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November 2011

AVOID OSHA PENALTIES EASILY

By Workplace Safety

Employers are fined millions of dollars each year for OSHA violations. The citations that result in fines are often overlooked by supervisors. Although employees usually receive generic information about OSHA standards in most workplaces, it’s important to implement training procedures that make OSHA’s rules clearer. It’s important for employees and employers to be aware of the penalties. To make the workplace more efficient and reduce OSHA penalty risks, consider the following changes.

Ergonomic Support. Companies that find ways to prevent repetitive motion disorders won’t face penalties and citations from OSHA. Another benefit these employers enjoy is a lower Workers Compensation premium. The best way to implement one of these low-cost changes is to analyze how workers perform tasks, look for strain reduction techniques and implement new changes. Focus on strain reduction techniques for backs, necks and joints.

Keep Better Records. Good documentation is one of the best ways to avoid OSHA penalties. When OSHA inspectors note gaps in the 300 log, they usually implement a full safety audit. If there are log deficiencies in the past few years, be sure to invest the necessary time to fix them. Employee files and workers’ compensation records can usually supply the missing information.

Implement a Disaster Plan. It’s important to have a plan that is effective. Famous earthquakes, hurricanes, fires, pandemics and terrorist attacks in history have taught everyone that preparedness is the key to surviving any disaster. Be sure that all emergency disaster plans include the following:

  • Safe building evacuation procedures.
  • Training for employees regarding what to do during emergencies.
  • Proper sanitation and hygiene procedures.
  • Arranging for business operation from remote locations.
  • Stocking emergency supplies, food and first-aid kits.
  • Communication methods and procedures for customers, vendors and families.

Remedy Routine Violations. Some of the most costly safety violations are easy and cheap to correct. The following violations result in costly fines but are easy to fix:

  • Exits that are partially or fully blocked.
  • Dirty or hazardous work areas due to poor housekeeping.
  • Lack of goggles, gloves, covers and other required safety equipment.
  • Flammable and dangerous materials that are stored improperly.

Although they’re simple problems to prevent initially, they’re on a list of the most common OSHA violations. These problems are often easy to overlook. It’s important to implement procedures and checklists to ensure they’re never an issue.

Consider Safety as a Profit Instead of a Cost. The cost of implementing and maintaining proper safety procedures can be viewed as a profit or a cost. Those who view it as a cost are more likely to find themselves with a handful of OSHA citations. They’ll also find that those citations are far more expensive than the cost of preventing the problems. Employers who view the safety standards as a profit are more likely to implement strict procedures and have a good system for maintaining them. The small cost of keeping safety procedures in operation is considered a wise investment. Another important issue to consider is that insurance doesn’t always cover the cost of workplace accidents that result from employee negligence. Most of the OSHA standards are in place to prevent negligence. With that thought in mind, it’s important to remember that any accident resulting from failure to comply with OSHA may not be covered by insurance. This is another good reason to follow the standards set by OSHA. For questions about workplace insurance policies and the specifics of what is covered in them, contact us.

FIVE SAFETY STRATEGIES FOR AVOIDING CORPORATE COMPLACENCY

By Workplace Safety

Approximately 15 people die each day from injuries or illnesses acquired at work. One of the leading contributors to this statistic is complacency. Safety is, unfortunately, one of the areas in which employees and leaders become too complacent. As they develop routines, their standards start to dwindle. Overseers might begin accepting a lower quality of work. To make matters worse, employees might continue finding shortcuts in their work. When shortcuts become common, accidents happen. Sometimes accidents occur and are not reported at all. Events that almost end in an accident also often go undocumented. Even if they’re lucky enough to avoid disaster, workers with complacent attitudes have the potential to drive the company they work for into the ground. The worst part about this snowballing scenario is that employers begin blaming employees, and employees always blame the employers. There are often blame battles between supervisors and employees also. Fortunately, there are several steps supervisors or overseers can take to minimize the dangers of workplace complacency.

  1. Get to know the employees individually. In a society that is individualistic, it’s important to treat people with the respect they have been taught to expect. Supervisors in the workplace must make a point to become familiar with each employee. Ask each person about their safety concerns and discuss company policies. Make sure they understand the company’s policies. When an employee states a safety concern, always do something about it. Employees must never feel that their safety concerns are being ignored.
  2. Make safety a main focus in management planning. During organizational and regular meetings, make safety issues a priority. Be sure to speak about safety concerns collected from employees’ suggestions to other corporate leaders. By talking about them during every meeting, it’s more likely that improvements and changes will happen quickly. While presenting the safety concerns, be sure to illustrate how the negative effects of ignoring the issues will hurt the company.
  3. Review and analyze all safety reports regularly. Although it’s most important to review injury reports stemming from safety issues, it’s also important to review near misses. Make sure employees know that it’s mandatory to record incidents that were almost accidents. After reading the reports, meet with the employees involved in each incident. Ask injured employees how they are doing and monitor their progress. Employees who had near misses must be interviewed to see if they have made any required changes to prevent future incidents. If the changes are beyond their control to make, be sure to take the necessary steps to implement them.
  4. Involve all employees in the safety process. Reward every employee’s effort toward safety involvement. Keep in mind that employees could ignore safety rules instead. To help encourage them to do more, implement a safety committee. Membership for the committee must be voluntary. However, many employees who want to be promoted are happy to join committees. For large workplaces, designate a committee for each department. Encourage the committee members to work together to enforce safety rules. Hold regular meetings at work, and allow safety committee members to voice their concerns. One of the best ways to prevent complacency about safety issues is to hold contests. For example, offer a monetary bonus for employees who stay incident-free for a specific time period. Money is always a valuable incentive to avoid complacency and negligence.
  5. Implement an efficient and anonymous reporting system. Employees who are considered tattletales shouldn’t be ignored. If they have safety concerns or see another employee breaking safety rules, it’s imperative to listen to them. Many employees are afraid to talk about others because they want to avoid conflict. Respect their desire to enjoy a comfortable workplace by implementing an anonymous tip system. Never tell an employee who has been reported that a specific fellow employee gave the tip. This only creates animosity. By keeping information anonymous, employees are more likely to follow safety rules. Employees know that anyone may report their actions without fear of being named individually, so they’ll be more careful. In addition to providing anonymity, this system is also a great way to gain the trust of employees.

In order to avoid complacency and negligence, safety must become a culture in the workplace. Employees and supervisors need to see that it’s a part of everything they do. They must also see the dangers and effects of becoming complacent. For example, arrange a seminar each month with a safety speaker who has been disfigured or disabled from a workplace accident. Videos, pictures and real-life exposure to disfigured workers is a good way for employees and supervisors to see the realistic safety risks of workplace complacency. Once a regular plan becomes an official culture that is rigorously enforced, it’s easy for everyone to enjoy a safe workplace.

UNHEALTHY BEHAVIORS AND DECLINING HEALTH IMPELS EMPLOYER COSTS

By Employment Resources

An employer’s health care expenditures are greatly impacted by the overall health of their workforce. In fact, the March 2011 Thomson Reuters Workforce Wellness Index found that the unhealthy behaviors of employees cost their employer an average of $670 per year, per employee.

The Thomson Reuters Workforce Wellness Index tracked the collective health of American workers with an employer-sponsored health insurance plan by considering six risk factors – blood pressure, cholesterol levels, blood glucose levels, and alcohol and tobacco usage. The costs associated with less-than-optimal health was also gauged.

The index declined two percentage points to 84.4% between 2005 and 2009. An ideal state of health, whereby there aren’t any behavioral risk factors or risk-related additional health care costs within a certain population present, is represented by a score of 100. The decline in ideal health is a major contributing factor when it comes to the rising health care costs for U.S. employers.

The index found that the six behavioral risk factors mentioned above were associated with 14% of the direct health care costs among the working, privately insured population. And, of the average $670 per employee that unhealthy behaviors cost the employer, $400 is attributed to high BMIs and $150 is attributed to elevated blood glucose levels. A separate study by Duke University also showed a clear relationship between how much is spent on a worker’s Workers Compensation claim and their BMI, which uses height and weight to measure body fat. The Duke study estimated that Workers Compensation claims for obese workers averaged $51,000 and those for workers of a normal/average weight averaged $7,500 dollars.

Given the research, it would be prudent for any employer trying to find ways to reduce their health care costs to confront the behavioral risks among their workforce. Experts recommend that employers and insurance providers compare their beneficiaries against the national norms, as this will help begin identifying and addressing any specific problem areas. What else can you, the employer, do?

Employee Wellness Programs. According to statistics from the CDC, employee lifestyle choices are attributed to 75% of an employer’s productivity losses and health care costs. Workplace wellness programs have been proven to improve employee health and therefore improve a company’s financial bottom line. In fact, the Wellness Council of America found that three dollars in health care costs are saved for each dollar invested in a wellness program.

Although the benefits to employer and employee alike are clear in writing, studies have shown that employee participation in wellness programs only averages 5% when an employer doesn’t offer incentives. A 2011 survey by employee support and work/life benefit provider Workplace Options showed the following:

  • Of the respondents, 76% felt it’s appropriate for companies to provide incentives for employees to better their well-being and health.
  • If offered an incentive, 73% of the respondents would enroll in their employer’s wellness program to better their personal health.
  • Only 36% of the respondents worked for an employer offering initiatives like wellness coaches, fitness programs, and on-site health screenings.

With the cost of health care premiums, absenteeism, and Workers Compensation continuing to rise for employers, many are starting to embrace the idea that offering employees rewards to pursue a healthy lifestyle is a worthy investment gamble. A Fidelity Investments and National Business Group on Health study showed that employee wellness incentives per employee increased from $260 in 2009 to $430 dollars in 2010. Representatives from the study noted that employers now face the challenge of getting employees to continue the healthier behaviors they adopt over the long run, not just temporarily from an incentive.

THREE POINTS TO CONSIDER BEFORE ALTERING YOUR EMPLOYEE BENEFITS PLAN

By Employment Resources

Just like most employees, most businesses start to look at ways they can cut their expenses during difficult economic times. One common focal point of such is employee benefits programs, especially in the area of health benefits. Considering that health benefits are frequently the most expensive aspect of a company’s benefits program, this might seem like a reasonable, logical place for an employer to take cost-cutting measures. However, employers should carefully consider what the consequences will be from making cuts to their employee benefits programs; whether or not there are any alternative cost-cutting options available; and, if benefits cuts are a must, how they can lessen the impact.

The Consequences. Let’s say you, as an employer, decide to target your employee benefits program and make some significant cost shifts toward your employees with the idea you’ll cut costs and save money. If the cost shift involves higher deductibles and/or co-pays for employees, then they might procrastinate in seeing a physician when they’re suffering symptoms of illness or injury, forgo or delay filling vital prescription medications, and do without wellness care. If the cost shift involves premium increases, then many employees, especially young and relatively healthy ones, might decide to drop coverage all together. The exodus could leave your plan with a larger and more undesirable risk pool. These types of cost shifts can very well cost the health plan more money over the long run. Furthermore, it can impact your company’s bottom line negatively when it comes to employee morale, productivity, disability costs, and absenteeism.

What’s The Alternative? An alternative to cost shifts would be to focus your benefit dollars on the measures that will enhance employee well-being and overall health. Some ideas would include:

  • Using incentives to motivate employees to participate in wellness activities, such as weight loss and fitness programs, tobacco cessation classes, and nutrition education and counseling.
  • Using incentives to motivate employees to participate in activities that can screen and detect serious medical conditions, such as glucose level testing, blood pressure screenings, cholesterol testing, and completion of health risk assessments.
  • Providing extensive preventive care coverage.
  • Having an employee assistance program (EAP) available to your employees can be especially helpful during poor economic conditions since it can provide resources and/or referrals for things like financial counseling, crisis intervention, and stress management.

If You Must… Despite the negative consequences, you might feel that cost-shifting is your only feasible option. If so, make sure that you do everything possible to soften the blow to your employees. Here are some ideas:

  • Offer voluntary benefits to your employees. This will cost you little, if any, money. While the employee will be responsible for most to all of the cost, they’ll benefit from group rates, convenient payroll deductions for the premiums, and the ability to personalize their coverage selections to meet their own unique needs.
  • Offer Flexible Spending Accounts (FSAs), which will let employees pay for health care expenses with pre-tax dollars and get the most of their health care dollars.
  • Offer employees Consumer-Directed Health Plans (CDHPs). These plans combine A Health Savings Account (HSA) with a health plan that has a higher deductible.

All of the above options have a commonality in that they each require an employee to get more personally involved in the their own health and the management of their health-related benefits. Whether the change makes the employee more vigilant in scheduling preventive care visits, participating in wellness activities, or budgeting their future health care expenses, the point is that the employee is assuming more responsibility for their health care and management thereof. It is this greater individual responsibility on the part of the employee that can be one of the best long-term cost-management tools available to an employer.

UNDERSTANDING EMPLOYER RESPONSIBILITIES FOR GROUP BENEFITS UNDER ERISA

By Employment Resources

The Employee Retirement Income Security Act (ERISA) is a federal law enacted to set minimum standards for the majority of voluntary pension and health plans in the private industry to protect involved individuals. This federal statute went into effect on September 2, 1974. ERISA requires plan sponsors to provide participants with thorough information about features and funding. In addition, it mandates fiduciary responsibilities for managers and controllers of plan assets. The statute also requires plans to have an established grievance and appeals process that is easy for participants to use in order to get benefits from their plans. Participants who are the victims of fiduciary duty breaches have the right to sue under this statute’s provisions.

Important ERISA Changes. Over the years, there have been several amendments made to the ERISA statute. These changes were made to further the protections offered to health benefit plan participants and beneficiaries. One of the most important amendments is the Consolidated Omnibus Reconciliation Act (COBRA). This amendment provides selected workers and their families the opportunity to continue their health coverage for a specified amount of time following the loss of a job or other certain events.

Another important amendment to the ERISA statute is the Health Insurance Portability Act (HIPAA). This provision created new protections for workers and their families with preexisting medical conditions. Such individuals would have likely faced discrimination in applying for health coverage prior to this act. The Mental Health Parity Act, Newborns’ & Mothers’ Health Protection Act and the Women’s Health & Cancer Rights Act are also important changes made to ERISA.

Definition of Responsibilities. Employers who are fiduciaries need to be familiar with the amendments made to the ERISA statute. This knowledge is helpful in understanding responsibilities. All fiduciaries have an important set of responsibilities since they act on behalf of the plan participants and beneficiaries. The following are important responsibilities to memorize:

  • Act in the interest of the plan participants and beneficiaries with the purpose of providing them with their benefits.
  • Follow plan documents that are consistent with ERISA.
  • Carry out all duties in a prudent manner.
  • Hold the assets of plans in trusts.
  • Only pay reasonable plan expenses.

Prudent action requires extensive expertise. This is one of the most important responsibilities employers have under ERISA. Fiduciaries lacking such expertise must hire a professional who has the proper knowledge to complete those functions. Prudence requires excellent skills in making fiduciary decisions. Every decision must be documented properly. It’s best for fiduciaries hiring service providers to interview several candidates, make comparisons and then make a decision. Following plan terms is also a vital responsibility. This includes memorizing the plan, reviewing it regularly and keeping it current.

Employer Liability Information. It’s important to know the potential liabilities that accompany employer responsibilities. Any fiduciaries who don’t follow standards of conduct face personal liability for restoration of losses to the plan. They also must restore profits that were obtained through personal misuse of plan assets. Fiduciaries have the ability to limit their liability in some circumstances. Proper documentation is an essential way to reduce the likelihood of undue liability issues arising.

Fiduciaries may also hire service providers to handle their responsibilities. In doing this, it is essential to include verbiage in the service contract that places responsibility of mismanagement of the plan on the service providers. Employers are responsible for the selection of service providers. However, they’re not liable for the decisions and actions of the providers they choose. It is important to remember that monitoring the service providers is essential. Keep documentation of all periodic monitoring to further reduce liability risks.

 

FACEBOOK POLICIES TRICKY FOR EMPLOYERS, EMPLOYEES

By Risk Management Bulletin

In the age of instant Tweets and impulsive Facebook posts, more companies are trying to figure out how they can limit what their employees say about work online without violating the law.

Confusion about what workers can or can’t post has led to a surge of more than 100 complaints at the National Labor Relations Board — most within the past year — and created uncertainty for businesses about how far their social media policies can go.

The number of cases spiked last year after the NLRB sided with a Connecticut woman fired by an ambulance service firm for criticizing her company on Facebook. The board ordered the company to change its policy that had banned workers from discussing the company online. In Fall 2011, an NLRB administrative judge ordered a non-profit group in New York State to reinstate five workers it had fired for posting Facebook complaints about working conditions.

The National Labor Relations Act protects all workers engaged in “protected concerted activity” – such as a discussion of working conditions. However, companies are concerned about the effect of disparaging online remarks that hundreds or thousands of people might see. What’s more, not everything workers write on Facebook or Twitter is necessarily legal just because they’re discussing their job; the test is whether the message calls on fellow employees to take some group action or goes “over the top” in criticizing a supervisor or employer.

Our risk management professionals would be happy to discuss this tricky issue with you.

SEVEN STEPS TO SAFER, HEALTHIER EMPLOYEES

By Risk Management Bulletin

It’s tough to run a company. However, taking steps can make your job easier and your workplace safer. You’re probably already doing most or all of these things, but just in case, here’s a quick review:

  1. Ensure compliance with safety and health standards. Comply in detail with OSHA standard that applies to your operations and your workplace. Check state regulations, which take precedence, if they’re stricter than federal standards. Enforce compliance with your own safety policies.
  2. Keep employees informed about hazards. Identify every hazard in every work area and in every job, and make sure employees with potential exposure know what the hazards are, how they’re dangerous, how to protect against them, and what to do if they’re exposed to a particular hazard.
  3. Take appropriate steps to minimize risks. This involves many things, including:
    • Well-conceived and implemented workplace safety and health programs.
    • Routine and thorough inspections and safety audits.
    • Effective engineering, administrative, and work practice controls.
    • Frequent and effective employee training.
    • Routine workplace maintenance.
  4. Teach employees to work safely. Train frequently to keep workers up to date on workplace and regulatory changes – and to keep them aware, alert, and prepared to work safely.
  5. Monitor performance and provide feedback. Don’t assume that workers will use what they learn in training or do what their supervisors tell them to do. For all kinds of reasons, workers will decide to take risks or ignore warnings and instructions. Make sure your supervisors monitor safety performance and provide feedback to maintain safe and healthy behavior.
  6. Pay attention to employees’ suggestions and complaints. Although you might not be able to use all their suggestions or be thrilled about their complaints, listening to employees is essential to get them on board with your safety and health programs and following your safety rules. The big plus here is that employee participation leads to employee ownership, which leads to employee-driven safety and a safer workplace.
  7. Correct problems quickly. Foot-dragging over hazard abatement tells your employees that you don’t care about their safety. Whenever a safety or health problem comes to your attention, take swift and effective action.

ARE MULTI-YEAR POLICIES A GOOD CHOICE?

By Risk Management Bulletin

More and more risk managers are considering multi-year insurance contracts as a way to lock in beneficial terms, conditions, and pricing before today’s “soft” market hardens. Before you make a decision, consider these facts.

A multi-year policy offers significant advantages:

  • Locks in favorable rates and coverages. Some insurers are slashing rates as much as 25% to attract buyers. The long-term potential for savings can be highly advantageous.
  • Lessens hassle. Because multi-year policy renewal dates are several years apart, you’ll avoid the time-consuming, costly process of annual policy renewals.
  • Strengthens relationships. A multi-year policy can help build long-term relationships among you, your agent, and your insurer. You’ll probably enjoy better rates, terms, conditions, or claims services than under single-year coverage or a three-year cancelable policy.

Here’s the downside of multi-year coverage:

  • Vulnerability to market timing. A multi-year contract leaves you locked in to specific terms, conditions, and rates for an extended period – which can prove frustrating if the cost of coverage continues to drop.
  • Cancelable or adjustable rates. Many “non-cancelable, multi-year” policies contain one or more clauses giving the insurer an out. Even if a policy is non-cancelable, it might still allow the company to raise rates based on your loss history or other factors.
  • High up-front costs. The entire premium is often due at inception. Although you might get attractive premium-financing terms, lost opportunity costs on your company’s internal rate of fund returns might offset premium savings.
  • Fragility of the relationship. Relationships grow from trust and experience over long periods, not from a single multi-year policy from an insurer with whom you might have little experience.

True guaranteed-rate, non-cancelable, multi-year polices can provide a variety of benefits not available with traditional annual policies. However, in some instances, these policies might be little more than marketing gimmicks designed to lure you with the possibility of substantial savings.

For an evaluation of your situation, feel free to get in touch with our risk management professionals.