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 Trust Matters, November 2016 

Hurricane Matthew could impact your Workers' Compensation premium

Clarification for New OSHA Rules

From the Claims Corner

Retiring RMS Head Receives Long Leaf Pine Award

Municipal Insurance Trust (MIT) of NC Naturally Slim Program

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Hurricane Matthew could impact your Workers' Compensation premium

We are constantly reminded of how quickly things can change. In past years, we have had winter storms, spring tornadoes and hurricanes. In one way or another we are all affected by such events. One item that is sometimes forgotten is the additional insurance expense incurred due to these events. For Workers’ Compensation, the extra man-hours and overtime hours increases your payroll, which will add additional costs to your final Workers’ Compensation audit invoice.

I'm sure most members did not include any additional man-hours into your original payroll estimate. Therefore, if you revise your budgets to reflect the additional costs related to the storm, you may wish to include some additional insurance costs due to the increase in payroll.

In the case of overtime; we exclude the half time portion of overtime. We only charge workers’ compensation on the straight time pay (we include all other pay types) for your employees.

Example: An employee’s normal work week is 40 hours for which he is paid $10 per hour. The employee worked 44 hours in a particular week. For the overtime hours (the 41st through 44th), the employee earned $15 per hour. The extra pay earned by the employee for overtime is $20 and is excluded in the premium calculation.

44 hours for the week less 40 hours regular work week = 4 hours overtime

4 x $15 overtime pay less 4 x $10 normal hourly wage = $20 extra pay for overtime

Remember, you originally pay your premium based on an estimated payroll. Once the year has ended, an audit is completed. Overtime premium (the ½ time) is excluded, but the straight time portion of the overtime does increase your total payroll.

If you have over/under estimated your payrolls, the difference in premium, if any, will be adjusted at the time of your workers’ compensation audit.

If you did not budget for the additional expenses in this current year, we will pick up the additional payroll at audit.

Clarification for New OSHA Rules

The Occupational Safety and Health Administration (OSHA) recently issued several new rules related to post accident drug testing, electronic injury reporting, and limitations on employee incentive programs. The intent of these new rules was to improve tracking of workplace injuries and illnesses and to help remove barriers that may prevent an employee from reporting an event. While the implementation date for these rules has either passed or will take effect January 1, 2017, risk management services received numerous inquires from our members for clarification on the OSHA rules. After researching the rules and having direct conversations with NC OSHA, we realized that our members needed additional information that was not easily found in other communications from OSHA.

The new rules stem from the May 12, 2016 Department of Labor document “Improve Tracking of Workplace Injuries and Illnesses; Final Rule”. One of the areas addressed in this document is the electronic reporting of data. The new rule, which takes effect January 1, 2017, requires some employers to electronically submit injury and illness data. The requirement does not add or change an employer’s obligation to complete, retain, and certify injury and illness records. It only requires certain employers to electronically submit some of the information from these records to OSHA. The electronic reporting is required for all establishments with 250 or more employees and for those with 20-249 employees in certain high-risk industries.

NC OSHA advised that due to the current setup between NC and federal OSHA that NC cities and towns will not be required to submit the information electronically at this time. You will continue to provide all required annual OSHA information as you have done in the past until NC makes a determination how it will respond to the electronic reporting requirement for local government.

Another area of discussion has been the procedures for post-accident drug testing. Many employers perform automatic drug testing for all injuries to an employee. The federal ruling states, “although drug testing of employees may be a reasonable workplace policy in some situations, it is often perceived as an invasion of privacy, so if an injury or illness is very unlikely to have been caused by employee drug use, or if the method of drug testing does not identify impairment, but only use at some time in the recent past, requiring the employee to be drug tested may inappropriately deter reporting.”

The intent of the ruling was to limit post-accident drug testing only to those events where the injury could be linked to the employee’s drug or alcohol use, similar to reasonable suspicion testing. According to NC OSHA, the new limitations for post-accident drug testing are currently under legal challenge. Until litigation is concluded, employers can continue with drug testing policies already in place, provided they abide by appropriate state and federal regulations.

OSHA is clear in their goal to remove barriers that prevent or deter an employee from reporting a workplace injury or illness. This includes prohibiting the employer from retaliating against the employee for reporting an injury. Employers must also avoid having incentive programs that deter or discourage an employee from reporting an injury. Incentive programs should encourage safe work practices and promote worker participation in safety-related activities. If an incentive program provides rewards for not having an accident/incident, then this program would be discouraging employee reporting and would not be compliant with the intent of OSHA’s ruling on incentive programs.

Risk management services will continue to monitor developments from OSHA related to these Department of Labor rules. Additional information can be found on OSHA’s website at www.osha.gov/recordkeeping/finalrule , or by contacting the League’s Risk Management Field Services director, Bryan Leaird at 919-715-2905 or bleaird@nclm.org

From the Claims Corner

It has been an interesting few weeks. October 8th brought us Hurricane Mathew which wreaked havoc on large number of communities across the north eastern, coastal and southern regions of our state. We have received 119 claims from the storm thus far 27 vehicle claims and 92 property claims, the largest of which is the Town of Princeville, a historic community on the banks of the Tar River in Edgecombe County.

We have two interesting claims pending before the Courts. “Nies v. Emerald Isle” is awaiting oral arguments before the NC Supreme Court. This case involves who has ownership and use of the dry sand beach between the sea oats and the mean high tide line. Many of us walk along this dry sand beach each time we are at the ocean shore. This case should determine if that property is owned by and for the exclusive use of the adjacent property owner or if the town/citizens have a right to use this area of the beach.

Another case “Quality Built Homes v Town of Carthage” has been to the NC Supreme Court and decided in favor of Quality Built Homes. The issue is the charging water and sewer impact fees against a property owner by a unit of local government. The case has been remanded by the Supreme Court back to the NC Court of Appeals to determine if impact fees that have been charged wrongfully should be refunded to the property owner and it so, to determine the time frame and limits (if any) of refunds due to the property owner.

Both of these cases will have a huge impact on many cities, towns and villages across the state. These cases have been adequately briefed and we will be watching them closely for a decision by the Courts.

J. Steven Lee, Director of Claims

Retiring RMS Head Receives Long Leaf Pine Award

If Bob Haynes wanted to retire quietly, he was in for disappointment.

Because after 26 years of exemplary service to League insurance pool members, growing those pools dependably and leading as a trusted friend to League staffers, Haynes was due a load of gratitude -- which took no time to materialize when he first announced his impending retirement as director of Risk Management Services in August.

But now, he's leaving with one of the highest honors that can be bestowed on any North Carolinian.

Haynes, who made his League retirement effective Oct. 31, was inducted into the Order of the Long Leaf Pine, which the governor orders for exceptionally meritorious servants or providers to the people.

Familiar inductees include Michael Jordan, Billy Graham, Maya Angelou, Gaylord Perry and Andy Griffith, in addition to several local government officials who've worked with the League.

Haynes was presented the honor during CityVision 2016, the League's annual conference held Oct. 23-25 in Raleigh. But he didn't know what was coming.

He knew something had to be up, though, when League officials asked him to a meeting that he wouldn't ordinarily attend. Things grew more suspicious when he was asked to sit in the front row, in a reserved seat.

He recalled what came next with a laugh, and then solemnity.

"I'm still very humbled by it," Haynes said. "I'm thankful to have spent 26-plus years at the League.... To cap off my career there -- in a job that I just absolutely loved, just to cap it off in this manner, I can't think of a better way to go out."

Haynes joined the League in 1990 as manager of risk management and loss control services and rose quickly in the organization. By 1996, he had reached the position with which he'd retire.

In a farewell letter, Haynes wrote: "My greatest pleasure has been getting to know so many municipal officials over the years and forming lasting friendships that I will carry with me. I have utmost respect for the elected and appointed officials who serve their communities so well. I am proud to have had the opportunity to work with each of you and can say with confidence that North Carolina is a better place because of the sacrifices our public servants make day in and day out."  

Municipal Insurance Trust (MIT) of NC Naturally Slim Program

We just wrapped up our second run of the MIT Health Benefits Trust of NC Naturally Slim program. This is a 10 week skill building course that is based on new understandings of what thin people do naturally and is free to our MIT medical participants that are 18 and older. The program teaches mindful eating, nutrition, physical activity, and has helped change Metabolic Syndrome for our members that have participated.  

Our first run of this program started in February of 2016, we had a total of 61 individuals complete the program and they lost a combined total of 543.3 lbs. The second run of Naturally Slim started in September of 2016 we had a total of 141 that graduated the program losing a total of 800 lbs. To date the MIT Naturally Slim participants have lost a grand total 1,343.3 lbs. together for 2016! For those members of the MIT medical plan interested in participating in our Naturally Slim program in 2017 the next online class will be in February, so look for your postcard to come in the US mail and enroll online in January.

Some of the great things people are saying about this program:

“The program was very easy, and I fell like it did help me achieve what I know to be my ideal weight set point. It also gave me confidence and legitimacy in doing some things I felt “guilt” about –i.e. not eating breakfast. I like the flexibility and the no guild aspect. It’s more of a maintenance approach which is good for me.”

“I am learning that food doesn’t control me the way I thought it did.”

“Progress for the first time in years! Motivated!”

“This is the first program I didn’t feel shamed into losing weight.”

“I have issues with joint inflammation and losing the weight has helped ease the pain.”

“Skin and hair seem better probably with amount of water I drink.”