R&R Insurance Blog

On Monday January 22, 2018, Congress passed HR195 to extend funding for the government through February 8, 2018.  President Trump signed the legislation into law Monday night.  Although this new law was crafted to continue funding the government, it did contain 3 specific items impacting employer sponsored health insurance plans:

• Health Insurance Tax
  • Presently, insured health plans include a premium tax that adds over 2% to the premium rate. This tax is part of the Affordable Care Act.  With the passage of HR195, the Health Insurance Tax will be suspended for 2019.
• Cadillac Tax
  • The Affordable Care Act contained what is often referred to as the “Cadillac Tax”. The tax was originally scheduled to be implemented in 2018.  It would result in a 40% excise tax for health insurance plans with annual costs in excess of $10,200 for single coverage and $27,500 for family coverage.  The tax would be paid by the plan sponsor.  This tax was delayed to 2020 and now, as a result of HR195, it is delayed until 2022.
• Medical Device Tax
  • Manufacturers of medical devices were set to be subjected to a 2.3% tax on their products. Again, this tax was part of the Affordable Care Act.  The passage of HR195 delays the start of this tax for 2 more years.

The new tax law (signed on December 22, 2017) eliminated the individual health insurance mandate penalty starting in 2019.  The employer mandate for Applicable Large Employers (generally companies with 50 or more full-time equivalent employees) and the 1095 reporting continues unchanged.

Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. R&R Insurance Services will continue to keep you informed of changes.

Read here for a more comprehensive list of these current updates. If you have any questions, feel free to contact a Knowledge Broker at 800.566.7007.

The IRS has released updated tax withholding tables that employers must use in 2018. The new tables reflect the changes made by the tax reform law—which was enacted December of 2017. Employers do not need to obtain new W-4 forms from employees.

According to the IRS, Notice 1036 is the first in a series of steps that the agency will take to help employers improve the accuracy of their tax withholdings by the a new tax reform law, the Tax Cuts and Jobs Act, enacted on Dec. 22, 2017.

The IRS will issue more withholding guidance in 2018. Employers should become familiar with the new tables and begin using them as soon as possible, but no later than Feb. 15, 2018. Employers should also monitor the IRS’s Notice 1036 website for future guidance regarding income-tax withholding under the Tax Cuts and Jobs Act.

For more in-depth information, read here, or contact a Knowledge Broker at 800.566.7007.

To illustrate the benefits of working with one of the largest independent agencies in the Midwest, the following example presents a recent claim situation for one of our newest valued clients.

Shortly after Julie was introduced to Jeff Wolfgram, Knowledgebroker at R&R Insurance, she was involved in an unfortunate car accident. Due to the nature of her situation, Julie continued working with her current insurance agent to file the claim.

During the next several days, Julie’s agent never got back to her and found it easier to get in touch with Jeff for questions. Jeff provided guidance on filing the claim, managing the claim process, etc.

Because of the level of service and the expertise Jeff provided, Julie ultimately decided to switch agents and begin working with Jeff Wolfgram and R&R Insurance Services.

Contact a Private Client Executive for more information.

*Client names have been changed to maintain anonymity.

With the new year come new updates on regulations. Wisconsin employers are being reminded of the important OSHA and Injury Tracking Application (ITA) items listed below.

OSHA Updates:

1. OSHA has increased its penalties as required by the Federal Civil Penalties Inflation Adjustment Act.  Penalty levels increased approximately 2 percent. The new penalty levels will apply to all violations occurring after November 2, 2015, with penalties assessed after January 2, 2018. 
2. Employers can now submit their OSHA Form 300A data for 2017 to the ITA.
3. Employers will not have to submit their OSHA 300 and 301 information for 2017 to the ITA.

ITA Updates:

Employers can now begin to electronically report their Calendar Year (CY) 2017 Form 300A data to OSHA through the agency’s Injury Tracking Application. All covered establishments must submit the information by July 1, 2018. Employers can view their submitted CY 2016 Form 300A summary information, but they cannot edit or submit additional 2016 data on the ITA website.

Establishments that meet any of the following criteria DO NOT have to send their Form 300A data to OSHA. Remember, these criteria apply at the establishment level, not to the firm as a whole.

• The establishment’s peak employment during the previous calendar year was 19 or fewer, regardless of the establishment's industry.
• The establishment’s industry is on thislist, regardless of the size of the establishment.
• The establishment had a peak employment between 20 and 249 employees during the previous calendar year AND the establishment’s industry is noton this list.

Covered establishments with 250 or more employees are only required to provide their 2017 Form 300A summary data. OSHA is not accepting Form 300 and 301 information at this time. OSHA will issue a notice of proposed rulemaking (NPRM) to reconsider, revise, or remove provisions of the "Improve Tracking of Workplace Injuries and Illnesses" final rule, including the collection of the Forms 300/301 data. OSHA is currently drafting that NPRM and will seek comment on those provisions. 

For more information, contact a Knowledge Broker at safety@rrins.com.

Do you know what the following people have in common?

Amy Pascal, Greg Steinhafel, Frank Blake, Richard Smith, Noel Biderman

All were CEOs of companies that lost their jobs following a data breach/hacking of their respective companies.

• Amy Pascal was CEO of Sony Pictures.  The company settled a class action lawsuit for $15 million
• Greg Steinhafel was CEO of Target.  They settled class action lawsuits for $50 million
• Frank Blake was CEO of Home Depot.  The company paid $27.25 million to banks, $134 million to Visa, MC and more banks, $19 million in class action settlements
• Richard Smith was CEO of Equifax.  Suits are still pending at time of publishing
• Noel Biderman was CEO of Ashley Madison. They paid $11.2 million to settle claims

The expense of dealing with a data breach can add up quickly.  Take, for example, a hospital that experienced a breach of 40,000 records.  The price tag was $450,000 for credit monitoring and ID Theft insurance, $175,000 in notification and call center expenses, $25,000 forensics costs and $90,000 in legal costs, and $500,000 in regulatory fines.

In another instance, a former hospital employee downloaded 102,000 patient records.  The expenses amounted to $1.4 million in credit monitoring & call center, $500,000 in notification expenses, $500,000 legal expenses, $250,000 forensics, $1.5 million in legal expenses and $750,000 in regulatory fines.

Many companies were impacted by the Petya/NotPetya malware in 2017.  Consider a full day without phones, six days without email, nearly two weeks without complete access to documents, and  $700,000 in lost billings.  That’s what happened when this malware hit a global law firm.  What lessons did they learn?  With ransomware, detection comes too late; everyone has a plan until you get punched in the face; no firm is immune. Globally the malware cost $1.5 billion, including companies such as  FedEx which posted a $200 million loss and Maersk  which posted a $300 million loss, to name just a few.

All companies are at risk regardless of size, industry, or location.  How do you offset the staggering amounts that a cyber event can cost your company?  Invest in risk management, cyber security, and cyber insurance.

Harvey Weinstein, Roger Ailes, Charlie Rose, Mike Cagney, David Guillod, Michael Oreskes and the growing list of executive sexual harassment scandals have dominated headline news over the past few months. The rising awareness of workplace misconduct, in an increasingly litigious society, may have employers quaking at the cost of defense. Regardless in size of the company, every business should consider putting the proper coverage in place to respond to this type of event.

Management fearful of costs associated with allegations ranging from sexual harassment to retaliation would best find relief with proper employment practice liability insurance (EPLI).

EPLI Overview

For most businesses, EPLI would not rank highest on a list of insurances to obtain such as general liability, property & casualty, and workers’ compensation. That said, EPLI should be an enticing insurance since, by a wide margin, it is the least expensive of the aforementioned.

EPLI coverage can be summed up as settlements, judgements, and the defense costs associated with claims against improper acts in the employment process. Common claims include harassment, defamation, discrimination, a hostile work environment, breach of contract, emotional distress, wrongful termination, and denial of career opportunity.

Not all EPLI polices are the same and it is best to discuss with your agent the proper coverage. One difference is the way policies may respond to 3^rd party claims.

Many EPL policies will only cover 1^st party claims. These are claims made by your employees or independent contractors. John Doe claiming wrongful termination would be covered in this scenario, but a customer receiving a harassing comment from your staff would be excluded from the policy. In short, if you deal with vendors, clients, or anyone from outside your organization, you have a 3^rd party exposure. Certain classes of business are at a greater risk - think restaurants, bars, and retail.

To address this exposure, make sure your EPLI carrier includes 3^rd party claims. In this scenario the company would also have coverage with vendors, customers, service providers, or business invitees.

A comprehensive summary of the legal environment and coverage practices of EPLI can be seen for free in R&R Insurance’s Employer's Practices Liability Insurance by Brian Bean. The 80 minute video is an excellent introduction for the information seeking executive wearing many hats.

EPLI Increasing Need

The elephant in the room is increased media attention around sexual harassment. Every day it seems a new celebrity or high profile executive has an allegation brought forth. A cursory glance at the trending #MeToo on Twitter would suggest a growing movement to callout organizational harassment of women.

EPLI not only mitigates sexual harassment risk, but a wide range of trending risk in the employment process.

In the last 20 years America has seen a 12% uptick in individual charge filings with the Federal Equal Employment Opportunity Commission. While Race and Sex discrimination make up the majority of cases, they have only risen slightly in number going year by year. The largest percentage increase in discrimination cases since 1997 have been Age (24% increase), Disability (36% increase), Religion (55% increase), and Retaliation (57% increase).

It may be surprising that 41.5% of these complaints were filed against companies with less than 100 employees – and these numbers only count filings at a federal level.

Media attention and rising awareness should be a major concern for a business lacking proper EPLI coverage. Its cost, relative to other business insurance, is low and mitigates a financially disastrous risk to the company. Executives would do well to, at the very least, inquire about the proper EPLI coverage from their agent.

This effort should be combined with proactive harassment training for your employees along with and proper procedures to respond to a claim situation.

One of the challenges that businesses have in protecting themselves from cyber attacks is keeping up with patching vulnerabilities.  In 2017 we saw in both the WannaCry  and the Petya/NotPetya events how quickly malware can spread globally through un-patched, unsupported software.

This week, major computer design flaws have been identified.  Here is a good explanation from KnowBe4, Inc. of the issue:

"Computer researchers have recently found out that the main chip in most modern computers—the CPU—has a hardware bug. It's really a design flaw in the hardware that has been there for years. This is a big deal because it affects almost every computer on our network, including your workstation and all our servers.

This hardware bug allows malicious programs to steal data that is being processed in your computer memory. Normally, applications are not able to do that because they are isolated from each other and the operating system. This hardware bug breaks that isolation.

So, if the bad guys are able to get malicious software running on your computer, they can get access to your passwords stored in a password manager or browser, your emails, instant messages and even business-critical documents. Not good.

So, What Are We Doing About This?

We need to update and patch all machines on the network. This is going to take some time, some of the patches are not even available yet. We also may have to replace some mission-critical computers to fix this.

In the meantime, we need you to be extra vigilant, with security top of mind and Think Before You Click."

This impacts not only corporate computers and desktops, but also smartphones and internet servers.   Intel, Amazon, Google, Apple, Microsoft, Firefox have either released fixes or will be soon.  

In April 2017, numerous industry trade groups and labor unions, filed legal challenges to the Respirable Crystalline Silica Standard’s (29CFR1910.1053 and 29CFR1926.1153) validity in several circuit courts across the country.  The petitions were consolidated into the U.S. Court of Appeals for the D.C. Circuit (Docket No. 16-1105).

On December 22, 2017, the DC Circuit Court issued its ruling. The following summarizes the Court’s ruling:

“In sum, we reject all of the petitioners’ challenges to the Silica Rule, with three exceptions. We hold that OSHA was arbitrary and capricious in declining to require Medical Removal Protection for some period when a medical professional recommends permanent removal, when a medical professional recommends temporary removal to alleviate Chronic Obstructive Pulmonary Diseases (COPD) symptoms, and when a medical professional recommends temporary removal pending a specialist’s determination. We remand to the agency to reconsider or further explain those aspects of the Rule.”

For additional information or to receive the full ruling, contact Safety@rrins.com.

We're often asked, "How do I know if there is silica exposure on my job site?"  While there is a variety of testing that can be done, you can start with 2 basic questions:

1. What tasks are being done?
2. What tools are onsite?

Common Tasks that Risk Exposure to Respirable Crystalline Silica

• Abrasive blasting
• Tuckpoint grinding
• Surface grinding
• Drilling and coring
• Jack hammering
• Chipping
• Cutting and polishing concrete/brick/granite/stone/tile
• Milling
• Excavating

Common Tools that Risk Exposure to Respirable Crystalline Silica

When the tools listed below are used on concrete, brick, block, stone, mortar, and other materials that contain crystalline silica there is an increased exposure.

• Stationary masonry saws
• Handheld power saws
• Walk-behind saws
• Drivable saws
• Rig-mounted core saws or drills
• Handheld and stand-mounted drills (including impact and rotary hammer drills)
• Dowel drilling rigs
• Vehicle-mounted drilling rigs
• Jackhammers and handheld powered chipping tools
• Handheld grinders
• Walk-behind milling machines and floor grinders
• Drivable milling machines
• Crushing machines
• Heavy equipment and utility vehicles when used to abrade or fracture silica-containing materials (such as hoe-ramming or rock ripping) or during demolition activities, and for tasks such as grading and excavating

When you've identified your risk, or are wondering your level of risk, the next step is to develop a strategic plan to keep your crew safe.  Keep in mind, it's not just about the task at-hand, it's also about what is going on around you.  Contact your KnowledgeBroker or safety@rrins.com to start the discussion.

Many employee benefits are subject to annual dollar limits that are periodically increased for inflation. The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the annual dollar limits for various welfare and retirement plan limits for 2018. Although some of the limits will remain the same, many of the limits will increase for 2018.

The annual limits for the following commonly offered employee benefits will increase for 2018:

• High deductible health plans (HDHPs) and health savings accounts (HSAs); 
• Health flexible spending accounts (FSAs);
• Transportation fringe benefit plans; and
• 401(k) plans.

Employers should update their benefit plan designs for the new limits and also make sure that their plan administration will be consistent with the new limits in 2018. Employers may also want to communicate the new benefit plan limits to employees in connection with annual open enrollment.

Click here to download the Benefit Plan Limits for 2018

Or contact a Knowledge Broker for more information.