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NEWSLETTERS
NEWSLETTERS
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561-683-8383
September 2008 |
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In this issue
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Case Study: CWCAs unbundled costs and save contractor $25,000
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Important Trends in Workers' Compensation: Declines in claim frequency slowing
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Q & A: The hiring process
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Case Study: CWCAs unbundled costs and save contractor $25,000
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Insured
A midsize masonry contractor.
Situation
The masonry contractor was using a PEO (Professional Employer Organization) and was concerned what it was paying for Workers Comp was higher than that of its competitors. It was difficult for them to determine their rate because the payroll taxes, Workers Comp and additional fees were combined.
Assessment
Certified WorkComp Advisors (CWCA) analyzed the PEO invoice and broke out the payroll taxes, fees and Workers Comp costs. It turned out that Workers Comp came to $59,000 a year. The CWCAs requested payroll data and loss information and calculated the Experience Mod at .95.
Solution
The CWCAs marketed the Workers' Compensation and secured a rate of $34,000. Recognizing the importance of making smart hiring choices to avoid future losses due to poor hiring practices, the CWCAs worked with the contractor to develop rigorous and effective hiring practices.
Result
The CWCAs were able to use their expertise in Human Resources and Workers Compensation to assist the contractor in understanding its costs and secure a savings of $25,000 per year.
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Important Trends in Workers' Compensation: Declines in claim frequency slowing
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In its latest research study, the National Council on Compensation Insurance (NCCI) reports that the decline in claim frequency for Workers Compensation injuries has continued into 2007, but the magnitude is much smaller than in the previous two years. Preliminary results indicate a modest decline of 2.5% for 2007, compared to 6.7% in 2006 and 6.8% in 2005.
According to the report, while declines in claim frequency are slowing, indemnity and medical severities continue to rise. Medical claims costs in 2007 continued to grow faster than the Consumer Price Index for Medical Care 6% compared to 4.4%, while indemnity severity outpaced wage inflation 4.0% to 3.3%.
The report also examined claim frequency changes for permanent total claims, the costliest 1% of lost-time claims and makes the following key findings:
Permanent total claims have increased significantly over the last three years
The rise in permanent total claims is evident across industries, regions, and payroll sizes
From 2004 to 2006, the increase in permanent total claims may have increased lost-time indemnity severities by approximately 1.5% per year and lost-time medical severities by approximately 2.5% to 3% per year.
As NCCI notes, "A key issue facing employers today is whether the large declines in claim frequency that began in the 1990s are likely to continue." These results suggest that the growth in claim frequency decline is indeed flattening.
NCCI indicates that the key drivers of claim frequency include global competition, increased use of robotics, increased use of modular design and construction techniques, increased use of power-assisted processes, advances in ergonomic design, and proliferation of cordless tools. Other factors include the impact of more and better job training, continued emphasis on workplace safety, a down economy where fewer untrained workers are being added to payrolls, older workers who tend to have fewer (although more costly) injuries and fraud deterrents.
While continued progress can be expected in automation and technology, it is possible that we are reaching the inflection point of declining claim frequency. Employers can no longer afford to be complacent and look to declining claim frequencies to help keep rates low. A comprehensive program of injury management is the only way an employer can maintain long-term control. |
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Q & A: The hiring process
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Q. "Ive read in your newsletter that an injury often begins at the date of hire. In the interview process, can I ask about the applicants history of Workers Compensation claims?"
A. No, an employer cannot ask the applicant medical questions or whether he or she ever filed Workers Compensation claims. Yet, when hiring an individual, it is very important to consider safe behavior to prevent Workers Compensation problems. You can ask open-ended safety questions regarding the job at hand and how they would perform the essential functions of the job. Let the applicants know that if theyre accepted for a job, theyll go through a fitness-for-duty physical and be asked questions about their medical history.
Q. "Ive heard that behavioral interviewing techniques can help make a good hiring decision. Do you have any suggestions?"
A. The key to asking behavioral-based interview questions is to examine the job requirements and skills needed and ask questions that reveal whether the applicant demonstrates the behavior you prefer. For example, to get an understanding of how a person works under stress and if they are likely to cut corners, you might ask the applicant to describe a time when he or she fell behind a production schedule and how they managed the situation.
Q. "When is the best time to run a background checks on applicants before or after the job offer?"
A. There are a number of factors to consider when deciding when to run background checks, including costs and time as well as legal implications. While each employers situation is different, it may make sense to run background checks on the final two or three applicants, prior to making a decision. If you do just one, there are potential delays in the hiring process, should the results be negative. If you wait until after the job is offered and accepted, there is the possibility of an unsatisfactorily result and a sticky situation, should the candidate contest the findings or have resigned from their job.
Employers must pay for lineman PPE
In a May 1 letter of interpretation http://www.osha.gov/, OSHA noted that lineman belts and hooks provide protection to employees from falls while climbing and/or performing work. This equipment is PPE and employers must pay for it when the equipment is used to comply with an OSHA standard.
Brochure deals with job stress in health care workers
Health care workers have relatively high rates of substance abuse and suicide, as well as depression and anxiety related to job stress. NIOSH has published a brochure offering information about the sources of stress and practices to help control it.
Gloves can prevent injuries and reduce costs
According to an article on www.occupationalhazards.com, Keep the Gloves On, by Don Groce, "The cost of hand injuries in just one sector of the construction industry is six times what it would cost those employers to offer every employee appropriate hand protection." This preventive measure represents potential to reduce pain, reduce lost productivity, and save dollars. Groce points out that todays protective gloves are comfortable and do not interfere with dexterity and are not cumbersome.
"The flat-dipped technology used to make many of the polymer-coated gloves provides a much cooler glove so that workers do not get so hot that they take off their gloves," says Groce.
Contractors should begin collecting data for new VETS-100A report
In 2009, federal contractors with government contracts of $100,000 or more that were entered into or modified on or after December 1, 2003 will have to file the new VETS-100A report. Although the report is not due until September 30, 2009, contractors must begin now to collect and maintain data, since the report must include data on veterans employment for 12 months ending on a date in the report year between July 1 and August 31 that represents the end of a payroll period.
Truckers with history of drug use are able to "job hop"
A recent report by the Government Accountability Office (GAO) found that 43 out of 600 commercial vehicle drivers tested positive for illicit drug use in the past two years. The GAO was able to obtain information on 37 of the 43 and found that 19 of the 37 were subsequently hired in spite of a positive drug test that should have disqualified them.
Transportation/warehousing most cited OSHA violation is powered industrial trucks
The most cited violation in the transportation and warehousing industrial classification in 2007 was the powered industrial trucks standard. This standard defines requirements relating to fire protection, design, maintenance and use of forklifts and other specialized industrial trucks. OSHA looks to ensure that modifications and additions to powered industrial trucks do not adversely affect capacity and safe operation. The second most cited violation was Hazard Communications that deals with how chemical risks are communicated to workers through Material Safety Data Sheets.
Night shift bosses more likely to get poor ratings
A nationwide survey of 1,000 workers conducted by Working America Institute, an affiliate of AFL-CIO, found that those working the night shift are more likely (38%) to say that bosses take credit for their work than day workers (21%), find it difficult to get time off approved (45%) and are most likely to rate their supervisors as bad bosses.
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