How to Keep from Hiring a Serial Workers’ Comp Filer

| posted in Blog, Newsletter

As employers have found in the last few years, hiring has become more difficult as the labor market has tightened amid a strong economy. With slim pickings, many firms are having to settle for workers they may not normally hire – but that can lead to issues like higher turnover and workers’ comp fraud. Some employers even have a hard time finding candidates that don’t have substance abuse issues, while some people are serial workers’ comp filers, malingerers or have prior industrial injuries that can end up affecting your bottom line and X-Mod. Here are some suggestions for helping you…
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Newsom Signs Sweeping Independent Contractor Bill AB 5

| posted in Blog, Newsletter

California Gov. Gavin Newsom has signed legislation into law that will codify a court ruling from last year that set new ground rules for what constitutes an independent contractor, and which expands on that ruling. There’s been a lot written in the media about the legislation, AB 5, and unfortunately much of it misses the point. Some news reports have said it will spell the end of independent contractors in the state and that anyone a company hires to do a temporary job on contract must be treated as an employee, along with all of the obligations that go with…
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Workers’ Comp Audit Mistakes: What to Look For

| posted in Blog

No company owner wants to undergo a workers’ compensation audit, but they are a fact of life if you run a business and have employees. Unfortunately, many audits don’t go smoothly and sometimes your insurer may make mistakes. Missouri-based Workers’ Compensation Consultants, which helps employers through the workers’ comp audit process, recently listed the 10 most common audit mistakes that insurance companies make. The list highlights a common problem and how you can detect the mistakes to avoid being stuck with a massive audit bill. Insurance companies allow you to review the audit with your broker. If you notice that…
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New Rule Simplifies X-Mod Calculation, Encourages Reporting First Aid Claims

| posted in Blog, Newsletter

A new method for calculating workers’ compensation experience modifications (X-Mods) took effect in California on Jan. 1, 2019. The Workers’ Compensation Insurance Rating Bureau of California has created a new simplified formula for calculating X-Mods as part of its efforts to add more transparency to the process. The new formula excludes the first $250 of every claim for the X-Mod computation, no matter how large or small the claim is. This also means that if an employer pays, say, $200 for first aid on a minor workplace injury, they are required to report it as a claim. Doing so will…
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Commissioner Approves 10.3% Benchmark Rate Cut

| posted in Blog, Newsletter

THANKS TO the reforms enacted in 2014, California Insurance Commissioner Dave Jones has ordered a 10.3% average mid-year decrease to the state’s benchmark workers’ comp rates. The new benchmark rate, which insurers use as a guidepost to price their policies, will take effect on July 1. The benchmark is essentially the base rates that cover expected costs of claims and claims-adjusting expenses across all worker class codes. Insurers can price their policies as they wish, so there is no guarantee that any particular employers will see rate cuts. When pricing your policy, your insurer will take into account your claims…
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Rating Bureau Recommends Rate Increase, Albeit Slight

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The Workers’ Compensation Insurance Rating Bureau of California will ask for a benchmark rate increase of 0.1% for policies incepting on or after Jan. 1, 2018. But, in light of the insurance commissioner approving a 7.8% decrease for July 1 of this year, the benchmark rate for 2018 policies will still be nearly 8% less than it was at the start of 2017. The change would affect the benchmark rate – also known as the pure premium rate – which is a guidepost that insurers use to price their policies. That said, insurers are free to price their policies as…
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How Three Companies Reduced Their Workers’ Comp Costs

| posted in Blog

We’ve told you often in these pages about various workplace safety and claims management techniques, but sometimes it’s good to learn from the first-hand experiences of other employers. The National Underwriter insurance trade publication recently profiled three companies that had reduced their workers’ comp costs using a combination of claims management and safety initiatives. You can use their experience to apply similar programs at your company.   SMS Holdings’ experience This housekeeping and maintenance service provider did not roll out a one-size-fits-all approach to safety at is multiple locations in 46 states. The company instead took a silo approach to…
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Employers Protest Proposed First Aid Claims Rules

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California employers are protesting a part of the Workers’ Compensation Insurance Rating Bureau’s 2017 rate filing dealing with first aid claims, asking the insurance commissioner to delay adoption. Businesses say the proposed reporting provisions are unclear and inappropriate in light of impending changes that will exempt the first $250 of every claim from the experience rating calculation. Many employers simply do not report first aid claims in order to keep their experience modifier down, even though the Rating Bureau requires them to do so. Beginning in 2017, frequency will become a major part of the formula for calculating X-Mods. Under…
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New Law Tightens Workers’ Comp Exclusion for Officers, Board Members

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A new law has made changes to the officer exclusion for workers’ compensation in California but it could cause problems for policies that do not incept on Jan. 1. Starting in 2017, an officer can be only excluded from workers’ comp coverage if he or she owns 15% or more of the company’s stock. That’s changed from the current rules that set no ownership levels for officers and directors that want to claim a workers’ comp exclusion, which has created confusion as well as an opportunity for fraud. However, the law is written in such a way that it also…
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The Effects on Your X-Mod When Purchasing Another Company

| posted in Blog

Many companies are often taken off guard when their workers’ comp X-Mod shoots up after a merger or acquisition. The experience modifier spike is usually the result of the other employer having a less than stellar workplace safety record and high workers’ comp claims costs. But there are pre-emptive steps you can take to understand the impact of the merger on your X-Mod and the more you know, the better chance you’ll have at coping with the changed circumstances. The reason is that workers’ compensation rating bureaus have strict rules regarding mergers and acquisitions to ensure that companies don’t engage…
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