When Johnny Comes Marching Home Again

Reintegration of veterans has implications for employers, WC& EPLI insurers

Large numbers of National Guard members and reservists who haveserved in Afghanistan and Iraq are reentering the labor force andwill continue to do so for the next several years. Over time theywill be joined by hundreds of thousands of active duty personnelseeking civilian employment after their separation from militaryservice. This presents enormous challenges not only for the men andwomen who have fought bravely for their country, but for theiremployers and insurers as well.

The brutal nature of war exacts a steep physical andpsychological toll on those called upon to wage it. Most haveendured significant physical, emotional and psychologicalhardships.

More than 2,000 have died and well over 15,000 have been injuredin Iraq alone. Each death is tragic and the mounting cost in livesis a divisive issue that is the subject of intense politicaldebates that are well beyond the scope of this article.

Relevant from an insurance perspective, however--and a workers'compensation perspective, in particular--are the much lessdiscussed challenges that tens of thousands of physically injuredservice men and women and their employers will face when theyrejoin the civilian workforce. Thousands of others will carry thepsychological wounds of their experience with them for many yearsafter their tour of duty ends.

While the vast majority of military personnel will enjoy arelatively seamless reentry to civilian life andemployment--following a pattern established by veterans of pastconflicts--reintegration of the physically and psychologicallyinjured will likely present unexpected challenges to a generationof employers with no experience in dealing with such large numbersof returning veterans, as well as their insurers.

The Injured Veteran

The line graph flagged "Physical Damage" shows that largenumbers of military personnel are physically wounded each month inIraq. Since the beginning of Operation Iraqi Freedom in March 2003through Oct. 31, 2005, a total of 15,415 military personnel hadbeen physically wounded in action--an average of 482 per month.

In the opening months of the war through March 2003, there were236 wounded per month, on average. However, as the insurgencywithin Iraq gained strength, the number of wounded increasedsharply--averaging 650 per month since April 2004.

The average soldier in Iraq has about a one-in-300 chance ofbeing wounded in combat in any given month at current troopstrength levels, which equates to roughly 3-to-4 percent on anannual basis. This suggests that 60,000-to-80,000 troops mightultimately be injured in hostile action in Iraq unless there is asignificant drawdown of U.S. troops in the years ahead.

While the Pentagon does not release statistics on the nature ofwounds sustained, the leading causes of death among troops in Iraqare hostile fire and improvised explosive devices, whichcollectively account for 70 percent of all deaths--and, no doubt, avery substantial proportion of the non-fatal injuries. The natureof the injuries runs the gamut from minor cuts, scrapes and bruisesto shattered bones, severe burns, loss of limbs and blindness.

The actual number of military personnel injured in Iraq isactually much higher than official Pentagon figures suggest. Thatis because the military releases figures only for those wounded in"hostile incidents."

There are no doubt many thousands of injuries sustained bytroops in non-hostile incidents, such as motor vehicle accidents orsoft-tissue injuries sustained while performing demanding physicaltasks under harsh conditions. Indeed, 22 percent of military deathsin Iraq through October 2005 were the result of injuries sustainedin non-hostile situations.

Additionally, thousands of civilian contractors working in Iraqhave also been injured and are eligible for compensation under theprovisions of the Defense Base Act.

Reintegrating Returning Veterans

The issue of reintegrating veterans back into the social andeconomic fabric of America is not new. After World War II, the "GIBill" provided educational benefits to returning service men andwomen. Other government programs provided assistance withemployment, home mortgages and health care. These programs wereimmensely successful, contributing to a sustained period ofextraordinary economic growth and innovation driven by what hasbecome known as this country's "Greatest Generation."

However, hundreds of thousands of physically injured veteransfaced special challenges and even discrimination in the workplacebecause of their disabilities.

Although they had put their lives on the line for their country,shed blood and even sacrificed parts of their body on thebattlefield, employers--fixated on profits and productivity in thepost-war economic boom, and unfettered by modern dayanti-discrimination laws such as the Americans with DisabilitiesAct--were understandably concerned that injuries sustained duringthe war would recur or be aggravated, impairing the worker'sability to perform, or even work at all.

Not only would productivity suffer, but workers' comp costswould be driven up due to injuries originally sustained duringmilitary service.

To accommodate these concerns, many states established"second-injury funds," which allowed employers (and their insurers)to cede costs of injuries that were principally the result of aworker's prior injury to a statewide plan that would redistributethose losses across all employers (and insurers) in the state.Effectively, SIFs functioned as reinsurers of second-injuryclaims.

The number of second-injury funds has declined in recent years,with states reasoning that they are no longer needed since theenactment of the ADA in 1990, which not onlyprohibits discrimination against disabled employees but alsorequires employers to make reasonable accommodations for them inthe workplace.

What Do Employers, Insurers Need To Know?

Employers and their insurers need to be prepared for the tens ofthousands of physically-injured veterans returning from conflictsin Iraq and Afghanistan.

Workplace injuries that are primarily the result of injuriesoriginally sustained during military service will generally becovered by the employer's workers' comp program--or, in somestates, by a second-injury fund.

In some states, workers' comp benefits may be apportioned orpartially offset by other disability payments received. Veteransare also entitled to lifetime medical benefits from the VeteransAdministration for service-related injuries.

In addition, employers will need to adhere to the law pursuantto ADA, which prohibits discrimination and ensures equalopportunity for those with disabilities in employment, state andlocal government services, public accommodations, commercialfacilities, and transportation.

In other words, discrimination based on physical handicap is notpermitted in the hiring or promotion process, and reasonableaccommodations must be made to meet the needs of disabledworkers.

Failure to comply with the terms of the ADA could result inlegal action and fines by the Equal Opportunity EmploymentCommission. Indeed, since 1992, the EEOC has awarded $529 millionto people found to have been discriminated against in violation ofthe ADA.

Employers could also be subject to tort actions under theiremployment practices liability coverage or directors' and officers'policies.

Mental Health Issues

Workers' comp systems and second-injury funds were establishedto help workers suffering physical injuries. In recent years, manystates have broadened the definition of compensable occupationalillness and disease to encompass stress and mental healthdisorders.

According to a 2004 study in the New England Journal ofMedicine, nearly 30 percent of Army and Marine personnel returningfrom Iraq suffered from at least one type of mental health problem(see accompanying bar graph, flagged "Emotional Damage")--includingdepression, anxiety and/or post-traumatic stress disorder(PTSD).

According to another study by the U.S. Department of VeteransAffairs, the incidence rate of mental health problems of any sortdoubled during the course of 2004, whereas the incidence rate ofPTSD nearly tripled.

The NEJM study also documented high post-deployment rates ofalcohol abuse. A wide variety of potential stressors are cited,ranging from being attacked or ambushed, to being unable to helpinjured civilian women and children, to having a buddy shot, not tomention the killing of another human being.

Troops exhibiting symptoms of mental health problems are usuallyloathe to admit it and are unlikely to seek professionalhelp--meaning such problems could continue to manifest themselvesafter separation from military service. Consider the findings fromthe NEJM study for military personnel serving in Iraq who hadalready met screening criteria for major depression, anxiety orPTSD:

o Only 78 percent acknowledged a problem.

o Just 43 percent indicated an interest in receiving help.

o Only 40 percent had received help from any professional withinthe past year.

o Just 27 percent had received help from a mental healthprofessional with the past year.

Military personnel cited a variety of reasons for not seekinghelp. (See the accompanying "By The Numbers" graphic.)

The vast majority of returning veterans will readjust tocivilian life and rejoin the workforce with no difficulty. However,employers must also be alert to signs of possible mental healthissues.

Monitoring is probably wise for a period of time, especially ifthe returning worker's job is stressful, or involves the operationof heavy machinery or equipment and/or driving. Few employers orinsurance claims staff members, however, are trained to recognizethe telltale signs of mental illness.

Employers and their insurers should be aware that veterans whowere wounded or suffer from a service-related mental illness arealso entitled to lifetime benefits from the VeteransAdministration. The VA also operates a Readjustment and CounselingService (www.va.gov/rcs) to ease the transitionof veterans returning to civilian life.

Welcome Home

Support of American troops serving in Iraq and Afghanistan doesnot end with their separation from military service. In manyrespects, our support as a nation begins anew, with equal access tojobs, education and health care.

Because economic opportunity is so critical to the successfulreintegration of veterans, the role of employers is crucial.Consequently, a variety of programs and legislation exist thatimpact the employer's relationship with returningveterans--especially those who have been physically orpsychologically injured in service to their country.

By simply treating our returning service personnel with therespect they deserve, veterans' needs will be met while employersbenefit from experienced, highly productive workers who have provenand distinguished themselves through their service to theircountry.

Robert P. Hartwig, Ph.D., CPCU, is senior vice president andchief economist at the Insurance Information Institute in NewYork.

Caption for pix:

While the vast majority of citizen-soldiers will have arelatively seamless reentry to civilian life, reintegration ofthose physically and emotionally harmed will challenge a generationof employers and insurers.

Line Graph:

Flag: Physical Damage

Caption:

A total of 15,415 military personnel have been wounded so far inOperation Iraqi Freedom, but the actual number injured is actuallymuch higher because the military releases figures only for thosewounded in "hostile incidents."

Bar Graph:

Flag: Emotional Damage

Caption:

Nearly 30 percent of returning army and marine personnel exhibitat least one symptom of mental illness. Few employers or insurerclaims staff members are trained to recognize the telltale signs ofsuch problems.

Flag: By The Numbers

Head: Why Not Seek Help?

Troops showing signs of mental health problems often won't admitthey are in any trouble, and many times won't seek help. Among thereasons why:

o 65 percent believe they would be perceived as weak.

o 55 percent think they will have difficulty getting time offfor treatment.

o 41 percent are embarrassed about their problems adjusting.

o 38 percent indicated that they did not trust mental healthprofessionals.

o 25 percent believe mental health care doesn't work.

"Thousands of civilian contractors working in Iraq have alsobeen injured and are eligible for compensation under the provisionsof the Defense Base Act."

Robert P. Hartwig