The National Council on Compensation Insurance (NCCI) is proposing changes in the Experience Rating Plan formula along with Missouri’s approved loss cost filing effective January 1, 2013. Why the changes and what do they mean for policyholders?
Increase primary/excess split point
Proposed changes include an increase to the primary/excess split point. The primary/excess split point is the dollar value that splits a loss into its primary cost and excess portions. Currently, the first $5,000 of a loss is considered the primary cost and the portion above $5,000 is considered excess. The proposed increase would bring the primary/excess split point to an inflation-adjusted $15,000 over a three-year transition period.
The $5,000 split point has been in place for approximately 20 years and the average dollar amount per claim has tripled since then. Currently, the primary loss amount that goes into the experience rating formula is much smaller than it was 20 years ago and does meet the current needs. The proposed changes increase the split point to $10,000 in the first year and to $13,500 in the second year. In year three, the changes will further increase the split point to $15,000 plus two years of inflation adjustment (rounded to the nearest $500).
Revise the maximum debit modification formulaThe proposed changes also include increasing the maximum debit modification to 10%, which is more reasonable than the current 0%. The revision also more fully accounts for differences across states in claim severities.
Predicted effectsNCCI does not feel the proposed changes will have any impact on the overall state premium. On an individual risk basis, most employers currently receiving credit experience modifications will receive larger credits. Most employers currently receiving debit experience modifications will receive larger debits. During the initial split point increase to $10,000, NCCI estimates that 93% of risks will receive less than a 10 point change in their experience rating modification. Additional information on this regulatory activity is available on NCCI’s website.
Workers compensation fraud and abuse are each destructive and expensive. Determining the difference between work comp fraud and abuse can be difficult, but it is important. In Missouri, work comp fraud and abuse each carry different legal consequences. Read more to find out exactly what the difference is and some of the most common examples.
AbuseWorkers compensation claim abuse is defined as any practice that uses the work comp system in a way that is contrary to its intended purpose and/or the workers compensation statute. Abuse can involve the magnification of symptoms that fall short of a lie, or it could involve the exploitation of benefits. While work comp abuse is not a crime in Missouri, it can be cause for work comp benefits to be discontinued.
FraudWorkers compensation fraud requires a lie that is material to the attempt to receive or deny workers compensation benefits. The presence or absence of a material and provable lie is the deciding factor between fraud and abuse. Although the lie is key to proving fraud, additional elements must also be present including intent, materiality and a benefit.
Take a look at some of the most common types of workers compensation fraud and abuse. The following examples are based on actual workers compensation claims.
Self-inflicted or intentional injury—Fraud A convenience store employee reported that he was assaulted and robbed while taking cash receipts to the bank. The police respond and the workers compensation carrier found the claim compensable and paid for medical treatment and total temporary disability benefits.
As the investigation proceeded, the employee admitted to stealing the cash deposit, and that his friend punched him in the face to make the assault appear more realistic.
The employee was later charged with stealing, filing a false police report and workers compensation fraud. He was ordered to pay restitution to the insurance company for the false claim and reimbursement of the stolen money. In the end, the employee lost his job and gained a felony criminal record, as well as, permanent damage to his vision.
Job-related injury that never occurred—Fraud
An employee was riding his four-wheeler and jumping over dunes during the weekend and sustained a serious knee injury. The employee waited until Monday morning and then reported that he hurt his knee just after starting work. Co-workers told the employer that he hurt it over the weekend. The employee was subsequently charged with workers compensation fraud.
Malingering or engaging in activities while allegedly disabled—Fraud or Abuse
An employee injured his back during the course and scope of his employment. While collecting workers compensation benefits, the employee continued to engage in out-of-state rodeo and barrel jumping events. The employee was photographed on horseback in mid-air as he jumped over barrels with his number and name listed in the caption. This evidence enabled prosecutors to charge him with workers compensation fraud. He lost his job and gained a criminal fraud conviction.
Workers compensation fraud and abuse are real problems and you can take control by preventing it in your workplace. Download some of fraud prevention materials:
Cell phones, smart phones and texting make our lives easier. But this convenience is one of the leading causes of vehicle accidents today, and it doesn’t have to be. On Jan. 3, 2011, the Federal Motor Carrier Safety Administration (FMCSA) announced a ban prohibiting truck and bus drivers from using hand-held cell phones while operating vehicles. Learn more about the regulations and consequences on theFMCSA website. Even if you are not in the transportation business, it’s important to work toward preventing distracted driving accidents.
Take a stand, develop a policyDistracted driving affects every industry, and the only way to prevent it is to face it head on. All company drivers, not just drivers of commercial vehicles, put themselves, other drivers and their employers at risk when they text or use cell phones while driving. Missouri Employers Mutual recommends that all employers develop and enforce a cell phones and driving policy.
An effective distracted driving policy should:
apply to all employees driving for company business.
clearly state that using smart or cell phones is prohibited while the vehicle is in motion.
be reviewed annually with each employee and documented.
Employers that contribute to and condone distracted driving open the company to liability. OSHA investigates vehicle crashes that are caused by texting and fines employers under the General Duty Clause. It’s not difficult to determine if a cell phone contributed to an accident because phone records are subject to discovery and can be used against an employer in a criminal and/or civil court. Data logs can prove that a driver was distracted and that the accident was preventable.
Support the policyEmployers can support their employees in smart driving by asking them not to multitask while behind the wheel. Make sure you encourage your employees to stop and check messages, return calls, eat or refresh before asking them to get back on the road. Don’t exacerbate the problem by requiring employees to take phone calls from dispatchers or the office while driving.
Learn more about keeping your employees and everyone else safe on the road at WorkSAFE Center.
When a workplace injury occurs, there is a mountain of paperwork to go with it. Somewhere in that mountain are OSHA’s recordkeeping requirements. Although injury recordkeeping can seem like just another thing on your to-do list, the information it provides is not only required but it is vital in preventing future injuries. Recordkeeping data identifies past problems and trends to consider when updating your workplace safety program.
Keep in mind that an OSHA log is an important part, but does not include all types of injuries and incidents that could have resulted in employee injury or those that only resulted in property damage. You need to keep track of all incidents to make your workplace safe.
Change is on the way, current requirements still apply
OSHA has issued a proposed standard for public input which means the existing requirements will likely change in the near future. For now, employers with more than 10 employees are required to report according to the current standards. Some lower hazard business sectors are typically exempt from recordkeeping. Visit OSHA’s website to find out if you are exempt. It’s important to note that if OSHA or the Bureau of Labor Statistics has requested your company to maintain a recordkeeping log, you are still required to do so even if you are on the exempt list.
All employers, including those that are exempt from OSHA recordkeeping requirements, must report to OSHA at 1.800.321.OSHA (6742) any incident that results in a fatality or the in-patient hospitalization of three or more workers within eight hours of occurrence.
OSHA logs that must be maintained
Employers that are not exempt from OSHA recordkeeping requirements must maintain three different logs. These forms must be kept up-to-date for five years after the year they cover. Unless requested, you do not have to mail these to OSHA. Download each of the forms in PDF or Excel format.
OSHA Form 300 (Log of Work-Related Injuries and Illnesses)
Lists injuries and illnesses, and tracks days away from work, days of restricted work or transferred
Maintained and updated throughout the year as incidents occur and must be filled within seven days of the injury
Employee slips, trips and falls are pervasive in Missouri’s schools. In 2011, MEM received more than 2,000 claims originating from these types of incidents. Injuries that result from slips, trips and falls can be physically painful and costly. Perhaps what hurts the most is that these injuries are preventable.
Slips, trips and falls are a major cause of employee injuries in Missouri and the second-most common work-related injury in the United States. A U.S. Department of Labor study shows that the average cost for treating slip, trip and fall injuries is $28,000. The good news is that you can do something about the frequency of slip, trip and fall injuries.
Prevent slips, trips and falls where they start.
Stairways and ramps
Loose tiles, loose carpet squares or worn out floor runners
In close or direct proximity with young children
Around storage areas, table or chair legs
In restrooms or kitchen areas with wet floors
Parking lots, curbs and gutters along sidewalks and school entrances
Take action now to prevent future injuries.
Review your workers compensation injury records and the financial impact.
Add a safety tip during regularly scheduled meetings.
Survey all walking and working surfaces for potential slip and trip hazards.
Plan ahead, and be prepared to keep walking and working surfaces safe during winter weather.
Require slip-resistant footwear when working both indoors and outdoors.
Send regular safety-related emails and texts to all employees.
Encourage employees to be an active part of their safety every day.
Report slip and trip hazards immediately.
Keep work areas organized and free of trip hazards.
Clean up spills immediately.
Walk slowly and avoid running.
Use handrails on stairs, and don’t carry boxes or items that block your view.
Use ladders properly, don’t over-reach and do not stand on chairs.
Wear over-the-shoe ice cleats when needed.
Wear rubber-soled shoes with tread when working or walking outdoors.
Report all injuries immediately.
Implementing these safety strategies in your buildings will have an impact on the health of your employees and your bottom line. Is your experience modifier rate over 1.0? If so, your school is experiencing too many injuries and paying more for workers compensation premium than other safer schools.
Your safety efforts must improve in order to get control of injuries and associated insurance costs. ConstructionInsuranceTOGO can help your school create a plan to reduce injuries and control workers compensation costs.
Stress is an unavoidable emotion that finds its way into all facets of life, and the workplace is no exception. Stress is commonly associated with headaches and upset stomachs, but it can also lead to more serious problems for both employees and employers.
Working under intense stress caused by personal life, family or work related issues can cause people to be distracted from their responsibilities. If high levels of stress are not addressed, they can lead to safety hazards in the workplace. Over-stressed employees can place themselves, coworkers, customers and the organization at extreme risk. Unhealthy levels of stress can:
cause coworker conflicts;
increase tension in the workplace; and
sometimes lead to violence.
A workplace with an otherwise strong foundation can be weakened by stress. When stress is at the forefront of an employee’s mind, judgment can be impaired, safety procedures and policies are more likely ignored, attention to detail is compromised and reaction time is slower. All of these add up to increased workplace accidents and injuries.
Employee Assistance Programs
Since stress is unavoidable, what can be done to decrease the risks involved with it? Employee Assistance Programs (EAPs) are an ideal solution that provide confidential and free or low-cost counseling services. EAP counselors work with employees to address the issues that may be causing distractions and inattention to job function requirements.
An active, visible EAP can actually help a company reduce the risks of workplace injuries, accidents, liability and costs related to the inappropriate use of medical resources. If your business already subscribes to an EAP, then don’t forget to inform new and existing employees about the services available on a regular basis. If subscribing to an EAP is not an option for your business, it is a good idea to keep a list of local free or low cost resources employees may find helpful in a time of need. Taking a new approach to stress management can benefit both the employer and employees.