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Smart Home Healthcare Agencies Know This Secret To Building Their Staff

I wouldn’t limit this little nugget to just Home Healthcare Agencies, as most smart run organizations know that efficiently utilizing your resources, deploying effectively, is really what creates competitive separation between you and your competitors.

In a recent Wall Street Journal Article “High Turnover of Home Care Givers Makes Life Precarious” it was revealed that the number one challenge home health agencies face is staffing. The challenge is staff recruiting and staff retention. If your in the home health care space you live this . What you might be missing though is how your largest competitors are winning the staffing war, which translates to more business for them. Can’t you just hear their pitch about how deep their bench , which is major consideration in choosing a home health care agency. Make no mistake about it , attracting and recruiting home health aides is THE competitive war right now.

These best run Agencies are using lucrative signing bonuses with vesting provisions to attract and keep home health aides employed by their home healthcare agencies. They are also increasing pay, and adding benefits to their most valuable, best performing workers. If you have your ear to the ground you may know this too. The question you may be asking yourself is where are they finding the money to do this with so much pressure on margins, especially if your income is capped by medicaide & medi-care.

For most it’s simply not in the budget. The numbers just don’t work, unless you know where to look; INSURANCE. Many of these home health care agencies asked a very simple question; if I can reduce my spend on my current insurance program by 15% to 20% that is a potential large pool of funds that I can then re-allocate into employee comps to attract and retain the best talent, WITHOUT a substantial impact on our budget.
Makes sense, however if it were that easy everyone would be doing that right? This is the differentiator. The home health care agencies that have been successful did not just contact 3 insurance brokers, flipping their loss runs, quoting their insurance programs in hopes of reducing their insurance spend by 15%. Been there, done that. Too much effort for not enough yield.

                          Wilda Diaz , CEO of Above & Beyond Home Care, based in Clifton N.J. revealed to us her experience.

                       “We had an idea how much all our open work comp claims were costing us , however we didn’t have the resources , bandwidth or insurance claims knowledge to capture the dollars we suspected  were out there. By partnering with the                              right firm we saw an immediate impact. The savings we were able to harness from focusing on this expensive waste of resources we put towards our recruiting efforts, improving our financial results without increasing our budget”.

 

Home Healthcare Aide

Instead they reimagined the whole insurance purchase experience. Which would you rather have as the CFO of a Healthcare Agency, 15% savings on your insurance program or 3 to 5 point increase in your profit margin? The question is rhetorical as 3 to 5 points on your profit margin is a far bigger number. We suggest instead of letting the insurance carriers choose who your broker is; (lowest rates win the deal), you look deeper. Incidentally the broker with the lowest rates when you bid your program last just happen to have the “right” carrier in the “right” year.

What these forwarding thinking home health care agencies did was interview (2) competing brokers, the incumbent and one other they thought might be a good fit based on experience within their industry asking them to review their program and give them ideas on how they might approach the account. Naturally premiums due matter, however when these home health care agencies realized how much money they were leaking due to claims THAT became the biggest driver in their decision. The broker that could identify organization pain points, designed a plan to mitigate those pain points to help them reduce current claims reserves, close existing open claims AND future work comp & liability claims proved far more valuable to these home health care agencies.

What most home health care agencies don’t understand is how the industry (carriers & brokers) have a different set of goals than do the home healthcare agencies. When you put claims in what happens to your premiums; they go up! When premiums go up who makes more money; Brokers & Carriers! Who makes less money; home healthcare agencies. This is why their business model doesn’t lean into creating claims efficiencies for home healthcare agencies. Ask yourself , outside of a quarterly claims call rehashing past failures, how are they impacting our future costs? What’s the plan ?

In summary, if you have open work comp or liability claims within your current program, or you have an insurance program without ANY deductibles , often called first dollar plans, you are paying far more for your insurance program than the Home Healthcare Agencies that are using COMP CARE as a risk management platform to increasing their profit margins.

These Agencies understood there was money in them there hills. Reporting a liability claim or work comp claim for their home healthcare agencies was just the beginning of the process, not the end. It took them a year to realize the savings compressing the values on current open claims , which reduced their future insurance premium. They took these  funds, put it into a pool, and began to focus on increasing the wages for their BEST workers, paying signing bonuses to recruit new workers which allowed them to take on more clients.

It’s very difficult to increase one expense component significantly and not decrease another within a similar range unless you are willing to sacrifice margin, which most home health care companies cannot .

Keith McNamara is a  Home Healthcare Practice Leader for Metropolitan Risk. He can be reached at (914) 357-8444.

 

Commercial Property, General Liability Insurance, Marketplace News, New York, Real Estate Practice Group, Risk Management

Why Property & Liability Insurance Cost So Much for Apartment Buildings , Co-Ops , Condos

Are you wondering why the renewal for your apartment building insurance for your rental building, Co-op or Condo has gone up by north of 20% ? This little primer might help explain why. The Chinese have a proverb, “may you live in interesting times”. If you’re an owner of commercial or residential real estate, especially in New York or New Jersey this proverb is an understatement. Faced with the double jeopardy challenge of escalating costs up & down your P&L in tandem with local laws capping your ability to raise rents if your units are subject to rent guidelines , finding new strategies to maintain your margins and investment yield is an imperative heading into 1st quarter to 2023. This is meant to be a primer for buyers or commercial insurance in the Metropolitan New York region. We have taken care to organize our executive summary into lines of insurance which makes the most sense.

Commercial Property Insurance :

For rental real estate , co-op’s or condominium buildings located in the metro NY region It’s all about C.O.P.E. ( Construction , Occupancy, Protection Class, Environment). When an underwriter looks at an account these are the buckets they use to organize how they will price your account. Buildings that have invested in their properties in terms of not just aesthetics ,(tenant) upgrades, but building safety & infrastructure enjoy the most competitive pricing & coverage terms. These are the items that carriers look for in the properties they underwrite.

  • Sprinkler Systems ( Common Areas Good; Fully Sprinklered Best)   
  • Standpipe Systems
  • 2nd Means of Egress .
  • Twin Parks Fire

    Self Closing Fire Doors.

    • Auditing of Fire Doors
  • Emergency Lighting / Exit Signs
  • Hard Wired Smoke Detectors
  • System to document repairs, maintenance, upgrades.
  • Upgraded Electrical systems
  • Water Sensors & Monitors
  • Boiler Sensors & Monitors
  • Upgrade Schedule communicating the installation of some of the features noted above.

At Metropolitan Risk we encourage building owners to use our infra-red scanning technology to scan your building for electrical hot spots. This is a smart pro-active initiative that can save the property owner much blood & treasure by preventing an electrical fire loss up front by identifying areas of your building where the electrical system may be failing before a fire results.

The insurance carriers we see that give the owners the most credit for these features are Travelers, GNY, FM Global, CNA, AmRisk. If your building lacks many of these features they still may quote the account contingent on how well the portfolio has performed in relation to it’s COPE.

As you read this and say to yourself, jeez we have most of this stuff, yet our insurance is still increasing;  or we are getting cancelled which is puzzling.

Remember when you purchase insurance through an insurance carrier, you are pooling your risk. This means you are getting lumped in with all the other buildings they are insuring. Each year the carriers, through their actuaries set the insurance companies rates based upon the losses the portfolio is incurring AND the cost of re-insurance. For some carriers it’s a double hit as their losses and re-insurance costs increase.

In the last 5 years , property losses are out passing the previous 10. Climate induced impacts are having significant cost impacts on re-insurance costs which get passed down to you the end user buyer. Remember the pooling of risk applies to the insurance carriers, not just the buyer. It’s all part of the cost food chain to transfer risk.

Many insured’s solely think about their buildings and their account performance, however the macros on the economy, portfolio loss performance , and the cost of their re-insurance contracts really dictate the cost of their property insurance. When you purchase insurance you are deeply impacted in a positive and negative way ; the “pooling of the risk”.

COMMERCIAL LIABILITY INSURANCE :

For your rental apartment building , Co-Op Building or Condominium building ,unlike Property Insurance,  which is increasing nationwide due to the cost of re-insurance driven mostly by the macros detailed above; liability insurance has much larger disparities market to market, state to state, locality to locality. New York State & New York City is case in point.

On January 9th, 2022 the Twin Parks Fire sent shock waves through out the New York City Habitational Insurance market; specifically as it relates to liability. In that fire 17 people dies due to smoke inhalation. The 19 story building was rated masonry non-combust which meant it was built primarily with steel and concrete. It had multiple means of egress (ways in & out) , with fire doors protecting the egress. The challenge for the owners and the insurers was the alleged malfunction of the fire door hinges which are self-closing. Due to their alleged malfunction smoke infiltrated the building killing 17 people from smoke inhalation.

What does that have to do with me? Great question; everything. When ever the carriers see a large loss like that come into view they look inward. How many buildings are we insuring that fit that risk profile. The answer was a lot. The determination was made that because the building was NOT fully sprinklered, which would have suppressed the smoke, this type of loss could be inevitable. Thus, the takeaway away for you is that if your building is NOT 100% sprinklered, your rates are going up, by a lot, and many carriers are refusing to insure you as they don’t want a repeat of the TWIN PARKS FIRE.

Sadly, that is only one component of the increase. Due to NY’s Labor Law or the Scaffold Law which imposes strict liability on property owners for workers who fall from a height, payouts on liability claims are significantly higher in New York than almost any other state in the country.

Gallo, Vitucci& Klar who specializes in Labor Law defense. “One of the labor law hotbeds in New York is Lackawanna County in upstate NY, think Buffalo. The Labor Law affects the entire state, not just NYC. That said NYC has a concentration of taller buildings which is why there is more activity there.”

At Metropolitan Risk we wrote an E-Book to help school property owners on the risks inherent in the labor law CLICK HERE to download. For purposes of this article , just understand that the Scaffold Law continues to push insurance costs for property owners much higher in this region than in any other region in the county. Which is a large component as to why your liability insurance costs continue to rise.

EXCESS  LIABILITY INSURANCE :

Similar to liability for essentially the same reasons excess liability insurance costs continue to rise with one notable exception.

The DEMISE OF THE “PROGRAM UMBRELLA” : Program Umbrella’s where essentially products where by an MGA “Managing General Agent” would purchase large limits of excess liability coverage , and then turn to retail agents and brokers and give them access to the program for their clients. For a “Premium” the agent or brokers customers could gain access to that particular Umbrella policy purchased by the MGA. Essentially giving real estate owners the ability to purchase at a discount excess liability insurance in “BULK”, getting the “BULK” discount.

As of this time last year there were north of 10 Program Umbrella’s you could bolt into , enjoying liability limits as high a $100 million dollars for your portfolio , or building. Those days are gone. While there are still a few left, the underwriting to get in is uncompromisingly  strict, and the pricing discount for buying in bulk is gone.

In over 25 years of serving building owners and developers I cannot recall a more challenging market for this cohort of insurance buyers. There simply is not enough insurance carriers writing this class of risk to drive pricing back down. It’s classic supply & demand. The carriers putting out paper on the street are calling the shots as they don’t have much competition. They are getting their number because the property owners MUST purchase coverage to comply with their lenders requirements. Lender in turn need to understand the dynamics of this current market and work with their property owners to find a balance.

On top of ALL of this are the new unfunded mandates from the City of New York, New York State and the Federal Government for all types of businesses. It’s a very challenging environment to be a landlord in New York City as the income is capped, but the costs continue to escalate higher than the other side of the P&L.

There are strategies building owners can take to mitigate some of these escalations. That is fertile ground for our next article in the series.

We hope you found this piece informative. Feel free to reach out to a Risk Advisor by calling (914) 357-8444 or simply CLICK HERE.

 

Claims Management, Commercial Auto, Construction Practice Group Content, Food & Beverage Practice Group Content, General Liability Insurance, Human Services Practice Group Content, Interview, Other, Risk Management, Transportation Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

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. 

Other

5 Tips For Employers With Repeat Accident Offenders

Do You Have Employees That Are Repeat Accident Offenders? 

 

If your business suffers from the high cost of employee injuries on their workers’ compensation insurance due to the same employees becoming injured repeatedly; this article is for you!

While the vast majority of workers comp claims are legitimate accidents from honest, hard-working employees some of these workplace injuries are from employees with ulterior, personal motives. When a “rogue” employee attempts to beat the workers’ compensation insurance claim system with frequent, sometimes suspicious workers compensation claims, those claims can cost your business ample time, resources, and substantial amounts of money. Here are 5 innovative tactics we use to challenge repeatedly injured employees we call “frequent filers”.

 

  • Thoroughly Investigate:  Seems basic and intuitive to state the obvious with respect to prioritizing accident investigations. That said if you have one individual who has filed several WC claims, we suggest investigating their claims more aggressively. Remind them that insurance fraud is a felony. If they understand you are not just rolling over they might not have the stomach to pursue their claim. Too many companies we consult with are not aggressive enough in their accident investigations which makes them a soft target. We had one company in particular that had an employee who injured himself like clockwork around the holidays and again during the summer using it as paid time off. His name appeared in claims reports 6 times over a 3 year period. That is a failure of leadership in that company as they simply accepted that sort of behavior. 

 

 Click to download our ACCIDENT INVESTIGATIONS eBook f0r organizations with repeat offenders.

 

  • Get a Medical Professional Involved: If this claim is resulting in an injury, make sure a physician/medical professional takes a clear look and makes their own judgment on the seriousness and legitimacy of the said injury. A professional evaluation provides a baseline for the injury and becomes permanent documentation to support the file. Further one of the biggest mistakes companies makes (especially with back / soft tissue) injuries is that they don’t take it seriously enough. The worker comes back too early, resulting in a much worse injury as a small back tweak becomes full-on displacement. Getting soft tissue injuries professionally evaluated save considerable sums of money long term in aggregate when it becomes habitual practice. 
  • Talk to the Worker’s Closest Peers: Talking to fellow employees that work on-site with the worker in question the most can give you a real understanding of this worker’s character, work ethic, and motives. Worker’s may pick up on his/her personal life and any issues stemming from it that can influence whether or not they may fraudulently file a WC claim. These can be but are not limited to, financial issues, domestic problems, serious health issues, or mental problems/instability that can affect their day-to-day work life. Further workers sometimes resent when their colleagues are taking advantage of the situation as it affects their workloads and team cohesion. 
  • Talk to the Employee 1 on 1: Lastly, if no other avenue seems to be giving any leads, having a 1 on 1 real discussion with your employee can help them open up about anything ranging from their happiness at work, their personal problems, and even if their WC are legitimate. 
  • Execute WHY ANALYSIS to determine the root cause of the injury. Perhaps this employee needs more training, more support with respect to executing their job. This is important rather than just jump to conclusions. In fact, this is the #1 reason we see repeat injuries. 

 

While not all frequent workers’ compensation claim filers are fraudulent, they’re worth taking a closer look at these steps to make sure your company is not being taken advantage of. For assistance in how to build your workers’ compensation cost containment program please consider our Comp Care Program. This is Metropolitan Risk’s turnkey program that can be implemented very quickly, delivering results for your org in record time. 

 

*If you’re an existing Metropolitan Risk Advisory client, call or email your risk advisor for quick access to our eBook.

Construction Practice Group Content, Food & Beverage Practice Group Content, Human Services Practice Group Content, Marketplace News, Risk Financing, Risk Management, Transportation Practice Group Content, Workers Compensation Insurance, Workers Compensation Premium Audits

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.

Commercial Property, Other

Having The CORRECT Business Interruption Insurance Determines If Your Business Survives

Business Income Insurance or Business Interruption Coverage is not only the most often overlooked insurance coverage, but the error rate in how it’s calculated is over 90%, and I am being generous here. Skeptical, pull your policy. My guess is your current agent or broker just applied your gross sales to arrive at the Business Interruption limit, or worse if it’s actual incurred loss it’s only for 12 months. I love actual incurred loss, what it should state is “Actual Incurred Loss As Calculated By The Insurance Company”. Yes, there is a HUGE difference.

 

Imbedded in most insurance policies are provisions for “business interruption insurance” or “business income” . It’s these provisions that provide coverage for loss of critical business income that provide the financial sustenance for a business to survive. Simply because your business suffers a loss, your bills don’t stop. I know my landlord at Bridge Street in Irvington NY wants his check on the 1st of each month, regardless of any business or personal tragedy. He knows his bills keep coming as well, it’s a vicious cycle. Thus quite often you have insurance to help bridge the financial gap between the revenue that your business would have enjoyed except for a covered event. How the loss is calculated and ultimately reimbursed is an article all by itself, and it differs depending on what type of business you are in, (i.e. manufacturer, restaurant, retail wine merchant, hotel).

 

If NY Business Interruption Insurance is deemed critical to the survival of your business we suggest performing a Business Income Stress Test. Quite simply what we do is offer up two or three likely claim scenarios that would potentially keep most C.F.O.’s up at night. We overlay your companies current financial’s, ( P&L , Balance Sheet), and apply the insurance carriers formula for calculating the business interruption portion of the loss which is contained in your insurance policy. In each claim scenario, we show you what your potential shortfall is BEFORE the loss occurs which is a critical point. To perform this calculation after the event is called a CLAIM, which at that point is simply P&L triage to get you through the month.

 

It’s absolutely essential that this stress test be performed on every business. In our business we can pick up and move to a temp facility provided there is power, and be operational in a matter of hours. A NY Wine Merchant, or Westchester NY Restaurant cannot. Understanding your cost structure, what is and is not reimbursable, and planning for it upfront quite often is the difference between life and death for many small businesses because they don’t have the financial cushion or the credit lines to make up the difference. The insurance proceeds from business interruption, or business income claim is the only financial lifeline.

 

If you are interested in seeing how your business would fare in our proprietary Business Income Stress Test, please speak with one of our Risk Advisors or call 914-357-8444.

Cyber Liability Insurance, Marketplace News

Cyber Security Awareness Month

October is Cyber Security Awareness Month! 

 


Cybersecurity is one of the fastest-growing concerns for businesses as many opportunities for growth within an organization have developed into fully remote positions.  To Celebrate Cybersecurity awareness month We suggest having these conversations with your team:

 

Cybersecurity management starts with training your organization to recognize potential cyber threats.  This year’s theme for Cybersecurity awareness month is Do Your Part. #BeCyberSmart 

Follow our social media accounts for our updates throughout the month. If you need more information on cybersecurity or cyber liability insurance, contact a risk advisor at 914-357-8444. Remember, do your part. #BeCyberSmart.

 

Human Services Practice Group Content, Marketplace News

New York’s DOL Introduces New Notice Of Pay Rate form for Home Care Providers Under New York Wage Prevention Act Updates

Effective October 1, 2020, New York State’s Department of Labor requires a new Notice of Pay Rate form for employers.  The form is required to be used by home healthcare aide under the Wage Parity Law. The updated changes to the New York Wage Theft Prevention Act  (WTPA) states the new Notice of Pay Rate Form must now include “the benefits portion of the minimum rate of home care aide total compensation.”

The amendment to New York’s Wage Parity Act requires that home healthcare employers include notice of the benefits their employees are receiving under the Wage Parity Law. The form requires employers to break down each benefit provided to the employee, and the home care agency must provide contact information for the person or entity providing the homecare aid benefits.

Home care agencies are now required to keep these records for at least six years.

What is required under the New York Wage Theft Prevention Act (WTPA)?

The WTPA requires employers to provide wage notices and pay stubs to their New York employees. The law requires written wage notices to be delivered to employees in English and the employee’s primary language, signed and dated by the employee and maintained for a period of 6 years. You must provide the notice at the time of hire and upon changes to the data.   The forms must include the following information on the written wage notice:

  • Rates of pay;
  • How the employee is paid (e.g., hourly, salary, commission, etc.);
  • Any allowances claimed as part of the minimum wage (e.g., tip, meal, or lodging allowances);
  • Regular payday;
  • The official name of the employer and any other “doing business as” names used; and
  • Address and phone number of the employer’s main office.

The employee wage statement or pay stub on each payday must include the following data:

  • Employee’s name;
  • Employer’s name, address, and phone number;
  • Dates covered by the payment;
  • Hours worked (both regular and overtime);
  • Rates of pay;
  • How the employee is paid (e.g., hourly, salary, commission, etc.);
  • Gross and net wages;
  • Itemized deductions; and
  • Itemized allowances and credits claimed by the employer.

Failure to comply with the new requirements of the WTPA in a timely fashion is punishable by penalties of up to $10,000 per affected employee. 

Click here to download the New Form

If you’re an employer in the home healthcare industry, you must revise your new hire notices & pay stubs to ensure they reflect the latest updates to WTPA. Failure to comply can subject your business to substantial penalties. Metropolitan Risk is closely monitoring Home Healthcare legislation in New York, New Jersey, Connecticut, and Florida. If you need additional information, contact a risk advisor at 914-357-8444

 

Source: New York Employers Must Comply with Updated Wage Notice Requirements

 

Other

Injury Concerns When Working Construction

Did you know that there are approximately 250,000 construction sites in the United States alone? Injury rates among construction workers are also marginally higher than those who choose other professions. Falling from heights, working with heavy machinery, and repetitive motion injuries are just some of the most common risks that construction companies have to account for. Yet, every year almost 20% of all work-related fatalities come from construction workers. 

Here are some of our tips on how to prevent injuries on your construction site:

Fall Protection:

    • Use fall protection such as guardrails, fall arrest systems, safety nets, and restraints to help prevent any sort of on-site injury.
      • Providing your employees with a safe work environment may seem obvious, but many employers think they’re saving money by not abiding by the rules. 

Heavy Equipment:

    • Check all vehicles and equipment for proper operation
    • Use traffic controls any time a vehicle enters a public thoroughfare
    • Place flaggers wearing high-visibility gear at all appropriate locations
    • Ensure that loads do not exceed the capacity of vehicles and equipment
    • Only make repairs once workers are protected from the movement of equipment

Scaffolding: 

    • Encourage your employees to be extra cautious with wet platforms during or after rain
    • Postpone work during extreme weather conditions (strong wind) 
    • Post signs clearly labeling the weight capacity of your scaffolding 
    • Do not move the scaffolding unless it is designed to do so (especially if there are workers on it)

Trench Collapses:

    • Workers should always have access to a ladder, stairway, or ramp to exit the trench 
    • Heavy machinery should never approach trench edges.
    • After a rainstorm or excessive vibrations, a competent person should inspect trenches before workers enter.

Repetitive Motion Injuries:

    • Some of the most common forms of injury in the construction world are repetitive motion injuries.
    • The best way to prevent these types of injuries is to educate your employees 
      • Teach your workers the proper technique for carrying equipment and lifting/moving objects

Personal Protective Equipment:

    • It is required that employers provide employees with the proper protective equipment while on the job, but it is the responsibility of the employee to wear the proper protective gear on all of their shifts
    • If your employees work around heavy machinery, make sure they are equipped with hearing protection, boots, and gloves.
    • The same goes for if your employees are working anywhere where their head is exposed, hard hats must be worn. 

 

Many of the tips provided in this article may seem obvious to a conscientious business owner. But unfortunately, construction worker injury is a problem year after year, and it is a result of bad safety practices. Do not think of implementing extra safety measures as a new expense that your business has to pay. Think of it as an easy way to save money, and not only will you save money in the long run, but your employees will be safer and happier. 

If you still have questions, you can contact a risk advisor today at 914-357-8444. Or, you can visit our website here.