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Workers Compensation Premium Audits

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A Fireside Chat with A Claims Adjuster

Our Claims Advocacy Team got to sit down with a workers’ compensation claims professional who specializes in high exposure claims. They discussed a high exposure claim that wasn’t reported timely to the carrier after the incident occurred.  

 

Please Note: This article has been edited for clarification and to protect the identities of those involved in the interview.

 

We’ve decided to call this interview a “Fireside Chat with a Claims Professional”, please tell me, are you actually in front of a lit fire or a fireplace or at least a match? 

Yeah, I have a nice scented candle lit, some nice ambiance for the room. 

What is your current role in the claims process? 

I oversee about 500 files, not directly managing the day to day activities and tasks to move a claim forward, but looking at it from a strategic standpoint, whether it be return-to-work, a settlement, or the resolution of some litigated matters.  I also assist clients in resolving their existing claims files.

Can you describe what a heavy litigated file/high exposure claim is?

Yeah, high exposure is really like your catastrophic claims. For example, someone who might be a paraplegic, quadriplegic, someone that suffers from a traumatic brain injury, or spinal cord injury. Those are leaning towards your high exposure. 

Heavy litigated are files that are going to essentially set a precedent in future case law and how it can impact lawyers and insurers in the future. 

Is the insured involved in the process at all? Or by the time that the issue reaches your hands is it completely out of the insured hands? 

I feel like most of the time the employers (named insured) are aware that I’m working on their files as a resource. Oftentimes I can be involved in the claims review process to help bridge some of the gaps that may be present, with the knowledge to move that file forward. 

 

However, It depends on the account and the type of policy that’s written because they (the insured) may be hands-off. They may have paid their deductible and then the claim is no longer the named insured’s problem. So they leave the claim up to the carrier going forward. 

 

You mentioned once their deductible is paid they often have a hand-off approach because it is no longer ‘their money’. Does the claim, the amount paid on the claim, and the amount paid from the deductible have an effect on their insurance? 

 

It has an impact on their rating. It affects their E-Mod (Experience Modification factor rating). What this means is when the insured goes out into the market place the following year when they are up for renewal,  that claim may show up. the incurred (paid + reserve) impacts their ability to be written for new insurance and essentially tells them what premium they’ll be paying.

 

From what you just told me, it doesn’t make sense for the insured to take a hands-off approach? Does that sound fair? 

 

I certainly think that they (the insured) should be involved because this directly affects and impacts their future with Mod ratings and what they’re going to pay for in the future. But many people still take the backseat approach. 

 

Though this often depends on the level of comfort they have with their carrier. So while I say it’s a backseat approach. It may seem a little hands-off because they feel confident in their carriers’ ability and what we put forth.  They know that we’re going to mitigate their losses as much as possible to bring it to a resolution. 

 

That’s a great point. I imagine this is true with a long-standing client, a company who’s been insured with you for a long time, they know the team and have the same players handling their claims, and they can kind of step back because they know that your team has their best interest at heart.

 

Seasonal/Winter Claims

 

So you’ve seen it all, as you’ve climbed the ranks in insurance and the claims world. Is there one type of claim you encounter where you just roll your eyes when it comes because it is the most common type of claim? This could be a winter claim, an industry-specific claim. 

 

I call them your classic injuries. The two most common ones that are seasonally driven are your slip and falls. They are the most common denominator in terms of what you see for December, January, February March claim volumes that come in. Slip and Fall will rank really high for what we see. 

 

Aside from that, lifting injuries are common as well. 

 

Are these injuries specific to a particular industry?  Do you only oversee construction, real estate, healthcare or are these claims kind of general and not industry-specific? 

 

I think claims like these are industry-specific. Your transportation carriers/delivery services, you typically see slip and falls from the parking lots or while they’re making a delivery to someones’ home. The same goes for lifting injury, that’s primarily where you see those.

 

 Construction is a fall from heights, that’s typically the most common one.  

 

Then the healthcare we see lifting injuries because your home health aides, they’re typically assisting with a client/patient, having to maybe get them up out of bed. Some of those patients are unable to help themselves get up, and typically these employees have to just lift 150 pounds to 200 pounds by themselves with no assistive device to help them do that. We see a lot of lifting and back injuries & neck injuries from that.

 

It sounds like our essential workforce, especially during COVID times are the ones getting injured the most.

Yes. I can agree with that. 

Most Expensive Claim That You Personally Have Seen 

 

What is the most expensive claim you’ve seen? For clarification when I say the most expensive claim it can be a specific body part that is a high dollar amount.

It depends on how high you’re looking to go. I’ve seen some claims that are multi-million dollars.

 

What was that? A multimillion-dollar claim? What was that Injury? 

 

Without disclosing too much detail, one employee rode in the back of a pickup truck of another employee, as they departed the employer’s location and a severe injury was sustained. It’s a multimillion-dollar claim because this employee needs 24/7 care and will need to live in a facility probably for the rest of their life. 

 

That’s tragic and I don’t think many insureds think about claims on that level. Maybe large corporations, like the transportation organizations we discussed earlier (UPS, FedEx, DHL.) Those companies have a large workforce at a national level, so maybe they’re more familiar with those. But smaller commercial clients, don’t see or even think that this could even happen, and now they’re looking at a multimillion-dollar loss that they didn’t budget for when running their business. 

 

Absolutely, and when we start to look at what happened and gather the facts around the event we start to ask questions like “What is your policy about having employees on site after work?” and if there is any surveillance footage of the location and what was actually happening. 

Having that information and the punch cards to show when they came in and when exactly they left.  in a lot of states, there are a number of “coming and going” rules that would either support the acceptance of or denial of that accident/injury, being considered within the course and scope of employment.

 

This ties into my next question, from your side of things I’m sure it’s frustrating when these claims, and you see that more could have been done from the insured standpoint. How can the client help in the claims process so it doesn’t get to your level? At least so they do everything they possibly can to help your team out, to help the adjuster out before it gets to you and it becomes a multimillion-dollar claim.

 

What we see very often, and in the example, we just talked about this claim wasn’t reported to us until several months after the accident happened.

 

Wow. 

 

It is so important to get it to us, even if they are not sure if it would be covered under Workers’ Comp. Oftentimes they (the insured) might think it’s covered under liability or if it’s a motor vehicle accident they strictly put it in as an auto claim. 

 

My advice would be to file that incident report, that first report of injury as soon as the incident happens. Let the carrier investigate it and be sure to really partner with the carrier to ensure that you’re getting them the information that they’re requesting. Preserving any evidence is crucial as well. 

 

So if you have surveillance footage be sure to take that and send it over right away. Witness statements are critical.  When you speak to someone right after an event happens the event is going to be right fresh in their head.  As opposed to trying to track someone down a few months from now, or even a week from now, their recollection of the event might vary. These witnesses might have also spoken to other employees about things being said around the workplace and you risk getting a skewed version of what actually occurred. 

 

Even include the profile for the employee: what’s going on? Oftentimes you’ll see they’ve run out of vacation time and now they’ve filed this claim. Then, we learn from other employees that this person was just taking a vacation. So all that information about what’s going on in this employee’s life and other things they’re aware of like disability claims that were previously filed for this employee in conjunction with just responding to the investigation as soon as it happens is pivotal.

 

I gather that a lot of times in an instance where this doesn’t happen, the insured is afraid of the repercussions and the carrier is going to penalize them. However, you don’t get penalized for doing the right thing, which is if you know something happened, report it. This way the carrier can work with you and guide you and do the investigation early on instead of 4 months out. 

 

So circling back to the example you gave us. What happened in the time it took for that event to hit your desk? 

 

In this situation, it was a case of “Everything that can go wrong, did go wrong.” The insured originally never put it through to workers’ comp. Why? 1. They were trying to pay for anything out of pocket to avoid having the claim show up on their claim history. Secondly, they heard this employee had passed away. The employer didn’t realize that the employee had survived the accident. 

 

Once we finally did receive the claim, the employees that participated in the internal investigation before it reached the carrier were no longer available for comment. 

 

This sounds interesting.

 

I’m not sure if that answered your question, but I’m not sure if this approach helped anybody because the state where this incident occurred is a state that requires you to get prior authorizations, and the employee already incurred several million dollars worth of care before this claim even reached us. There was no direction and we couldn’t negotiate the rates with the home healthcare. At this point, we’re trying to go backwards to try to project what could occur in the future. 

 

What a mess. 

 

This approach doesn’t work well from the financial standpoint either because it doesn’t help the injured worker and then the carrier is trying to quickly piece together to make a decision before the state’s deadline for when you have to file a decision. There is a lot of scrambling. 

 

This sounds so stressful. The insured may be able to self-pay but those accidents need to be very minor. Even if the insured does self-pay there are still forms that need to be filled out and the insured is required to keep them on hand but it sounds like in this instance it was a major accident, to begin with. 

 

Thank you so much for sharing. This touches on what a lot of clients are asking and are worried about. At the end of the day, they all want the best insurance rates and the best insurance coverage, but the only way to achieve that is cooperation and reporting things timely when an employee is injured. 

 

It sounds like in this instance the insured didn’t try to reach out to the injured employee because they didn’t know if he was still alive.

 

There was no contact made. In fact, it was asked for us to not contact the family until we (the carrier) had the full scope of what was going on because at that point we didn’t want to contact the family and give them unrealistic expectations of what would be covered.  The insured definitely learned a lesson on what not to do next time. 

 

Something as simple as reaching out to the employee who was injured, or reaching out to the family if you can’t get the employee,  and they’re not showing up to work is a big step and a huge help to the claims team and to the employer as well. They should know where their employees are. 

 

I find it very important for the employer to be engaged in this process. Whether they are a short-term or a long-term employee. Following up and showing that area of concern, asking them when they might return to work. It makes that employee feel valued. It could also result in a quicker return to work.

 

A great point you’ve touched on. 

 

The employer/employee relationship  

 

I ran into an issue where I was trying to encourage one of my clients to reach out to an employee that had gone MIA for a little bit. Their response was they didn’t want to because they were afraid that the employee would consider it harassment and the employer’s view was “this employee is out on workers’ comp. We have no right to speak to them.”

 

I think a lot of insureds feel this way:  once the employee is out on workers’ comp they’re not allowed to speak to the employee. But, what you’re telling me is this is not truly the case. 

 

To my knowledge, there is no employment law that prevents the employer from checking in on their employees. Disability does that to check in with their employees to check-in and see how they’re progressing and how they’re healing. The employer may not be able to ask directly “When are you returning to work” but they can ask how they’re progressing. 

 

Depending upon the relationship between the employer and the employee, the employee may be forthcoming with more information. 

 

A lot of times these folks are just home and don’t have many other people to talk with. A lot of them are isolated, working-class individuals. So their family, friends, and everyone else is at work, so they’re longing for social interaction. The employer reaching out shows the employee that they’re concerned about their wellbeing and the employee can be eager to come back.

 

It sounds like this is just the kind thing to do. 

I don’t know of any law that stops someone from doing that so we encourage reaching out to the employee. 

I wasn’t meaning this from any legal standpoint. I just meant a lot of employers are like “Well they’re out on workers’ comp. We’re not talking to them”. They’re still your employees.

Especially when some of these employees have been with the company for 15+ years. How do you let this accident happen and not show empathy or concern for how the employee is doing? I think from the carrier side of this we’re in situations where we can’t have direct contact with the employee because they’re attorney represented. Therefore the employer is our outlet to keep us updated.

 

Oftentimes they (injured workers) go to a doctor’s appointment and they give their employer a call with an update: “I just went to my  Dr.’s appointment and I’m going to be out for another 4 weeks. I need to go to physical therapy and then go back to the Dr.’s.” 

 

As a carrier, it takes us a longer route to get this information because we have to call the provider to get information, and sometimes it takes two weeks plus to get the office notes, depending on how long it takes the physician’s office to have their notes dictated. 

 

It’s often helpful to the carrier if the employer maintains that relationship with the employee. It can help get that person back to work sooner, which benefits the claim. 

 

You’re detailing a really important dynamic which we try to communicate to our clients, and it’s nice to hear the same from you, another claims expert. It’s a group effort and the insured is a key player in how these claims can end up. It starts with keeping in contact. Once the adjuster loses contact with the claimant due to attorney representation it sounds like the employer is the key person to maintain that contact and relay important information to you guys. 

 

I think that this is something a lot of people often overlook because it’s not common knowledge.

 

Exactly what I was saying. 

 

This has given us a lot to think about, to share with our clients. Is there anything else that I didn’t touch on that you were hoping to talk about? Any inside scoops.

 

You know, I gave an example of a catastrophic claim and there are other claims out there. What I think is always a challenge for employers is the accident description itself. Sometimes that’s where they start scratching their head. The employer starts asking themselves “Do I report this? Do I not report this? Should I be taking a hands-on approach? Do I let the claims team just handle it?”

 

The employer may not want to reach out during the investigation period, because the employee may start asking questions that they don’t have the answers to. 

 

Right. 

 

I’ve seen all sorts of things, and the issue is that there are various grey areas in claims that can affect whether or not the claim will be accepted by the carrier. 

 

You mentioned some of the more common areas of claims and can some of those be prevented? 100% Yes, but some will inevitably happen. The other side of this is the quicker we can get these resolved, and the greater involvement we can have earlier on, the more likely we will help the injured employee return to work sooner. The more we can do to prevent these accidents from occurring, the safer the staff is and the better things can be. 

 

Risk Management 101. Preach! Thank you so much for your time. Our fireside, Vanity Fair-esque interview. This was a lot of fun! I may be reaching back out to you for a summer edition of this!  

 

Claims management is an integral part of your insurance purchasing process. If you have any questions or need help with claims management within your organization contact one of our Metropolitan Risk Risk Advisors for information on our available programs. 

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New York State’s Updated Sick Leave Law

New York State’s Paid Sick Leave policies were introduced on April 3, 2020, and went into effect on Sept. 30, 2020.

On January 1, 2021, employees may start using their accrued leave. 

The number of sick leave hours required is based on the number of employees that work within your organization:

0-4 Employees:

If your net income is $1 Million or less, employers must up to 40 hours of unpaid sick leave. If net income is greater than $1 Million, employers must provide up to 40 hours of paid sick leave 

5-99 Employees: 

Employers must provide 40 hours of paid sick leave per calendar year.

100+ Employees:

Employers must provide up to 56 hours of paid sick leave in a calendar year. 

How sick leave is accrued 

Employees begin accruing leave on September 30, 2020. Leave must be accrued at the rate not less than one hour of leave accrued for every thirty hours worked. 

An alternative to the accrual of sick leave by hours, employers may choose to provide the full amount of sick leave at the beginning of each calendar year (ex. An employer with 50 employees may choose to provide 40 hours of sick leave starting Jan.1 of yea year or at the beginning of a 12-month period determined by the employer. NOTE: Upfront sick leave cannot be subject to later revocation or reduction if the employee works fewer hours than anticipated by the employer.). 

Who is eligible

All private-sector employees in New York State are covered, regardless of industry, occupation, part-time status, and overtime-exempt status. Federal, state, local, and government employees are NOT covered, but employees of charter schools, private schools, and not-for-profit corporates are covered.

Permitted Usage of Sick Leave 

After Jan 1, 2021 employees may use accrued leave following a verbal or written request to their employers for the following reasons impacting the employee or a member of their family for whom they are providing care or assistance with care. 

Sick Leave: 

  • For Mental or physical illness, injury or health conditions, regardless of whether it has been diagnosed or requires medical care at the time of request for leave
  • For the diagnosis, care, or treatment of a mental or physical illness, injury or health condition, or need for medical diagnosis or preventative care.

 

Safe Leave:

  • For an absence from work when the employee or employee’s family member has been the victim of domestic violence as defined by the State Human Rights Law, a family offense, sexual offense, stalking, or human trafficking due to any of the following as it relates to the domestic violence, family offense, sexual offense, stalking, or human trafficking: 
    • to obtain services from a domestic violence shelter, rape crisis center, or other services program; 
    • to participate in safety planning, temporarily or permanently relocate, or take other actions to increase the safety of the employee or employee’s family members; 
    • to meet with an attorney or other social services provider to obtain information and advice on, and prepare for or participate in any criminal or civil proceeding; 
    • to file a complaint or domestic incident report with law enforcement; 
    • to meet with a district attorney’s office; 
    • to enroll children in a new school; or 
    • to take any other actions necessary to ensure the health or safety of the employee or the employee’s family member or to protect those who associate or work with the employee. 

Leave Increments 

Employers are permitted to require that leave be used in increments (e.g., 15 minutes, 1 hour, etc.) but may not set the minimum increment at more than 4 hours.

Employers must notify employees of these leave increment policies in writing or by posting a notice in the worksite prior to leave being acured, any restrictions in their leave policy affecting the employees’ use of leave, including any limitations on leave increments 

Rate Of Pay

Employees must be paid their normal rate of pay for any paid leave time under this law, or the applicable minimum wage rate, whichever is greater. No allowances or credits may be claimed for paid leave hours, and employers are prohibited from reducing an employee’s rate of pay for sick leave hours only. 

An employer cannot retaliate against an employee in any way for exercising their rights to use sick leave. Furthermore, employees must be restored to their position of employment as it had been prior to any sick leave taken. Employees who believe they have been retaliated against for exercising their sick leave rights should contact the department of labor’s anti-retaliation unit.

Record Keeping

Employers are required to keep payroll records for 6 years, which must include the amount of sick leave accrued and used by each employee on a weekly basis.

Employers are required to provide within three business days a summary of the amount of sick leave accrued and used by the employee in a current calendar year or any previous calendar year, at the request of the employee.

 

Employees who believe that they have been retaliated against for exercising their sick leave rights should contact the Department of Labor’s Anti-Retaliation Unit at 888-52-LABOR or LSAsk@labor.ny.gov. 

 

If you still have questions, contact a Risk Advisor at 914-357-8444. If they cannot help you they’ll direct you to an employment lawyer that can. 

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How Workers’ Compensation Class Code #8873 “Telecommuter Reassigned Employees” Can Help You Save Money On Your Insurance Premium

The New York Workers’ Compensation Insurance Rating Board (NYCIRB) has released a new class code for ‘Telecommuter Reassigned Employees’.

If you are a business owner you might be wondering how do I adjust my workers’ compensation rates for employees that we kept on the payroll, but did not actually perform their duties? It doesn’t make sense to pay workers comp premiums for an expensive labor class during a workers comp audit when those employees were essentially paid to sit home. 

 

Over the past eight months, we have experienced difficult and trying times due to the pandemic. One critical aspect of the first few months of the pandemic was the ability of employers to keep their employees on the payroll whether or not they were actually performing their duties. The PPP program went a long way in helping employers achieve that important concession. 

 

The question that has come up recently with many employers is how do we properly account for that portion of payroll we paid our workers when they actually didn’t perform their actual duties. In industries like construction or healthcare, the insurance costs basis can generate a lot of insurance premiums because the class codes for those labor components have a high insurance rate tied to it. 

Now there is a relief for workers compensation premiums for these “reclassified” employees.

The New York Workers’ Compensation Insurance Rating Board (NYCIRB) has released a new class code for ‘Telecommuter Reassigned Employees’.

Temporarily Reassigned Employees, which establishes new classification code 8873, Telecommuter Reassigned Employees, requires that it be applied to the payroll of employees who, during New York’s stay-at-home order related to the COVID-19 pandemic (and future stay-at-home orders), are reassigned to either (a) not perform any work duties (idle), or (b) perform clerical work duties at home that they otherwise would not perform. The rate per $100 of payroll for Classification 8873 will mirror the rate for Classification 8810 (clerical office employees).

Further, this provision is applicable at the start of New York’s stay-at-home order and for up to 30 days after its conclusion. Employees who are classified to code 8871, Telecommuter Clerical Employees, are to remain classified as 8871.

In other words, the new 8873 classification only applies to employees who are reassigned and meet one of the two conditions described above. These amendments are effective for all new and renewal policies effective May 1, 2020, as well as to all in-force policies as of March 16, 2020.

We have provided the NYSIF Q&A sheet of commonly asked questions about this new workers’ compensation class code.

We would be happy to review the parameters of the new class codes and the impact it may have on your business. Please contact one of our Risk Advisory to discuss further.

Construction Practice Group Content, Food & Beverage Practice Group Content, Human Services Practice Group Content, Transportation Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

Who Is Exempt From Workers Compensation Coverage?

The New York workers’ compensation insurance law requires the majority of employers to have appropriate workers comp insurance coverage in place. However, there are three key exemptions.

Sole Ownership

If you run your business alone and don’t have any employees, you may not need to have workers’ compensation coverage.  You should note, however, that in order

not to inadvertently break the law, you must not use the services of volunteers, such as family or friends.

Partnership

Partnerships set up under New York laws may also be exempt, but only where they comply with the provisions applicable to businesses in sole ownership outlined above.

Small Corporation

Where one or two people have set themselves up as a corporation, hold all the offices and own all the stock, they might also be exempt, as long as they have no employees of any kind, as per the other two exempt categories above.

Sub-Contractors

It is important to note that should your otherwise exempt business use the services of sub-contractors, you should make sure they have their own insurance coverage. Otherwise, the New York Workers Compensation Board may rule that they are employees. Similarly, when a sole owner, partner, or small corporation owner works as a sub-contractor, he or she is required to hold personal New York workers compensation insurance.

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What A High Experience Mod Means and How It Can Affect You

You’ve just seen your Experience Modification Rating (EMR) and it is high again. Or your worst-case scenario, it has gone up again. Year over year, you’ve spent time shopping for your insurance due to your high EMR. It is time to stop shopping and start proactively working to lowering your EMR because eventually, it will catch up to you.

What Is Your Experience Mod?

Let’s start with a basic definition. What is your Experience Modification Rating or your EMR? A simple definition of EMR is Payroll divided by Claims. The video below explains what your experience mod is and what is expected of your organization. (If the video does not play in your browser click here.)

Remember, an average experience mod is a 1.0, this is like receiving a “C” on your report card. If you’re happy with this, stop reading now. Good luck, you’ll be competing against companies with a greater competitive advantage than you because they’ll have a much lower cost structure, higher profits, and a larger business development budget.  

Some Construction companies bidding on government work are ineligible if their EMR is above 1.0. 

How To Find Your Experience Mod Rate

The NCCI (National Council on Compensation Insurance), is a group that calculates Experience Modification Factors for companies across the entire United States. Some states have their own rating bureaus due to their size and complexity. For example, New York and New Jersey have the NYCIRB & NJCRIB respectively. For a detailed explanation of what your Experience Modification Factor is and how it’s calculated visit this site. 

Why is Your Experience Mod High?

There are a number of reasons why your EMR is high. The biggest factor is the number of open claims. If your organization has a high number of claims or one large claim on your Workers’ Comp policy your EMR may stay high until that claim is closed.

How This Affects Your Organization

What this means is that most companies will see another increase in their Experience Modification Factor following their next recalculation. That takes place on their “Unit Stat Date,” and, if left unchecked, your business could face higher rates, possible penalties, and Labor Department Violations.

What You Can Do To Lower Your Experience Mod:

  1. Track incidents (near misses) not just claims. Most claims can be avoided if you are meticulous about tracking all of the near misses that lead up to the eventual incident. Most claims could have been avoided in hindsight as the employee typically was taking shortcuts long before the ultimate injury occurred. Track these infractions and you will prevent at least one injury a year.

    High Experience Mod

  2. Investigate accidents immediately and thoroughly; take corrective action to eliminate the hazard. If you sense fraud, get aggressive; don’t be an easy target. We suggest Why Analysis follow all incidents. That’s a whole other article that can be accessed HERE.
  3. Report all incidents to your insurance broker or Risk Advisor immediately. Studies show the longer it takes to report a claim, the more expensive it will be. A 4-week delay in reporting an injury drives the cost of that same injury by 48% according to a Hartford Insurance study of over 2 million claims.
  4. Alert your workers’ compensation claims adjuster to any serious, potentially serious or suspect claims. Frequently monitor the status of the claim, and communicate with the adjuster to resolve them as quickly as possible. Too busy to do that,  have our Claims Advocates communicate with the adjuster on your behalf. Our Claims Advocates were insurance adjusters so they speak that language holding the carrier’s adjusters accountable.
  5. Every reported claim to your insurance carrier no matter the line of insurance should have an action plan attached to it to close out the claim. This is a big mistake most businesses make. They report it and then forget it until the policy comes up for renewal. At that point, they are shocked at the increase in the workers’ compensation insurance premium which is always driven by claims experience. Folks forget that workers’ compensation insurance is really a very expensive credit line to the business.
  6. Take an aggressive approach to providing light-duty or transitional to all injured employees upon their release from treatment. Return To Work programs are extremely powerful tools for lowering the cost of a workers’ compensation claim as they give leverage back to the employer, stopping the tail from wagging the dog.  Supervise light duty employees to ensure their conformance with restrictions.
  7. In serious cases that involve lost time, communicate with the claims adjuster to demonstrate your interest in returning the injured employee back to gainful employment.
  8. Set safety performance goals for those with supervisory responsibility. Success in achieving safety goals should be used as one measure during performance appraisals. At Metropolitan Risk this is just one of the K.R.I’s (Key Risk Indicators) we emphasize to establish internal standards and accountability.
  9. Develop a written safety program, and train employees in their responsibilities for safety. OSHA rules dictate for every facility location or job site there must be a competent person. Incorporate a disciplinary policy into the program that holds employees accountable for breaking rules or rewards them for correctly following safety procedures. This should be tied into the employee handbook which each employee receives when they are on-boarded for your org.
  10. Frequently communicate with employees, both formally and informally, regarding the importance of safety keeping safety top of mind at all times.
  11. Make safety a priority – senior management must be visible in the safety effort and must support the initiative.
  12. Evaluate accident history and near-misses at least monthly. Look for trends in experience, and take corrective action on the worst problems first.
  13. Ensure your payroll and class codes are accurate. Over 65 % of workers’ compensation audits have errors. See COMP CHECK .
  14. Ensure the correctness of your mod calculation. Far too often there are errors here as well. See COMP CHECK

You can build all this out organically by yourself OR speak to a Risk Advisor about our COMP CARE PLATFORM. We have this all built. It’s turn-key and ready to be deployed in your organization if you are serious about reducing your workers’ compensation costs. There are no short cuts…

How Metropolitan Risk Can Help

Still looking for more info? Still have question? We have a team of Risk Management specialists who are here to help! Contact a Risk Advisor today for more information on how you can work towards lower workers comp costs by closing claims instead of shopping for insurance.  Click here to book a 5-minute call with a Risk Advisor

Claims Management, Construction Practice Group Content, General Liability Insurance, Risk Management, Vendor Sub Contractor Qualification, Workers Compensation Insurance, Workers Compensation Premium Audits

How to Acquire the Best Contractors Using an Approval Plan

When deciding on acquiring a contractor for a job, it is almost never a smooth, easy process. A contractor or specialized worker is sometimes necessary last minute. For that reason, it’s helpful to develop a plan for screening contractors and determining which one is best.

There are a few key steps to take in order to achieve the best results when acquiring a contractor.

The first, most important step, is to develop an approval process that either accepts or denies potential contractors. Only allow exceptions in very limited situations while documenting all thought processes on why the contractor should be used. Be sure to do this when it comes to making exceptions for contractors that aren’t initially accepted. Finally, it is important to gather data on what went right and wrong to further refine the approval process.

When struggling to find a contractor to fill a certain position, it is important to evaluate all choices and to have a system that selects the best available contractor.

An owner wouldn’t want an employee not doing their best work, so it doesn’t make sense to hire a contractor that isn’t best suited for the situation. Using a proper system will ease the task of finding a contractor, increase performance on the job, and boost the reputation of a company. Being diligent in the approval process is key. 

 

Better contractor fits save a company time and money, whereas poor fits hurt the profit of a company. Poor fits can also potentially damage a company’s reputation. Successfully operating an approval plan also is a self-fulfilling prophecy. As more and more contractors are sorted, data is collected which further refines the plan, making it more effective. It’s a challenging process to come up with a solid approval plan but will be worthwhile in the long run.

 

For more information contact one of our Risk Advisors or call 914-357-8444

Commercial Auto, Commercial Property, Construction Practice Group Content, Directors & Officers, Food & Beverage Practice Group Content, General Liability Insurance, Human Services Practice Group Content, Line of Insurance, Transportation Practice Group Content, Vlogs, Workers Compensation Insurance, Workers Compensation Premium Audits

Commercial Insurance 101: An Introduction to Insurance

Commercial Insurance is one of those things that every company has but not every company understands. In some cases, a person is chosen to be put in charge of the insurance buying process and this person is usually an HR person who has a very little understanding of what goes into the insurance buying process.

 

To recap the video, commercial insurance is essentially when a person, business, or group of people transfer a risk that could cost money in damages to an insurance carrier. To transfer the risk, the business will pay a flat fee – a premium – that changes in cost every year based on the previous year’s claims. There are also difference types of insurance as well, including workers compensation for worker injuries on the job. There is also auto liability, general liability, property damages, and others.

 

The one part of insurance many do not understand is: Why do carriers agree to this? The damages may be 10x the insurance premium. It turns out that out of the hundreds of millions of premium policies carriers write every year, they will lose money on only a very small fraction of them. When insureds (those buying insurance) pool their risk into a small group of carriers, many of them pay for a premium. However, much of the time it turns out that their were no damages or claims to need compensation. That does not mean they should not pay for insurance the next year. Insurance is for the protection against the unpredictable. A driver with a perfectly clean record can skid on ice one day. Those damages can cost tens of thousands of dollars.

Learn about the different types of commercial insurance and the role it plays inside of your business. This is just a starting point to learn some of the basics of commercial insurance.

 

Still have questions? Call one of our risk advisors today at 914-357-8444. Or, visit our website here.

 

Other, Workers Compensation Insurance, Workers Compensation Premium Audits

Questions On The Guarantee Insurance Company Liquidation?

 Do you have questions on the Guarantee Insurance Company Liquidation?

On November 27, 2017, Guarantee Insurance Company ordered into liquidation by the Second Judicial Circuit Court in Leon County, Florida. The Florida Department of Financial Services is the court-appointed Receiver of the company. The Florida Receiver began working to transition claim files and claim data to the New York Workers Compensation Security Fund. As of January 03, 2018, the Ancillary Receivership Order has not yet been approved. This has caused a delay in the transition as well as processing of open and new claims.

Employers insured through GIC began receiving notifications from the New York Liquidation Bureau (NYLB) on specific claims.

They advised the delayed transition and employers would be responsible for providing WC benefits. However, payments made by the employer may get reimbursed if the claim is subject to the WCB rates and covered.

This focuses on those unequipped on deciding which claims to pay, how much to pay, and what documentation is enough to seek reimbursement. To assist folks struggling, contact New York Liquidation Bureau for instructions on employer responsibilities pending the transition.

By January 25, 2017, we learned that the Ancillary Receivership Order expects to become approved by a judge at a hearing. The recommendation is that employers handle existing and also new claims as follows:

  • New claims should be reported through the normal channels to get the claim on record.   If the employee is losing time from work the employer should seek medical documentation on the disability.  If the disability exceeds 7 days, we recommend employers pay at the smallest rate of $150.00. You should do this until the transition takes place or until the Workers Compensation Board establishes the appropriate rate.  Paying the least ensures payments made are timely to the injured worker but limits the risk of overpayment.
  • The injured worker already receiving compensation benefits will continue to get paid for a period of time on existing claims where benefits were being disbursed. It wasn’t specified who is making those payments, but it seems the employer doesn’t need to start disability payments on these claims.
  • It is possible some of these claims need investigations completed and a controversion filed (formal denial). To protect employers from potential fines/adverse consequences, it may be necessary to hire an independent adjuster to conduct a compensability investigation.  If the investigation warrants a controversion, clients may need to hire an attorney to assist with filing the forms with the Workers Compensation Board. Contact your claims advocate for help. We can suggest an independent adjusting firm and law firm. We will ensure only necessary work is getting done however, still assisting with the assignment. Reimbursement for expenses is not clear once the transition takes place.
  • Our contact @ (NYLB) indicated employers are not expected to pay medical bills. Moreover, if the order becomes signed by late January as expected, medical bills will be processed by an assigned claims administrator.

Still want more info? Feel free to contact us if you have further questions or concerns by CLICKING HERE.

Workers Compensation Insurance, Workers Compensation Premium Audits

Should You Excercise The Executive Officer Exclusion On Workers Comp Insurance

With insurance mistakes can be hidden for years until a claim arises. Then the error becomes obvious and expensive. One error we see often is when single owner or dual owned businesses voluntarily elect to trigger the executive officer exclusion on their workers comp insurance.

Most states require employers to purchase a workers compensation insurance policy to cover workers who are injured or made ill due to a workplace exposure. If you are an owner and executive officer of a company AND have only one or two executive officers you may exclude yourselves from coverage. Note however there are potential drawbacks to opting out that need to be seriously considered before you make your decision. Further each state has it’s own rules for when and how an executive officer may exclude themselves from coverage. What rules apply to you are contingent on where your company is domiciled and if you are a multi state risk which would be governed by NCCI. 

Executive officers of a corporation are usually included for coverage under each state’s workers’ compensation laws unless they file for an exclusion from the policy. Partners and sole proprietors are generally exempt from coverage but may elect coverage under the workers compensation policy. For the NY State Statutes CLICK HERE.

Benefits of Workers’ Compensation Insurance for Executive Officers 

The benefits are the same for everyone covered under a commercial workers’ compensation policy, including officers. Workers compensation coverage pays benefits to workers injured on the job. These benefits include medical care, a portion of lost wages and permanent disability. It also provides death benefits to dependents of employees killed from a work-related accident.

A typical health insurance policy specifically excludes work-related injuries unless there is a rider attached to the policy that adds business coverage. Furthermore, health insurance does not cover disability the same way that workers’ compensation insurance does. Most times when we are invited into the business to assess how designed a companies insurance program is built we rarely ever see coordination between the corporate health insurance program and the workers compensation insurance program.  

Why would an Executive Officer Exclusion opt out of workers’ compensation insurance?

Many executive officers and business owners make the following assumptions when opting out of workers’ compensation insurance:

  • They assume that their medical insurance is enough to cover them in the event of an injury incurred at the workplace.
  • They assume that they would never want to file a workers’ compensation claim against their own company, so they don’t see the need to pay premiums for a policy that they won’t use.
  • They think they are saving alot of money off the workers compensation premium by excluding themselves.

Drawbacks for Executives Officers of Opting Out:

Even if an executive officer spends the majority of his or her time at a desk, there is still a risk of injury. And if an injury occurs, it’s likely that the officer’s health insurance policy will have an exclusion for work-related injuries. Without workers’ compensation insurance, the cost of treatment for those injuries would have to be paid for by the company, or come out of the pocket of the executive officer.   

Opting out of workers’ compensation insurance may save  money off the workers compensation premium, but it also transfers risk to the employer and to the corporate officer who chooses to opt out. The risk for injury is greater than you think. Many executive officers travel for work and travel to and from meetings. As an exmple if you are traveling in between meetings and injured in a car accident by a person who has little insurance who will pay your medical benefits and lost wages for recovery? The risk is much greater than most people realize which is why we rarely advise our clients to exclude themselves from workers compensation coverage. 

Lastly there is usually an exclusion in the group health insurance for injuries caused at work which should be covered under workers compensation coverage. Rarely is this exclusion ever cooridnated between your health insurance broker and your workers compensation broker. Ultimately this cost will be absorbed by the executive officer sadly.

Additional Premium Charges

If an executive officer rejects coverage, he or she will most likely have to file a form with the state and/or the insurance provider prior to obtaining coverage for the rest of the company. In absence of this notification, the insurance provider will assume that the officer is electing coverage, and will charge him or her a premium. The premiums for executive officer coverage is usually less than a thousand dollars and has a maximum cap for highly compensated executive officers which differs by state. 

Option to Self-insure

With self-insurance, a company can avoid paying workers’ compensation premiums by serving as its own carrier. The catch is that the company has to agree to post a bond or put money aside to pay for any claims that may occur. Each state has its own self-insurance requirements.

Consult Metropolitan Risk Advisory today by CLICKING HERE  if you have questions with regard to covering an executive officer or any other workers compensation related question.