In comparison, the 2005 average cost of an indemnity claim was $38,105 — of which $13,079 was spent in indemnity and $25,028 was spent in medical cost.

The report shows that, since 2005, indemnity has risen 50.485% and medical costs have risen 62.1%.

Monies spent on indemnity and medical plus reserves are used to calculate your experience modification. AS an employer, you may not have control of what is happening to the whole Work Comp industry but you do have control of your experience modification. Your Work Comp broker or agent should be guiding you on how to obtain the lowest experience modification possible for your class of business.

The 2011 experience modifications issued by the WCIRB will now  include your ZERO claims EMR. Your company’s EMR goal every year should be to get as close a possible to your ZERO claims EMR. If your broker or agent is not willing or can’t give you a plan on how to lower your future EMR you should contact my team here at Van Beurden Insurance.

http://www.fresnobee.com/2010/08/22/2050224/worker-comp-battle-looms.html#storylink=misearch

“Thank you so much for your professionalism and prompt response to  my communications. It has been a pleasure working with you to solve the issues surrounding this traumatic event. For that reason, I have recommended you and Travelers to our Homeowner’s Association.”

Here are a few claims benefits you could receive by placing your business with Travelers:

• 24 hour-7 day per week-365 days a year claim reporting
• Prompt contact and loss inspection by a local Travelers claim professional
• Timely loss adjustment (estimates are written at the customer’s home or business and left with the customer)
• High customer satisfaction scores

Please contact our office today to get your free, no obligation quote and receive the great customer service that Travelers and our other preferred carriers have to offer!

Health Insurance was designed originally to pay for emergencies, not for a runny nose. That’s the way Auto Insurance is designed. You don’t expect your car insurance to pay for an oil change. Why should we expect health insurance to cover every incidental expense?

Here’s an article from a recent Wall Street Journal:

http://finance.yahoo.com/insurance/article/110187/americans-cut-back-on-doctor-visits?mod=insurance-health

I have always believed that Commissioner of Insurance should not be an elected office as much (insert all) of the time the person elected 1) Has no clue about how insurance works, even well after this person is elected, 2) Uses the office as a stepping stone to higher office (See Quackenbush,Garamendi, Poizner, etc.)  3) Seeks to pander to their constituency instead of disclosing the true facts about the state of the marketplace to the consumer.

Although Dale Debber makes arguments to the contrary, we have seen claims cost rise and frequency maintained which will push pricing up. You need not look any further than the past 3 years combined loss ratios of carriers in the state to end up with the same conclusion that the WCIRB came up with.

FLASH REPORT!

WCIRB Says 30 Point Rate Increase for Workers’ Comp

“It’s going to be in the ball park of 30%,” chief actuary Dave Bellusci tells Workers’ Comp Executive. “But I wouldn’t be surprised if it’s over.” Workers Compensation Insurance Rating Bureau (WCIRB) staff still has to finalize the calculations before preparing a pure premium advisory rate recommendation for the Governing Committee, it says, so the final numbers could still change a bit. But a 30 point increase is the general consensus of its Actuarial Committee. This comes against a backdrop where the WCIRB’s veracity and integrity are continuing to come under question.

“A 30 point increase is beyond all reason” says Dale Debber, principal of Compline and publisher of this newsletter, and recognized workers’ comp expert. “It will drastically affect California business deterring increased employment during these tough economic times. If taken, it will likely lower the collectable payroll, sales, and incomes taxes for the State California. Worse, this comes at a time when it will necessarily impact the legislature’s budget negotiations.” Debber says, “It will raise the prices of practically everything for all consumers.” The industry is trashing the Schwarzenegger reforms

Debber opines that WCIRB management has a history of putting accurate facts together in such a way as to lead others to an inaccurate conclusion. Compline, he says will soon publish a report studying these issues.

WCIRB says the current calculation does not include a separate element for the impact of the Almaraz/Guzman and Ogilvie decisions, as it is assumed that the impact of those cases is already in the underlying data. The WCIRB is sticking to its previous story and continues to peg that impact at 5.8%.

For its part, WCIRB says the industry’s experience is developing consistent with WCIRB’s prior recommendation, Bellusci notes, but says an increase over the prior filing is warranted due to another year of inflation and a lower than projected frequency decline in 2009. The latter point prompted the committee to alter its loss development methodology to base it on the 2009 trend data rather than a two-year average. The committee also tweaked the loss development methodology to account for an industry-wide slowdown in claims settlement rates, but is sticking with its current methodology for calculating loss adjustment expenses.

It’s the fastest growing payment format in the industry. More than 60% of all employers currently use some form of “instant” pay for their workers comp policy. The advantages are simple, no down payment, no monthly audits and minimal final audits.

The Hartford’s XactPAY® with Payality means you eliminate a large down payment, pay no late fees and your payroll costs are lower!

Click here to contact me today for more information.

Thanks

Mike

What originated as a $79,422.70 additional final audit billing has been successfully protested and reversed resulting in a $4,317.30 premium return.

This is a total difference of $83,740 and took three weeks to resolve.

Our client now has a ready response the next time someone asks “What has your agent done for you lately?”

Please contact me if you could use some assistance with a workers comp audit problem.

Although most homeowners’ insurance policies will pay for items damaged by losses such as fire and theft, scheduling these items expands coverage to protect additional losses such as mysterious disappearance, lost diamond, breakage, etc. (subject to a few common exclusions). The best news: you generally pay no deductible!

Don’t wait to get the protection you need on your most valuable possessions. Contact our office today and we can help you decide on the right coverage for the items that you value most.

Here’s a very interesting and relevant question answered by HR Attorney Pamela Fyfe of Nonprofit Insurance Alliance Group at http://www.blueavocado.org/content/can-employees-smoke-medical-marijuana-work .

Payroll reporting is getting more confusing for all of you business owners, and a Payroll company like Payality, can make your life a lot easier. Let me know if you’d like to learn more about Payality, or click here to visit them now.

“We’ll lie awake at night for the business owners, so they can get some sleep.”

Chet Reilly, Payality, Kingsburg CA

HOWEVER, I just spoke with them today, and they told me to be on the lookout for September. I’m on the edge of my seat.

I have to say this also;  I have several clients with Blue Shield, and not only did they not get increases, they also don’t expect any soon! Am I in an alternate universe where they don’t raise rates? WOW! Let’s keep our fingers crossed.

Keeping  people healthy is the most effective way to reap the financial benefits of cost avoidance. The cost of prevention drastically reduces health care costs, and directly impacts an employees ability to remain productive.

If you are an employer looking for a competitive edge in today’s market, it is in your best interest to take responsibility for effectively managing the health and well being of your employees. – Employee Benefit News

As a former small business owner, I know employees can be your best assets, or your worst nightmare. Keep them healthy, and in return you will make more money, and reap the rewards.

You may need help paying bills for the veterinarian or for medication.

One of our companies offers $1,000 worth of coverage — complimentary — if you purchase Collision Coverage for your vehicle.

Whenever your pet is injured during a claim that is covered by comprehensive of collision, $1,000 is available for any pets riding in your vehicle. There is no additional cost to you as long as you purchase Collision Coverage on at least one of your vehicles.

• The pet must be in the vehicle when injured.
• They will only pay up to $1,000 even if there are multiple pets injured.
• They will pay $1,000 if the pet dies as a result of the claim. You are not required to replace the pet.
• If the vehicle is stolen they will cover $1,000 death benefit only if there is a total theft of the vehicle while the pet is in it.

Please contact me for more details!

It appears that Congress will be adjourning without passing a bill that will reauthorize the National Flood Insurance Program (NFIP) beyond May 31, 2010.  This means that the program WILL EXPIRE at midnight on May 31, 2010.

The Senate is not due to vote on the bill to extend the NFIP until at least Monday, June 7, 2010.  This means we will be faced with another lapse in statutory authority to issue or renew flood insurance policies pursuant to the NFIP.  Based on past experience, this lapse means that we will be unable to issue any new or renewal flood policies, or make coverage changes on existing flood policies after May 31, 2010.

FEMA has advised us to pend premium transactions received after May 31, 2010, until, and if, Congress and President Obama pass and sign the bill that re-authorizes the NFIP.  New and renewal policies or coverage changes will go into effect at the earliest date, which is consistent with the receipt of premium and waiting period rules of the NFIP and the expected extension of authority for the NFIP.  For applications made in connection with a mortgage loan, if the extension of the authority to issue flood insurance policies under the NFIP is granted retroactively, new policies will be issued effective as of the date of the loan closing.  Additionally, if Congressional extension is granted retroactively, any claim for insurable losses suffered from the effective date for the policy term will be honored by the NFIP, even if the authority is granted after the date of such losses.

In essence Congress has just made the business of closing a loan for homes in a Special Flood Hazard Area more difficult.  You would think by now they would have done something to deter this from happening again!  We will be up to date on all the idiosyncrasies of how to deal with the hiatus … give our office a call with any questions or concerns.

I want to update a previous post and let every individual Anthem Blue Cross policy holder know they will not be experiencing the rate increase proposed earlier in March. Per the CA Department of Insurance, Anthem Blue Cross had 2 math errors in calculating the new rates.

This is great news for Californians!

“Do I have to report the money I contribute to an employee’s retirement plan to my workers’ comp carrier?”

My response:

Contributory payments made by the employer in connection with group insurance, stock purchase plans or qualified retirement plans and deferred compensation plans are not to be included in the payroll you report for workers’ comp. Plan must be qualified under Section 125.

To really answer the question, my next question is, “Is it a qualifying plan under Section 125 IRS code?”

If its not, then its considered money they earned but THEY chose to defer and therefore it IS reportable as payroll for workers’ comp …

Example 1 –

Joe earns $2,000 and his employer elects to put another $200 into his retirement account. If it qualifies under Section 125, the employer only reports payroll of $2,000 for both payroll and comp purposes and Joe does too. If not, the employer must report payroll of $2,200 because Joe is deemed to have earned $2,200, irregardless of how much Joe takes home right now.  Make sure it qualifies as a Section 125 plan!

Example 2 –

Joe earns $2,200 and JOE elects to put $200 into his retirement account. Even if it qualfies under a Section 125, you still have to report wages of $2,200 for workers comp because that’s what he earned.

Example 3 –

Joe earns $2,200 and he elects to have $200 taken out as part of his contribution for his own health insurance costs through a Section 125 plan. He only reports income of $2,000 and you only report payroll of $2,000.

Example 4 –

Joe earns $2,200 and he elects to have $200 deposited into his Health Savings Account. He only reports income of $2,000 and you only report payroll of $2,000, PLUS any contributions you make as the employer on top of the $2,200 are not reportable to workers’ comp.

So if the employer contributes $200 and Joe contributes $200 , for workers’ comp purposes, only $2,000 total is reported.

Does that clarify?

Bottom line, make sure its a qualifying plan. If your employees are currently paying a portion of their own health insurance costs outside of a Section 125 plan, both you and they are wasting a lot of money.

The employer is a contractor with a long history of a sub 100 experience modifier.  Four years ago, as comp prices fell rapidly, the employer’s original agent pushed them to the cheapest carrier.  Unfortunately, the carrier did not pre-screen their MPN and allowed all doctors into the network.  That year, two of the injured employees selected attorneys to represent them, and the attorneys instructed the employees to switch primary treating physicians to “applicant friendly” doctors.  Unfortunately for the employer, the “the applicant friendly” doctors were already in the MPN — and the employees were allowed to switch to those doctors.  Both claims grew rapidly and this year the employer is faced with a modifier over 150.

Now, the employer reviews how the carrier selects their MPN and what safeguards are in place.

Do you review your carriers’ MPN?  What criteria do you use when reviewing a carrier?

Contact me for more information on this important topic.

From the Federal Trade Commission and more on snopes.com

The Truth about Cell Phones and the Do Not Call Registry

Despite Re-Circulating E-mail, It is Still Not Necessary to Register Cell Phone Numbers

As the number of phone numbers on the National Do Not Call (DNC) Registry surpassed 139 million, the Federal Trade Commission today reiterated that despite the claims made in e-mails circulating on the Internet, consumers should not be concerned that their cell phone numbers will be released to telemarketers at any time in the near future. In addition, according to the agency, it is not necessary to register cell phone numbers on the DNC Registry to be protected from most telemarketing calls to cell phones.

The truth about cell phones and the DNC Registry is:

• Contrary to the e-mail, cell phone numbers are NOT being released to telemarketers, and you will NOT soon be getting telemarketing calls on your cell phone.
• There is NO deadline by which you must register your cell phone number on the Registry.
• Federal Communications Commission (FCC) regulations prohibit telemarketers from using automated dialers to call cell phone numbers. Automated dialers are standard in the industry, so most telemarketers are barred from calling consumers on their cell phones without their consent.
• The national associations representing telemarketers have stated that their clients do not intend to start calling consumers’ cell phones.
• There is only ONE DNC Registry. There is no separate registry for cell phones.
• The DNC Registry accepts registrations from both cell phones and land lines. You must call from the phone number that you want to register. If you register online, you must respond to a confirmation e-mail.
• While the telecommunications industry has been discussing the possibility of creating a wireless 411 directory, according to the FCC, even if a wireless 411 directory is established, most telemarketing calls to cell phones would still be illegal, regardless of whether the number is listed on the federal government’s National Do Not Call Registry.

For More Information

To learn more about the National DNC Registry and the rules that enforce it, visit the FTC at www.ftc.gov or the FCC at www.fcc.gov.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

The following is from a recent article from the Insurance Journal Online.

California Contractors Self-Insured Group Closes

By Patricia-Anne Tom
April 30, 2010

The California Office of Self-Insured Plans is revoking the certificate of the Contractors Access Program of California (CAP), a self-insured group of contractors, as requested by the group.

According to OSIP spokeswoman Erika Monterroza, the group, which has had as many as 266 members over its life, requested in October 2009 the revocation at the end of its insured term, which ended on Dec. 31, 2009. “The order for revocation was not finalized until March 29, 2010, but was approved effective Jan. 1, 2010, because the order isn’t issued until all members show proof that they are covered by other insurance or are no longer in business,” she explained. The group is still responsible for paying for claims that arose prior to Dec. 31, 2009.

CAP has faced regulatory action in the past because earlier reports indicated the SIP had insufficient funds to cover estimated future liabilities. California regulations require self-insurance groups to have deposits cover 135 percent of estimated future liabilities.

OSIP became aware that CAP had insufficient funds to meet the 135 percent requirement in the summer of 2009, Monterroza said. Groups are always re-assessed on future liabilities based on their annual report of claims. “At that time, we requested a deficit plan to make up the insufficiency,” she said.

In February 2010, OSIP said CAP indicated its liquidity problems were more significant. So, OSIP required that the group provide a weekly report of all its expense and claims paid, and any expenses above claims are required to be approved by the OSIP. Currently, CAP has deposits to cover 110 percent of estimated future liabilities, Monterroza said.

There has been conjecture by other media that OSIP was lax in its oversight of CAP, because CAP’s group manager CRM has had difficulties in other states, specifically New York, Monterroza added. However, “a lot of that conjecture is not accurate,” she said. “Where there were clear indications that there were issues by the company in other states, in California that has not been the case. Regulations for self-insurance plans in California are much more stringent than in other states.”

All of the requirements for regulatory actions and insufficient funds is designated by California Regulation Title 8, Section 15477, Paragraph B, points 1 through 7, Monterroza said.

End of Article

Many companies go to self insured group plans because they appear to be cost effective (premium savings) and they are basically “Sold Up” by a broker or administrator as a viable alternative to stand alone plans, or first dollar insurance. As you can read, there is a clause in all of these contracts (Joint and Several) that ties you financially to all the other members of the group. You are your brothers keeper in these plans. I highly suggest that you get information from a trusted Professional Work Comp Advisor prior to entertaining joining a group like this.

It is possible to pay $25,000 in premium into one of these plans, and then recieve a massive additional premium (or capital call) when they go under. This is the first failure in a while, but I assure you it will not be the last. CRM managed 5 different groups as SIP’s. 4 of them will cease operations as of 7-1-10, and one (CAP) has been seized.

CRM is also the Holding Company of Majestic Insurance Company that was recently downgraded to B++ with a negative outlook by A.M. Best Rating Service.

I will try and keep you up to speed on these developments in this sector of the market as the story (s) unfold.

Thank you for reading my blog.

If you have assets that are greater than your current insurance liability limits, you should protect them with an umbrella policy.  With the frequency of lawsuits increasing dramatically it has become more important than ever to make sure that you are adequately protected.

The personal umbrella policy is one of the most affordable and best values in insurance.  A $1million umbrella with 2 houses and 2 vehicles often costs less than $250 … and that’s a small price to pay to protect what you have worked so hard for!