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Workers Compensation

13 Sep

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5 Steps to Reduce Workplace Injuries

September 13, 2016 | By |

Ben Franklin once said, “An ounce of prevention is worth a pound of cure.” Workplace injuries accounted to $170 billion (OSHA) of costs paid by small businesses in the US. Direct expenses associated with worker injuries include medical care, lost wages, overtime, and additional training and human resource expenses. Further, indirect costs such as decreased productivity, lower morale, higher workers’ compensation premiums, damage to reputation or brand, and increased turnover quickly add up resulting in lost profits.

However, businesses can take a proactive approach to preventing worker injuries in order to reduce the costs involved with injuries. Here are 5 steps that a business can take today to reduce worker injuries:

Commit to safety and engage employees. Commitment to safety should begin with owners and upper management team members, and should be communicated clearly throughout the organization. Managers promote safety by following safety guidelines themselves and by modeling safe practices at all times, while encouraging employees to do the same.

Responsibility for safety should be assigned to appropriate team members. Safety responsibilities should also be included in employee job descriptions.

Internal meetings further increase awareness of safety initiatives and allow for open discussion on the importance of safety in the workplace. Initially, a meeting should be held to communicate management’s commitment to keeping employees safe on the job.

Analyze current operations and workplace hazards. OSHA offers several resources to assist employers in assessing safety. Self-inspection checklists are provided in OSHA’s Small Business Handbook and OSHA has an on-site confidential consultation program to assist businesses with analyzing workplace safety. Business insurance companies often offer loss control services to help with identifying potential exposures and reducing workplace injuries, and often have credits or discounts available for companies who show a commitment to safety.

Develop and implement an action plan to lower hazards. After safety issues are identified, implement a corrective action plan. Assign responsibility for follow through to appropriate team members, and use action steps and deadlines that can measured. Document hazards that were identified and the steps taken to prevent future injuries.

When an injury occurs, immediately perform an investigation to determine what happened and how the injury may have been prevented. Make appropriate changes to procedures in order to prevent future injuries.

Provide training to employees. It is imperative that employees understand how to perform their jobs safely. Consistent training should be provided that instructs employees on safety policies, safe practices, and actions to take in the event of injury. OSHA offers a large inventory of training resources. Insurance companies also often provide resources for safety training.

Monitor the safety program and adjust as necessary. Inevitably, industries change and procedures need to adjusted. Make it a point to revisit your safety program at least semi-annually and make adjustments as necessary.

By committing to safety and taking steps to protect workers from injury, businesses can reduce the costs associated with workplace injuries. The “ounce of prevention” taken today could result in future profits that are retained and invested rather than spent on worker injury costs.

At Pioneer Business Insurance Agency, we work hard at being accessible, helpful, and result-oriented. Learn more about us at PioneerBusinessInsurance.com. How can we put our expertise to work for you?

01 Sep

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What is Workers’ Compensation?

September 1, 2016 | By |

Workers’ compensation is a state-regulated program, and is required of certain employers by law in most states. It covers wage-loss benefits, medical treatment, and rehabilitation for employees who suffer a work-related injury or illness. Workers’ compensation also includes employer liability coverage, meaning that employees who receive these workers’ compensation benefits cannot file suit against their employer in connection with the work-related injury or accident, with few exceptions.

When an employee suffers a work-related injury or illness, the workers’ compensation policy covers the costs of the employee’s wages and medical care, and many workers’ compensation policies have programs which help to facilitate recovery and expedite return-to- work.

Premiums for workers’ compensation are determined by business classification and payroll. Classifications group businesses with like businesses, and these classification categories and determined by rating bureaus. Payroll is determined on an individual basis by a premium audit. A premium audit typically includes the insured submitting information about the business’s owners/officers, employee gross payroll, job descriptions, and subcontractors. When an audit is completed, the insured receives a statement that outlines the classifications, payroll amounts, rates, and other policy changes.

Cost Management

There are several ways an employer can manage the cost of workers’ compensation.

Choose your insurance agency carefully. Exclusive and captive agents are limited to offering only one carrier for workers compensation, while independent agents represent multiple insurance companies, and have the ability to compare policies for the best value.

Implement a formal safety program, such as written safety procedures, prompt claims reporting, and return-to-work programs.

Talk about safety with your employees. Provide training for injury prevention, and allow for meetings that address safety issues.

For more information on this and other insurance topics and coverage, please call our office.

01 Aug

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Is an individual doing work for me an independent contractor or employee?

August 1, 2016 | By |

Several tests can be used to determine whether an individual qualifies as an independent contractor or employee for the purposes of state and federal laws. Fundamentally, all of these tests seek to answer the question, does the company control how the work will be performed (suggesting an employer-employee relationship) or does the company deal only with the results of this work (suggesting an independent contractor relationship)?

Five of the most common tests are:

  • IRS Factor Control Test (or 20 Factor Test): used in regard to IRS withholding, Immigration
  • Economic Reality Test: used in regard to Fair Labor Standards Act, Workers’ Compensation, Discrimination
  • Relative Nature of Work Test
  • ABC Test: used in regard to Unemployment benefits
  • Common Law Test (or Right to Control Test:) used in regard to Discrimination, ERISA, Worker Adjustment and Retraining Notification Act, National Labor Relations Act, Labor Management Relations Act

The test used depends upon the particular statutes or government agencies involved. Please not that these tests are only guidelines and are not applicable in every situation. Therefore, a worker may be considered an employee under one statute, but an independent contractor under another.

Misclassifying employees as independent contractors carries financial risks. In addition to penalties and fees, companies may also be charged with liabilities including back taxes and overtime. This may also open the company to lawsuits related to:

  • Denial of ERISA and other benefits
  • Denial of Workers’ Compensation
  • Denial of Family Medical Leave Act (FMLA)
  • Discrimination for failure to accommodate for a disability
  • Failure to include the individual in employee count which resulted in the company appearing not to be required to comply with Title VII, ADA, ADEA, FMLA, WARN Act, Affirmative Action, or other state or federal employment laws
  • Failure to retain proper tax forms for employees
  • Disputed ownership of rights to completed work

For more information and relevant forms, visit http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Independent-Contractor-Self-Employed-or-Employee. Give Pioneer a call for more information on this and other insurance topics and coverage.

 

23 Jun

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Workers’ comp vs. Occ Acc: what’s the difference?

June 23, 2016 | By |

Workers’ compensation is a state-regulated program, and is required of employers who employ three or more employees at any one time, or employ one or more employees for 35+ hours per week for 13 or more weeks by law in most states. It may cover wage-loss benefits, medical treatment, and rehabilitation—related medical expenses—for employees who suffer a work-related injury or illness. Workers’ compensation also includes employer liability coverage, which may provide protection to an employer if an employee sues the employer in indirect relation to a workers’ compensation claim, often covering legal defense costs, up to the policy limits. Workers’ compensation doesn’t eliminate the issues of an unsafe workplace, however, and employers have a responsibility to maintain a safe working environment for their employees.

Occupational accident insurance may provide medical, disability, and accidental death and dismemberment benefits, but it’s not workers’ compensation—it isn’t state-regulated or state statutory. Occupational accident policies may cover wage-loss benefits, medical treatments, and rehabilitation for employees or covered independent contractors, but only up to the policy limits. Employers are allowed to choose their coverage and deductible amounts, based upon the employer’s perceived risk.

While workers’ compensation policies typically involve a higher cost to the employer, they may offer more comprehensive coverage, particularly in terms of employer liability, which is not a component of occupational accident coverage. However, individuals who qualify as independent contractors are not always covered under state workers’ compensation laws; while employee classification is determined by the federal government, workers’ compensation laws are determined by the state government. For these individuals, employers may want to consider occupational accident coverage.

For a useful infographic delineating the differences between workers’ compensation and occupational accident policies, click here. For more information on this and other insurance topics and coverage, please call our office.

16 Nov

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5 Ways to Simplify Your Business Insurance Audits

November 16, 2015 | By |

Just hearing the word “audit” can cause some to cringe, but preparing for an insurance audit ahead of time can help to make the process much smoother and less stressful.

The purpose of an insurance audit is to verify payroll or revenue to confirm that the insurance policy is rated appropriately. When a policy is written, estimates for payroll and/or revenue are used to determine the annual premium. Many general liability policies and all workers’ compensation policies are audited. Other types of insurance policies can also be auditable, including excess liability policies and contractors’ equipment policies.

Here are 5 steps that you can take ahead of time to simplify your insurance audits:

1. Use clear bookkeeping processes and maintain accurate adn detailed records. Some of the records that an auditor might ask for include payroll journals, federal tax reports, and individual earnings records. Payroll journals should reveal monthly totals along with a breakdown of work performed by employees. Individual earnings records should include the type of work performed, the hiring date and the termination date.

2. Clarify classification codes used for rating. Policies are rated by classification codes, so it is essential to use correct classification codes. Rates can vary greatly by classification. For example, the rates for a clerical worker or salesperson are much lower than the rates for a carpenter. If an employee has more than one job duty, you may be able to use two classification codes depending on the state where you are located, however you must keep clear records on the hours devoted to each classification and the classification codes must be approved by the insurance company prior to starting the policy.

3. Understand how payroll is calculated. Generally, the payroll used for the audit is the total remuneration paid to an employee. There are some exclusions, so check with your agent, your state workers’ compensation agency or your insurance company to determine possible exclusions in your state. One example is overtime. You may be able to deduct pay that exceeds straight time for hours worked by an employee.

4. Notify your agent and insurance company of changes to your payroll. If your payroll changes during the policy term, talk with your agent to determine whether the policy should be endorsed to avoid unexpected premiums at the end of the policy term.

5. Verify coverage for sub-contractors. If you are using sub-contractors, collect a copy of their general liability and workers’ compensation policies prior to hiring them so that they are not included as employees in the audit.

In short, accurate records will help you to prepare for and simplify the insurance audit process and help you to avoid costly audit bills. By following the tips above, you will be well-prepared for your next audit.

If you would like to learn more, visit us at PioneerBusinessInsurance.com, or call us at 888-596-7242. At the Pioneer Business Insurance Agency we work hard at being accessible, helpful, and result-oriented. How can we put our expertise to work for you?

08 Nov

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Safety first! Prevention for Cumulative Trauma Disorders

November 8, 2012 | By |

More than half of workplace injuries are caused by musculoskeletal disorders (MSDs), such as cumulative trauma disorders (CTDs).  In fact, $1 of every $3 of workers’ compensation costs are attributed to MSDs. Employers who are aware of risk factors, and take action to minimize these types of injuries ultimately benefit by controlling losses and improving the productivity of their workers.

What are Cumulative Trauma Disorders?

CTDs are injuries of the musculoskeletal and nervous systems attributed to repetitive motion, over-exertion, vibrations, pressure from hard surfaces, and prolonged or awkward positions. Disorders associated with CTDs include carpal tunnel syndrome, tendinitis, low back pain, bursitis, and several others.

Who is at risk?

Employees who perform repetitive motions are especially susceptible to developing CTDs. Office employees who spend extended periods of time working at a computer, and manufacturing employees who perform repetive motions (such as snapping a part in place) are among those most at risk.

What can I do to prevent or minimize CTDs in my company?

First, Employers should increase awareness of CTDs, and the risk factors that contribute to these types of disorders. Designate someone on your staff to handle safety at your workplace, by researching safe practices and ergonomics (the process of adjusting workstations for safety and comfort).Your business insurance agent should also be able to provide you with helpful resources.

Next, talk with your employees about the importance of good posture while sitting or standing for extended periods of time. For example, while sitting at a computer, feet should be flat on the floor or on a foot rest, the head should face forward with a slight tilt downward, wrists should be in a nuetral position, and elbows should be within a 70-135 degree angle. Encourage employees to take short breaks to reduce injuries caused by sustained positions, and to consider deep breathing and stretching when in the same position for an extended period of time.

If you would like to learn more, visit us at PioneerBusinessInsurance.com, or call us at 888-596-7242. At the Pioneer Business Insurance Agency we work hard at being accessible, helpful, and result-oriented. How can we put our expertise to work for you?

 

 

06 Apr

By

Workers’ Compensation FAQ

April 6, 2012 | By |

What is Workers’ Compensation?

Enacted in Michigan in 1912, workers’ compensation is the first form of no-fault insurance. Prior to 1912, workers were required to prove negligence on behalf of their employer to recover damages from their employers. Once the workers’ compensation system was enacted, the burden of proof by employees was removed and employers were required to provide compensation for workers injured while on the job.

Additionally, the Workers’ Compensation Act protected employers by limiting the damages that a worker can recover to wage loss benefits, costs of medical treatment, and defined rehabilitation services. Prior to the act, workers could recover for damages such as pain and suffering, loss of enjoyment of life, and other damages awarded to them.

What does Workers’ Compensation cover?

For the employee who suffers a work-related injury or illness, workers’ compensation covers wage loss benefits, medical treatment, and rehabilitation. In exchange for the benefits provided under workers’ compensation, employees are prevented from filing suit against their employer in connection with the work related injury or illness, with few exceptions.

Who is required to carry Workers’ Compensation?

Michigan statute requires all public employers to carry workers’ compensation. Private employers must carry workers compensation if they regularly employ 3 or more workers at any one time; or they regularly employ at least 1 worker for 35 hours or more per week.

Workers’ compensation is voluntary for any other employer to manage the risks associated with worker injuries, and should be carefully considered. Sole proprietors, contractors, and sub-contractors have unique provisions under the workers’ compensation law, and should become familiar with state requirements.

Penalties for employers who do not comply with the Workers’ Compensation Act could include costly fines, imprisonment, and civil damages brought against the employer by an injured employee. Further, each day that an employer is uninsured serves as a separate offense under Michigan statute.

How can I manage the costs of Workers’ Compensation?

There are several ways an employer can manage the costs of workers’ compensation. Here are some suggestions:

  • Choose your insurance agency carefully. Exclusive and captive agents are limited to offering only one carrier for workers compensation, while independent agents represent multiple insurance companies, and have the ability to compare policies for the best value.
  • Implement a formal safety program. Many employers who implement safety measures such as written safety procedures, prompt claims reporting, and return-to-work programs find that they are able to effectively reduce the costs of workers’ compensation.
  • Talk about safety with your employees. Provide training for injury prevention, and allow for meetings that address safety issues.

For more detailed information about workers’ compensation in Michigan, visit www.michigan.gov/wca, or talk to a licensed insurance professional.

At the Pioneer Business Insurance Agency we work hard at being accessible, helpful, and result-oriented.  Learn more about us at www.PioneerBusinessInsurance.com.  How can we put our expertise to work for you?