Workers’ Comp Brokers Find Ways to Compete With Payroll Goliaths

PEO Compass | Breaking PEO Industry NewsIndependent insurance brokers in the workers’ compensation line were rocked in recent years with new competition from payroll service providers such as Paychex and ADP, but lately they have made counter moves to help themselves in the market.

While in years past, insurance carriers were reluctant to offer payroll services to the agents and brokers that sold their policies to help them compete with the big payroll service companies, that has been changing, said Scott Hauge, president of Small Business California and owner of Cal Insurance & Associates in San Francisco.

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California Bill Could End Use of Temporary Workers

California Bill Could End Use of Temp WorkersThe California legislature is considering a bill that could rewrite the relationship between employers and temporary staffing agencies. Assembly Bill 1897 (Hernandez, D-48) would make employers that hire laborers from temporary agencies liable if those agencies fail to provide workers’ compensation insurance, violate wage and hour laws or fail to withhold proper taxes.

This legislation could, effectively, end the staffing agency model by making it difficult for most small businesses to use the services.

Spike in use of compounded medications leads workers comp cost increases

The utilization and cost of compounded medications in workers compensation claims Risk Transfer serves commercial insurance buyersspiked last year, while the costs of antidepressants and non-narcotic painkillers also continued to rise, according to a report released Thursday by pharmacy benefit manager Express Scripts Inc.

The use of compounded medications, which include oral and topical medications that are combined or mixed, increased 71.9% from 2012 to 2013, according to Express Scripts’ “Workers Compensation Drug Trend Report.” Meanwhile, the average cost per compounded medication prescription was $1,299.13 in 2013, up 29.8% from the previous year.

via Spike in use of compounded medications leads workers comp cost increases |

Cost Increases Drive Higher Drug Trend for Workers’ Compensation

Risk Transfer serves commercial insurance buyersSignificant increases in cost per prescription drove drug trend for workers’ compensation payers higher in 2013, according to an Express Scripts’ “Workers’ Compensation 2013 Drug Trend Report.” Overall pharmacy spending for workers’ compensation increased 9.5 percent, primarily from an 8.2 percent jump in cost per prescription; effective management programs helped keep utilization increases to just over 1 percent.

via Cost Increases Drive Higher Drug Trend for Workers’ Compensation

Nearly 3 million Americans — a record — are employed as temporary workers, up by 28 percent between 2010 and last year

 

Temporary Workers, Risky Situations

Temporary workers are much more likely to be injured on the job than their permanent counterparts. OSHA’s Temporary Worker Initiative is designed to make temp safety top-of-mind among companies.

By Andrew R. McIlvaine
Wednesday, April 9, 2014

Lawrence Daquan “Day” Davis, a 21-year old with a high school diploma, began his first day of work at a Bacardi bottling plant in Jacksonville, Fla., in August 2012. According to news reports, Davis was excited about his new job — he’d told family members he hoped to finally be able to repay his mother for car-repair bills and buy a home with his fiancé.

Unfortunately, Davis didn’t make it to his first break period: He was crushed to death that morning by a machine that loaded pallets after being sent to sweep up broken glass from under the machine. Davis’ co-workers hadn’t realized he was still under the machine when they turned it back on.

An investigation by the Occupational Safety and Health Administration later determined that Bacardi failed to, among other things, properly train its temporary workers — of which Davis was one — to operate the machine and levied fines totaling $192,000 on the company.

Davis was just one of a number of temporary workers who’ve died on the first day of their jobs in recent years. A far greater number of temps have suffered serious injuries at work, and this trend has become a major focus of the Occupational Safety and Health Administration.

Nearly 3 million Americans — a record — are employed as temporary workers, up by 28 percent between 2010 and last year, according to a new report from CareerBuilder and Economic Modeling Specialists. A recent analysis of workers’ compensation http://www.hreonline.com/images/466695833tempworkersriskM.jpgdata by the nonprofit news organization ProPublica finds that in five U.S. states, temps face a much higher risk of getting injured on the job than permanent employees. Those states include California, Florida, Massachusetts, Oregon and Minnesota — in the last state, temps have a 72-percent greater chance of being injured on the job than permanent workers, according to the analysis.

Jonathan Snare, a partner at Morgan Lewis & Bockius who served as assistant secretary of labor for OSHA under President George W. Bush, says the topic of temp safety was a recurrent theme at the American Bar Association’s Occupational Safety and Health Law Committee’s meeting, held last month in Tucson, Ariz.

“This is a huge focus and a significant priority for OSHA,” says Snare, who was a speaker at the conference.

To help clarify the issue of which party is responsible for recording work-related injuries involving temporary workers, OSHA has just released a new booklet that explains OSHA 300 recordkeeping responsibilities for staffing firms and their clients.

The new booklet is part of OSHA’s Temporary Worker Initiative, launched by the agency last year in the wake of the outcry over the deaths of Davis and other temporary workers. The TWI is a combination of outreach, education and enforcement that’s intended to ensure that staffing firms and their clients take the issue of safety for temporary workers very seriously.

The lack of clarity concerning who bears primary responsibility for temp workers’ safety — the staffing firm or the client — has been a factor in temp injuries and is an ongoing concern within the staffing industry, says Stephen Dwyer, general counsel for the American Staffing Association, the industry’s main trade group.

“Yes, there has been confusion and there continues to be some confusion, which is why ASA supports OSHA’s Temporary Worker Initiative,” says Dwyer.

Whoever controls and directs the work of temporary employees has the primary responsibility for ensuring their safety and recording any injuries on the OSHA 300 logs, he says. In the overwhelming majority of cases, that would be the client, he adds.

In some cases, HR departments may mistakenly assume that temps have already received sufficient safety training from the staffing firms that supply them, says Howard Mavity, a partner at Fisher & Phillips in Atlanta and co-chair of the firm’s workplace safety and catastrophe-management practice group.

“Safety training is actually 10 percent classroom and 90 percent on-the-job,” he says. “If you have a staffing firm that conducts basic training on safety and that’s all the temps get, then they’re going to get to the client’s plant and not know which chemicals are there, and so on — that’s a screw-up.”

The informal nature of many on-the-job training programs can mean many temps go without it, which undermines their safety, says Mavity.

“Many employers intuitively understand that the jobs requiring more training and experience don’t go to the new folks — it’s a common principle,” he says. “But the problem is, it’s also an informal policy. And if it’s informal, it often doesn’t happen.”

In some cases, a plant manager faced with a pressing need may tell a temp who’s been assigned a menial, low-hazard job to go work on a potentially dangerous piece of equipment or in an environment where hazardous chemicals may be present — activities that typically require extensive training and experience, says Mavity. In other cases, plant managers may forget to include temps in normal safety processes, such as routine safety training and briefings, or ensure they’re supplied with company-provided personal-protective equipment, he says.

“If you have temps performing the same job as full-timers, you’ve got to remember they are not going to be miraculously prevented from harm just because they’re temps,” he says.

Dwyer says ensuring temp safety must be part of a process that starts prior to a temporary worker being assigned to a job and continues throughout the assignment.

“In terms of best practices, this means discussing the respective safety obligations of the staffing firm and the client prior to the assignment, inspecting the client’s work site when feasible to see if any safety issues need to be addressed, and then specifying in the contract who’s responsible for what,” he says.

Randstad Sourceright, a global staffing firm with U.S. headquarters in Atlanta, has its risk department conduct on-site safety assessments of potential clients, says John Piazza, senior vice president. Should the assessments uncover potential problems, Randstad Sourceright will issue recommendations for correcting them, he says.

“Those recommendations will determine whether or not we end up doing business with a client — if the client is unwilling to adopt our recommendations, then we most likely won’t be doing business with that client,” says Piazza.

He says he’s noticed a change of attitude among clients regarding temp safety during the last few years.

“The biggest change I’ve seen of late is really the attitude of the clients — in the last three years, I’d say they’ve become much more collaborative,” says Piazza. “I think the Temporary Worker Initiative has definitely been an influencer. It’s made temp safety a little more top-of-mind.”

According to the ProPublica report, some countries — such as Germany — have laws that bar companies from hiring temporary workers to perform hazardous jobs, such as working in confined spaces where hazardous chemicals may be present.

“The lack of basic protection for temporary workers in this country is shameful,” U.S. Rep. George Miller, the ranking Democrat on the House Education and Workforce Committee, said in a statement to ProPublica. “It is important that the U.S. examine some of these provisions and consider whether they can serve as models for statutes to help protect American workers.”

However, Dwyer says laws restricting temps from certain jobs shouldn’t be necessary so long as staffing firms and clients observe safety best practices.

“Temps can be just as qualified as their permanent counterparts, but the key is that clients need to treat and train temps for a particular job just as they would their internal employees,” he says.

Ensuring temp safety also requires greater collaboration between HR and safety departments, says Mavity.

“It’s surprising how little HR and safety people talk — but they should be best buddies,” he says.

Each function can help the other in important areas, such as disciplining workers who fail to adhere to safety protocols, creating incentives for safety awareness and ensuring that safety training is properly coordinated, he says. Training logs should be shared by HR and safety staff to ensure that all employees — temps included — get the training they need, he says.

They must also work together to ensure the company’s safety processes take temporary workers into account, says Mavity.

“You should not be relying on your temp provider for safety training, and if you do rely on them for any aspect of it, then you’re going to have to have some oversight to make sure they’re doing it right, because OSHA will use a very broad due-diligence approach,” he says.
Copyright 2014© LRP Publications

“Deee-Fense”… Baseball’s Big Shift

http://online.wsj.com/news/articles/SB10001424052702304679404579459233064277204

Great article on how analytics in baseball is making a big difference. Stats made meaningful through action and measured by performance…

Coming off a blessed opening day in the Fens where PJ and I saw the third flag raised in both of our lifetimes, baseball has been on my mind. Having been exposed to the “inner circle” of MLB ownership through working with the Yankee organization on their insurance platform, baseball is one of the last institutions you would expect to break from tradition and use data and analytics to make decisions that were normally made with “the gut”.

The article speaks to the defensive shifting that has become all the rage in baseball. Used over time for hitters such as Ted Williams and more recently Barry Bonds, shifting the defense based on a player’s tendencies to hit the ball has become all the rage. The Red Sox 199 times in 2012 and 478 in 2013. These defensive movements accounted for 15 additional outs over the course of the season. How consequential were these towards their 8′th world series win last year? Was it that 15′th out that got them a key win in September?

“It’s baseball. You have to play the percentages”

The “moneyball” trend towards data and fact and away from “instinct and intuition” to “not get out” at all costs is the future. Insurance is the biggest laggard in using analytics and time of information to make “shifts” in underwriting and pricing business. The scouts of insurance are the underwriters who don’t always want to follow the GM’s plan (Actuaries). Technology is and will change this by making the ability to follow actuarial science easy. In our world, not getting out is reduced to red, yellow green v latin mathematical formulas.

Will this be the time where technology and understanding how it can be applied to institutions as traditional as baseball (or insurance underwriting)? I’m betting on it!

“War is ninety percent information.”
Napoleon Bonaparte

These insurance products decrease workers’ comp claims: Report

Risk Transfer serves commercial insurance buyersWorkers’ Compensation Report, 42% of all companies providing voluntary accident and disability insurance report declines in their workers’ comp claims—some of up to 50%.  Roughly 17% of employers offering voluntary accident insurance and 15% of those offering disability saw claims declines of 25% to 49%. The declines were most frequent for large employers, 55% of whom noted a corresponding decline in workers’ compensation claims. 34% of small- and medium-sized companies reported the same results.

via These insurance products decrease workers’ comp claims: Report.

Top 5 Riskiest States for Employee Lawsuits

According to the study, on average, a U.S.-based business with at least 10 employees has a 12.5 percent chance of having an employment liability charge filed against it. However, businesses in several states face a much higher level of exposure to litigation, according to the research by Hiscox.

California has the most frequent incidences of EPL charges in the country, with a 42 percent higher chance of being sued by an employee for establishments with at least 10 employees over the national average.

via Top 5 Riskiest States for Employee Lawsuits