentage of lower skilled employees in the hotel industry and it’s very labor intensive,” according to Brian Ruane, senior vp, director of the real estate and hotel practice group at insurance broker Willis Group Holdings, which counts Caesars among its client base.“You have people unsupervised in rooms lifting box springs or bending down to scrub tubs and often incorrectly, and that causes problems as far as injuries. That makes hotels unique when it comes to insurance claims. Plus, because of the industry’s high turnover rate, insurance companies don’t like to underwrite many hotel firms because the cases are subsequently tough to manage.” Beyond those programs, however, Caesars has established what appears to be an even more revolutionary solution in the form of its own pharmacy located in its Paris Las Vegas hotel. At the pharmacy, Ewing said employees with prescriptions from their doctors can get free medication for themselves or their families that are on the medical plan. With 250 drugs available, he said the pharmacy has been a huge success with employees and the company itself since it cuts down on absenteeism and allows the company to track which medicines its employees are taking. Ewing said the pharmacy opened this past year and, consequently, he doesn’t have any benchmarking statistics that show how well it is doing from a return on investment perspective. However, because employees are so satisfied with the service, Caesars is looking into opening another one at one of its Atlantic City, NJ, properties. With regard to workers compensation, Ewing said higher costs are unavoidable since the state of Nevada continues to increase them because of the high concentration of company workers in one place and the ongoing threat of terrorism. However, Caesars’ keeps them in control by having a physical therapy facility at the Paris hotel, which allows employees to receive their therapy on site and avoids having them take time off to go somewhere else. To counteract rising workers compensation premiums, Brian Ruane said there are many avenues to pursue, including an increased focus by hotels’ management on overall safety and proper instruction regarding manual labor. He also said there are opportunities out there to use what are called retrospective-rated or deductible plans, where more of the risk of loss is transferred to the hotels in return for reduced insurance costs. “This is p