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1 month ago · by · 0 comments

California Split Point Changes

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) recently made changes to the system for determining employers’ experience mods. Because experience mods are one of the largest factors when determining your workers’ compensation premiums, it’s important to know the details of these changes, and what they mean for your business.

Split Point Changes

The largest change the WCIRB made was to the split point, which had not been changed since 2010:

  • Losses in excess of the split point will now be ignored during the calculation of an employer’s experience mod. These losses were previously considered, but did not carry as much weight as losses below the split point. Excess losses focus on the severity of injuries and illnesses in the workplace, a focus that will no longer be considered under the new changes to the rating system.
  • Losses up to the split point will still count fully in the calculation of an employer’s experience mod. These primary losses focus on the frequency of injuries in the workplace, as they are fully weighted during the calculation of an experience mod. Because the WCIRB chose to focus on primary losses, the agency believes that employers will be encouraged to develop safe workplaces and reduce the occurrence of injuries and illnesses.

In addition to the focus on primary losses, the split point will now vary between approximately $4,500 and $75,000, based on the size of a business, instead of the previous $7,000 fixed split point. There will be approximately 90 threshold split points. The WCIRB believes that a varying split point will benefit smaller employers, who could previously expect abnormally high experience mods after a single, catastrophically large loss. Additionally, other states that use a fixed split point typically set them at $15,000 or higher, which the WCIRB believes is unfairly high for many small businesses.

For example, under the old split point system, a small employer with a single $60,000 loss would have a vastly different experience mod than a larger employer with 10 $6,000 losses. Under the new system, the WCIRB hopes to encourage safety at all times instead of punishing employers for abnormally high and rare losses.

What the Change Means for You

Although the varying split point can now reach extreme heights, the WCIRB believes that the elimination of excess loss consideration will cause premiums to remain flat. However, it’s possible that you could see your split point—and consequentially, your premiums—rise if you increase your workforce substantially.

The most important factor when working to lower your workers’ compensation premiums is to reduce the frequency of injuries and illnesses in the workplace—especially now that the calculation of your experience mod will be determined almost entirely by primary losses. For help keeping your workplace safe and responding to injuries and illnesses at your business, contact us at 831-661-5697 today.

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1 month ago · by · 0 comments

OSHA’s Proposed Electronic Reporting Deadline is Dec. 1, 2017

OSHA’s final rule on electronic reporting requires certain employers to submit data from their injury and illness records electronically so it can be posted on the agency’s website. Because the rule is an extra requirement on top of existing OSHA recordkeeping standards, affected employers need to be ready to comply with the rule before the proposed Dec. 1, 2017, deadline.

Other News and Tips
Preparing for OSHA Inspections
If an unannounced OSHA inspection finds violations at your business, you may have to pay thousands in fines and watch as your reputation plummets. Fortunately, OSHA inspections generally follow an established procedure that you and your staff can prepare for.

When an OSHA compliance officer arrives at your business, it’s important to check his or her credentials and then determine if you’ll give consent to the inspection. Although you can refuse an inspection or give only partial consent, the compliance officer will take note of this and OSHA may take further action.

Once an inspection begins, the goal should be to determine its purpose and set any ground rules. You should also be prepared to provide proof that your business is in compliance with OSHA standards. During the walkaround process, be sure to take notes of what the inspector documents so you can review them later.

OSHA inspections can be stressful, even when your business is in full compliance. Scurich Insurance can provide you with our inspection guide, “Be Prepared for an OSHA Inspection,” and help your business impress OSHA compliance officers.

OSHA Removes Employee Fatalities from Home Page

Although OSHA used to include a URL link on its home page that would direct viewers to a list of employee fatalities, the agency recently moved the link to a separate page on its website.

According to a spokesperson from the Department of Labor, the link was moved in order to increase the accuracy of workplace data, as previous listings included fatalities that were outside OSHA’s jurisdiction. However, OSHA will keep the list of employee fatalities on its website and continue to review data from employers.

Although the electronic reporting rule initially required certain employers to start submitting their required information by July 1, 2017, OSHA’s Injury Tracking Application website wasn’t ready to receive electronic reports in time, and OSHA proposed Dec. 1, 2017, as the new deadline. The rule doesn’t change an employer’s requirements to complete and retain regular injury and illness records, but some employers will now have additional obligations. Here are the requirements for the rule:

  • Establishments with 250 or more employees that are required to keep injury and illness records must electronically submit the following forms:
    • OSHA Form 300: Log of Work-Related Injuries and Illnesses
    • OSHA Form 300A: Summary of Work-Related Injuries and Illnesses
    • OSHA Form 301: Injury and Illnesses Incident Report
  • Establishments with 20 to 249 employees that work in industries with historically high rates of occupational injuries and illnesses must electronically submit information from OSHA Form 300A.

The final reporting requirements will be phased in over two years. After the initial Dec. 1, 2017, deadline, establishments with 250 or more employees must submit information from OSHA Forms 300, 300A and 301 by July 1, 2018. Beginning in 2019 and every year thereafter, the information must be submitted by March 2.

For more help preparing for this new rule, call us at 831-661-5697 and ask to see our comprehensive Compliance Overview on OSHA’s electronic reporting rule.

New Silica Rule Enforcement Begins

A new OSHA rule on respirable crystalline silica will require employers to limit their employees’ exposure to silica hazards and provide medical exams to monitor highly exposed employees. The rule is scheduled to come into effect on June 23, 2018; however, OSHA began enforcement of the new rule in the construction industry on Sept. 23, 2017.

Under the new rule, employers must reduce the permissible exposure limit (PEL) for respirable silica to 50 micrograms per cubic meter of air (50 µg/m3). The rule also requires employers to take the following steps:

  • Establish engineering controls to limit employees’ exposure to the new PEL.
  • Provide employees with respirators when engineering controls alone do not provide enough protection.
  • Establish a written silica exposure control plan.
  • Provide medical exams to employees who are exposed to levels of respirable silica at or above the new PEL for 30 or more days a year.

To see more information on the respirable silica rule, and to see specifics about the rule’s application in the construction industry, visit OSHA’s website.

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2 months ago · by · 0 comments

California Workers Compensation – Employer Responsibilities

Workers’ compensation is a system of no-fault insurance that provides medical and monetary benefits to employees or their survivors for work-related injuries, diseases and deaths.

The California Workers’ Compensation Act (WCA) defines employer responsibilities under the state’s workers’ compensation program. The Division of Workers’ Compensation (DWC) of the California Department of Industrial Relations monitors and enforces employers’ compliance with these requirements throughout the state.

Coverage Requirements

Almost all California employers must secure workers’ compensation coverage for their employees. The WCA defines an employee as any individual working for another individual or organization who is not an independent contractor. Employers are bound by WCA coverage requirements even if they only have one employee, regardless of whether the employee works full-time or part-time.

Coverage requirements also apply for temporary workers. Temporary employment agencies, employment referral services, labor contractors and any other similar entities hiring temporary workers are solely responsible for their employees’ coverage.

To meet coverage requirements, employers can either secure a workers’ compensation insurance policy from a private insurance company licensed to do business in California or apply for self-insurance certification with the Office of Self Insurance Plans (OSIP).

Self-Insurance

A self-insured employer uses its assets, rather than an insurance policy provided by an insurance carrier, to cover its obligations under the workers’ compensation program. Employers that wish to self-insure must obtain authorization from the OSIP. Whether the OSIP will grant this authorization depends on an employer’s financial strength, proposed benefit delivery system and loss prevention program. To qualify, an employer must:

  • Have at least $5 million in shareholder equity;
  • Have net profits of $500,000 or more for the five years immediately prior to the application;
  • Make a deposit based on the employer’s expected future liabilities, with a minimum amount of $220,000;
  • Hire a certified third-party administrator or ensure that internal staff becomes OSIP-certified to process and handle benefit claims; and
  • Provide the following documents:
    • Certified, independently-audited financial statements; and
    • A proposed injury and illness prevention program that meets, at a minimum, Cal/OHSA safety and health regulations.

Self-insured employers are subject to audits by both the DWC and OSIP. These audits are used to verify that self-insured employers are making benefits payments promptly and properly.

Certain employers are not allowed to self-insure. These employers include:

  • Professional employer organizations;
  • Leasing employers;
  • Temporary service employers;
  • Any employer in the business of providing employees to other employers; and
  • Employers that have allowed their coverage to lapse (unless they receive authorization from the DWC).

Group Self-insurance

Multiple employers can create self-insurance groups by combining their assets to insure against their individual liabilities. Authorization for group self-insurance requires employer groups to show they have sufficient financial stability to meet all their obligations under the WCA. In addition, a group of employers seeking to self-insure must:

  • Operate in the same industry;
  • Make a deposit equal to 135 percent of its estimated future liabilities;
  • Have sufficient funds to cover any losses and administrative expenses for at least eight of out of 10 years;
  • Obtain excess insurance for claims over $500,000; and
  • Report to each member of the group any possible conflict of interest between the group and any vendors.

Self-insurance Annual Renewal

Self-insured employers must submit annual reports to show their continued compliance with eligibility requirements. These reports are also used to assess the adequacy of each self-insurance deposit.

Employers that are required to deposit additional funds to their initial deposit must make their contributions within 60 days of filing their annual report or by May 1 of the year in question, whichever is comes first.

COVERAGE NOTICE REQUIREMENTS

Employers subject to the WCA must display a notice in a conspicuous place stating that they have workers’ compensation insurance coverage that complies with the WCA. Failing to display this notice constitutes a misdemeanor and may be considered evidence that the employer does not have insurance.

The coverage notice must be available in English and Spanish and must include specific information about the employee’s rights and obligations under the WCA. The DWC has issued a model poster that employers can use to fulfill these requirements.

An employer that fails to provide this notice must allow its employees to be treated by their physician of choice for any injuries that occur during the time the notice is not displayed.

In addition to the posting requirement, employers must provide the same information to new employees at the time of hiring (or by the end of their first pay period). New employees must also receive instructions on:

  • How to obtain appropriate medical care for job-related injuries;
  • The role and function of the primary treating physician; and
  • How to obtain and submit the form the employee must use to notify the employer he or she wants to use a personal physician.
  • If an employer is insured, the insurance carrier is responsible for providing the employer with copies of a notice that contains all the required information for new employees.

INJURY Reporting Requirements

Under the WCA, employers have reporting obligations any time an employee sustains a work-related condition that results in:

  • Lost work time beyond the employee’s work shift at the time of injury; or
  • Medical treatment beyond first aid.

For this purpose, “first aid” means any one-time treatment and any follow-up visit for observation of minor scratches, cuts, burns, splinters, or other minor industrial injuries that do not ordinarily require medical care. Treatment that meets this definition is still considered “first aid” even if it is provided by a medical professional.

Note: Effective Jan. 1, 2017, workers’ compensation insurance carriers are required to report all work-related injuries, including those that involve only first aid with no lost work time, to the California Workers’ Compensation Insurance Rating Bureau (WCIRB). The WCIRB uses this information to, among other things, help determine an employer’s premium rates for workers’ compensation insurance.

However, this change does not affect an employer’s injury-reporting obligations under the WCA. An employer may chose, but is still not required, to report injuries that do not result in lost work time or treatment beyond first aid.

When an employee incurs medical expenses for first aid, the billing medical provider has an obligation to report the treatment to both the DIR and the employer’s insurance carrier. The medical provider’s report (or an employer’s voluntary report of a first-aid-only injury for which no medical expenses are incurred) is what triggers an insurance carrier’s obligation to report the claim to the WCIRB under the new rule.

This reduces an insured employer’s incentive to pay medical bills for first-aid-only treatment out of pocket instead of allowing its workers’ compensation insurance carrier to cover the expenses, because these types of claims can now affect an employer’s premium rates regardless of how the first-aid treatment expenses are paid. 

Within one working day after an employer receives notice or first obtains knowledge of an employee’s work-related injury that results in lost work time or medical treatment beyond first aid, the employer must:

  • Provide the employee with Form DWC 1 (“Workers’ Compensation Claim Form & Notice of Potential Eligibility”);
  • Ask the employee to complete the employee section of form DWC 1 and return it to the employer;
  • Complete the employer section of the form; and
  • Within one working day after receiving the form back from the employee, submit the fully completed form to its insurance carrier (or directly to the DIR, if the employer is self-insured) and provide a copy to the employee.

In addition, employers must fill out Form DLSR 5020 (“Employer’s Report of Occupational Injury or Illness”) and send it to their insurance carriers or claims administrators within five days after first receiving notice or obtaining knowledge of an injury.

In the event that an employee becomes the victim of a crime while on an employer’s premises, the employer must provide written notice to the employee, within one day of the crime, stating that he or she is eligible for benefits resulting from physical and psychiatric injuries.

Reporting for self-insured employers

When employers secure coverage with a policy from an insurance company, the insurance company will work with the employer on preparing, maintaining and submitting reports and records that the DWC requires to monitor compliance with California law.

An employer that decides to self-insure, however, must meet certain reporting obligations on its own. One of these obligations is to file an annual report as prescribed by the DWC. Annual reports must show:

  • The amount of all compensation claims;
  • The amount of benefits paid to date;
  • An estimated amount of future liability on open claims under state and federal laws;
  • The average number of employees and the total wages for each adjusting location;
  • A list of all open indemnity claims; and
  • The amount of security deposit made by the employer.

MORE INFORMATION

Please see the DWC website or contact Scurich Insurance for more information on workers’ compensation laws in California.

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Scurich Insurance Services
Phone: (831) 661-5697
Fax: (831) 661-5741

Physical:
783 Rio Del Mar Blvd., Suite7,
Aptos, Ca 95003-4700

Mailing:
PO Box 1170
Watsonville, CA 95077-1170

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