Ten commandments for a workers’ comp audit

Work Comp Premium Audit

While an IRS audit strikes fear in the hearts of business owners, a Workers’ Compensation premium audit is considered routine. Yet, there is a very good chance that it can result in higher charges, particularly if you are not adequately prepared. Clerical errors, incorrect classifications, and miscalculations often lead to overcharges.

There are two important things to remember about Premium Auditors. First, their objective is to maximize your premium, after all, they work for the insurance company. Second, overworked, they have tight time constraints. The more organized you are and the easier you make the job for the auditor, the more likely you are to have a favorable audit.

Here are ten commandments to keep in mind:

  1. Thou shalt not be unprepared
  2. Thou shalt not forget to be there to answer questions
  3. Thou shalt not answer any questions that are not asked
  4. Thou shalt not forget to review your policies being audited before auditor arrives
  5. Thou shalt not forget to do a payroll breakdown -by class code / by department or by job duties
  6. Thou shalt not forget to separate owners, officers, clerical, outside sales and drivers payrolls; or any other employee[s] that you feel should not be classed to the “governing” class code
  7. Thou shalt not forget to have Certificates of Insurance for subs and independent contractors on hand
  8. Thou shalt not forget to have the definitions of payroll, sales, sub-contract cost, etc. “on hand and reviewed” before auditor arrives
  9. Thou shalt not fail to ask auditor to recap the audit findings before he / she leaves
  10. Thou shalt not forget to ask for a copy of the audit

— Jerry Fulmer, Institute of WorkComp Professionals

We’re here to help. As Certified WorkComp Advisors, we are trained to prepare employers for audits, spot errors and get them corrected.

To learn more about premium audits, and download a FREE copy of the AuditCheck® Program Workbook so you too can have an overcharge free and error free audit, click here.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

 

OSHA: A review and look ahead

Unlike other agencies, such as the EPA, OSHA has not experienced the scale back in enforcement and rulemaking that was expected under the Trump administration. Most attribute this to the fact that there is still no Assistant Secretary of Labor – the longest vacancy ever for the top job at OSHA. Given the present political climate and election year activity, few expect the position to be filled during this final year of President Trump’s first term.

In addition, two vacancies on the Occupational Safety and Health Review Commission (OSHRC) meant that it could not issue decisions since March 28, 2019, because it did not have a quorum. However, it can now resume its work because the Senate confirmed Cynthia Attwood and Amanda Wood Laihow by voice vote Jan. 9, 2020.

What’s been unexpected?

  • No reduction in enforcement emphasis programs. OSHA continues to implement the same number of national (NEP) and regional (REP) emphasis programs as under the Obama administration.
  • Number of inspections has increased. While the number of compliance officers (CSHO) is lower, the number of inspections in 2019 was 33,401, compared to 31,948 in 2016. Although this means the average CSHO’s hours per inspection is lower, it demonstrates a continued commitment to enforcement.
  • Average penalty per serious violation increased dramatically. Under $1,000 in 2009, the average penalty per serious violence reached a high of $5,232 in 2019.*
  • Records for the number of $100,000 penalty cases. In the first year of the Trump administration, there was a record-setting 218 cases with penalties of over $100,000. Last year it was 179 and the three years average is 199 cases, compared to a high of 202 cases in 2011 and an average of 168 cases under the Obama administration.*
  • Little change in the percentage of inspections that result in a serious, willful, or repeat violation. If an employer gets a knock on the door, there’s a very good chance that at least one serious, willful, or repeat violation will be issued. For the past two years, only 28% of inspections closed as “in compliance.” For those that were not in compliance, 87% had at least one serious, willful, or repeat violation in 2017 and 2018 and 86% in 2019.*
  • No let-up on repeat violations. Under the Obama administration, there were significant changes that increased the likelihood of a repeat violation. Workplaces in a corporate family were no longer treated as independent establishments, but as one workplace; in the guidance document, the Federal Operations Manual, the look back period was extended from 3 to 5 years, and there was proactive targeting of past violators for inspections. These practices have not changed. In fact, in 2018 OSHA successfully defended the case, Triumph Construction Corporation v. Secretary of Labor and the U.S. Court of Appeals for the Second Circuit ruled that OSHA is not bound by any look-back period on which to base a repeat violation, a significant expansion of the scope of repeat classifications.

    However, there was one bright spot for employers. In July 2018, the OSHRC issued its decision in Secretary of Labor v. Angelica Textile Services, Inc., providing employers guidance on rebutting repeat violations and clarifying the defenses that employers may have in combating repeat violations. Although the violations involved the same standards of LOTO and confined spaces, the OSHRC found that they were not “substantially similar” because the original violations involved wholesale deficiencies and the company had taken significant abatement actions, and therefore, the conditions differed. OSHA, however, remains committed to repeat violation enforcement, and the case is on appeal to the Second Circuit.

  • Increases in budget. Typically under a Republican administration there are budget cuts to limit enforcement, yet the budget has been increased twice with a 4% increase for FY20, including the enforcement category.
  • Penalties keep rising. Under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, the maximum allowable penalty amount for OSHA violations is adjusted annually. The latest increase occurred on Jan. 15, 2020. The maximum penalty for “willful” or “repeat” violations is now $134,937 and the maximum fine for serious, other-than-serious, failure-to-correct (per day), and posting-requirement violations increase is $13,494.
  • Criminal prosecutions continue. Two Department of Justice (DOJ) memos that expanded worker safety criminal prosecutions issued by former AG Sally Yates continue to be enforced by AG William Barr. The first relates to individual accountability for corporate wrongdoing and the second encourages the DOJ to use other environmental laws with more teeth and longer statute of limitations to prosecute worker safety crimes.
  • Site Specific Targeting Plan implemented. In Oct 2018, OSHA initiated the Site-Specific Targeting 2016 inspection program (SST-16) that uses the injury and illness data electronically submitted by employers in 2016. These are tough wall-to-wall inspections. The SST list includes 3,000 establishments and 1,000 inspections have already been conducted.*

Scale back in rules and public shaming

  • The first significant deregulation action was the overturning of the Volks rule by Congress under the Congressional Review Act in 2017. The Volks rule gave OSHA the ability to issue citations to employers for failing to record work-related injuries and illnesses during the 5-year retention period.
  • There also was a scale back of the e-recordkeeping rule, adopted in January 2019, that eliminated the requirement for the largest establishments (250+ employees) to annually submit electronically 300 Logs and 301 Incident Reports. However, the rule did not roll back as many provisions as expected, notably the anti-retaliation provision and public reporting concerns.
  • There has been a slowdown in rulemaking. Some rules moved to “long term actions,” including the Process Safety Management (PSM) Standard, Drug Testing Program and Safety Incentive Rules, and Combustible Dust.
  • There’s been a significant decrease in the number of enforcement press releases issued by OSHA, which can be inflammatory and issued before employers have an opportunity to respond. In 2019, 176 press releases were issued, compared with an average of 463 per year under the Obama administration.* However, the tone hasn’t reverted to the factual reporting of the Bush administration but has remained aggressive.

A look ahead

Inspections

It is projected that the number of inspections will remain steady or rise slightly as the budget includes funding for an additional 26 FTE CSHOs and five FTE whistleblower investigators. Expect to see an aggressive continuation of the SST-16 program that targets non-construction workplaces with 20 or more employees with elevated Days Away Restricted or Transferred (DART) rate, together with a random sample of low-rate establishments and those that did not submit the required electronic data.

The top four priorities are investigation of imminent danger, fatality and catastrophe investigations, response to complaints, and programmed inspections, such as SST and emphasis programs. In Oct. 2019, for the first time since 2015, OSHA changed the weighting system it uses for inspections:

  • Group A, criminal and significant cases (those where fines total more than $180,000): 7 Enforcement Units (EUs)
  • Group B, fatalities and catastrophes (hospitalization, amputation, physical loss of an eye), chemical plant National Emphasis Program, process safety management inspections: 5 EUs
  • Group C, the “fatal four” – caught-in, electrical, fall and struck-by hazards: 3 EUs (expect an uptick in construction industry inspections under this group)
  • Group D, priority hazards: amputation, combustible dust, heat, non-PEL overexposures, workplace violence, permit-required confined space, air contaminants, noise, and site-specific targeting: 2 EUs
  • Group E: everything else: 1 EU.

With these priorities, employers can expect to see more six-figure penalties.

Rulemaking

  • LOTO. Many employers were relieved when the term “unexpected energization” was not removed from the LOTO standard as proposed; however, OSHA left open the door to remove it in the future. In May 2019, the agency issued an RFI seeking input on control circuit type devices and robotics, but to date, OSHA has not provided updates on rulemaking action. There has been an uptick in requests for variances from businesses to consider safe robotic systems as energy-isolating devices. This is an opportunity to change the standard beneficially to reflect technological advances and bears watching.
  • Silica rule. The silica standard requires that medical surveillance must be offered to employees who will be exposed at or above the action level for 30 or more days a year starting on June 23, 2020. Employers with silica present need to document objective data that they do not have exposures at or above the action level under any circumstances.

    It’s anticipated that the recently requested feedback on expanding table 1 of the standard will result in additional engineering and work practice control methods that effectively limit silica exposure for the tasks and equipment currently listed in the table.

  • Beryllium. The compliance date for ancillary provisions in the beryllium standards for construction and shipyards is September 30, 2020. Enforcement of the engineering controls in the general industry standard starts March 10, 2020.
  • Workplace violence. OSHA plans to initiate a Small Business Regulatory Enforcement Fairness Act review panel that will begin an effort to create a standard designed to address workplace violence in the healthcare and social services industries.
  • Other. Other possible new rulemakings will deal with powered industrial trucks, walking-working surfaces rule to clarify its requirements for stair rail systems, cranes and derricks in construction, communication tower safety, welding in construction confined spaces, occupational exposure to beryllium and beryllium compounds in construction and shipyard sectors, and updates to the Hazard Communication Standard.

*Conn Maciel Carey webinar, Annual OSHA Update: 2019 in Review and 2020 Forecast

Note: The information above applies to OSHA in federally mandated states. If you are located in a state where a state agency enforces the OSH Act, the information may differ.

 

Workplace Wellness Programs the Key to Cutting Insurance Costs

According to numerous studies, healthier employees lead to lower premiums. And if employers can make their employees healthier without cutting benefits or shifting more premium costs to their employees, is there a downside? After all, Fortune 1000 companies have been using wellness to combat rising health care costs for years.

According to a Duke University study, the cost of obesity among full-time employees is estimated to be $73.1 billion. As a result of health problems linked to obesity, lost job productivity could be more costly than medical expenditures. The report recommended that employers promote healthy foods in the workplace, encourage a culture of wellness
from the CEO on down, and provide economic and other incentives to employees who show signs of improvement. While workplace wellness programs began as a niche industry, they have morphed into comprehensive programs for worksites of all sizes.

They’re touted as an effective business strategy to improve the health and productivity of
workers, reduce health care costs, attract new employees, and retain existing ones.

Sadly, these programs have no value if they’re not used. A study by the National Institute
for Occupational Safety and Health, “Availability of and Participation in Workplace
Health Promotion Programs (WHPPs) by Sociodemographic, Occupation, and Work
Organization Characteristics in U.S. Workers,” found that approximately 47 percent of workers have access to WHPPs and only 58 percent of those with access actually participate.

So, who’s using WHPPs and who’s not?

That depends on several factors, including the type of job and whether the employee is full time or part time.

Occupations such as farming, fishing, forestry, food preparation and serving, construction, and extraction had the lowest availability of WHPPs and workers in these occupations were also the least likely to participate in the programs. Employees who worked less than 20 hours a week, worked regular night shifts, were paid by the hour,
or worked for temporary agencies were also less likely to participate.

Researchers also identified barriers that kept workers from participating, including time
constraints, lack of awareness, low supervisory support, and perceived need, but noted such barriers vary by industry.

The report concluded that employers should gauge workers’ priorities before designing and implementing WHPPs and to customize programs to their employees’ specific needs in order to maximize participation.

Another factor that may be helpful in gauging participation is to identify which wellness perks were most important to workers and how those perks impacted productivity.

Polling among employees was surprising. It wasn’t fitness facilities nor technology-based
health tools that topped the list of why workers had job satisfaction, but air quality and natural light.

Air quality and light were the biggest influencers of employee performance, happiness, and well-being. Also high on the must-have list was water quality, followed by comfortable temperatures, then acoustics and noise levels.

Not surprisingly, employees want to be able to customize their work environment, such as the temperature and natural light.

One company has taken those needs to heart by managing the acoustic levels in their employee’s space by creating a floor plan without assigned seating. Neighborhoods of workspaces were designed specifically for employees collaborating in person, remotely, or those who choose to work alone. Similar arrangements can be made for temperature and light.

Here are seven steps employers can take to improve their results:

  • Make WHPPs employee-centric – Survey employees about their workplace wellness priorities and tailor or modify the program to those needs.
  • Integrate WHPPs with workplace safety programs – For positive results, common safety issues such as work schedules, workplace culture, ergonomics, substance exposures, noise levels, fatigue, and so on should be incorporated with the wellness
    program.
  • Recognize that workplace wellness is more than physical health – Studies have shown that most worksite health programs focus on physical activity, nutrition, and stress management. Environmental factors such as air, light, temperature, and acoustics are usually overlooked.
  •  Personalize as much as possible – Employees love to personalize their workspace, whether it’s framed photos of their kids or Star Wars memorabilia. Along those same lines, employees expect the company to take their well-being into account in
    all aspects of work.
  • Recognize that workplace wellness is more than physical health – Studies have shown that most worksite health programs focus on physical activity, nutrition, and stress management. Environmental factors such as air, light, temperature, and acoustics are usually overlooked.
  • Recognize the challenge of changing human behavior – Personal behaviors and habits, including health and safety, are very difficult to change. It takes take time and effort.
  • Give employees a sense of ownership – Much like a culture of safety, employees must buy into a culture of wellness. Consider a wellness committee from a cross-section of departments and employees to provide input and drive participation.
  • Monitor employee satisfaction – Attempt to measure the return on investment of WHPPs, including health care costs, absenteeism, disability claims, and workers’ compensation claims. It’s important to incorporate “soft” measures, too, such as satisfaction and morale.

In addition to holding down insurance premiums, wellness programs can positively affect workers’ compensation costs, although measuring the impact takes longer because of the method of calculating the experience rating.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Reminder: Injury reporting deadlines

Employers are reminded that they must post their 2019 Summary of Work-Related Injuries and Illnesses (Form 300A) from February 1 to April 30.

March 2, 2020 is the deadline for companies that are required to submit the form electronically using the Injury Tracking Application. It’s important to remember that in reporting 2019 data, establishments must now provide their Employer Identification Numbers (EIN). For more information.

For free access to OSHA Recordkeeping & Injury Reporting/Tracking software that has automated OSHA Uploading compatibility, visit here.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Things you should know

Funding package extends TRIA, eliminates Cadillac Tax

The federal funding package signed by President Donald Trump in late December includes a seven-year extension of the Terrorism Risk Insurance Program (TRIA). The Cadillac tax, an excise tax on high cost employer-sponsored health plans, which was a part of the Patient Protection and Affordable Care Act (ACA) was permanently repealed.

Medical and indemnity payments increase with age of worker: WCRI

A recent study from the Workers Compensation Research Institute (WCRI) found little difference in injury rates and outcomes for workers regardless of their age, with rates highest for workers aged 19 and younger, followed by workers aged 55 to 65. Younger workers are more likely to suffer from struck-by injuries or cuts and older workers more likely to suffer from falls and fractures.

The key differences are in payments per claim and lost time. Payments per claim steadily increased up to age 64, with permanent partial disability/lump sum payments averaging a little more than $10,000 per claim for younger workers, climbing to an average of nearly $25,000 for workers aged 60 to 64. Average duration of temporary disability benefits plateaued at age 45 at 24 weeks compared with nine weeks for the youngest workers.

There was a slightly more than 10% chance to have seven days of lost time at 36 months of maturity for workers aged 15 to 19 and a 31% chance for workers 65. Indemnity payments for workers aged 60 – 64 averaged $22,000 compared to under $5,000 for younger workers.

For the report.

Fatal injuries increase: BLS

Workplace fatalities increased from 5,147 in 2017 to 5,250 in 2018, but the fatal occupational injury rate held steady at 3.5 per 100,000 full-time equivalent workers according to the Bureau of Labor Statistics. Fatalities from transportation remained the most frequent fatal occupational injury, accounting for 40% of occupational deaths. Workplace violence deaths increased 3%, including a 12% increase in suicides, and unintentional overdoses also increased. Fatalities from falls decreased 11% after reaching a 26-year high in 2017 and contact with objects and equipment fatalities declined 13%.

NCCI launches online comp court case tool

Court Case Insights,” a new resource tool from the National Council on Compensation Insurance (NCCI), provides information and interpretations of court cases reported by NCCI’s legal team.

Virginia Beach mass shooting results in 450 comp claims

More than 450 city workers have filed workers’ compensation claims following a mass shooting at the Virginia Beach city offices in May that left 12 dead and six injured. Many of the claims are for mental stress.

State News

California

  • The new reporting requirements for Cal/OSHA went into effect Jan. 1. AB 1804 directs employers to immediately disclose incidents via telephone or through a new online portal. Employers may continue to send incident reports by email until the agency launches the new site.

Florida

  • The maximum weekly benefit level rises to $971, up $31.

Illinois

  • Governor signs amendments (SB 1557) to The Cannabis Regulation and Tax Act to clarify workplace drug testing and other issues, including protections for an employer’s drug testing policy.
  • Legislation regulating the use of artificial intelligence (AI) in hiring practices went into effect Jan. 1.
  • The Workers’ Compensation Commission is reminding stakeholders that it has proposed a new rule, required by Senate Bill 94, that specifies how an insurer must send a complete explanation when medical bills are denied.

Massachusetts

  • new study by the Department of Health of Workers’ Compensation Data aims to help identify priorities for reducing injuries and illnesses among private workers. One finding shows that health care continues to be one of the most dangerous types of work in the state, and violence against health workers is one of the leading causes of injuries.

Missouri

  • The Department of Commerce and Insurance has recommended a 1.6% decrease in workers compensation insurance loss costs for 2020. The change is one of the smallest in the country and the smallest decrease in recent years.

New York

  • The Workers’ Compensation Board has published FAQs relating to the drug formulary.
  • The law prohibiting employers from asking applicants about their salary histories went into effect Jan. 6.

Tennessee

  • The insurance commissioner approved a 7.1% overall loss cost decrease for 2020, lower than the recommended 8.2% from NCCI. The reduction will become effective March 1, 2020.

Virginia

  • The Corporation Commission has approved an overall loss cost decrease of 10.7% for the voluntary market and an 8.4% decrease for the assigned-risk market, effective April 1.
  • The State Corporation Commission (SCC) has approved revisions to the premium levels that will lower the overall premium level for the industrial, federal, surface and underground coal mine classifications in the voluntary market and assigned risk plan. The changes become effective April 1.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Legal Corner

Workers’ Compensation

Privette doctrine protects film studio from personal liability suit – California

In Castro v. ABC Studios Inc., ABC contracted with the owner of a gas station to film a TV show and also hired Executive Assurance (EA) to provide security for the property. On the side of the property was a metal rolling gate weighing about 900 pounds that did not have stops, in violation of Cal OSHA. On the day of the filming, a security guard employed by EA attempted to stop the rolling gate from hitting a truck and the gate fell on her, causing serious injury.

The security guard filed suit against the landowners and ABC, asserting claims for premises liability and negligence. The Court of Appeal for the 2nd District upheld the finding of the lower court that the Privette (1993 decision in Privette v. Superior Court) doctrine applied. Subject to certain exceptions, the Privette doctrine bars employees of independent contractors from suing the hirer of the contractor for workplace injuries.

After ABC was dismissed from the action, a jury found the security guard sustained damages of $2,534,613. The jury allocated 72.5% of fault to the landowners and 27.5% of fault to EA.

Injuries incurred during employer-sponsored bowling event compensable – Florida

In Reynolds v. Anixter Power Solutions, the 1st District Court of Appeal overturned the denial of benefits to an employee who was injured while bowling with co-workers during an employer-sponsored event. While the employer argued the event was an excluded “recreational activity”, the court noted that the event took place during regular work hours and had, as one of its purposes, the discussion of business goals for the upcoming year. Although employees could decline the invitation, this was insufficient to prove the event was voluntary, particularly in light of the goal stated by the employer.

Daunting burden of proof for toxic exposure nixes claim – Florida

In City of Titusville v. Taylor, an appellate court overturned the award of benefits to a city employee who had spent several months working to clear a wooded area and was diagnosed with fungal meningitis. Although a specialist presented testimony that the workplace was the “most likely” source of the fungus, the law requires that occupational causation be proven by clear and convincing evidence. In noting that the employee had failed to meet his burden of proof, the appellate court lamented “the Herculean task created by the heightened burden of proof for toxic exposure claims,” but said this was a matter for the legislature, not the courts.

Stuntman’s estate awarded $8.6 million in civil suit – Georgia

A stuntman died in July 2017 while shooting a scene for the television show, The Walking Dead, in Senoia. While AMC Networks argued that the stuntman was an employee of Stalwart Films, the family argued that he was an independent contractor and the jury agreed. Jurors found AMC Networks’ entity, TWD 8, and its production company, Stalwart Films, negligent, but said AMC Networks was not liable.

Exclusive remedy does not bar class-action suit under Biometric Information Privacy Act – Illinois

In Treadwell v. Power Solutions Int’l, an employee’s putative class action against his employer alleged the use of a fingerprint timekeeping system violated the state Biometric Information Privacy Act (“BIPA”). The employee claimed he had been injured by the employer’s interfering with his right to control his biometric data and the employer argued that claims for monetary damages under BIPA are preempted by the exclusive remedy provisions of workers’ comp.

Since the employee had shown that the employer’s actions were intentional, a federal district court found that one of the exclusion provisions of exclusive remedy was met – the injury was not accidental. Further, the court noted that the damages alleged were not the sort contemplated to be compensable under the state’s workers’ comp statute.

Award for amputation insufficient – Indiana

In Senter v. Foremost Fabricators, a three-judge panel of the Court of Appeals unanimously reversed and remanded a Workers Compensation Board decision, finding that an award of $12,880 was insufficient for a worker who had to have her pinkie finger and part of her hand amputated. The court noted that the Board had read the statute too narrowly and that while she was not entitled to an award for the loss of her entire hand, the Board should have used its discretion to provide a partial award for what was amputated on her hand.

Third-party cannot offset for employer’s fault – Minnesota

In Fish v. Ramler Trucking, an employee suffered injuries while helping to load a concrete beam onto a truck being operated by an employee of another company, Ramler Trucking Inc. He received workers’ comp benefits from his employer and filed a common-law negligence claim against Ramler. A jury allocated 5% of the fault to the employee, 75% to his employer and 20% to Ramler.

Ramler argued that its liability should be limited to its 20% fault. The case made its way to the state Supreme Court, which ruled a third-party tortfeasor’s liability to an injured employee could not be reduced based on an employer’s share of the blame. An employer liable to an injured employee under the Workers’ Compensation Act and a third party liable in tort to the employee do not have common liability, whether joint or several.The benefit was limited to a credit in the amount of the workers’ compensation benefits paid to the injured employee by the employer.

High court says employer entitled to credit for amount paid in vacated settlement – Minnesota

In Block v. Exterior Remodelers Inc., an employee received a $40,000 settlement for a back injury and continuation of medical benefits. Several years later, he experienced pain related to the old injury and required further surgery. His petition to vacate the settlement was granted, but there was a question whether the employer was entitled to a credit for the $40,000 already paid.

The Supreme Court noted the settlement was done properly and an award may be set aside later if the WCCA determines that there is cause to vacate the settlement.

Authorized medical treatment still applies to out-of-state care – Nebraska

In Rogers v. Jack’s Supper Club, a worker injured her back and settled her claim, with the employer agreeing to pay for ongoing medical care. Her “Form 50” physician died and she continued treatment with the doctor’s colleague and received reimbursement. Later, when she moved to Florida the company suggested they agree to a pain management specialist, but she had already chosen one and sought reimbursement for the care she received. The company argued it was not responsible for the medical expenses since it had not approved the physician. Further, it presented evidence that she was being treated with an opioid cocktail, although this was not a factor in the legal determination. The worker argued since the designated physician had died and she moved out of state, she was free to choose her doctor.

While the compensation court approved reimbursement, the Supreme Court disagreed. A new Form 50 physician could be selected either with agreement of the employer or by bringing the matter to the attention of the compensation court.

IME testimony barred based on attempt to influence decision – New York

In Matter of Keller v. Cumberland Farms, an appellate court affirmed a decision by the state Board that precluded the admission of a medical report and testimony by an independent medical examiner (IME). The physician did not turn over to the Board a letter he received from the employee’s attorney before the medical examination and an intake form completed before the examination, which the court found to violate the law.

The worker alleged that he contracted bladder and kidney cancer from years of exposure to carcinogens while working as a diesel mechanic for the employer.

Court finds Workers’ Compensation Board’s 8-page brief limitation unreasonable – New York

In Matter of Daniels v. City of Rochester, an appellate court found that the regulation that authorizes the Workers’ Compensation Board to dismiss an application for review when a brief is longer than eight pages without an adequate explanation is unreasonable,

Proximity of termination to injury claim doesn’t mean retaliation – New York

In Matter of Peterec-Tolino v. Five Star Electric Corp., a three-judge panel of the Supreme Court affirmed a Board’s determination that an electrician was fired about one month after an injury claim for legitimate business actions. The employer had been implementing a furlough replacement program that involved laying off approximately 10 percent of its electricians and had emailed his supervisor several months before the injury suggesting he be laid off for sub-standard performance. The employee also acknowledged that prior to his injury, he was told by an employer’s representative that the employer had contacted his union looking for other qualified workers to replace him.

Surveillance nixes continuation of benefits after 18 years – Pennsylvania

In Jones v. Workers Compensation Appeals Board, a maintenance custodian for the Southeastern Pennsylvania Transportation Authority was seriously injured in 2001. The employer attempted to terminate benefits in 2015 but was denied. In 2018, the employer tried again, submitting surveillance showing the employee, a Jehovah’s Witness, pulling a large suitcase and setting up a display of pamphlets, as well as standing on the street corner and gesturing with his arms and hands without restriction, and other activities involving lifting heavy objects.

In light of the surveillance, the workers compensation judge rejected the employee’s physician’s testimony that his condition demanded restrictions of no lifting over 10 to 15 pounds, no overhead work, no constant turning of the neck, no repetitive use of the arms, and no more than four hours of work per day. A three-judge panel of the Commonwealth Court agreed that he had fully recovered from his injuries.

Two conditions must be proved for benefits – Virginia

In Sorour v. Avalon Transp., the Court of Appeals affirmed the Commission’s denial of a limousine driver’s claim for benefits following a mysterious, one-vehicle accident that occurred while the driver was “on the clock.” While the court noted that the driver had proven his injuries occurred in the scope of his employment, he had not proven that his injuries arose out of his employment.

At the time of the accident, the driver was driving in a company vehicle to the company’s office at the request of his manager and he hit a guardrail on the exit ramp. The driver failed to prove how the accident occurred and, therefore, he did not establish the causal connection between his injury and the conditions under which his employer required the work to be performed.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

OSHA watch

Inspections increase in FY 2019

In FY 2019, which ended September 30, 33,401 inspections were conducted. This is more inspections than in each of the previous 3 years – 32,023 in FY 2018, 32,408 in FY 2017, and 31,948 in FY 2016. The agency also provided a record 1,392,611 workers with training on safety and health requirements through its various education programs.

CIC certifications no longer accepted

Certifications issued by Sanford, Florida-based Crane Institute of America Certification LLC (CIC) for crane operators engaged in construction activities are no longer valid because the CIC is no longer considered a nationally recognized accrediting agency. Employers will not be cited for work performed by crane operators holding CIC-issued certifications obtained before Dec. 2, 2019, if those crane operators acquired the certification with the good faith belief that it met government standards. However, CIC certifications or re-certifications issued on or after Dec. 2, 2019 are not acceptable.

Minor corrections and clarifications to Walking-Working Surfaces regulations published

notice published in the Federal Register corrects minor errors and clarifies requirements in the Walking-Working Surfaces and Personal Protective Equipment standards.

Update to NEP on amputation hazards in manufacturing

Updated guidance was issued for Compliance Safety and Health Officers conducting inspections in manufacturing facilities that could potentially have incidents involving amputations. There is a new method for targeting industries that involves using amputation reports submitted by employers as well as Bureau of Labor Statistics (BLS) incident and amputation rate data. The 75 NAICS codes covered under the National Emphasis Program (NEP) can be found in Appendix B of the compliance directive.

There will be a 90-day outreach program offered to employees.

Recent fines and awards

Florida

  • Garabar Inc., based in Lake Worth, was cited for exposing employees to fall and eye hazards at a worksite in Royal Palm Beach. The roofing contractor faces $64,974 in penalties. The inspection was conducted under the REP for Falls in Construction.
  • Action Roofing Services Inc., based in Pompano Beach, was cited for exposing employees to fall hazards at Palm Beach Gardens and Port Saint Lucie worksites. Inspected under the REP for Falls in Construction, the roofing contractor faces $146,280 in penalties.

Georgia

  • Kittrich Corp., operating as Avenger Products LLC, was cited for exposing employees to amputation, fire, and electrical hazards at the company’s Gainesville facility. The pesticide and agricultural chemical manufacturer faces $90,801 in penalties for lockout/tagout violations, improper storage of chemicals, failure to update and give employees access to safety data sheets, and more.
  • Wright Metal Products Crates LLC, based in South Bend, Indiana, and operating as WMP Crates was cited for exposing employees to amputation, chemical and other safety hazards at a worksite in Lavonia. Inspected under the NEP on Amputations and the REP for Powered Industrial Trucks, the company faces $195,034 in penalties.
  • Mavis Southeast LLC, operating as Mavis Discount Tire, was cited for exposing employees to fall, struck-by and other hazards at the company’s distribution facility in Buford and faces $191,895 in penalties.

Massachusetts

  • United Parcel Service Inc. was cited for exposing employees to multiple hazards including exit access, fire, and electrical at the shipping and delivery facility in Vineyard Haven. The company faces $431,517 in penalties for four repeated and seven serious safety violations.

Missouri

  • Martin Davila, operating as Davila Construction, was cited for exposing employees to fall hazards at job sites in Wentzville, Grover, and St. Louis. The residential roofing company faces $205,098 in proposed penalties.

New York

  • Frazer & Jones Company Inc. was cited for 33 workplace health and safety violations at the manufacturer’s Solvay iron foundry. The company faces $460,316 in penalties for multiple violations, including exposing employees to crystalline silica, iron oxide, combustible dust, falls, struck-by and caught-between hazards, unsafe work floors and walking surfaces, inadequate respiratory protection and more.
  • A whistleblower investigation found that Bouchard Transportation Company Inc., B. No. 272 Corp, a petroleum barge company based in Melville, and its officers violated the whistleblower protection provisions of the Seaman’s Protection Act (SPA) when it retaliated against a seaman who cooperated with U.S. Coast Guard (USCG).

Pennsylvania

  • Dana Railcare, based in Wilmington, Delaware, was cited for confined space hazards after an employee asphyxiated while servicing a rail car containing crude oil sludge in Pittston. The railcar service provider faces $551,226 in proposed penalties and was placed in the Severe Violator Enforcement Program.

Wisconsin

  • An administrative law judge of the OSHRC affirmed a citation of $2,800 against Guaranteed Home Improvements LLC after a worker was seriously injured in a ladder fall for using the ladder in icy and slippery conditions and failing to secure it to prevent accidental displacement. There was, however, an issue of fact regarding the side rails of the ladder, and the second citation of $2,884 was vacated.

For additional information.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Watch out for 20 costly workers’ comp mistakes in 2020: Part Two (11-20)

Part 2

For many employers, workers’ comp was a bright spot in 2019. Rates were low, workplaces continue to be safer, and the industry made significant strides in controlling opioids. Yet, there are unresolved issues and persistent trends that can spell trouble for complacent employers in 2020.

As employers continue to grapple with long-term labor shortages, it’s important to be mindful that workers’ comp cannot be separated from employee retention and engagement. It’s a core business practice of comprehensive risk management that protects your most valuable asset – your employees.

The order of the following listing does not reflect importance and some may not apply to your workplace. We hope you will use the list to establish your priorities:

  1. Not updating job descriptionsJob descriptions are critical in the recruitment and hiring process, promote greater accountability, enable medical providers and employers to work together in recovery at work, and provide protection in litigation complaints under a host of laws, including the ADA and FMLA. Don’t underestimate the importance of reviewing job descriptions as an integral part of work processes.
  2. Not adapting training to the generational span in the workforceToday, organizations face the challenge of motivating, training, and engaging individuals that span from Gen Z (born after 1997) to Baby Boomers (born after 1945). Companies must recognize the different skill gaps, communication styles, and expectations and find creative ways to reach all generations. While much is written about adapting the workplace to the declining physical abilities of an aging workforce, Gen Z, which is expected to represent 20% of the workforce in 2020, has only recently gotten attention.

    Gen Z grew up immersed in technology and constant interaction, multitasks across five screens on average, freely expresses themselves online, is visually oriented, and has a very short attention span. Many do not have hands-on industrial and mechanical experience, making concepts such as lock-out tagout hard to grasp. Expect the trend of personalized and microlearning to continue in 2020.

  3. Failing to foster mental health resilienceMuch of the legislative activity for presumptive laws is focused on public safety personnel, but there is movement to extend it to other employees such as nurses, teachers, private company EMTs or others on the front lines in crises. There has also been an uptick in workers’ compensation claims for post-traumatic stress disorder following shootings and other violent incidents along with claims for extreme stress. These are complicated and the state laws for coverage vary greatly, although most are limited. Even when the injuries are not deemed compensable, mental health issues can adversely affect recovery.

    These factors, coupled with an increase in workplace suicides, mean that employers cannot ignore the mental health of their employees.

  4. Having cybersecurity myopiaWhile most people think of data and information when they think of cybersecurity, it also can involve safety risks. As operations become more digital and connectivity increases, IoT networks become more vulnerable. Cyber invasions and infections can be used to create havoc or cripple essential equipment for financial gain. Hackers may be insiders or outsiders or the issue may be worker errors.
  5. Overlooking heat stress hazardsWith rising ambient temperatures, 18 of the last 19 years have been the hottest on record according to NASA. The problem is not limited to the Sun Belt states. OSHA recently fined a utility-pole service provider in Nebraska for a heat-related death. Heat stress poses a serious health hazard to workers and also increases safety risks.
  6. Not evaluating telemedicineThe use of telemedicine has been slow to take hold in workers’ comp, but some employers have used it successfully to speed access to care, improve patient compliance, and reduce costs. It’s being used effectively for employees working in remote areas, integrated with the nurse triage process, particularly for minor injuries, and follow up care.
  7. Having a claims denial mindsetDenied claims often lead to higher medical costs and litigation, as studies show about 67% of initial denials are approved. When the claim is legitimate and the claim is denied, it leads to bad feelings and low morale. If you suspect fraud, strongly present the case to the adjuster. But denying claims to lower costs is going to backfire.
  8. Hiring undocumented workersThe national debate on immigration has left undocumented workers in the precarious position of deciding whether to pursue medical care and benefits at the risk of arrest and deportation. While employing undocumented workers is illegal, they represent a good percentage of the workforce in construction, agriculture, and hospitality. In some cases, they are knowingly hired and in others, they have presented false documentation. The statutes vary by state, but many states cover workers compensation for undocumented workers.

    It makes good business sense to validate legal status through E-Verify at the start of employment.

  9. Not staying abreast of legislative and regulatory changesIn addition to the items identified above, drug formularies, medical treatment guidelines, opioids, and Medicare Set Asides regulations will significantly impact workers’ comp. Challenges to the constitutionality of the ACA and single-payer healthcare also bear watching.
  10. Not planning for the changing nature of workThe year 2020 begins a new decade destined to see humans and machines working as integrated teams, with the Fourth Industrial revolution bringing technologies that blur the lines between the physical, digital and biological spheres across all sectors. Retail had more injuries than manufacturing in 2018. Hazards from employee interactions with motorized equipment like autonomous forklifts and robots, high-stress holiday hours, slips and falls, and overexertion have all contributed to the increase.

    Companies are struggling to implement safety protocols that match the pace of automation and protect employee privacy. Drones, wearables, and apps continue to gain traction in workplace safety, but cost, privacy, understanding the proper use and how to analyze the data remain barriers, particularly for smaller employers.

    Further, this tectonic shift has implications for training and education as workers need new skills to adapt to their changing roles and responsibilities. Lifelong learning will become a primary driver for employee success and employees will seek employers that provide such opportunities. It’s got to be all about positioning for the future.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Watch out for 20 costly workers’ comp mistakes in 2020: Part One (1 – 10)

For many employers, workers’ comp was a bright spot in 2019. Rates were low, workplaces continue to be safer, and the industry made significant strides in controlling opioids. Yet, there are unresolved issues and persistent trends that can spell trouble for complacent employers in 2020.

As employers continue to grapple with long-term labor shortages, it’s important to be mindful that workers’ comp cannot be separated from employee retention and engagement. It’s a core business practice of comprehensive risk management that protects your most valuable asset – your employees.

The order of the following listing does not reflect importance and some may not apply to your workplace. We hope you will use the list to establish your priorities:

  1. Not taking a holistic view of injured employeesRegardless of the size or type of claim, there’s been an overarching shift in treating injured employees as consumers, rather than claimants. This means not only advocating for them and giving them support and a voice in handling claims, but also recognizing the social and economic factors that affect recovery, and the psychology of pain. Taking the time to understand the needs of the individual employee both improves claim outcomes and bolsters employee morale.
  2. Relaxing claims monitoringWhen claims are down, it’s easy to divert attention elsewhere and leave the claim to the adjuster. Yet, three to five percent of claims drive 50 to 60 percent of the cost and it doesn’t take a catastrophic injury to create a complex, costly claim. Delayed recovery, which can be caused by co-morbidities, psychological or family problems, employment issues, attorney involvement, or prescription abuse increases the duration and cost of a claim. Early identification of these potential high-cost claims reduces costs.

    Also, when legacy claims linger on autopilot, by default, the employer commits to costly ongoing medical care that often involves opioids. While the industry has done a good job of controlling opioid prescribing for new claims, regular intervention is necessary for older claims to accelerate settlements and improve pain management.

  3. Not recognizing marijuana is here to stayThe continuing trend of states legalizing marijuana for both medical and recreational use in spite of the federal ban has made it one of the top challenges in maintaining a safe workplace. Staying abreast of evolving laws and cases, as well as a clearly defined policy on how marijuana will be addressed in the workplace, are necessary to ensure the safety of all workers and decrease the likelihood of adverse employment actions. Shifting cultural acceptance of marijuana as well as its legalization in many states means that employers need to thoughtfully evaluate their drug testing policies.

    Case law in 2019 moved toward protecting the medical use of marijuana in the workplace. Sixteen states provide workplace protections for legalized medical marijuana use either through their statutes or through case law, including Arkansas, Arizona, Connecticut, Delaware, Illinois, Maine, Minnesota, Nevada, New Jersey, New Mexico, New York, Oklahoma, Pennsylvania, Rhode Island, West Virginia, and Massachusetts.

    Experts postulate that there will be more law suits from employees or job applicants who were terminated or not hired because they failed a drug test and take medical marijuana. Further, the question of marijuana as treatment in workers’ comp claims will continue to be a hot issue in 2020.

  4. Failing to understand what’s happening at OSHAWhile many observers expected a decline in the number of OSHA workplace inspections, they increased to 33,401 in FY2019, higher than in any year since 2015. There’s been a record number of $100,000+ citations, higher penalties, more willful and repeat citations, as well as worker safety criminal prosecutions.

    On October 1, OSHA implemented major changes to how it prioritizes inspections and other compliance activities. Factors now considered in inspection weighting include:

    • Agency enforcement priorities
    • Impact of inspections on improving workplace safety
    • Hazards inspected and abated
    • Site-Specific Targeting (SST) program objective

    Further, the agency announced that it is moving away from its long focus on “OSHA recordables” as a way to measure the safety of a workforce and will focus its enforcement efforts on leading indicators, which are proactive.

  5. Failing to properly classify employeesWhile the contractor vs. employee status debate has existed for many years, it ramped up in 2019 and is expected to be a hot issue in 2020. Some estimate that over 30% of the workforce is part of the gig economy. With the passage of AB5 in California and a growing number of court cases, expect to see more legislation and court cases.
  6. Developing a false sense of security from distracted driving policiesOver the past five years, motor vehicle accident claims accounted for 28% of workers’ comp claims over $500,000. They now account for more worker fatalities than any other cause and savvy employers know they have to go beyond state laws to develop best practices. Employers are being held liable for employee crashes, even when employees use hand-free devices. The National Safety Council considers hands-free devices to be just as distracting as hand-held devices while driving.

    A distracted driving policy is only the beginning. It must be implemented, updated, and consequences for non-compliance enforced. There are growing options for discovering violations – locking devices, GPS monitoring, in-vehicle cameras, and so on.

  7. Being unprepared for workplace violenceWith more high-profile workplace shootings, fear of workplace violence is on the rise. According to the Society for Human Resource Management (SHRM), one in seven workers do not feel safe at work. Unfortunately, incidents and attitudes that lead to workplace violence are a reality at all workplaces. Workers feel safer and more valued when investment is made in security and preparation.
  8. Not reassessing your PPEWhen NASA was forced to cancel the first-ever spacewalk by two women because it did not have two appropriate space suits, social media erupted with stories from women in all industries about ill-fitting or no PPE. Through continued advancement and technological changes, “smart” PPE with sensors that monitor, collect, and record biometric, location, and movement data is on the rise. In addition, employees’ personal preferences and increased comfort have driven new innovations.

    Providing the right PPE is another way companies can recruit and retain more talent.

  9. Ignoring changes in workplace ergonomicsMusculoskeletal disorders (MSDs) develop over time, but are highly preventable at a reasonable cost. Yet, they account for close to one-third of all occupational injuries and illnesses and have a median of nine days away from work.

    New technologies and devices, an aging workforce, temporary workers, more employees working remotely, the dramatic shift to e-commerce, coupled with massive changes in warehousing and office designs have introduced new ergonomic challenges. Moreover, employees want to work in a comfortable environment and embrace employers that take a holistic approach to ergonomics. A 2019 study by Future Workplace and View found that air quality and natural light were most important to employees, topping fitness facilities.

    Addressing new potential ergonomic risks now will prevent costly injuries in the future, improve productivity, and retain talent.

  10. Failing to stay in touch with your medical provider networkPerhaps you’ve had a few good years with no lost-time injuries. No real need to stay in touch with your medical network. But networks and providers change as do work processes. An ongoing face-to-face relationship ensures your workers get appropriate and priority treatment as well as leads to better outcomes for injured employees.

For Cutting-Edge Strategies on Managing Risks and Slashing Insurance Costs visit www.StopBeingFrustrated.com

Culture Issues: Having a Good Culture is More than being OSHA & HR Compliant (Benchmarking Your Culture)

If you cannot measure it, you cannot improve it.” – Sir William Thomson (Lord Kelvin).

Sure, you can think you’re improving something, but unless you know what the problem was in the first place you can’t truly fix it, and if you don’t truly fix it your improvement is nothing more than band-aid surgery. For example, a baseball player is in a deep slump and can’t hit a lick. Suddenly he’s goes four for five in a game and thinks he solved his problem. But what caused the problem? Without analyzing and benchmarking what he’s been doing all along, i.e. the angle of his bat, how high he holds his hands, the all-important “launch angle,” he will not have a true measure of if he is on the right track or just “having a good day.”

This is not uncommon in the business world. Let’s take for example your experience modifier, which is one of the biggest drivers of an employer’s workers’ compensation premium. The lower your experience modifier is the lower your premium will be.

Your experience modifier is based on your data, total claim dollars and audited payroll amounts over a three-year period.  Unfortunately, most insurance agents will come to you and say: “You have a 0.94 experience modifier. That is great! You are getting a credit of 6% for a great loss history.” In other words, your company is making money. Therefore, you must be stressing to your employees to be job safety conscious. But that’s not automatically the case.

Many times a business owner believes because they are making money they have a good culture, so all is good.  However, when they conduct an analysis, and do a deep dive into the all-important data points, they can see that there are issues within the company that is holding them back from real growth, productivity, accountability and profitability. From making real money.

To Continue Reading: Construction Today Magazine