R&R Insurance Blog

Although Halloween has come and gone, we believe it's never too late to discuss sweets.

As a child, I absolutely loved Halloween. I would run rapid through my neighborhood filling my bag with goodies. After visiting every house, I would rush home and change into a new costume and go revisit those houses who gave out the best candy.

I know what you’re thinking – Yes, I was one of those kids. Yet, I guess I never looked at it that way, rather that I was complimenting those who enhanced my experience of trick-or-treating.

At R&R, we pride ourselves on being all about enhancing your experience and we strive to be that one house on the block that exceeds everyone’s expectations with Health Benefits.

When it comes to partnering with an organization as their Health Benefit Broker, we are truly handing out the oversized candy bars with resources and services like:

• A Financial Analyst on staff and an investment in Financial Analytic Software. When you combine the two, you get a Count Dracula understanding of your best plan design options all in real-time, giving you the power and confidence to make the best decisions for you and your employees.

• ACA Assurance. With an on staff, ACA compliance guru, we ensure our clients are proactively informed about all things compliance related so that even if a black cat crosses your path, we’ve got you covered.

• A commitment to wellness. With R&R, you don’t have to go bobbing for apples to try and construct a wellness program. With a staffed and certified wellness specialist we’ll hand deliver the apples and design/build a wellness program that’s geared toward cost reduction, consumerism, and engagement.

• A dedicated customer service team. To us, we think great service is expected, so to be that one house on the block who exceeds your expectations, we personalize each client’s service package and deliver accountable service metrics to ensure you’ll never have a horrific experience.

• An employee communication/education plan like no other. If you feel like your employees are zombies after you talk to them about benefits or you have to dust the cobwebs off your health plan materials, you’re not alone. Now, we’re not going to give away all the beetlejuice about what makes us so unique and different, but we can assure you that we have a “ballroom blitz” communication strategy that seals the coffin on everyone else.

Some employers have been getting mini-bars for years and have not realized they may be missing out on some incredible enhancements. Don’t be scared by the thought that there isn’t a better house on the block. We’re confident, you’ll be haunted to know what has been absent when you learn how if a different kind of Broker, takes a different kind of approach, you and your employees get a much different kind of result.

I appreciate you carving out a few minutes to read this and welcome the opportunity to further connect and illustrate the endless advantages R&R brings to our clients.

Learn to Recognize the Warning Signs and Prevent Cyber Crime

Think your business is reasonably safe from a cyber-attack? Think again. The threat is so widespread that there is an entire black market built to arm hackers with the tools they need to breach your systems.

The good news is that there are a number of steps your business can take to not only protect your employee and client data, but also to demonstrate the level of diligence that is critical to your customers and insurers. Click here to download our free e-book: Prepare Your Business For a Cyber-Attack.

In addition to the e-book I want to share with you the results of the NetDiligence 2014 Study of Cyber Claims. This is their fourth annual study about data breaches and the claim losses they sustain. In the study they analyzed 117 data breach insurance claims in a variety of business sectors. They estimate this represents 5-10% of all claims filed. Here are some of the highlights:

1. Personally Identifiable Information was the most frequently exposed data followed by Personal Health Information
2. Hackers were the most frequent cause of loss followed by staff mistakes.
3. Healthcare was the sector most frequently breached followed by financial services
4. Small revenue (under $2 billion) companies experience most incidents
5. The average claim payout was $733.109. The average for a large company was $2.9 million, for healthcare it was $1.3 million
6. The average cost per record cost was $956.21
7. The average cost for Response Costs was $366,484
8. The average cost of legal defense was $698,797
9. The average cost of legal settlement was $588,520
10. Breach response costs are 30% higher when no insurance is in place.

This study further emphasizes the risks and the key role that insurance can play.

Quite often, I’ll get questions from employers wondering what impact the ACA will have on worker’s compensation. A recent study by the Worker’s Compensation Research Institute (WCRI) helps shed some light on what employers can expect. It’s not encouraging news.

According to the recent WCRI study, hundreds of millions of dollars in insurance claims nationally could shift from health insurers to worker’s compensation carriers.

The concept is simple. The Affordable Care Act encourages health providers to form Accountable Care Organizations that shift payment from a traditional fee-for-service model to capitated or pre-paid health insurance. As you know through experience, most worker’s compensation treatment is based on fee-for-service.

The study suggests that providers may, in some cases, have a financial incentive to categorize an injury as being work-related. In States like Wisconsin and Pennsylvania where a large percentage of workers are enrolled in capitated health plans, this case shifting could be significant.

For more information on the report, click here.

If you would like assistance with evaluating your current worker’s compensation policies and procedures to see if there are ways to strength your program, please contact me.

OSHA recently announced they will be expanding their enforcement resources in hospitals and nursing homes. Targeting the most common causes of workplace injury and illness in the healthcare industry, OSHA will primarily focus on musculoskeletal disorders related to:

• Patient handling
• Bloodborne pathogen
• Workplace violence
• Tuberculosis
• Slips, trips and falls

OSHA states that in 2013, US Hospitals recorded nearly 58,000 work-related injuries and illnesses – amounting to 6.4 work-related injuries and illnesses for every 100 full-time employees. These numbers are almost two times as high as the overall rate for private industry.

How Can You Prepare?

Don’t wait for OSHA. At R&R, we highly recommend taking action now to develop a plan and prepare for a potential inspection. To better prepare your organization and your administrators, take time to answer the questions below and determine an execution plan for each of the key areas. We have also provided links below to audit materials centered on these key topics.

For audit materials on any of the topics below, or to learn how your organization can better prepare for an inspection, contact safety@rrins.com.

• Patient Handling
• Infection Control
• Exposure Control
• Workplace Violence
• Tuberculosis
• Slips, Trips and Falls

1. Additional Insured: A person or organization not automatically included as an insured under a policy, and is added by endorsement to the policy at the request of the first named insured. The person or organization then becomes an insured for a specific project, product or premises.
2. Primary and Non-contributory: Primary is a term used to determine whose policy is going to pay first; non-contributory is a term used to indicate that the primary policy will not seek contribution from the other policy until the full claim is paid or the policy is exhausted.
3. Waiver of Subrogation: The insurance carrier has the right to recover its claim payments from those who were responsible for the loss. By endorsing its policy with a waiver of subrogation, the carrier is stopped from pursuing this recovery.
4. Ongoing Operations: Work or other business activity that is in process and has not yet been completed or abandoned.
5. Completed Operations: Work of the insured that has been completed under a contract or work order, or has been put to its intended use.
6. Indemnify: To make compensation to an entity, person or organization for injury, loss or damage; to make the other party “whole”.
7. Hold Harmless Agreement: A provision in a contract that requires one contracting party to respond to certain legal liabilities of the other party. Typically, hold harmless agreements will be “basic”(or “limited"), “intermediate” or “broad”.
8. Indemnitor: The party agreeing to indemnify and hold the other party (indemnitee) harmless.
9. Per-Project Aggregate: Required by many project owners or general contractors, this is a standard endorsement to the general liability policy which allows a contractor to specify the application of a separate general aggregate limit to individual construction projects, subject to the usual maximum limit the policy will pay per policy term.
10. Alternate Employer Endorsement: Applicable when one employer lends, rents or leases an employee to another employer. This endorsement resembles an additional insured endorsement to the workers compensation policy and is attached to the regular (lending) employer’s policy.

Click here to download a copy of this blog.

R&R Insurance Services is pleased to provide this information to you as a guide. It is intentionally condensed. For a thorough explanation of these and other terms, and if applicable in your situation, please contact your Knowledge Broker.

An uninsured subcontractor can increase your exposure to liability and workers compensation claims, affect your experience modification factor and increase your premium. If the subcontractor does not carry insurance, your policy could respond in the event of a claim. An uninsured subcontractor will be considered to be your employee.

The insurance company’s auditor will ask for both payroll and 1099 records in order to determine final premium. If certificates from subcontractors cannot be produced, the cost of those subcontractors will be included in your audit.

Some tips for a successful certificate management program:

• Advise subcontractors up front that certificates will be required
• Ensure that dates on the certificate align with the length of time they will be on the project. If the project goes longer, ask for a renewal of the certificate
• The certificate must show evidence of both general liability and workers compensation insurance
• Don’t allow for exceptions, even if the subcontractor claims to be exempt from the workers compensation requirement (sole proprietor, no employees, etc.)
• Your R&R agent can assist you in setting up specific insurance requirements concerning limits and policy provisions designed to protect you such as:
  • Additional insured status
  • Primary and non-contributory insurance
  • Waiver of subrogation

We urge you to require your subcontractors to be insured and to furnish a certificate of insurance as proof. Click here to download a copy of this blog.

R&R Insurance Services is pleased to provide this information to you as a guide. It is intentionally condensed. For a thorough explanation of these and other terms, and if applicable in your situation, please contact your Knowledge Broker.

The workers compensation act in Wisconsin changes every two years through an “advisory council” process. The Worker’s Compensation Advisory Council, made up of five management representatives and five labor representatives, is charged with exchanging proposals and negotiating an agreed bill that goes off to the legislature for consideration. Typically, this agreed bill makes it through the legislature without much friction. But that's not always the case.

As we are nearing the end of this biennial cycle, it’s important that you understand the proposals that are being considered by the Worker’s Compensation Advisory Council as many could have a direct impact on what you pay for worker’s compensation insurance in the future. Here’s a brief summary of the key proposals:

LABOR PROPOSALS

• Rate Increases and Indexing: Labor is looking for sizable increases in payments made for injuries that involve permanent partial and permanent total disability.
• Continuation of Healthcare Contributions: For those employers who offer health insurance, labor is looking to require that you continue to make those employer contributions to the health plan for as long as the injured worker is in that disability state. That would be for an unlimited time and it would be regardless of whether you had terminated the employee for cause or they quit for any reason.
• Vocational Rehabilitation Exceptional: This would allow employees who are being retrained as a result of a workplace injury to collect full indemnity benefits while in school AND collect wages at another employer for up to 20 hours without an offset of indemnity benefits.

MANAGEMENT PROPOSALS

• Statute of Limitations Reduction: Currently, an employee has 12 years to pursue a worker’s compensation claim against their employer. Management is looking to reduce that to 3 years.
• Eliminate Statutory Permanent Partial Disability Ratings: Currently, there are certain surgical procedures that result in permanency ratings that automatically start at a minimum level, regardless of the outcome of the procedure. With advancements in medical procedures and technology, the management representatives would like to see these minimums removed.
• Controls on RX’s Dispensed at a Doctor’s Office: Some doctors are dispensing prescriptions to injured workers at their offices and charging insurance carriers 3-4 times the cost of the drugs. Management is asking to implement some controls on the cost and length of time a physician can dispense meds from their office.
• Medical Cost Containment: Most states in the U.S. have instituted aggressive cost containment measures to better control the cost of treatment for work related injuries. Wisconsin lacks that type of control and the cost of medical treatment is sometimes 2-3 times more expensive for work related procedures as compared to those covered under a health plan. Management is also asking for the ability to direct where an injured worker can get treated.

No doubt that many of these proposals, if they become part of a bill that gets passed by the legislature, will have an impact on the cost of your insurance going forward.

For additional insight on how any of these might impact the cost of your worker’s compensation insurance, please contact me.

Are you curious on how your experience modification factor (“ex-mod” as it is referred to in the industry) compares with other Community Action Agencies in Wisconsin? Before we get to that comparison, let’s take a step back to be sure we have a basic understanding of the experience modification factor.

Each year, about 3-4 months prior to your worker’s compensation insurance renewal, your Community Action Agency is provided with the experience modification factor that is calculated by the Wisconsin Worker’s Compensation Rating Bureau. That ex mod is based on three years of your prior loss information and simply put; it’s a reflection of how well your organization is controlling the frequency and severity of workplace injuries. It’s somewhat of a scorecard. In fact, in the for-profit world, many general contractors will only work with sub-contractors who have ex-mods at or below 1.0.

If your Agency is “average”, your experience mod is a 1.0. If you have more losses than expected for the work that you do, you will have a “debit mod” and pay more for your premium. If you have less than expected losses for the work that you do, then you will have a “credit mod” and you will pay less, thereby freeing up additional funds for vital community programs.

What I found in my analysis of the ex-mod data is that only four of the Agencies in Wisconsin have ex-mods under 1.0. And in most of instances, the ex-mods are just slightly under the benchmark. The remaining Agencies have mods over 1.0 and are paying from 5% to 39% more for their work comp insurance. Whether your ex-mod is over or under 1.0, I am confident that every Agency has the ability to reduce their ex-mod from its current value. And what programs could you fund if you were able to reduce those costs?

Click here to view the summary.

If you have an interest in learning how low your ex-mod can actually go, or would like to discuss potential policies and procedures that you could implement in the short term that would have the most impact on driving down your specific ex-mod, please contact me.

The 2015 WI Cyber Security Summit will be held on October 28, 2015 at the Marquette University Alumni Memorial Union, Monaghan Ballroom, 1442 W. Wisconsin Ave, Milwaukee. The conference begins at 7:30 am. Registration will be available shortly at www.homelandsecurity.wi.gov. The conference is hosted by the State of Wisconsin and will include Cyber disruption response strategies, addressing cyber threats, recruiting & training the cyber security professional and networking with cyber security leaders.

Data Breaches and the FTC

As if businesses didn't have enough to worry about, on August 24, 2015 the U.S. Court of Appeals ruled in a unanimous decision that the Federal Trade Commission has the authority to bring actions against companies for failure to adequately protect consumer information from data breaches. The decision involves the case of Federal Trade Commission v. Wyndham Worldwide Corp, et al. Wyndham suffered a data breach in 2008 and 2009 when hackers gained access to their property management systems and stole information of more than 610,000 consumers. The Court ruled that the authority of the FTC resides under a section of a 1914 federal law that prohibits "unfair trade practices." The FTC claimed that Wyndham's computers "unreasonably and unnecessarily" exposed consumer data from the risk of theft.

Tracking a Bluetooth Skimmer Gang in Mexico
This is a really interesting article that outlines how the author found at least 19 different ATMs that had been hacked from the inside and retrofitted with tiny, sophisticated devices that store and transmit stolen card data and PINs wirelessly at various resorts in Mexico.

Let me start by asking, do you know how to do a somersault?

Without seeing if you raised your hand, I am willing to bet, you confirmed that you know how to do a somersault.

Now I’ll ask you – Do you really remember how to do a somersault?

Seems pretty simple – right? But when was the last time you actually got down on all fours and attempted to muddle your body into a ball and project your feet over your head? Chances are, it’s been quite some time since you last attempted this feat. And probably with good reason – why do a somersault as an adult (unless you’re a gymnast, in the military training to dodge enemies, or a ninja)?

The other day, when I got home from work, my wife asked me if I could do a somersault. Naturally, and with my male self-assurance, I replied, “Yes, certainly.” Now, my wife wasn’t asking because she had any interest in seeing me do one, she was asking because she had resided in her own self-assurance and thought, “It’s just like riding a bike.”

See, a few hours earlier, our 5 older children (ages 10 through 13) were trying to teach oops child #6 (2 ½) how to do a somersault. Yet, as my wife looked on, she noticed that the older kids forgot how to do a somersault. She chuckled and giggled as they rolled their bodies from side to side in an attempt to relearn something that seemed so simple.

So, as expected, my children, who are motivated by the grief they can instill in their mother, threw out the challenge to my wife, “Let’s see you do it, Mom!”

I wasn’t there to see it, yet my wife’s explanation was visual enough that I laughed pretty loud at the thought of her trying to outdo the kids. She explained how she got into a jumbled ball and stayed locked there for what seemed like an eternity. She was perplexed at how to make the transition of, tuck, roll your neck, arch your back, push off with the balls of your feet, brace with your hands, and let your hands and shoulders fall through after your feet and legs project end over end.

I am not going to age my wife, yet let’s just say it’s been 20 plus years since she made the attempt. Did she do it? Yes. Was it as easy as she thought? Heck no. Does her back and neck now hurt? You bet.

So, why does a guy who’s a Healthcare Broker for a living think there is a correlation between doing a somersault and managing your healthcare benefits? Well, it’s simple. When was the last time you truly went through the process of evaluating what your Healthcare Broker is offering for you? See, in sales, we’ll do flips, cartwheels, jump through hoops, and even somersault at the chance to earn your business. Yet once you say yes, are you circling back, taking note of why you said yes, and holding your Broker accountable to the somersault they promised?

Being a Healthcare Broker is not just saying I know how to do a somersault, it’s being an expert at it and performing the aerial feats that landed us your business in the first place. A quality, high-flying Broker relationship should include a plan that illustrates how they’ll be doing airborne bouts for you on a continual basis throughout the year.

At R&R, we’re poised to exceed your expectations and deliver a 12-month, somersault of a plan to provide you with the confidence that the flips and cartwheels continue long after you award us a, “Yes.”

If you’d like to learn how we’ll transcend your expectations, please contact me.

Now, if you’re wondering if I attempted the feat of the somersault, well, the answer is yes, and the outcome was even worse than my lovely wife’s.

A different kind of Broker truly equals a different kind of result. Knowledge is in the Knowing – Come Know With Us.