Data Breach Response Plan

Our business associates at Regions Bank have put together a great article on creating a Data Breach Response Plan. Q1 2019 to Q1 2020 reported a 273% increase in data breach exposing 8.4 billion records, from insurance providers to credit bureaus, 2021 is expected to report higher threats. In the last couple of weeks there has been a lot of noise surrounding cyber security, which brings to light what the projections or expectations for this upcoming year are. IBM identified that it takes companies an average of 280 days to identify and contain a breach/cyber security occurrence.

So What is a Data Breach Response Plan? In short, it is a roadmap for your company to follow should a breach occur. Similar to an Emergency Response Plan but for your data and IT platform. Top points from Regions’ article:

  • Build a Response Team; from Executive level through HR down to customer support and external vendors
  • Include and detail specifics for the following in your plan:
    • Identify breach; triggering events
    • Contain the breach
    • Notify Data Breach Team and initiate plan
    • Investigate
    • Notify internal and external relations of breach; as required by law
    • Safeguard data
    • Conclusion and review meeting; team meets to analyze breach and make adjustments to the existing plan

My personal add on this is to research and obtain a cyber security insurance policy, mitigate your cyber risk. Cyber insurance protects against damages caused by electronic threats to your computer systems or data. Cyber threats can lead to the theft, damage or misuse of sensitive information or other vital technologies and can result in downtime and recovery costs that often include specialized repairs and legal fees

Forbes’ article “The Best Cybersecurity Predictions for 2021 Roundup” gives us some insight as to what we can expect. Here are some of the highlights, click on the article link above for the full article.

  • 2020 reported cyberattacks on healthcare facilities in the U.S. affecting 17.3 million people in 436 breaches tracked by the U.S. Department of Health and Human Services (HHS) Breach portal.
  • Amid an expectation of decline to revenues in 2021, 51% of executives plan to increase cybersecurity budgets

Govtech.com has also chimed in on where we need to protect ourselves for 2021 and what is expected to be at greatest risk; high points listed below, click link above for full article (interesting and informative read):

  • Increase attacks expected on home computers and networks; scary seeing as though many of us are still working remotely
  • Dark web expected to allow criminals access to purchase more sensitive corporate information
  • App stores through mobile devices and smartphones are expected to be attacked
  • Cloud base push for storage will likely create gaps in security
  • Application Programming Interfaces (API) threat models are high targets for enterprise breaches

Here at Libertate Insurance, data is a viable part of what allows us to do what we do for our clients. We hold data security at a high level of importance to our brand. We also know that the best reaction is a planned reaction. Putting a plan in place to protect your organization and your clients is important. We offer programs for cyber security that can further protect you, should you fall victim to the latest trends in the world of scams. Please contact us to review program details and understand the benefits of obtaining a cyber security policy.

Unemployment Tax Rates in Florida are Increasing

The Office of Economic and Demographic Research (EDR) has recently published the attached forecast summary on Florida’s Unemployment Compensation Trust Fund for 2021 and beyond. Suzanne Hurst, Deputy Director of Florida Association of Professional Employer Organizations (FAPEO) offers the following review of these figures.

The Office of Economic and Demographic Research (EDR) is a research arm of the Legislature principally concerned with forecasting economic and social trends that affect policy making, revenues, and appropriations.

The figures below come from the attached summary provided by the Office of Economic and Demographic Research (EDR). This document provides historic context, current figures and forecasted figures for benefit charges, collections and rates for Florida’s Unemployment Compensation Trust Fund.  This important information is provided to you for your cash flow planning. 

Unemployment Tax Rates – Minimum Tax Rate

2020 – .10%

2021 – .29%

2022 – 1.15%  (forecasted)

2023 – 1.11% (forecasted)

2024 – .56% (forecasted)

2025 – .10% (forecasted)

Your Florida PEO Lobbyist, David Daniel, is presenting a detailed briefing at a meeting Friday of state-wide business interests about possible solutions to impact of social costs from benefit payments related to the pandemic.  Your FAPEO board has created multiple proposals that could lower rates as early as this year.  We will continue to advocate for common sense solutions that protect Florida’s small employers as everyone struggles during these economic times. 

We will keep you up to date on all developments as these proposals move through the lawmaking process. 

Small Business Snapshot

Our friends at NAPEO released the 2020 4th Quarter Small Business Snapshot, click on the link for more details.

Source: NAPEO; Opportunity Insights Economic Tracker, Small Business Revenue tracker, revised data, updated November 9,2020.

Some of the interesting data reported and tools noted below:

  • Small business reports 31% lower daily revenue than Q1;
  • 74% of small business are reporting large or moderate negative impact related to the pandemic;
  • The Wells Fargo/Gallup Small Business Index through 2020 Q3 is showing the current trend in line with Q3 2008 as well as future expectations; Check out the Wells Fargo website for Small Business Resources to help with your 2021 Business Plan;
  • The Unemployment rate is showing a 3.3% increase from Q3 2019 with Hawaii, Nevada and New York showing the highest.

Not partnered with a PEO? Connect with us and let us know how we can help! Find out more on our website here.

Friday the 13th! Weekly Round Up

Did you know that Friday the 13th occurs in any month that begins on a Sunday? Quite simple math but I never really thought about it! The fear of Friday the 13th affects an estimated 17 to 21 million people in the United States, according to the Stress Management Center and Phobia Institute. However, studies on accident trends show that fewer accidents are reported on this day, as people are likely more cautious and limit travel and activities. You can find more interesting tidbits on the history of Friday the 13th at Earthsky.org

Here are our highlights from the week

Veteran’s Day 2020

The United States just honored its Veterans with the observance of Veteran’s Day. The anniversary of Veteran’s Day marks the end of World War I back in 1918. Originally coined as Armistice Day, to reflect the signing of the armistice between the Allies of World War I and Germany, was renamed Veteran’s Day in 1954 to honor all those that have served in the U.S. Military. November 11th is also celebrated by other countries as Armistice Day and Remembrance Day. While times have certainly changed for our Country since the early 1900’s, I thought sharing the below quote from President Woodrow Wilson, on the first anniversary of such an important day, was fitting for the times.

“To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service, and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of nations.” You can find more on the History of Veteran’s Day, here at U.S. Department of Veterans Affairs

The U.S. Department of Veterans Affairs is also always accepting donations and volunteers. Learn more on how you can show thanks and give back, year-round, to those whom have given us so much.

MilitaryBenefits.info has put together a listing of the 2020 Veteran’s Day Free Meals and Deals for those of our Veterans reading this post, many of them throughout the week and month of November.

To all Veterans, We thank you for your sacrifice, your bravery, and our freedom.

Hot for PEOs and Small Business

AllRisks is pushing their Self-Storage Facility Program in light of non-renewal trends related to program administrators losing their markets. AllRisks has been providing solutions for storage-related exposures including products for boat/RV storage operators, self-storage facilities and converted buildings. They have 2 exclusive Self-Storage Programs with National Capabilities. AllRisks offers over 30 National Specialty Insurance Programs ranging from Amusement Insurance to Tattoo Shops. Contact Libertate Insurance today for more information.

PIE Insurance released updates of important need to know facts about workers compensation claims fraud and how to protect your business. Types of workers’ comp insurance fraud fall into three categories:

1- Employees committing claim-related fraud by fabricating details surrounding an injury. Injury claim indicates injury happened at work in the warehouse, when it really happened on a ski trip over the weekend

2- Employers may engage in policy-related fraud by falsely reporting employees as contractors or by improper employee classification; i.e. admin desk position is reported when employee is actually a warehouse worker performing manual labor

3- Healthcare professionals can commit medical provider fraud by performing unnecessary services to collect insurance payments, fraudulent billing or partaking in kick-back programs

Workers’ comp fraud has historically cost between $6 and $7 billion dollars each year based on estimates from CAIF (Coalition Against Insurance Fraud) and the NICB (National Insurance Crime Bureau). Insurance fraud is a white-collar crime and can lead to fines and imprisonment, and increased premiums and penalties for small businesses. The Claims Journal issued an article in August of 2020, indicating that with COVID-19 the California Workers Compensation Insurance Rating Bureau is estimating annual losses in the state of $1.2 billion, extrapolated nationally approximating $5 billion. The plan to combat fraud? Data! Insurers are accessing cross-payer, multi-year claims data to identify repeat claimants, attorneys and medical providers.

How do we protect ourselves and our businesses? Educate and Document!

  • Be forthcoming about physical requirements and hazards of the job
  • Educate employees as to the proper way to lift, pull, and carry objects
  • Provide training on work-related hazards, exposure risks, and safety equipment
  • Inform employees and new hires about a zero-tolerance policy for false claims
  • Teach employees how workers’ comp works and how to correctly report injuries
  • Provide a safe way for employees to report suspicious workers’ comp activity
  • Maintain and report accurate records regarding employee roles and numbers

This is great HR information to help support businesses and mitigate risk. If you have questions or are limited in your HR resources contact Libertate Insurance today, we can help.

NAPEO released its November 2020 edition of PEO Insider, for members. Interesting Featured Articles in this month’s release include Q&A on State Legislative and Regulatory Trends, Non-COVID-19 Developments in the States, What PEOs Need to Know About the SECURE (Setting Every Community Up for Retirement Enhancement) Act, and so much more. Take a few minutes and dive into some of these interesting and useful articles. NAPEO is a great organization for all things PEO.

NAPEO also hosted an online webinar last night, for members, going over the 2020 Election and what’s next! Georgia and Washington are in recount and lawsuits have been filed in Arizona, Georgia, Michigan, Nevada as well as Pennsylvania.

Notable key dates in the upcoming months:

December 8th – states are required to settle all disputes

December 14th – Electoral College meets at state level and votes for President

January 6th – Joint Session of Congress counts electoral votes and declares a winner

January 21st – President is sworn in

If you are not currently a member of NAPEO, visit their site here and learn how to join.

Weekend in Sports

There are a ton of football events continuing this weekend with football seemingly back in full swing. South Alabama vs Louisiana, Notre Dame vs. Boston College, Miami vs. Virginia Tech, USC vs. Arizona, Florida State vs. NC State and the list continues, hope you have the opportunity to catch your favorite team. For our NFL roster Kansas City comes in the first ranking spot for week 10, they have a bye week so we won’t be able to watch them play this weekend. The next highest ranking teams are Pittsburgh and Baltimore. Pittsburgh squares off against Cincinnati 4:25pm ET catch them on FOX and Baltimore will battle New England at 8:20pm (ET) available on NBC. Find more on your favorites here at ESPN.com

Have a Great Weekend Everyone!

Summary of 2020 Employer Health Benefits Survey

Each year, the Kaiser Family Foundation conducts a survey to examine employer-sponsored health benefits trends. This document summarizes the main points of the 2020 survey and suggests how they could affect employers.

Health Insurance Premiums

In 2020, the average premium rose by 4% for both single coverage and family coverage. The average premiums were $7,470 and $21,342, respectively.

However, premiums for single coverage under high deductible health plans with a savings option (HDHP/SOs) were noticeably lower than the average single coverage premium. The family coverage average between HDHP/SOs and other plans was largely the same. HDHP/SOs’ annual premiums for single and family coverage were $6,890 and $20,359, respectively.

Worker Contributions

The average worker contribution toward the premium was 17% for single coverage and 27% for family coverage. Employees at organizations with a high percentage of lower-wage workers (where at least 35% make $25,000 or less annually) made above-average contributions toward family coverage—35% vs. 24% when compared to employees at firms with a smaller share of lower-wage workers.

In terms of dollar amounts, workers contributed $1,243 and $5,588 toward their premiums for single coverage and family coverage, respectively. Workers enrolled in HDHP/SOs contributed less on average, paying $1,061 for single coverage and $4,852 for family coverage.

Plan Enrollment

The following were the most common plan types in 2020:

  • Preferred provider organizations (PPOs)—47% of workers covered
  • HDHP/SOs—31% of workers covered
  • Health maintenance organizations (HMOs)—13% of workers covered
  • Point-of-service (POS) plans—8% of workers covered

HMO enrollment has gone up and down over the last several years (enrollment was up to 19% in 2019), so it’s unclear how this will trend in the near future.

Employee Cost Sharing

Most workers must pay a share of their health care costs, and the average deductible for all workers was $1,644 in 2020. The average annual deductible has increased by 25% over the past five years and nearly 80% over the past decade. The prevalence of HDHP/SOs has contributed to the increase of deductible amounts. The percentage of covered workers with a general deductible of $2,000 or greater has increased to 26% in the last five years.

Beyond deductibles, the vast majority of workers cover some portion of the costs from their health care services. For example, 65% of covered workers have coinsurance, and 13% have a copay for hospital admissions.

In addition, nearly all workers are covered by a plan with an out-of-pocket maximum (OOPM), but the costs vary considerably. Among covered workers with single coverage, 11% have an OOPM of less than $2,000, and 18% have an OOPM of $6,000 or more.

Availability of Employer-sponsored Coverage

Similar to the last few years, 56% of employers offer health benefits to at least some workers. Only 48% of very small employers (three to nine employees) offer coverage, while nearly every large employer (1,000 or more employees) offers coverage.

Health and Wellness Promotion Programs

Wellness programs help employees improve their lifestyles and avoid unhealthy habits. Fifty-three percent of small employers and 81% of large employers offer at least one wellness program in the areas of smoking cessation, weight management and lifestyle coaching. Of these large employers, 44% offer participation incentives like gift cards or merchandise.

Telemedicine

The large majority of employers with 50 or more workers have embraced telemedicine, with 85% offering health care services through this method. Within the last year, telemedicine offerings have increased significantly, especially among employers with between 50-199 workers.

Self-funding

Twenty-three percent of workers with small employers are enrolled in plans that are either partially or entirely self-funded, compared to 84% of workers with large employers. In the past few years, level-funded plans have become more popular. Level-funded plans are health plans provided by insurers that include a nominally self-funded option for small or mid-sized employers that incorporates stop-loss insurance with relatively low attachment points.

Conclusion

This year continues a period of a stable market, characterized by relatively low-cost growth for employer-sponsored coverage. While premium growth continues to exceed earnings and inflation increases, the differences are moderately small. Additionally, while there have been some changes in terms of employer-sponsored health benefits, no trends have gained significant traction.

However, it’s still unclear how the COVID-19 pandemic will affect employer health plans in 2021. Given the economic impact, employers may need to shift more costs to employees than they have in the past. Alternatively, employers may look to other funding models to provide competitive health benefits.

What’s more, 2020 is an election year, and a Supreme Court case regarding the Affordable Care Act is scheduled for around the same period. Both of these events could significantly impact employer health plans in unforeseen ways.

Looking forward, employers should begin to identify tools and resources they can use to offset higher premiums. As costs continue to rise and possible political changes ensue, employers and employees may begin to see increased market movement.

For more information on benefits offerings or on what you can do to control your health care costs, contact Libertate Insurance today.

When Robert Hartwig Talks, People Listen…

As I was pulling this post together, for good reason, the old EF Hutton commercials we grew up with (dating myself)…

…came to mind. “When E.F. Hutton talks, people listen”…

As EF Hutton was considered (or at least advertised) as “the smartest guy in room” for all things investments; the same holds true for Robert Hartwig @Bob_Hartwig when it comes to insurance economics. He is the guy insurance company CEO’s call to help predict the future and someone I have had the pleasure to meet and see present on a few occasions. You will not see anyone provide more data and direction in a short session that is credible and meaningful.

Robert, a PHD/CPCU, was the former Chief Economist of the Insurance Institute of America and currently serves as the Clinical Associate Professor of Finance, Risk Management & Insurance @ USC’s Darla Moore School of Business. His latest presentation points to some areas that are important to understand and budget for.

https://www.uscriskcenter.com/wp-content/uploads/2020/09/Inland-Marine-UW-Association-American-Institue-of-Marine-Underwriters-9-30-2020.pdf

I have listed some of my key take-aways below and the slide number you can reference for the detail:

Slide 12 – 12.5-25% reduction in workers’ compensation premiums based on rate reductions coupled with drop in exposure basis due to COVID-19. COVID-19 Claims will not be used for rate-making purposes in most states until 2021. All other lines are seeing material drops in written premium due to usage, but rates at the same time are on the rise.

Slide 13 – Range of workers’ compensation losses on a national basis due to presumption is $.2 – $92B … quite a delta and as you will note, and a far greater one than any other line (which are also not yet understood). The range for Business Interruption losses is next with anywhere from $2B – $22B expected. The courts will be the most impactful on where this end result comes in based on policy interpretation. Policy language and intent will be the battlefronts.

Slide 15 – Cost of COVID v comparable pandemics in recent age – the cost and number of countries impacted by COVID-19 versus other pandemics (SIKA, Swine Flu, SARS etc.) is staggering and exponential.

Slide 30 – Presents the investment yield trends for 10-year US Securities which is a foundational “safe” investment for insurance carriers – down 61%. Puts more pressure on operational results which in turn, more pressure on upward pricing.

Slide 31 – 9 of the the top 10 ever point drops on the S and P ever occurred in 2020. The 3’rd largest percentage drop in history occurred on 3/16/20 at -11.98%/-324.9 points. This volatility is of grave concern to the investment strategies of the insurance carrier community. This also puts upward pressure on pricing.

Slide 41 – Business closures will cause debt of $3T for at least a generation to overcome. This is very saddening and a complex issue to make a call on. Be safe and put us in debt for another generation or open up and hope for the best? Question of the century –

Slide 47 – Rates on most lines of insurance (with the exception of Workers’ Compensation) are rising at a rapid pace. Umbrella (20%) and Directors and Officers insurance (16.8%) being hammered the hardest, with Business Interruption (9.7%), Commercial Auto (9.6%) and Employment Practices Liability insurance (9.4%) also expecting hefty increases.

Slide 50 – Business Interruption insurance will be highly litigated going forward, especially on those policies that do not have a pandemic disease exclusion. This and the presumption issue in regard to workers’ compensation are what will cause the greatest uncertainty going forward as to the exposure to the insurance community and how they react as a result the pandemic.

In conclusion, it has been a long cycle of premium reductions. Drop of exposure basis (payrolls, sales, miles travelled etc) may neutralize overall premiums to some extent, but the “as is or lower” rate renewals of the last decade will be very tough to navigate this year. Get out ahead of your renewals, especially on the specialty casualty side. Let us know if we can help.

Report: COVID-19 Accounts for 1-in-9 California Workers’ Comp Claims in 2020

Wow — We are seeing a depletion of capacity/increased costs for health care and other “client-facing” industries.  The why —

“CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.”

.005 of all claims in California are a COVID19 fatality year to date.  The unknowns are the reopens, adjusted reserves and longevity of the severe and critical patients.  Still much unknown –

September 28, 2020

The California workers’ compensation COVID-19 claim count continued to grow in August, albeit at a much slower rate than in July, with new data showing that as of Sept. 21, the state had recorded 5,130 COVID-19 claims with August injury dates, according to data compiled by the California Workers’ Compensation Institute.

CWCI says that brings the total for the year to 41,861 claims, or 11.2% of all California job injury claims reported for accident year 2020. Those claims included 224 death claims, up from 160 reported as of Aug. 10.

The latest claim count shows that the number of COVID-19 claims reported to the Division of Workers’ Compensation doubled from May to June, then increased another 16% in July. The numbers reported for August, however, fell sharply, even accounting for the lag in the reporting of COVID-19 claims, according to CWCI.

The CWCI projects there could ultimately be 8,208 COVID-19 claims with August injury dates. Given that the latest tally suggests COVID-19 claim volume may have peaked in July, CWCI is now projecting 48,086 COVID-19 claims with January through August injury dates, which is less than the January through July projection from last month.

CWCI reports that the distribution by industry shows health care workers continue to account for the largest share of California’s COVID-19 claims, filing 38.1% of the claims recorded for the first 8 months of this year, followed by public safety/government workers who accounted for 15.8%. Rounding out the top five industries based on COVID-19 claim volume were retail trade (7.6%), manufacturing (7.6%), and transportation (5.0%). In addition, the percentage of denied COVID-19 claims declined to 28.6% from CWCI’s May report of 35.5%.

Related:

NAPEO and How to Price Your Workers’ Compensation Exposure

While this year’s “Super Bowl” for NAPEO was a bit different, I was very impressed in what was put together under the shadow of the pandemic.  Great content and albeit virtually, great to catch up with folks.

My dear friend and colleague Tom Stypla did a lunch and learn on how to price client companies for workers’ compensation that is linked here…

How to Price Your Workers’ Compensation Exposure Final

Tom has priced more PEO business than anyone I know.  His understanding of PEO workers’ compensation is extremely impactful.

If we can help you with an underwriting strategy or an individual client, let us know!  321.217.7477 is my cell….