California Sees More Financial Troubles with Workers Comp

 

As if California does not have enough monetary problems, now comes word that insurers’ witnessed billions in financial losses during 2011.
 
The Workers Compensation Insurance Rating Bureau reported that the insurers who provide coverage for the majority of employers collected $10.4 billion in premiums in 2011, but paid out some $7.7 billion in support benefits and medical care, and had expenses of $5 billion, thereby losing approximately $2.3 billion.
 
According to the new report, losses on workers comp coverage were greater than those experienced in 2010.
California’s workers comp insurers on average in 2011 spent approximately $1.22 on claims and expenses for every dollar of premium they took in. That compares to $1.17 in both 2010 and 2009, $1.01 in 2008 and 85 cents in 2007.
 
Insurers, the report points out, paid out $4.4 million for medical care of disabled workers and another $3 million in direct support benefits to workers. The report, however, does not include data from large private and public employers who generally self-insure for job injuries as opposed to purchasing insurance.
 
 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Ohio Workers Comp Board Helping Employers Predict Costs, Create Jobs

 

Approve $65 Million in Rate Cuts
 
The Ohio Bureau of Workers' Compensation (BWC) recently extended the $65 million in rate cuts enacted last year for Ohio's private sector employers to the 2013 policy year that began July 1.
 
According to the BWC,its board of directors approved the proposal to maintain the statewide average rate at the current level, therefore maintaining last year's 4% average rate reduction over the 2011 rates for private employers.
 
 
Opportunity to Predict Costs, Create More Jobs
 
"Stable rates provide employers with more opportunities to predict costs and contribute to the kind of jobs-friendly climate they need to expand and create more jobs for Ohioans," said BWC Administrator/CEO Steve Buehrer.
 
The rates for the 2013 policy year were effective as of July 1. Each employer's actual premiums incorporate overall claims cost experience within their specific industry and job classifications, as well as their own individual performance.
 
 
Exploring Other Costs Savings with Administrative Fund
 
The board also reviewed a recommendation to reduce assessments for the Administrative Cost Fund, which funds the operating expenditures of BWC.
 
Cost savings initiatives in recent years are allowing for the recommended 3% decrease in the assessment for private employers. The amount each employer pays into the Administrative Cost Fund is calculated as a percentage of their premium.
 
"Careful cost controls are allowing BWC to apply $35 million to future operating expenses and reduce the amount of employer premiums going toward those expenses," added Buehrer. "We continue to look for innovative opportunities to save, from renting unused space in the William Green building to reducing operating expenses through capital improvements and better managing our recycling program and trash collection."
 
The board will vote on the Administrative Cost Fund proposal during its next meeting scheduled for Friday, June 15. 
 
 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 

 

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

The Best Tidbits of News from the Workers Comp World

Lexis Nexis Weighs – In on Health Care Reform

Health Care Reform Law Upheld
 “Experts, Officials, Media Offer Their Two Cents on Constitutionality of Affordable Care Act. John Stahl, Esq. says the Supreme Court's decision upholding the Affordable Care Act was a "where were you" moment in American history. He surveys how LexisNexis authors Thomas A. Robinson, Robert G. Rassp, and Jennifer C. Jordan, as well as other experts and officials, reacted to the news. Read More.”
 
Romneycare & Workers’ Comp
“Workers' Compensation Under Romneycare Provides Clues for Nationwide Future of Systems, by John Stahl, Esq. Uncertainty regarding how the U.S. Supreme Court deciding that the Patient Protection and Affordable Care Act (ACA) was constitutional would impact workers' compensation systems makes this a good time to review an expert's related research. RAND Director for Research Paul Heaton prepared a report entitled "The Impact of Health Care Reform on Workers' Compensation Medical Care: Evidence from Massachusetts" earlier this year. Read more.”
 
Rebecca Shafer to Speak at National Workers’ Comp Conference
“LexisNexis has partnered with the National Workers' Compensation Conference to create an enhanced legal track for attorneys and other workers' comp professionals.Larson's Advisory Board Executive Committee member Rebecca Shafer will be speaking onLegal Triage. View the program agenda. Overall, there are 15 members of the Larson's National Workers' Compensation Advisory Board speaking at this event. You don't want to miss this conference! Take advantage of the special discount for all LexisNexis Workers' Compensation Law Community members. Community membership is free at our site."
 
Additional Health Care News
 
A new study, Monitoring the Impact of Reforms in Texas, CompScope™ Medical Benchmarks, 12th Edition, from the Workers Compensation Research Institute (WCRI) says that costs of medical care for injured workers in Texas have dropped. The study says the drop is largely the result of reforms and an increased focus and effort on managing medical care in the state’s workers’ compensation system.  Read more…
 
Dr. Arthur Kellermann, MD, vice president at the RAND Corporation and a director of RAND Health, was the keynote speaker at the recent American Occupational Health Conference in Los Angeles, hosted by the American College of Occupational Environmental Medicine (ACOEM).  In an address titled “Personal and Population Health in the 21st Century:  From Volume to Value, “  Dr. Kellermann discussed the nation’s healthcare crisis and suggested action steps needed to reform our health care system.  Watch the Video
 
 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 

 

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

If You Can Not Get Workers Comp Coverage, Look to the State Fund

There is an alternative to commercial insurance companies or self-insurance for your workers compensation needs.  In about 20 states, including the three largest states, California, Texas and New York, there is a state sponsored insurance company that competes with the private insurance market for workers compensation policies and premiums.  They are often referred to as the State Fund.

 
 
In some of these states, the state government takes an active role in the operation of the state insurance companies and the insurance company is a quasi-governmental agency.  In other states, the state created and funded the insurance company, but no longer operates or manages it.  (WCxKit)
 
 
Each of these state operated insurance companies is domiciled in the state where they operate and they do not issue policies outside of the state boundaries. 
 
 
The State Funds have come about because of the difficulty employers can have in securing workers compensation coverage, especially if they are in a high risk line of business.  Employers who have excellent safety programs are coveted by the commercial insurance companies.  The modification factor used to establish premiums reflects the lower than average loss experience of these companies. 
 
 
The opposite holds true for companies who have higher than average loss histories.  The standard insurance companies are not interested in obtaining the business, resulting in it being difficult for those employers to obtain workers compensation insurance.
 
 
A poor loss history is not the only reason employers will end up in the State Fund.  The state legislators in every state are often tinkering with the workers compensation laws.  Changes in the laws such as increases in the maximum weekly indemnity benefit rate, or the number of weeks an employee can collect benefits, makes for great vote buying strategy for state legislators, but results in increased cost to the workers compensation insurance companies.  When the insurance companies are not allowed to raise the premiums proportionally to the additional claims cost, they become selective in whom they will insure.  With cost increasing faster than premiums, very few insurance companies will write policies.  When they do write policies, they are very selective.  This results in employers with decent loss histories being pushed into the State Funds.
 
 
State Funds, like standard insurance companies, strive to assist the policyholders in reducing the number of insurance claims they have.  The State Funds often offer various services to the policyholders.
 
Guidance in establishing a Return-to-Work program
Offering comprehensive loss control programs including on-site inspections
Ergonomic evaluations
Educational materials including posters, pamphlets, safety manuals
OSHA compliance assistance
Anti-fraud programs
Wellness programs

 

In about a dozen states the State Fund is the insurance company of last resort.  The State Fund offers insurance coverage to all employers, often at a price that is slightly higher to much higher than what the insurance policy would cost from a standard insurance company.
 
 
When an employer cannot obtain workers compensation insurance from any other source, the department of insurance will mandate the employer be provided insurance by the State Fund.  Of course, the State Fund charges an appropriate premium to reflect the higher exposure to claims when they insure these employers.
 
 
The single state coverage of the State Funds often makes them a poor choice for employers who have operations in multiple states. For instance an employer who has operations in both California and Nevada can insure his California operations through the State Compensation Insurance Fund, but will have to locate another insurer for the workers compensation policy to cover the Nevada operations. (WCxKit)
 
 
State Funds are occasionally a smart choice for the employer.  The premium charged can be lower if the charter does not mandate the making of a profit.  The added services listed above – provide the policyholders with more value than the employer can purchase separately.  Check with your state Department of Insurance to see if there is a State Fund available in your state.
 
 
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 
 
WORKERS COMP MANAGEMENT GUIDEBOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Financial 101 for Workers Comp Reserves

 

Reserves are the money set aside by the insurer/self-insured to pay the cost of a workers compensation claim.  The cost of a workers comp claim is an obligation of the insurer or self-insured, so it is good financial management to have the money available to meet that obligation. It is also the law in every jurisdiction that the money to pay the claim is set aside and held separately from the insurer or self-insured’s other funds.
 
 
Reserves are normally broken down into indemnity cost, medical cost, and expenses. In recent years, due to the cost of litigation, some insurers and even some self-insureds have added a fourth category, legal, with all litigation expense in the legal category and all other claim handling expenses in the proper expense category.[WCx]
 
 
To establish what the reserves should be, the workers compensation adjuster considers each category independently. The estimated amount of indemnity expense, medical cost, legal expense and general expense is broken down into parts to arrive at the estimated reserves (dollars) needed to pay the claim. The normal breakdown is:
 
 
  • Indemnity
  • Temporary total disability  (weekly rate multiplied by number of weeks the employee is expected to be off work)
  • Temporary partial disability  (weekly rate multiplied by number of weeks the employee is expected to be on modified duty at a reduced rate of pay)
  • Permanent partial disability  (Disability rating multiplied by appropriate number of weeks of compensation)
  • Permanent total disability (weekly rate multiplied by maximum number of weeks the employee can receive)
  • Rehabilitation or Vocational Training  (estimated cost of training)
  • Funeral benefits  (cost of burial up to state maximum amount)
  • Death benefits to dependents  (weekly indemnity rate multiplied by number of weeks provided by statute, payable to spouse and/or children and/or other relatives financially dependent on the employee)
  • Medical
  • Doctors
  • Hospitals
  • Diagnostic testing
  • Ambulances
  • Specialists
  • Prescriptions
  • Medical transportation
  • Attendant care
  • Drug screen
  • Physical therapy
  • Legal
  • Attorney fees
  • Court reporters
  • Court cost
  • Expert witnesses
  • Expense
  • Medical reports
  • Peer review
  • Independent medical examinations/evaluations
  • Surveillance
  • ISO report
  • All other expenses
 
 
The initial reserves are set at creation of a case based on the adjuster’s understanding of the nature and extent of the injury. The original reserves will often change as the adjuster learns more about the claim. The initial reserves are based on the average cost for similar claims. When the injury is more or less severe than originally anticipated, the reserves should be adjusted up or down as appropriate.
 
 
As the claim progresses the adjuster should review each medical report to determine the claimant’s (employee’s) medical status and work status. Based on the information provided in the medical report, the adjuster will know whether or not it is necessary to add additional medical reserves (for example to cover additional diagnostic testing that has been requested), or change the indemnity reserve (for example the employee is released back to full duty earlier than expected).
 
 
With complex workers compensation claims, the adjuster may change the reserves several times as additional medical information becomes available. Normally those changes in reserves are increases in the amount of money set aside due to the medical treatment being greater than originally expected, indemnity cost being higher due to a longer time off work than originally anticipated, a permanent partial or total disability.[WCx]
 
 
Reserving is not an exact science, but the adjuster should try to be as accurate as possible with the reserves. With proper reserving, the insurer or self-insured will be able to meet the financial obligation to pay the claim.
 
See also our WC 101 section from our website Lowerwc.com. 


 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Employers Think Insurance Boards Funding Fairness Report is Unfair

 

The Ontario Workplace Safety and Insurance Board’s recently released review of the province’s workers compensation system has raised several questions and indicated challenges still lie ahead, according to the Ontario Trucking Association.
 
The nearly-200-page “Funding Fairness” report, conducted by law professor, Dr. Harry Arthurs, was designed to give direction to the WSIB for the next 15-20 years and restore the system to financial health. But the report looks only at funding issues, not expenditures – a concern the Ontario Trucking Association and other employer groups raised during the consultations with Dr. Arthurs last year. The report did contain a chapter on the subject; however, due to the mandate, no recommendations were given.(WCx)
 
 
In response to the report, and issues related to unfunded liability, Ontario Minister of Labour Linda Jeffrey announced the provincial government would introduce a new regulation under the Workplace Safety and Insurance Act to require the WSIB's insurance fund to reach sufficiency of 60% funding in 2017, 80% funding in 2022 and 100% funding by 2027.
 
 
However, the OTA notes: “What she didn’t say, but which is implicit in the report, is the way the WSIB is going to reach these targets is by increasing premiums, which are paid solely by employers.”
 
One of Dr. Arthur’s recommendations is that WSIB premiums should be based on actual costs, not whether rates are affordable. He says there should be no government interference with rate setting unless the province is experiencing a severe economic crisis. He also recommends each rate group should pay the full current and future costs of new claims, which the WSIB must accurately price.
 
It goes on to say that the current rate groups should be replaced with sectorial groups. This would take place over the next several years with appropriate transitional measures to avoid sudden premium rate increases, according to the report.
 
Additionally, the report raises questions over the future of experience rating programs. Dr. Arthurs’ recommends, for example, that experience rating should be maintained only if the board declares the purpose is injury reduction and return to work; it achieves these purposes; and is resourced to prevent abuses. He calls for a time-limited experience-rating experiment to be conducted in one industry.
 
Other recommendations include the reestablishment of medical/scientific panel to identify occupational disease and the full indexing of all benefits.
 
It will be imperative that meaningful consultation with employers takes place,” says OTA president David Bradley. “If the WSIB administration has already made up its mind what it is going to implement from the Arthurs report and how it is going to do it, then the process will be doomed to failure. These are enormously important issues. Employers want a better system too, but we cannot afford to sign a blank check.
 
Gutting experience rating programs is not the answer,” Bradley continued. “We’ve got to make sure that all employers are paying their fair share and I don’t see how anyone can talk about the future sustainability of the WSIB without dealing with the expenditure side of things.”(WCx)
 
 
The release of the report has prompted OTA to form a WSIB issues committee to help guide the association’s analysis and positioning on these issues over the next couple of years. 

 

 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

  
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Why Every Business Needs to Have Commercial Insurance

Every new business and every small business needs to have commercial insurance, even if your business only has a few employees. Commercial insurance covers the business against the risk of loss by providing protection from fire, weather events, lawsuits, employee injuries, and many other types of insurance losses. The insurance premium is often a small price to pay to protect the business from an event that could wipe out a business without insurance.

 
 
Commercial insurance is broken down into three categories: property, liability and workers compensation. The small business needs coverage in all three areas.  Each of the three categories can have variable types of insurance that can be tailored to the needs of the business. See our Buyer's Guide to WC Insurance Coverage. [WCx]
 
 
Property
Many new business owners think of property insurance as protection from fire and flood, but property insurance can be much more than that. There are two basic areas of property insurance.  The first area is real estate insurance to cover a business’ buildings. The second area is personal property insurance to cover non-real estate property. Non-real estate property insurance can provide coverage for equipment, inventory, cargo and other owned property. 
 
 
The property insurance can be tailored to provide protection from business interruption, crime, equipment breakdown, glass breakage, debris removal and any other type of property loss specific to your business. Property insurance will also include fidelity and surety bonds.
 
 
Liability
Liability insurance will protect the small business from claims brought against it by others.  Liability insurance provides protection from customers who bring claims and from other non-business related third parties. The liability insurance on a small business building can provide it from customers who are injured on the property, for instance a customer who slips and falls while in a store. Liability insurance can provide protection for the small business if one of its products causes an injury due to a defect in the product. Liability insurance also includes vehicle insurance in case a delivery truck is involved in an accident due to the carelessness of the driver.
 
 
There are various types of specialty liability insurance. Lawyers, appraisers, consultants, or anyone whose business is to provide advice and guidance will need Errors and Omissions insurance.  Doctors, druggists and all other types of medical providers need Medical Malpractice insurance. If the business is formed as a corporation, the directors and officers will need Directors and Officers liability coverage to protect them from lawsuits over the decisions they make.
 
 
Workers Compensation
Almost every employer needs workers compensation insurance to protect the business from the cost of injuries incurred by employees while on the job. Only the very smallest of businesses (1 up to 5 employees which varies by state) are exempt from the requirement to have workers compensation insurance. Even if a very small business is exempt from carrying workers comp coverage, it is still a good idea to have workers compensation insurance. See our WC 101 for more information. 
 
 
The workers compensation insurance pays for all the medical care of the injured employee, and replaces a portion of the employee’s lost income if the employee is unable to work due to his/her injury. If a small business does not have workers’ compensation coverage, the business and in some cases the individual business owner, is liable for all cost of an employee’s injury and can be sued for those costs.
 
 
The Commercial Insurance Policy
The commercial insurance policy normally contains four parts: 1) identification of the exposures or items insured, 2) the premium cost, 3) the conditions and exclusions of the policy, and 4) how claims will be paid. Upon receipt of the insurance policy, the business owner should carefully review the policy, imagine every possible thing that can go wrong and verify there are provisions in the commercial insurance policy to cover those events. If the commercial insurance policy does not cover an exposure to loss that the business owner is aware of, the insurance broker should be contacted and those concerns addressed by the broker.
 
 
Prior to purchasing the commercial insurance policy, the new business owner should contact an insurance broker or agent to review the nature and type of the business. By reviewing your insurance needs, this professional will be able to provide an insurance policy that meets all your needs. [WCx]
 
 
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Bands of the RMS Titanic – A Workers Comp Tragedy

Today, as this is being written, is the 100th anniversary of the sinking of RMS Titanic, an event which was a catalogue of small failures leading to giant consequences. All but forgotten today is one of the most frustrating episodes of that event– the exclusion from survivor benefits of the families of the eight members of Titanic’s two bands.

 
 
Normally, bands aboard passenger ships in 1912 were hired by the shipping line, in the case of the Titanic the White Star Line, a British corporation with its operational headquarters in lower Manhattan. Once hired, the bandsmen became non-seamen members of the crew. In hiring bands for the much-celebrated maiden voyage, the White Star Line was unwilling to pay union scale. [WCx]
 
 
The musicians’ union would not allow members to play as crew members for less than union scale. However, a compromise was reached with the White Star line to permit the band members to be listed as second class passengers and be paid as “independent contractors,” even though they were berthed in crew quarters. Today, that transparent end-run around the obvious would not be allowed to stand, but things were different in 1912.
 
 
After the collision, the band members were requested to remain on deck playing light dance music to calm those aboard. They continued to play until the ship’s list prohibited them from further performance. None attempted to get into a lifeboat and none survived. (There is no solid evidence that “Nearer My God to Thee” was ever played, but one of the last two tunes was said to be a rag-time piece, perhaps by Scott Joplin.)
 
 
All other family members of the deceased crew received some form of survivor benefits but the band members, alone, received, officially, nothing. As “independent contractors,” the band members were not covered by the British Workers Compensation Act, a result upheld by a British court.
 
 
The families might have received a better result in New York, but the state was in the short period between the court invalidation of its first comp law and the official passage of its second. Everything on the Titanic, it seemed, was dogged by evil timing.
 
 
However, the plight of the families of the bandsmen received great publicity in the US and the UK. Edward Elgar (of “Pomp and Circumstance” fame) presided over a memorial concert, as did John Philip Sousa. The fraternity of professional musicians rallied and, eventually, a charitable trust was established for the benefit of the families, who received about what the families of other crew members had received. (The band members were paid about $40 per month and benefits which was hardly sufficient.)
 
 
In some ways, the lessons of the Titanic were on the same order as the Triangle Shirtwaist tragedy two years earlier. The complicity of the musicians’ union in the inexcusable fiction that the band members were independent contractors led to much unneeded pain. The failure of a court to apply an equitable reformation of the relationship was also out of line with the growing opinions present even in 1912 .[WCx]
 
 
To the crew and passengers of RMS Titanic – “Requiescat in Pace.” 

 

Author: Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. medsearch7@optonline.net

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Ohio Company Ordered – Provide Workers Comp Coverage or Stop Operations

A Cuyahoga County, Ohio judge has ordered Gray Container, a 55-gallon drum manufacturer, to discontinue its operations for repeatedly refusing to maintain workers compensation coverage. See Ohio's Guidelines here in our WC resource center. 

 
 
The injunction against Gray Container, requested by the Ohio Bureau of Workers Compensation (BWC), was filed to protect employees. This injunction is believed to be the first action of its kind by BWC. The Attorney General’s Office represented BWC during this action. [WCx]
 
 
This case is ultimately about fairness to the employees who deserve protection in the case of workplace injury and fairness to the 250,000 other Ohio businesses that have to pick up the tab when a worker for an uninsured company is injured," said BWC Administrator/CEO Steve Buehrer. "In this instance, Gray Container ignored repeated efforts by our staff to find a workable solution, even as multiple claims were filed by its workers."
 
 
Gray Container allowed its policy to lapse in September, 2006 and despite repeated attempts by BWC to assist the company to maintain coverage, it failed to protect its employees.
 
 
During that time, 22 claims, one of which was a death claim, were filed and Gray Container now owes almost $700,000. Ohio law ensures benefits for the injured workers even if the employer is without coverage. When an employer fails to pay premiums, other Ohio employers are forced to carry the burden. [WCx]
 
 
The company's owner already pled guilty in May to felony failure to comply with workers comp laws.
 
 
At a hearing in June of last year, Gray agreed to make a lump sum payment, make monthly payments, and continue to report payroll and pay premium in a timely manner. In all instances, Gray failed to meet any of these agreements.

 


Author Robert Elliott
, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Understanding Key Differences Between Insurance Agents and Insurance Brokers

Employers often wonder does the workers compensation agent or broker work for them or does the agent/broker work for the insurance company?  If an issue develops with the workers compensation insurance company, will the agent/broker be there to assist you, the employer in resolving the issue, or will the agent/broker repeat what the insurance company says?

 
 
As both insurance agents and insurance brokers sell insurance to the public, many people use the terms “agent” and “broker” interchangeably.  They think of them as one and the same. There are some subtle, but important differences between an agent and a broker. [WCx]
 
 
The insurance broker is an independent business that sells insurance products for various companies. The insurance agent can be either an independent agent or a company agent.  The independent agent, like the broker, will sell insurance policies for multiple companies. While the company agent, also referred to as a captive agent, sells insurance policies for a single insurance company. 
 
 
Both the agent and the broker act as intermediaries between the client (the employer) and the insurance company.  They are both responsible for the proper processing of the application for insurance, the various forms and collecting, and submitting the premium to the insurance company. Large domestic and multi-national companies use insurance brokers to handle their insurance needs which are complex, with multiple types of insurance.
 
 
The difference between an independent agent and a broker is a matter of degree.  A pure agent will sell the insurance policy and perform the administrative functions.  The broker in some states will have a different license than the insurance agent, representing more experience, more education or both.  Brokers often offer a wider variety of insurance products.  Brokers will often have the expertise to analyze employer business needs and make recommendations on how to provide the coverage needed.  Brokers cover the cost of the higher level of expertise by adding an administrative fee to the workers compensation policy in the form of a higher premium. If they place sufficient volume with an insurance company, the commission they receive is higher from the insurance company. In all states, insurance agents and brokers need to be licensed.
 
 
A good agent or a good broker will educate the client ( the employer) any time there is a question or a concern about what  insurance coverage is needed. By providing you with information, they will guide in making the best decision for your company. The good agent or broker will never make the decisions for you, but give the information to make the best decision for your company.
 
 
The independent agent and the broker will place your insurance business with the insurance company(s) that can best provide your company the workers compensation or other insurance products that are right for the company. The insurance contract is arranged by the agent or broker or between your company and the insurance company.  The agent or broker is not a party to the contract.
 
 
Often the greatest difference between an agent and a broker can be seen when a dispute arises between the employer and the insurance company.  The captive agent is an employee or agent of the insurance company and will toe the company line.  The independent agent and the broker represent the client, the employer. In all situations the insurance policy language will prevail.  When the insurance policy is ambiguous and does not clearly address the situation between the employer and the insurer, the independent agent and the broker have the responsibility and the obligation to represent the interest of the employer. 
 
 
Brokers and independent agents run into trouble when they allow loyalties to shift to the insurance company because of concern for maintaining business relationships with the insurer.  Brokers and agents should work in the best interest of the client, the employer, even when it could be to their own detriment.
 
 
Whether a captive agent, independent agent or broker, they each have a duty of due diligence and attention to the suitability of the insurance policy they are arranging for you.  Each should be looking out for the employer interest and using their expertise to provide your company with the workers compensation insurance coverage that is right.

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20% to 50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.
 

Our WORKERS COMP BOOK:  www.WCManual.com
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact info@reduceyourworkerscomp.com.
 

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