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 Trust Matters - February 2013 

Property/Liability and Workers' Compensation coverage renewals coming up

Registration open for RMS Spring Meetings

Risk Matters: Mitigating risk exposure

Wodziak retires after 15 years with League

Did you know?

Health care reform update

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Property/Liability and Workers' Compensation coverage renewals coming up

The underwriting unit will send out renewal applications in March.  The application asks for information we need to renew the coverages you purchase.  Please return your application as early as possible.  This allows us to process your renewal in a timely manner.  The renewal application will be processed in the order it is received.

Please review your schedules for property, autos and other equipment very closely to be sure all items that you want covered are listed.  Otherwise, you may have an uninsured loss.  On the Workers’ Compensation side, please review the estimated payrolls and revise the payrolls to what you think your actual payroll will be for the year. 

We receive inflationary data from our appraisal firm each year. We will use this data to inflate property values based on the construction of the structure. However, if you had a property appraisal performed in the last six months, your property schedule will be adjusted to reflect the new values and any new structures that were discovered during the appraisal process.

If you have questions or need assistance in regards to your property and liability coverages, please contact Ryan Ezzell or Ariele D'Angelo.  For workers’ compensation, please contact Carol Regina or Steve Hulme.

Registration open for RMS Spring Meetings

Don’t forget to register for one of seven free RMS Spring Regional meetings at a location near you to learn how the latest health care information will affect your town and the League’s three insurance trusts. Attendees can expect to receive:

  • an update on the financial strength of the trusts;
  • an update on rates for 2013-2014;
  • information on your responsibilities and what to expect with health care reform;
  • ideas on how to reduce losses, and
  • up-to-date news on tools to help members control the cost of health care.

There will be sessions in High Point, Raleigh, Wallace, Greenville, Kill Devil Hills, Asheville and Hickory. Click here to view the agenda and register.

Risk Matters: Mitigating risk exposure

The League’s Loss Control staff continues to review claims activity to identify areas that will assist our members in reducing injuries and workers’ compensation cost.  A recent analysis of workers’ compensation claims identified that employees who are reporting multiple injuries account for nearly half of all injury claims reported during a five year period – which contributes significantly to costs.  Following are some interesting facts concerning these claims:

  • Employees who filed multiple injuries accounted for 45 percent of all workers’ compensation claims and 39 percent of all workers’ compensation incurred costs.
  • The average cost per claim for an employee with multiple injury claims is $15,691.
  • 152 employees reported 4 or more injuries in a five-year period. 
  • The average cost per claim for employees with four or more claims is $17,946.

The findings from the analysis highlighted a concern that is one of the leading contributors to workers’ compensation costs and the premiums required to cover those costs. Loss control is working with our members to implement controls to help minimize this type of claim. There are a few steps that every member can take to mitigate their exposure:

  • Develop a thorough job description for each position. The employer needs to fully understand all of the physical requirements that are necessary to perform the tasks for the position. It is impossible to determine if an applicant can perform the required activities if they have not been identified.
  • The absence of thorough job descriptions also presents a challenge when an employee is returning from an injury and is either placed on modified duty or returned to full duty. The attending physician is unable to accurately evaluate the employee to determine if the employee is physically capable of performing the requirements. This can result in an employee being returned to an activity that could result in additional injuries.
  • The member should investigate every injury. The member needs to determine what caused the injury and if the injured employee, and perhaps all employees, needs additional training. The member should also review polices and physical controls to determine if changes are needed to prevent similar injuries. 
  • A modified duty program should also be used as a tool to help mitigate the exposure. Research has shown that employees who are allowed to remain out of work after being released by a physician to modified duty often remain out of work longer than expected, which usually results in higher claim costs. 

Employees with repeat injuries are a significant contribution to the workers’ compensation loss experience.  Every injury has the potential to impact a member’s premiums. The foundation for implementing each of the steps discussed above is to develop thorough job descriptions. Loss Control is available to assist members with this type of exposure or any other risk control concerns the member might have. Members with solid loss control programs add to the overall strength of the insurance pool, which benefits everyone.

Wodziak retires after 15 years with League

We congratulate Dianna Wodziak, Property/Liability Underwriter, on earning her retirement at the end of 2012. Dianna joined the League staff in 1997 as we embarked upon the ambitious task of bringing the property/liability underwriting function in-house. This function was done by contract vendors for ten years. Because we were able to hire competent and dedicated people like Dianna, we were successful in making this transition. Dianna brought a wealth of insurance and risk management experience to our organization. More importantly, she embodied the culture of putting the member first as she worked with so many of you to help manage your insurance program, make solid risk management decisions and better understand insurance . Dianna considered those she worked with her friends, and we know you enjoyed working with her. In addition to her underwriting responsibilities, Dianna was part of our door prize team that made the exhibit hall at our NCLM annual conference special. We will certainly miss Dianna, and we are sure you will as well. We are moving forward with filling the position and plan to make an announcement soon.

Please be sure to remove Dianna’s e-mail from your address books. Send any change requests or certificate requests to RMSunderwriting@nclm.org. You can also fax these to (919) 715-8751. Any other insurance questions should go to either Ryan Ezzell at (919) 733-2633 or Ariele D'Angelo at (919) 715-8151.

Take time to review your coverage -- we can help!

Underwriting staff meets, on average, with more than 60 members per year to discuss coverages, schedules and other risk management issues. One of the main purposes of our underwriting visits is to uncover exposures that are not currently insured. We will also review your property, auto and equipment schedules to be sure that you are spending your premium dollars wisely. We are also available to perform a site visit and help inventory water and wastewater treatment facility structures after a treatment plant expansion. The meeting can be as large or small as you need. We can meet one on one with the insurance contact or all of your department managers. We can also coordinate with our Loss Control, Claims, and Members Services staff to be there as well.

If you are a newly appointed insurance contact, or just feel that you could benefit from an underwriting visit, please contact Ryan Ezzell at (919) 733-2633.

Health care reform update

On February 12, Governor Pat McCrory announced North Carolina will not work with the federal government in setting up a health insurance exchange citing a “lack of preparation within state government during the past year to build necessary and reliable systems to implement a state exchange.” This has since been confirmed as the Senate and House passed legislation to bar the establishment of a state-based exchange and Governor McCrory has signed the bill into law. The Affordable Care Act requires that the exchanges open on Jan. 1, 2014, with open enrollment on Oct. 1, 2013. The exchange will provide individuals with an option to meet the individual mandate. There are provisions that will allow small groups to participate as well. Employers with more than 50 or more full-time employees who work more than 30 hours per week are mandated to provide employee medical coverage or face a $2,000 penalty per employee per year. The penalty is multiplied by the number of employees less 30.

In a related story, the Congressional Budget Office reports that the Affordable Care Act will result in significantly fewer uninsured, which of course is one of the goals of the law. The Office estimates that the uninsured will shrink from 58 million to 44 million next year due to the opening of the exchanges. This number is expected to fall each year and stabilize at 29 million in 2017. There are two key reasons cited for these reductions in uninsured:

  • Starting in 2014, the Affordable Care Act will give premium subsidies to the lower-income uninsured individuals to purchase coverage in public health insurance exchanges and heavily subsidize states that expand Medicaid (it appears NC will not expand Medicaid).

The report also points out that employer based coverage will fall by 6 million by 2016. Experts say that this is to be expected because employers with less than 50 employees will be exempt from the health care reform law’s $2,000 penalty for not offering coverage and low income employees will be eligible for federal subsidies to offset premiums for coverage purchased in exchanges. Of course, some employers will determine that in order to attract the best possible workforce, the provision of a group medical plan is required.