Update - NCCI Audit Noncompliance Charge Endorsement

Effective 1/1/2017 the National Council on Compensation Insurance approved a Workers Compensation policy endorsement where an insurance company can charge up to 2x the originally estimated premium when a policy holder is in non-compliance with an audit request. 
 
In addition, failure to cooperate with the audit may result in a cancellation of Workers Compensation coverage. Audit noncompliance will disqualify an employer from obtaining coverage from any insurance company until the outstanding audit is completed.
 
We realize these audits can be time consuming, our staff is available to assist with questions and audit preparation. 
 
Feel free to contact us should you need help.
 
Dan Zeiler
dan@zeiler.com
708.597.5900 x134

 

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Experience Modification Looks Complicated, But It Isn't

 

Experience modification (experience mod) is a key factor when monitoring workers compensation premiums. Experience mod is a rating factor that determines your workers compensation premium based on loss experience. A 1.0 rating means expected losses equal actual losses that occur. A rating below 1.0 indicates that actual losses occurred are less than expected losses, resulting in a lower premium. A rating above 1.0 means actual losses are higher than expected losses, resulting in a higher premium. In short, your experience mod compares your workers compensation claims to companies of similar size and industry.  

Experience mod ratings are calculated based on certain components. One component is the payroll for the business. Workers compensation claims are highly dependent on payroll numbers being accurate, therefore payroll figures are often audited. A second component is the loss history of the business. The loss history can be determined from analyzing claim data that has been filed. When calculating the premium for the policy, items such as the frequency of claims are essential to provide an accurate premium. It gives an insight as to how the business operates and if there are trends regarding workers compensation claims. The last component is reserves used for claims. Claim data provides information to help compute payments, and reserves are required for claim totals. Reserves are assigned to open claims and represent future payouts. Claim adjusters often handle large amounts of claims, so it is imperative to have open claims reviewed for accuracy to avoid the formulation of the experience mod can become incorrect.  

In the real world injuries will happen, but the response can help keep your experience modification rate from increasing. Having a plan to manage injuries and workers compensation claims is imperative for getting control. An effective safety program that eliminates hazards is the starting point. Also, your experience mod is influenced more by small, frequent losses rather than large infrequent ones. Implementing a Return to Work Program is important for any business. Having a program in place will help lower days off which in turn will keep your experience mod down. For example, if an employee sprains their ankle, what can you do to decrease their days off? Can they input data while sitting at a computer or maybe help out somewhere else? Read our article  Illinois Workers Compensation Insurance - Keep Your Premiums Low  to learn more.

If you have questions or would like more information, call any of our 3 locations in the Chicago-land area today. Our customer service representatives are eager to share their knowledge and speak with you about any insurance related topic. Zeiler Insurance is an independent insurance agency and has been providing quality customer service for 101 years in our Alsip, Chicago, and Gurnee locations. Our goal is to help you understand insurance as well as provide you with the most competitive insurance rates in the industry. Whether you are a customer or just want more information, let us help you with our years of expertise in the insurance business.

Dan
dan@zeiler.com
708.597.5900 x134
http://www.zeiler.com

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Five Ways to Avoid OSHA Penalties

Five Ways to Avoid OSHA Penalties

During the first half of October 2014, the U.S. Occupational Safety and Health Administration announced a dozen citations against employers. A New Hampshire roofing contractor was fined $61,600 for not providing adequate fall protection. A Connecticut roofing contractor faces several citations following a fatal accident in July. A metal parts processor in Ohio was cited for 10 serious violations and $64,000 in fines over the accidental death of a supervisor. A cabinet maker in New Jersey faces a six-figure fine for exposing employees to a carcinogenic chemical. The death of an employee on a conveyor belt has a Mississippi lumberyard facing a $75,000 penalty.

Noncompliance with OSHA regulations can cost employers a lot of money. The good news is that complying does not have to be cumbersome or expensive. These procedures and attitudes can help a company keep its name out of an OSHA news release.

Improve record keeping. Good documentation is an employer's first defense against an OSHA inquiry. Information gaps in the OSHA 300 log (the record of work-related injuries and illnesses) may prompt inspectors to conduct comprehensive safety audits of businesses. Filling in missing information for the past three to five years can save your business a lot of grief and expense. Check personnel files and workers' compensation loss records for details of accidents.

Focus on ergonomics. Preventing repetitive motion disorders can help businesses avoid citations and penalties. It also reduces workers' compensation insurance premiums in the long run. Analyze how workers are performing their tasks and look for ways to reduce the strain on their joints, necks and backs.

Fix the routine violations first. Some safety issues are simple and cost little or nothing to correct. For example:
•Blocked exits
•Lack of protective equipment, such as gloves and safety goggles
•Poor housekeeping
•Improper storage of materials such as flammable liquids

These problems can accumulate over time. OSHA has penalized businesses with large numbers of violations like these, so it pays to monitor and correct them.

Have a plan for disasters. The weather has become more volatile, as the tornadoes of recent years and storms like 2012's Superstorm Sandy have shown. Contagions such as the Ebola virus can come seemingly from out of nowhere. Businesses must be ready for the unexpected. Disaster plans should include:
•Training for employees on what to do in the event of an emergency
•Procedures for safe evacuation from the building
•Workplace hygiene
•Stockpiling of emergency supplies such as first-aid kits
•Training for employees on how to administer first aid and CPR
•Arrangements for operating from remote locations
•Communications with employees, their families, customers and vendors

Although OSHA is not concerned with some of these aspects of the plan, having them in place will help the business survive the event.

View safety as a profit driver, not a cost center. Preventing workplace injuries costs money, but it also can improve a business's profitability. Some project owners and general contractors will consider bids only from contractors with workers' compensation experience modifications lower than 1.0. Firms with a reputation for safe operations will attract better workers. Also, insurance does not cover many of the costs from workplace accidents, such as time spent on investigating the incident, reduced employee morale, lost productivity, reporting costs, and the cost of OSHA penalties. Money saved on prevented accidents goes straight to the bottom line.

Some workplace injuries occur despite an employer's best efforts to prevent them. However, reasonable steps to improve workplace safety reduce the frequency and severity of injuries, make the business more competitive, and avoid problems when an OSHA inspector visits. To learn more, speak with us!

If you have questions or concerns on this issue, do not hesitate to call Zeiler Insurance and speak to one of our customer service representatives. As an independent agency, Zeiler Insurance prides itself with quality customer services for the people of the Chicago-land area and the rest of the Midwest. Customer or not, we can review your insurance and see if you are being protected appropriately for the right price.

-Dan Zeiler

danz@zeiler.com

(708) 597-5900  X134

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Illinois Workers Compensation Quote

Illinois Workers Compensation quotes...   we have very competitive work comp rates but it's important that we do more in order to control your long term costs:

  • We make sure you are getting the best workers compensation mod rate possible.
  • We make sure your open reserves don’t adversely affect your mod.
  • We will help prepare a workers compensation premium audit before the auditors arrives.
  • We help establish a working relationship with occupation health clinics.
  • We help prepare job descriptions to avoid bad hires.

Let me know if we can help you with your workers compensation program.


Dan Zeiler
dan@zeiler.com
708.293.5500
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Illinois Workers Compensation Policy

A quick review of the workers compensation policy declarations (Dec) page prior to renewal and upon receipt of the renewal policy can turn up opportunities to save premiums or avoid disputes with the insurer. Take a close look at the following items and give some thought to the possibilities.

  • Estimated payrolls -- If they look high, you could be giving your insurer a free loan. If they are too low, then expect severe sticker shock from an additional billing at the time of the premium audit.
  • Classifications -- Are these the jobs the employees are actually performing?
  • Discounts and Rates -- Are they similar to your last policy?
  • Credits -- Are they similar to last year? Have any credits been eliminated?
  • Deposit premium for the policy period -- Can you pay a smaller deposit premium and make monthly payments?
  • Insured's information -- Check the first section, usually listed or shown as Item 1, and verify information about the named insured, such as name, address, and entity type. Make sure that this matches your company's info exactly. (There can be major problems when the policy has a slightly different name or address.)
  • Coverage provided -- Item 3 of the Dec page details information concerning coverage. Check Section A, Workers Compensation Insurance, and Section C, Other States Insurance. If your company is operating in a state that is not listed, you could end up paying a WC claim out of pocket.
  • Premium calculation -- Usually Item 4, does this look right to you? Does it look similar to last year's policy?
This exercise only takes about 20 minutes, maximum, but could result in corrected errors that provide significant savings for your company.  We help employers in the Chicago Illinois area control their workers compensation costs.  Let us know if we can be of any help to you.
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Illinois Workers Compensation Modification Factor - Is it correct?

Having a handle on the method of computing your experience modification factor for your workers compensation is a must. Because of the many factors and hands involved in the process the potential of error  is very high.

 

  • As you know, your work comp premium is based on your payroll and the payroll used to compute your mod is derived from your payroll audits. Have you checked that the correct payroll is being used on the workers compensation mod worksheet? Are you confident that the payroll audit was correct? 
  • Experience mods are also developed from your loss history. Do you know when and where the claim data is pulled in order to compute your mod? 
  • When claim data is provided for the computation, any open reserves are used for the claim totals. Do you know that a claim adjuster can handle hundreds of workers comp cases? Have your open reserves been reviewed prior to claim data being sent to formulate your mod?

 

Mod Errors

 

We work with many businesses in the Chicago Illinois market. Our  processes ensure that your insurance premiums are at the minimum. Feel free to contact me with any questions.

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Illinois Pay as You Go Work Comp

Pay as You Go Workers Compensation

 

We are excited to announce a new Pay As You Go workers compensation program. The idea being that you pay your insurance premiums based on the wages in any given pay period. 

 

·         Improved cash flow

·         Eliminates large down payments

·         Minimizes audit adjustments

·         No late fee charges

 

Who are good candidate for this program?

 

·         Businesses with fluctuating payroll (Contractors!)

·         Businesses with past audit issues

·         Businesses with seasonal exposures

·         Businesses with a peak season

·         Any business that wants to improve cash flow

 

 Pay as You Go Workflow

 

Not only do we manage your workers compensation program,   we offer competitive pricing and now an online pay as you go program. Contact me with any questions or interest.


Dan Zeiler
708.293.5500
dan@zeiler.com
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Workers’ Compensation Premium Audit Alert!

Every year, Illinois Workers’ Compensation and Employers Liability rates can change based on the industry loss experience in the Governing Classification.  NCCI compiles data for Illinois, and traditionally rates are adjusted beginning January 1st.

 

For example, Class Code 5645 Carpentry—Detached One or Two Family Dwellings:

 

            Voluntary rate was 23.17 per $100 payroll Effective January 1, 2010,

            and increased to 23.60 per $100 payroll Effective January 1, 2011.

 

We can all recognize how the rising cost of medical expenses and higher weekly wages play a part in the increased rates and subsequent premium an employer pays for a Workers’ Compensation Policy.

 

For those employers who elect to include coverage for Executive Officers, another dramatic increase in premium is on the horizon. 

 

Along with the traditional increase in rates, Effective January 1, 2011:

 

Minimum Payroll applicable in accordance with Basic Manual Rule 2_E-1 –“Executive Officers”  was increased 250% over 2010 to $1,000 per week.

 

For example, an Owner / Executive Officer of a Carpentry Risk included on the Workers’ Compensation Policy had a Minimum Payroll exposure of $400 / week in 2010, or $20,800. Same Executive Officer has a Minimum Payroll exposure of $1,000 / week in 2011, or $52,000.   Based on the published rates above, at minimum payroll, the Executive Officer’s portion of the Premium just increased from $4,819 to $12,272.

 

If you have Executive Officers covered on a Workers’ Compensation Policy in Illinois, with exposures that have been at or below the minimum payroll, be aware of the changes that will be reflected come audit time.

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Illinois Workers Compensation Premium Audit for Contractors

We talked about this being workers compensation premium audit season in our previous post.  I'm currently working with a Chicago area contractor that is subject to the Davis-Bacon Act.   For those that this pertains to...  remember that the fringe benefits that you may include as wages, can be deducted form the payroll on the premium audit.  For some contractors this can be huge.

Feel free to contact me with any questions:  708.293.5500

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Illinois Workers Compensation Premium Audit

There's many employers who's workers compensation policy period ends 12/31.  So basically...  it's PREMIUM AUDIT SEASON!

BUILD AN OVERCHARGE-PROOF WORKERS COMPENSATION PREMIUM AUDIT PACKAGE

 

  • Utilize a spreadsheet
  • From your Illinois Unemployment Quarterly Reports – total each employee’s earnings for the year.
  • Slide each employee into a job duties column (make sure you’re specific as to the duties which correspond to the appropriate work comp classification).
  • Adjust for Excluded Payroll (overtime, tips, certain allowances, contributions to benefit plans, etc.)
  • Have your Certificates of Insurance ready for any subcontractors
  • Cap owners pay to the appropriate number
There's a little more to the process but you get the idea...  

0 Comments »

Pay as You Go Work Comp

Pay as You Go Workers Compensation

 

We are excited to announce a new Pay As You Go workers compensation program.  The idea being that you pay your insurance premiums based on the wages in any given pay period. 

 

·         Improved cash flow

·         Eliminates large down payments

·         Minimizes audit adjustments

·         No late fee charges

 

Who are good candidate for this program?

 

·         Businesses with fluctuating payroll  (Contractors!)

·         Businesses with past audit issues

·         Businesses with seasonal exposures

·         Businesses with a peak season

·         Any business that wants to improve cash flow

 

 Pay as You Go Workflow

 

Not only do we manage your workers compensation program,    we offer competitive pricing and now an online pay as you go program.  Contact me with any questions or interest.

 

 

Dan Zeiler

708.293.5500

dan@zeiler.com


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Check Your Workers Comp Policy Dec Page Closely at Renewal

A quick review of the workers compensation policy declarations (Dec) page prior to renewal and upon receipt of the renewal policy can turn up opportunities to save premiums or avoid disputes with the insurer. Take a close look at the following items and give some thought to the possibilities.

  • Estimated payrolls -- If they look high, you could be giving your insurer a free loan. If they are too low, then expect severe sticker shock from an additional billing at the time of the premium audit.
  • Classifications -- Are these the jobs the employees are actually performing?
  • Discounts and Rates -- Are they similar to your last policy?
  • Credits -- Are they similar to last year? Have any credits been eliminated?
  • Deposit premium for the policy period -- Can you pay a smaller deposit premium and make monthly payments?
  • Insured's information -- Check the first section, usually listed or shown as Item 1, and verify information about the named insured, such as name, address, and entity type. Make sure that this matches your company's info exactly. (There can be major problems when the policy has a slightly different name or address.)
  • Coverage provided -- Item 3 of the Dec page details information concerning coverage. Check Section A, Workers Compensation Insurance, and Section C, Other States Insurance. If your company is operating in a state that is not listed, you could end up paying a WC claim out of pocket.
  • Premium calculation -- Usually Item 4, does this look right to you? Does it look similar to last year's policy?
This exercise only takes about 20 minutes, maximum, but could result in corrected errors that provide significant savings for your company.  We help employers in the Chicago Illinois area control their workers compensation costs.  Let us know if we can be of any help to you.
0 Comments »

Illinois Workers Compensation Premium Audit

Found another simple mistake yesterday on a worker’s compensation premium audit. An owner/officers payroll was slid into the governing work comp class. This is a janitorial service client of mine in the city of Chicago and the error was simple to find.  It was simple to find because we completed a premium audit package for the insurance auditor.  We had a summary to refer back to once the final audit was completed by the insurance company.

 

BUILD AN OVERCHARGE-PROOF WORKERS COMPENSATION PREMIUM AUDIT PACKAGE

 

  • Utilize a spreadsheet
  • From your Illinois Unemployment Quarterly Reports – total each employee’s earnings for the year.
  • Slide each employee into a job duties column (make sure you’re specific as to the duties which correspond to the appropriate work comp classification).
  • Adjust for Excluded Payroll (overtime, tips, certain allowances, contributions to benefit plans, etc.)
  • Have your Certificates of Insurance ready for any subcontractors
  • Cap owners pay to the appropriate number
There's a little more to the process but you get the idea...  

0 Comments »

Illinois Workers Compensation Insurance: The Processes to Control your Costs

Historically, the emphasis on keeping premiums low has been at the time of a workers compensation insurance policy renewal.  Agents start contacting employers before the expiration date to collect payroll and loss information.  Applications are prepared and requests for quotes get shot out to multiple insurance companies.  Problem is that this practice does nothing to control the factors that affect your workers compensation costs.

  • Controlling your Workers Compensation Experience Modification
  • Claim reserve control
  • Hiring Practices
  • Managing Injuries
  • Premium audit preparation
  • Supervisor Training
These are all important tools to truely have an impact on your long term workers compensation premium.  If you are an Illinois employer or have a business in the Chicago area.  Contact me for a workers compensation evaluation.

Processes
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Illinois Workers Compensation Insurance: Subcontractors

At least once a week I have an uninsured subcontractor issue. Some common misconceptions:

 

  • I’ll have them sign a waiver.  Unfortunately, it's not that easy.
  • Subcontractor has no employees and not required to buy work comp.  Not an option for you.   

 

The Illinois Workers Compensation Act reads - in addition to an employee the employer is liable to pay compensation to “any contractor or subcontractor unless such contractor or sub-contractor has insurance, in any company or association authorized under the laws of this State” blah blah blah.   See definition of an Employer 1(a)3.

 

The Basic Manual published by the National Council on Compensation Insurance (NCCI)  reads – “in those states where workers compensation laws provide that a contractor is responsible for the payment of compensation benefits to employees of its uninsured subcontractors, the contractor must furnish satisfactory evidence that the subcontractor has workers compensation insurance in force covering the work performed for the contractor.” 

 

Basically, get your certificates in order to avoid being charged at time of a workers compensation premium audit!

 

If you are an employer in Illinois or the Chicago area and have more questions on this issue… feel free to contact me.

 

Dan Zeiler

708.293.5500
dan@zeiler.com

4 Comments »

Illinois Workers Compensation Insurance - FREE CD OFFER

Just to remind you....  we are offering a free CD on the Eight Secrets of Workers Compensation Insurance.  The highlights include:
  • Be Insurance Premium Audit Ready
  • Claims Management
  • Don't Hire Problems
  • Incorrect Workers Compensation Experience Modification Factors
  • Better Account Management
Click here to request your free copy or visit our website at :  http://www.workcompadvisor.com/secrets.cfm.

Learn how to control your Work Comp Rates.
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Illinois Workers Compensation Insurance

Found another mistake today on a workers compensation premium audit.  

We have an employer in the Chicago area whose audit was processed incorrectly.  Even though we helped prepare the audit - somewhere in process of getting the detail to the independent auditor,  the auditor to the company, the company to the premium audit processor...  something was missed.   The owner of the company was placed in the wrong workers compensation classification causing a $3,500 mistake.

Make sure you prepare an audit package before the auditor shows up at your door.  This helps determine the accuracy of a work comp premium audit when the final results are received.  

The reason so many mistakes are made on a work comp program....
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Workers Compensation Premium Audit

Insurance Premium Audit

Found another error in a Work Comp Premium Audit. A Chicago area employer was subject to the Davis-Bacon Act. Basically the Act requires paying prevailing wages on public works projects. 

“All federal government construction contracts, and most contracts for federally assisted construction over $2,000, must include provisions for paying workers on-site no less than the locally prevailing wages and benefits paid on similar projects.”

And although your Workers Compensation Premium is subject to to the higher wages - the higher benefits are not.  This Illinois employer lumped the required compensation into the employees pay and during the workers compensation premium audit – those wages were included in the final payroll numbers.   A simple over site but with $25,000 in fringe benefit costs – the additional premium was $2,200.
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Illinois Workers Compensation Experience Mod

Sometimes you can just smell when a workers compensation experience mod is wrong.  Check out the one I was just reviewing for an Illinois employer.




Payroll on an experience mod should reflect the work comp premium audit numbers. Little bit of a coincidence that the payroll on this experience mod is exactly the same for two years in a row.  AND, how many times does the payroll in each of your workers compensation classification codes end with 000.  

If your actual payroll turned out to be higher than the estimated payroll at the beginning of the policy period, you could be missing out on a better experience mod credit when these errors are missed.    

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Free Workers Compensation CD

We're offering a free CD on the Eight Secrets of Workers Compensation Insurance.  The highlights include:
  • Be Insurance Premium Audit Ready
  • Claims Management
  • Don't Hire Problems
  • Incorrect Workers Compensation Experience Modification Factors
  • Better Account Management
Click here to request your free copy or visit our website at :  http://www.workcompadvisor.com/secrets.cfm.

Learn how to control your Work Comp Rates.

0 Comments »