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R&R Insurance Blog

No More Reminders | Wisconsin Contractors Premium Adjustment Program (WCPAP) Credit

Posted by the knowledge brokers

Effective 2/1/2021, the Workers Compensation Rating Bureau (WCRB) will no longer issue courtesy postcard reminders to employers eligible to file for the Wisconsin Contractor's Premium Adjustment Program.

Read the full Circular Letter from the WCRB

WCRB will mail an orange WCPAP postcard notification to complete the WCPAP Online Application for one more renewal cycle (fiscal year 2020). 

Beginning with policies effective 7/1/2021 eligible employers should create their own reminders to complete their WCPAP Online Application every year. 

REMINDER: employers must submit a WCPAP Online Application every year, no less than 90 calendar days prior to the first day of the month of their worker’s compensation policy renewal.  The WPAP Online Application is updated every year on the evening of September 30th.  Therefore, you may complete this online application as soon as October 1st, regardless of your policy effective date.

Policies Expiring

WCPAP Online Application Deadline*

January

November 2

February

  November 3

March

  December 1

April

  January 1

May

  January 31

June

  March 3

July

  April 2

August

  May 3

September

  June 3

October

  July 3

November

  August 3

December

  September 2

*Updated as of January 2020 - dates subject to change

 

Topics: Construction

Cyber bulletin issued by the Department of Homeland Security

Posted by Jason Navarro

DHS

In early January 2020 the Department of Homeland Security issued the following urgent bulletin concerning retaliatory cyber-attacks: https://www.dhs.gov/ntas/advisory/national-terrorism-advisory-system-bulletin-january-4-2020

There are no specific direct threats yet but, as mentioned, there is a significantly elevated risk and high likelihood of a Cyber-attack by Iran (a state sponsor of terrorism) in retaliation to recent events. 

While it is not likely that our customers in Wisconsin will be directly targeted, it is highly likely customers will be impacted by the contingent cyber exposures of a state sponsored retaliatory cyber-attack.   The likely impact would be because the major cloud and network systems our customers depend on would be down:

  • Denial of service attacks
  • Network interruption
  • Contingent business income and sales loss

This is why a true cyber policy that contains coverage for all of this is more important than ever!   

We are being proactive and want to help now before a loss occurs!  

  • Get a quote today and it can be done with a few quick questions: click here to request a quote answering 7 simple questions
  • A true cyber insurance policy is not as expensive as you might think and covers not only direct cyber-attacks but contingent exposures around systems your company depends on.   
  • One of our top carriers also features a reimbursement for upfront cyber defense costs, up to $3,000, on IT risk mitigation to help make IT systems safer and mitigate risk.  

We urge you to please contact Jason Navarro (Director of Cyber Crime) and/or complete the 7 step questionnaire so we can help implement an adequate cyber-program with you.  

Topics: Cyber

How to Prevent Package Theft

Posted by the knowledge brokers

porch pirate

This holiday season, you may find that online shopping is a convenient way to check items off your list. While shopping from the comfort of your couch has its benefits, have you considered the risks involved with having a package delivered to your front door? Package thieves, sometimes referred to as “package pirates”, are stealing millions of packages every year. According to a study done by C+R Research, 31% of individuals had a package stolen last holiday season. On average, stolen packages can be an expensive loss. According to a study by Ring last year, the median value of a stolen package was about $250. With the Holiday season among us and online shopping on the rise, you and your family may want to discuss some options to keep your gifts and deliveries safe. Here are a few tips for how to prevent a package theft from happening at your door step.

  1. Outdoor Security Camera

    Installing a camera at your front door is a great way to provide piece of mind, and can deter a thief from attempting to steal your package. Doorbell camera systems such as Nest and Ring are user-friendly and easy to install. These home security systems will allow you to view a live stream of your home from your personal smart phone, so you always know who is knocking at your door. Most doorbell camera systems will notify you when activity is detected, so you’ll know exactly when your item is delivered (even if they don’t ring the doorbell!). Use this function to prevent a package theft by stopping at home to bring your item inside, or even teaming up with neighbors by asking them to hold your package temporarily.
  2. Ship to Work or to Friend/Family’s Home

    For some individuals, stopping at home in the middle of the day might not be an option. A great alternative is to have your item shipped to your workplace. Speak to your manager and see what your company policy is- most employers understand that you spend most of your time at work therefore it may be acceptable to receive deliveries there. Sometimes workspace is limited though, so brainstorm people you know that are usually home during the day. Family members who are retired or friends that work from home would be great people to reach out to! The more the merrier when it comes to preventing package theft in our community.
  3. Amazon Hub Locker or In-Store Pick Up

    If you are shopping on Amazon, there is now an option to ship packages under 20lbs to an Amazon Hub location. Instead of having your package shipped to a home or business, you can select a “Pickup Point” in your area and have your item shipped to a secured locker kiosk. These Kiosks are located in more than 900 cities and towns across the US! You can use an easy online locator tool to find one near you. They tend to be at neighborhood grocery stores, banks, pharmacy and other easy to access locations. You will receive an email when your item is delivered, and you must pick it up within 3 days of delivery. When you arrive for pick up, just enter your unique pick up code, retrieve your item from the locker, and you are good to go!

    Alternatively, if you are shopping at an online retailer other than Amazon, check to see if there is an “in store pick up” option. Insider tip: call the store directly if you do not see a “ship to store” option online. Often times, stores will offer free shipping when you ship to their location!
Online shopping has become a common part of our lives, and its safe to say its here to stay. That being said, porch theft has become all too common as well. Being aware of the risk is the first step to protecting your deliveries. Taking a few moments to consider the above tips may save you from being a part of the staggering porch theft statistic. We hope that these tips were helpful, and wish you have a very happy Holiday season!

Final Rule on Hospital Price Transparency Released

Posted by the knowledge brokers

hospitalOn Friday, Nov. 15, 2019, the Trump administration released its final rule regarding hospital price transparency. This final rule will take effect January 1, 2021, a year later than originally proposed.

Hospitals will now be required to provide easily accessible billing information to patients. This means having all standard charges available online and in one single data file that can be “read by other computer systems,” according to a CMS press release.

Learn more here about the final rule released by the Centers for Medicare and Medicaid Services (CMS) regarding hospital price transparency.

Topics: Employee Benefits

Health Care Flexible Spending Account Limits for 2020

Posted by the knowledge brokers

fsaMany employee benefits are subject to annual dollar limits that are periodically updated for inflation, such as HSAs, health FSAs, and transportation fringe benefit plans. The IRS recently released Revenue Procedure 2019-44 revising the Health Care FSA and Limited Purpose FSA maximum for 2020. For tax year 2020:

  • The dollar limitation for employee salary reductions for contributions to health flexible spending arrangements is $2,750, up $50 from the limit for 2019.
  • The monthly limitation for the qualified transportation fringe benefit is $270, as is the monthly limitation for qualified parking, up from $265 for tax year 2019.

The IRS typically announces the dollar limits that will apply for the next calendar year well in advance of the beginning of that year to give employers time to update their plan designs and make sure their plan administration will be consistent with the new limits. Check out our convenient chart with all of the major IRS benefits limits for 2020!

Contact a Knowledge Broker for more information.

Topics: Employee Benefits, Compliance

IRS Releases New Limits for Retirement Plans

Posted by the knowledge brokers

Retirement-Savings

Think of this as a friendly alert to double check your personal retirement contribution amounts with your HR or payroll department to ensure you continue contributing at the maximum amount as that limit has increased for 2020.

For business owners, this is great information to share with employees who are maxing out so they can continue fully maximizing their retirement savings potential.

Looking for additional guidance personally or for your employees?  Reach out to R&R Wealth Management with questions: MyKnowledgeAdvisor.com / 262.696.5167.

 

2020 Contribution and Benefit Limits

For 401(k) and other Qualified Plans

Type of Limitation

2020

2019

401(k), 457 and 403(b) maximum annual elective deferral limit

$19,500

$19,000

401(k), 403(b), or 457 plans catch-up contribution limit for individuals aged 50 or over

$6,500

$6,000

Defined contribution plan annual limit

Lesser of:

$57,000, or

100% of compensation

Lesser of:

$56,000, or

100% of compensation

SIMPLE maximum annual elective deferral limit

$13,500

$13,000

SIMPLE 401(k) or SIMPLE IRA catch-up contribution limit for individuals aged 50 or over

$3,000

$3,000

Traditional IRA contribution limit

Lesser of:

$6,000, or

100% of compensation

Lesser of:

$6,000, or

100% of compensation

Traditional IRA catch-up contribution limit for individuals aged 50 or over

$1,000

$1,000

Defined Benefit plan annual limit under section 415

$230,000

$225,000

Annual allowable compensation limit for deduction, benefit and contribution purposes

$285,000

$280,000

Highly Compensated Employee

$130,000*

$125,000*

Key Employee/officer in a top heavy plan

$185,000

$180,000

Income subject to Social Security tax

$137,700

$132,900

 

*Applies for determining Highly Compensated Employees for the 2020 plan year.

Limits stated above are subject to the provisions of the plan. Refer to your plan document or contact your plan consultant (TPA) for more information.

The content of this document is for general information only and is believed to be accurate and reliable as of posting date but may be subject to change.

Falling Work Comp Rates: The Good, the Bad, and the Ugly

Posted by Dan Scheider

On October 1, 2019 Wisconsin continued its trend entering a fourth consecutive year of reduced workers’ compensation insurance rates.  Rates in 2019 fell an average of 8.84% compared to 2018, which is the most dramatic reduction in over a decade.  This rate reduction will affect work comp policies with renewal dates between 10/01/19 to 09/30/20.

Workers’ compensation rates are state mandated in Wisconsin, meaning all insurance carriers must use the same rates resulting in premiums from one carrier to another are basically the same. 

While at first glance, this appears a “boon” to the bottom line for Wisconsin contractors as work comp premium makes up the lion’s share of insurance costs.

When it comes to the 4th consecutive year of reduced work comp rates there’s “the Good, the Bad, and the Ugly…”

... the Good …

In general, a reduction of work comp rates result in reduced premium costs to contractors.  It’s estimated that Wisconsin businesses will save over $170 million in reduced work comp premiums.

In 2019, the Wisconsin construction industry will see the greatest reduction in work comp premium compared to other industries:

Overall 2019 Wisconsin work comp rate reduction:  -8.84%

Construction

-11.21%

Goods & Services

-8.66%

Manufacturing

-8.11%

Within the various Construction industry class codes, the 2019 WC rate reduction ranges from:

High

Low

-16.4% Roofing

-4.0% Sand & Gravel

-16.0% Carpentry

-7.2% Water & Gas Main

-15.5% Excavation

 

 

Sewer1

 

... the Bad …

To understand the downside of falling work comp rates, a snapshot of the last 4-years is needed.  Overall the new 10/1/19 rates are 24.1% lower than the rates that were in effect on 9/30/16. In the last four years there has been nearly a ¼ reduction in the potential work comp premium dollars available to the insurance market (Construction is over 30%).

Rate Drop

The effect of four consecutive years of work comp rate reductions is a continued deterioration of insurance carrier profitability in writing this line of insurance, which will eventually lead to:

  • Insurance carriers scaling back % of Dividend Offerings (an action that insurance carriers have historically been reluctant to take for fear of a loss of market share)
  • Potential of reduced insurance carrier interest in writing WC coverage (especially standalone WC markets)
  • Potential of rate increases in non-work comp coverage lines to support the overall account profitability
  • Hardening of the insurance market, that already has been seen rate increases over the past few years in Business Auto and capacity limitations on Umbrella/Excess  

... and the Ugly …

Construction companies may be surprised to learn that significant WC rate reductions have an inflationary impact on the Experience Modification Rate (EMR).

It should be noted that this inflationary impact to the EMR will offset to some degree the premium reduction created by reduced WC rates.

Of the many variables that affect the EMR, the below example illustrates the inflationary pressure created by reducing WC rates:

  • “Expected Losses” are the amount of losses that the State of Wisconsin expects to result from the state mandated work comp rate.
  • As the state mandated work comp rates have reduced over the past 4 years (example: -33% in Sewer Construction), the “Expected Losses” that will result from the reduced WC rates also reduce.
  • “Expected Losses” are compared to each construction company’s “Actual Losses” in the calculation of the EMR.
  • The lowering of the “Expected Losses” through reduced WC rates when compared to the “Actual Losses” results in inflationary pressure to the EMR.

The only way to offset this inflationary pressure on the EMR is for contractors to reduce their “Actual Losses”.

Contractors familiar with competitively bidding on large projects know all-too-well the importance of having an Experience Modification Rate below 1.00. Most contractors have seen their EMR increase over the past several years, due in part to the last 4 years of WC rate reductions.

 

What can Contractors do?

Competitive pressure on insurance carriers

  • Start the renewal process early (120 days prior to renewal)
  • Evaluate insurance carriers:
    • WC Dividends Plans
    • Analysis of carriers coverage enhancements and/or restrictions
    • Evaluation of Carrier Support Functions (Loss Control / Safety Services & Claims Service)
    • Carrier dedication to the construction industry (Most national carriers have construction dedicated Underwriting / Loss Control / Claims functions)

Pre-Loss – Safety:

  • Identify who is accountable at each job site for administering safety?
  • Involve the insurance carrier and insurance broker to create an annual service plan addressing:
    • Training (employees / supervisors & foremen / safety director)
    • Jobsite inspections (Are we following our policies and documenting all inspections and corrective action?)

Post-Loss – Controlling Costs:

  • Claims should be reported immediately
    • Statistics confirm a direct correlation between immediate reporting of a WC claim and minimizing the cost of that WC claim
  • Keeping WC claims “Medical Only”
    • “Medical Only” claims (without Loss of Wages and or Disability) are discounted by 70% for the purpose of the impact on the EMF
  • Partnering with an Occupational Medical Provider
    • By having a medical provider familiar with your business, there tend to be fewer hang ups in getting employees to return to work as fast as possible
  • Regularly scheduled mid-term and year-end claim reviews with broker and insurance carrier

  

Applying for available work comp credit programs:

  • Wisconsin Contractors Premium Credit program (up to a 10% Premium Reduction that has no impact on the EMR)
  • Wisconsin Apprentice Credit Program (up to $ 2,500)

 

NOTE:  Some insurance brokers (including R&R Insurance) have dedicated Construction divisions to serve the needs of Wisconsin’s construction industry.

To sum it up, while at first glance the continued workers’ compensation rate reduction that took effect on 10/01/19 may create the appearance of saving “A Fist Full of Dollars” on reduced WC premiums, in reality an objective evaluation would indicated that there is “The Good, the Bad & the Ugly..”.

 

Topics: Workers Compensation, Construction

Amazon Entering the World of Health Care

Posted by the knowledge brokers

Amazon LogoOnline retailer Amazon recently announced that you can now use your flexible spending account (FSA) or health savings accounts (HSA) to purchase eligible medical products on its site. Amazon’s FSA and HSA stores enable you to add your respective health payment card to the site and shop for your eligible products as you would shop for any other item.

Some examples of eligible medical expenses include the following:

  • Bandages
  • Eyeglasses
  • Blood glucose monitors

For more information about using your respective health payment card through Amazon, read more here.

Is Your Company At Risk Of An IRS Penalty?

Posted by Pete Frittitta

IRSDid you know that $4.5 billion in Affordable Care Act (ACA) employer mandate penalties were assessed by the IRS for the first assessment year alone (2015)? It is expected that by 2026, over $228 billion in penalties will have been assessed. This summer, the IRS began sending Letters 226-J for proposed 2017 ACA employer mandate penalties. Additionally, the IRS is increasing efforts to identify potential non-filers via Letter 5699.

One in every six large employers is currently at risk for compliance action by the IRS regarding the ACA penalties.

This is a reality and the fines can be significant!  R&R Insurance provides evaluations and reconciliations for clients.  However this is a constantly evolving process.  In fact, we helped one client avoid a $118,213.26 penalty with our proven process.  Read more here.

For more information regarding Letter 226-J, you can refer to our previous blog here.

For more information regarding Letter 5699, you can refer to our previous blog here.

[Note: The ACA requires applicable large employers (ALEs) to offer affordable, minimum value health coverage to their fulltime employees or pay a penalty. This employer mandate provision is also known as the “employer shared responsibility” or “pay or play” rules. An ALE is only liable for a pay or play penalty if one or more of its full-time employees receive a subsidy for coverage through the Marketplace/Exchange.]

Topics: Affordable Care Act

Mental Health Awareness | End the Stigma

Posted by the knowledge brokers

mental health awarenessAn employee’s mental health encompasses how they think, feel and act. It also includes their emotions and social well-being. While mental health does include mental illness, these two are not interchangeable.

1 in 5 U.S. adults experience mental illness annually;

a recent study by Deloitte revealed that less than half receive treatment.


It has also been found that mental illness is the leading cause of disability for adults in the U.S. between the ages of 15 to 44—making more work days lost to mental health-related absenteeism than any other injury or illness.

The discussion of mental health has been more popular in recent years with the tagline of “end the stigma,” this discussion will only keep growing as society realizes that not all illness are visible ones.

So what does this mean for employers?

It is important that organizations create a culture that supports its employees and their mental health. This process is easier than one might think. Below are five easy ways to implement support at your organization:

  1. Promote Mental Health Awareness in the Office
    • This is the first step in supporting employees and their mental health. There must be awareness and de-stigmatizing of mental health or illness. Provide resources / information to employees and those seeking support.
  2. Offer Flexible Scheduling
    • Help employees better balance their work and personal lives by embracing workplace flexibility. This will look different at every company but provide employees with job satisfaction, better health, increased work-life balance and less stress.
  3. Address Workplace Stress
    • Chronic workplace stress can cause fatigue, irritability and health problems. While it’s probably not possible to eliminate job stress in its entirety for employees, you can help them manage it more effectively.
  4. Evaluate Your Benefit Offerings
    • Review the benefits you offer and make sure they support mental well-being. Also evaluate your current health plan to see if it covers mental health services.
  5. Provide Mental Health Training for Managers
    • It’s important to properly train management in recognizing the signs of mental illness, excessive workplace stress, workplace bullying and fatigue. Furthermore, managers should be trained to handle potentially difficult conversations with employees surrounding mental health.
podcastFor more information, you can listen to this short podcast: Mental Health Awareness and Employer Strategies or read 5 Ways HR Can Support Employees’ Mental Health.

Topics: Employee Benefits