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NEWSLETTERS
NEWSLETTERS
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561-683-8383
January 2009 |
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In this issue
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Real estate client saves $176,000 and lowers Experience Mod
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The missing component in post accident analysis
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Workforce Health and Cost Trends: What to Expect in 2009
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Real estate client saves $176,000 and lowers Experience Mod
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Insured
A large residential property company with more than 5,800 units encompassing 46 high-rise buildings and over 153 acres.
Situation
The company was using a large insurance agency/broker that was lax in managing the companys claims, resulting in a high Experience Mod of 1.65. The broker was not pro-active in managing past claims; no annual modification or claims reviews had been done since 2002. With a breakdown in communication and a sense that service was inadequate, the customer approached Certified WorkComp Advisors (CWCAs) to review the policy and examine the claims.
Assessment
CWCAs entered the Mod worksheets into the Modmaster software to compare company loss-runs with the claims on the Experience Modification worksheet, studying different claim situations and claim changes to identify problems.
Solution
The CWCAs were able to document a number of errors that resulted in a revised Experience Mod from the past two years on some claims, and as far back as six years on others.
Result
The work resulted in credit revisions for the 2002, 2003, 2008 and 2009 policy years. The 2002-year had two claims settled, which lowered the Mod from 1.65 to 1.56, saving $73,003. The 2003-year had three claims that were adjusted, reducing the Mod from 1.78 to 1.65, saving $84,245. In 2008, there were two claims from 2006 that closed for $0, plus two clerical errors, which brought the Mod down from 1.26 to 1.23, returning $14,773. And for the 2009-year, there was one claim adjusted, resulting in a lowering of the Mod from 1.33 to 1.32 and a savings of $4,602.
Overall, the CWCAs were able to save more than $176,000.
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The missing component in post accident analysis
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The vast majority of safety professionals do an excellent job of keeping an eye on the prize - reducing OSHA recordables. Failure to do so, and suddenly a company is shut out from bidding on the next big job, all because not enough attention was paid to passing inspections, making sure machine guards are in place and all equipment is in good operating condition.
But a costly mistake occurs after many injuries. Inadequate attention is paid to the injured employee. Other than a missing body on the shop floor, few employers are aware of the long-term ramifications when the injured worker goes into the Workers Compensation system and suddenly finds himselfthrough no fault of his ownout of work because he received inadequate medical treatment or because a Return-To-Work program did not exist.
Although most safety professionals conduct a thorough post-accident analysis, the focus is to make sure the accident doesnt happen again. Unfortunately, they often put less time into making sure the injured worker is receiving the proper medical treatment and is enrolled in a Return-To-Work program, with the ultimate goal to get the employee back on the job.
Consider the following true story. An employee was injured on the job and couldnt return to work because he was in too much pain, prompting the employer to invoke the Family Medical Leave Act. Twelve weeks later, the injured worker realizes his job is gone and suddenly hes out of work, leading him to ask What just happened?
What happened was nobody followed up with the post-accident investigation to make sure he was receiving the proper medical treatment so that he could return to work, nor did he have an opportunity to transition back to his job. With attention focused on the demands of production, employers often assume the injured employee is being taken care of by the system.
Yet, when injured employees are ignored, bad things can happen. Researchers at the University of Western Ontario found that depression, anxiety, substance abuse and other mental health problems often go hand-in-hand with being out of work. William R. Avison, PhD, professor of sociology at the University of Western Ontario, states, Job loss seems to result in a serious erosion in people's sense of control and self-esteem.
Safety professionals should broaden their scope and understand that as much time and effort needs to go into what happens to the injured employee after the accident occurs as they do in trying to prevent the accident from occurring. If the accident does occur, a stringent effort must be made to get all parties on the same page to meet the desired expectation of getting the injured party back to work as soon as possible. This includes focusing on proper medical treatment, a reasonable length of recovery, constant communication and an effective Return-To-Work program.
Keeping a close watch on the sterile metrics that make up the primary safety goals is important. But no less important is what can happen to an injured worker suddenly faced with being out of work (studies show that every time the unemployment rate increases 1%, there are 6,000 more recorded deaths each year).
Bad things happen when workers are unable to return to work after an injury. When safety professionals make it part of their job to deal effectively and completely with the post-accident scenario, then not only is the injured party better served, but so is society.
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Workforce Health and Cost Trends: What to Expect in 2009
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According to the American College of Occupational and Environmental Medicine and the Integrated Benefits Institute, when employer health care costs are combined with the cost of productivity losses through absenteeism and presenteeism, the annual cost averages $13,000 per employee. Although employers increasingly are recognizing that productivity is inextricably linked to the health of their workforce, most employers struggle to find the proper strategies to curtail the burgeoning costs while improving wellness.
Preliminary survey findings by HR consultancy Mercer indicate that health benefit costs will rise by 5.7% in 2009 the lowest rate of increase in more than 10 years. Other consultants, such as Aon Consulting and Buck Consultants are predicting increases in the 10 to 11% range.
In all cases, the findings recognize that employers are taking steps to curb costs. Most employers intend to increase deductibles, co-payments, co-insurance or employees out-of-pocket spending limits. From 2003 to 2007, the median family deductible for in-network services in a PPO rose from $1000 to $1500. Other cost saving measures include adding consumer-directed health plans, a high deductible plan with an employee controlled HSA or health reimbursement arrangement (HRA).
Faced with higher costs, many employees are taking appropriate steps to lower their medical costs, such as lower cost drug options. However, some are taking actions that could lead to higher costs in the future including skipping recommended doctors visits.
According to Cathy Tripp, national leader of consumerism at Watson Wyatt, In the current financial climate, employers stand to gain from reinforcing messages on preventive care, wellness resources and the importance of following prescribed drug regimens. There are a number of behaviors that, if embraced today, will lead to substantial health cost savings in the long term.
Wellness programs are among the most prevalent ways companies are promoting healthful behavior. A June 2008 report, Employee Health & Productivity Management Programs: The Use of Incentives, by ERISA Industry Committee, the National Association of Manufacturers (NAM) and IncentOne, Inc. found that incentives are an effective tool to engage employees and keep them involved in wellness programs. The report concludes that incentives for weight management programs ranged from $5 to $500 and for smoking cessation programs from $5 to $600. Incentives per person per year ranged from $100 to $300, with an overall average of $192.
Employers continue to experiment with incentive offerings. While in 2007, the primary incentive was health premium discounts; in 2008, gift cards were the most popular incentive, closely followed by health premium discounts and cash incentives. Rewards are focused on participation and completion rather than the achievement of specific goals such as weight loss or smoking cessation.
While motivating employees to participate, employers must comply with an array of legal and regulatory issues, including HIPPA, ADA and state laws. Legal issues in this area are constantly evolving as more challenges to programs occur.
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