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R&R Insurance Blog

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

5 Benefits of a Home Security System

Posted by the knowledge brokers

Home Security System

Many homeowners avoid installing home security systems because of the cost associated with the installation, monitoring and servicing. The security company charges a monthly fee for monitoring, and false alarms will also incur charges. Is the cost worth it?

Aside from the primary reason (keeping your family safe), you must consider other benefits of a security system, such as the cost of replacing stolen items and broken doors and windows. The peace of mind you have when your family is safe is invaluable.

Together with our from our friends at PropertyCasualty360.com, there are five reasons why a home security system worth the investment.

  1. Fire detection
    • Features such as smoke detection provide a timely warning for smoke in the house. Heat detectors can alert you if they sense a source of heat. Heat detectors can establish the presence of a growing fire in your home and provide a timely alert when they detect a small change in temperature. Early detection can help prevent further damage from the fire. Some heat detector will signal the authorities to respond to a fire crisis in your home.
  2. Detraction from possible intruders
    • Protecting valuables is the immediate benefit that people enjoy when they install a home security system. You continuously buy, inherit, and collect items that mean a lot to you or cost you a lot of money. The items reflect your values and accomplishment in life, but they are also the target for burglars.  The system alerts authorities of burglary, which increases the chances of catching the criminal. The cameras not only monitor your home but help identify the criminal for the committed crime. The video footage will also help you create a list of items lost during the burglary.
  3. Potentially lower home insurance premium
    • While there are many factors that make up the cost of home insurance, many insurance companies provide discounts to property owners who have a home security installed on their premise.  A home security system will also help protect your identity. Some invaders target your identity. Identity theft can occur if an invader if you keep crucial documents at home or forget them in the car. An invader can use the information on these documents and cause you significant financial losses.
  4. Protect against carbon monoxide gas
    • Carbon monoxide gas is part of combustion fumes. Burning wood, stoves and other heating systems produce carbon monoxide gas. The gas is colorless, tasteless, and odorless. Thus, the human senses cannot detect the presence of the gas in the air. Prolonged exposure causes the gas to build up in the bloodstream. Large amounts of the gas in the air will cause your body to replace the oxygen in the red blood cells with the gas. The side effects include serious tissue damage, and in severe cases, carbon monoxide poisoning culminates in death. A home security system can incorporate a carbon detector. The detectors will sense high amounts of the poisonous gas in your home and alert you so you can take the right measure.
  5. Peace of mind
    • Various security breach situations can disturb your peace of mind. For instance, if you live in an insecure area where burglary can occur at any time, having a home security system is crucial. Peace of mind is essential for the seniors or another person with a disability who frequently remain at home. Such people cannot respond with the necessary speed to a dangerous situation. The security system will monitor your home and dispatch security personnel whenever the need arises. Some security systems also feature a wearable medical alert device for those with specific medical conditions to call for help when a medical situation arises. You can go on a vacation or attend to your job feeling confident and safe.

 

Topics: home insurance

Top 3 Non-OSHA Trainings for Manufacturers

Posted by John Brengosz

iStock-181895133

Many people say they have a safe work environment - but how safe is it really?  Or often we hear "yes, we have a safety plan in place so we're fine." 

We challenge you:

  • How often do supervisors get together to review protocols? 
  • Can you show us your post-accident forms?  And who reviews post-accident reports? 
  • Who is responsible for formal inspections?  And how often are they performed?

Vendors are increasingly looking for formal, documented processes to prove steps towards a safe culture.  And, ultimately, this can have an impact on insurance premiums. 

R&R's Professional Services staff have created trainings to address the three most critical points for manufacturers:

  1. Work Comp 101
    • The most effective 1st training, intended for Supervisors, this eye opening session takes a high level approach to explaining the financial impact safety plays in a risk management program
    • EX: a trip to the Emergency Room is generally 2x-3x more expensive than a walk-in clinic - do you have a relationship with a clinic that understands Workers Compensation and your Return-to-Work program?
  2. Accident Investigation
    • About as real as it gets in safety!  This session emphasizes the importance of a documented process: the POTENTIAL, learn from the ACTUAL, and lose the THEORETICAL
  3. Performing your own Safety Audits
    • More than the daily walk-through on the floor, this shows the value of a team of auditors ("the more eyes, the better!") and provides assistance with creating custom checklists specific to your organization

As with any successful safety program, it is important to have management involved in the process and to review protocols annually.

Our Professional Services team make these a regular part of our client's risk management program.  Looking to attend a general session? Check out our full seminar & webinar schedule.

Topics: Manufacturing, Workers Compensation

OSHA Injury Tracking Application - New Initiative

Posted by Maureen Joy

oshaOSHA started a new initiative this year: if the OSHA 300A data an employer submits to the Injury Tracking Application (ITA) shows the rates are above their industry averages, then that employer will receive an email. The email is informational only and obligates an employer to do nothing. As with every employer, regardless of their rates, OSHA encourages frequent review of safety and health efforts.

As always, we are here to answer any of your OSHA questions - please reach out to your KnowledgeBroker or view one of our OSHA webinars.

For your information, below is an excerpt of the email: 


Dear Employer:

OSHA recognizes that the DART rate does not necessarily indicate a lack of interest in workplace safety and health. If you are one of the many employers who would welcome help from experts in workplace safety and health, OSHA has many compliance assistance resources, several of which are at no cost and confidential.

If you are a small employer with fewer than 250 workers on-site and no more than 500 workers corporate-wide, OSHA’s On-Site Consultation Program is available to you. This program is administered by state governments completely separate from OSHA’s enforcement program. The program assists employers to identify and eliminate or control hazards effectively and economically. More information on this program, including contact information for the local office in your state is available at https://www.osha.gov/consultation.

OSHA has resources to assist a company to develop and implement a safety and health program. Such a program to find and fix workplace hazards before they cause injury or illness can proactively reduce injuries, illnesses, and fatalities. Not only do employers experience dramatic decreases in workplace injuries, but they also often report a transformed workplace that can lead to higher productivity and quality, reduced turnover, reduced costs, and greater employee satisfaction. If you use the On-Site Consultation Program, the state consultant can help you develop an injury and illness prevention program. More information can be found on the OSHA webpage at www.osha.gov.

Other avenues to address this issue include hiring an outside safety and health consultant, working with your insurance carrier, or contacting your state’s workers’ compensation agency for advice to address a high DART rate. In addition, engaging your workers to identify hazards and find solutions is a proactive method to resolving safety and health hazards.

Thank you for your attention to this matter.

Sincerely,
Occupational Safety and Health Administration

 

Topics: Workers Compensation