Thermal emergencies, wildfires and extreme weather events are increasing in frequency as global temperatures rise. To mitigate the risk of climate change, companies are already “strengthening” their physical facilities, reevaluating their insurance and seeking to reduce their carbon footprints. Companies must also carefully consider climate change when designing their human resources policies and benefits. Here are several reasons why this is important.
Worsening health and rising healthcare costs
We do not know the full impact of global warming on medical cost trends, although we do know that a warmer planet will have significant adverse impacts on human health. Rising temperatures will likely lead to more direct heat injuries and worsening air pollution, which will increase respiratory and cardiovascular diseases. One analysis suggests that half of Phoenix residents would need medical attention for heat injuries if a future heat wave coincided with a multi-day power outage.
The World Health Organization estimates that 99% of the world’s population already breathes air that exceeds health guidelines. A warmer planet also means an expanded area will be at greater risk from infectious diseases previously limited to tropical climates. Employer-sponsored health insurance should be prepared for unexpected medical costs due to climate change.
Increased mental health needs
Global warming may increase mental health needs, which were already high as anxiety, depression and opioid use disorder increased dramatically during the COVID-19 pandemic. Climate anxiety is especially prevalent among young adults. Access to mental health has increased during the pandemic as health care has become widely available, although the reimposition of state regulations as the pandemic emergency ends may decrease access.
Employers can increase employee assistance programs to increase access to mental health services without cost sharing. They can assess the adequacy of their health plan’s mental health network to meet members’ evolving needs. They can also implement technology and virtual solutions to increase access to mental health.
Disruptions in the provision of medical services due to climate-related weather events
The health care delivery system may also be ill-equipped to deal with climate change. Half of all inpatient beds in California are located within a mile of a high fire risk zone, and hospitals in California were evacuated during wildfires in 2017 and 2020.
NYU Langone Hospital evacuated patients using ladders when generators failed due to flooding in Superstorm Sandy (2012), and the hospital was closed for more than two months, with repairs costing more than $1 billion. This storm also led to the evacuation of three other hospitals in New York City.
Employers may find that members with plan designs that limit access to select providers require care from non-preferred providers during weather-related emergencies. Climate change could lead to more employees moving where they live, increasing the importance of access to virtual care.
See too: When a disaster strikes, what is HR’s role in avoiding “chaos and confusion”?
Financial insecurity due to climate change
Climate change will also increase financial stress for many workers, especially those with lower education levels and wages. Heating costs in colder climates will decrease, but cooling prices will increase substantially. Some employees will have to relocate temporarily or permanently due to flooding or extreme weather events.
Many people in colder climates will have to spend capital on air conditioning systems that were previously not needed. Those with chronic or serious illnesses will face higher additional costs due to increased medical expenses.
Employers can establish hardship funds, which must be ready to make immediate payments during weather emergencies. They can evaluate your plan’s benefit design to assess what portion of the population is likely to face financial hardship due to medical costs and offer low-wage workers health insurance plans with lower out-of-pocket costs. Lifestyle spending accounts give employees the flexibility to spend employer deposits on unforeseen needs.
Greater urgency to address disparities
Those who live in poorer communities and communities of color already have poorer health and are at the greatest risk of adverse outcomes due to climate change. Those who are poorer and non-white are more likely to live in low-lying areas susceptible to flooding and in neighborhoods with fewer trees and subject to higher temperatures.
Vulnerable employees may benefit from hardship funds and time off work. Companies that invest in employee housing can be assured that this housing is resilient to climate change. As temperatures rise, asthma attacks and mental health needs will increase disproportionately in vulnerable communities, increasing the importance of providing excellent access to diverse providers who can better meet the needs of at-risk communities.
Employees need assistance to reduce their carbon footprint and prepare for future climate events
Many employees are considering purchases that would increase their families’ climate resilience while decreasing greenhouse gas production. Companies can offer charging stations for electric vehicles at work and can encourage the use of public transport or bicycles whenever possible. They can provide financing and group purchasing for heat pumps and discounts or grants to help employees increase their family’s climate resilience. Companies can offer these subsidies on a tiered basis to provide help to those most in need while avoiding widening disparities.
Workplace adaptations to address climate change
In addition to improvements in benefits design, companies can help protect their employees from some of the adverse impacts of climate change in the workplace and while commuting. Better indoor air quality can lead to a decrease in respiratory diseases while increasing productivity. Employees can avoid exposure to heat or adverse weather conditions during long commutes if they can work remotely.
Flexible schedules can allow employees to travel and work at times when temperature or air quality pose less risk. Workplace safety measures such as protective equipment, cooling stations and health screenings can reduce injury rates.
Climate change is upon us and is likely to have a huge impact on our health and our economy. Companies can protect their productivity and be more attractive to talent by proactively adapting benefits and policies to increase employee resilience to climate change.
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