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Monthly Archives

July 2008

Jul 01
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DON’T LET YOUR WORKERS USE CELL-PHONES BEHIND THE WHEEL

By Risk Management Bulletin

As of July 1, California has joined a growing number of states and localities that have banned or limited cell-phone use while driving.

Although it’s far from the only distraction that can take drivers’ attention off the road (eating, fooling with the radio — even shaving or putting on makeup — are all-too-common sights), cell-phone use behind the wheel is the one that lawmakers have chosen to target. It’s also the one that many plaintiff attorneys have used to file lawsuits when a driver using a cell-phone causes an accident. Surprisingly (or perhaps not when “depth of pocket” is considered), these suits often target the offending driver’s employer, even if the employee wasn’t driving during work time or using a company car or cell phone.

For these reasons — and most importantly, the safety of all concerned — it makes sense for employers to have a cell-phone-use policy on the books. Says Attorney Heather Skidmore, “[Such a policy] will help ensure that employees are aware of their obligations under federal, state, and local rules and regulations regarding the use of cellular phones while driving …so [that] employers can begin to build a defense to possible tort claims that might offer some protection if an employee becomes involved in an accident.”

A cell phone use policy should include (but not be limited to):

  • An absolute prohibition of cell-phone use while driving (or a requirement that drivers pull over to take or make calls).
  • If phone use behind the wheel is necessary, require use of a headset, which is now the law in California.
  • Don’t allow drivers to make speed dialing calls. Employees should strive to plan their calls before they get behind the wheel.
  • Requiring drivers to let the called party know that they are driving and to suspend the call if traffic conditions become hazardous.
  • Ban text messaging or reading text and taking notes during a call.
  • Make sure that employees acknowledge that the policy has been read and will be followed, with violation subject to discipline, up to and including termination.

For more information on guidelines for cell-phone use behind the wheel, feel free to get in touch with us.

Jul 01
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EMPLOYERS, WORKS SWEAT OUT HEAT STRESS

By Risk Management Bulletin

As summer temperatures rise, so does the health and safety threat from heat in the workplace.

Some 4,000 Americans die each year from heatstroke, and thousands of others suffer from heat-related illnesses. Many of these incidents occur as employees work on jobs that flourish in warm weather, such as construction, roofing, landscaping, or other maintenance chores. Safety professionals and those who might be affected by heat issues need to understand the danger and react to it.

Heat illnesses come in three varieties:

  1. Heat cramps. Doing hard work in a hot environment throws the body’s natural balance off kilter, as excessive sweating dehydrates the body, and precious electrolytes evaporate with it, causing muscles to seize up, like a car engine starved of oil.
  2. Heat exhaustion (heat prostration or heat collapse) has similar causes to heat cramps, but different symptoms — dizziness, weakness, nausea, and clammy skin, with body temperature remaining normal.
  3. Heatstroke. Overwhelming heat overload disrupts the body’s temperature controls, with a fever of 105o or higher often causing fatalities. “This is the one that kills kids locked in cars on sunny days … and old people in poorly ventilated apartments during heat waves,” says author James M. MacDonald. “But it also kills healthy 30-year-old guys working in a humid warehouse.”

To curb the threat of temperature-related illnesses, we’d recommend having your workers take these precautions:

  • Pre-hydrate. Before activity starts, have workers drink up to 16 ounces of fluid. Then drink eight ounces every 20 minutes during the activity.
  • Drink flavored water. Because plain water quenches thirst too quickly, workers tend to not drink enough of it.
  • Acclimate to the heat slowly, over five to seven days of exposure. For new workers, institute a 20% increase of time in the heat each day. Workers already used to these conditions can increase exposure slightly faster, but four days out of the heat means that they’ll need re-acclimation.
  • Don’t wear a hat. It restricts heat loss through the head. Workers operating in direct sunlight can wear a visor.
  • Wear loose, thin synthetic fabrics. They help the skin stay cool through evaporation. Avoid cotton because it soaks up sweat, forestalling evaporation.
  • Wear your PPE no matter what the temperature. It can’t protect you if it’s not on you. If it’s uncomfortable, take frequent breaks.

Our risk management professionals would be happy to work with you in creating a workplace. Just call or e-mail us.

Jul 01
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WHAT ARE THE COBRA REQUIREMENTS FOR YOUR COMPANY?

By Employment Resources

Under COBRA (Consolidated Omnibus Budget Reconciliation Act), the federal government requires employers to offer temporary continuation of health benefits to certain employees who suddenly lose their jobs.

The law says that employers who fit a certain profile must offer COBRA to employees who undergo a “qualifying event.” This event is typically the termination of employment, whether voluntary or involuntary. It could also be a reduction in work hours, resulting in the loss of the employee’s health benefits. However, if an employee loses their job due to some type of gross conduct, the employer may not have to provide COBRA benefits.

Unfortunately, like many federal employment laws, COBRA can be confusing to interpret and understand. It can be quite a challenge to figure out whether or not your company is required to comply with this law. However, it’s critical that you first determine if COBRA applies to your business. Otherwise, you may end up facing expensive excise taxes, government investigations, fines or even litigation brought forth by former employees.

Here are the factors that determine if an employer is subject to COBRA:

Company size

According to the Department of Labor, employers with 20 or more employees are generally subject to COBRA. However, the law does not cover the District of Columbia, federal employees, particular church-related programs and some companies with less than 20 employees. If you fall into this group, you are required to give detailed notice to employees about their COBRA rights.

Small employer exception

Although many smaller businesses do not have to comply with COBRA, there are some exceptions. Under the law, if an employer “normally” employed 20 or more employees in the previous calendar year, they must offer employees COBRA benefits.

In other words, if your business employed more than 20 employees on half or more of the company’s typical business days the previous year, you are required to comply with COBRA. You have the option to figure the number of people you employed either on a daily basis or a pay-period basis. You must count all employees, regardless of whether they were enrolled in the group health plan.

Under COBRA, both full-time and part-time employees count toward the total number. However, a part-time employee does not count as a “whole” employee. Instead, they count as a fraction of an employee depending on how many hours they work as compared to a full-time employee.

For example, let’s assume your company requires that an employee must work 30 hours per week to be considered a full-time worker. In that case, an individual who works 15 hours a week would be considered half of an employee, someone who works 10 hours a week would count as a third of an employee, and so on. However, no business can require that employees work more than 40 hours a week to be considered full-time.

Self-employed workers, independent contractors and corporate directors do not count, even if they receive health benefits from the company. But here’s where it gets confusing: even though these workers do not count as an employee for the purpose of small business exceptions, they may still be eligible to receive COBRA benefits due to a “qualifying event.”

Multi-employer plans

In a multi-employer health plan, each participating employer must determine independently whether or not they are subject to COBRA laws. For example, if a multi-employer plan that is not required to follow COBRA suddenly adds an employer that does fall under the law, the entire plan is then subject to COBRA.

Additionally, business mergers and spin-offs can impact COBRA requirements. If you are uncertain about whether your company is subject to COBRA, you should consider meeting with an attorney.

Jul 01
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PRESCRIPTION DRUG SPENDING TREND SLOWS DUE TO INCREASED GENERICS USAGE

By Employment Resources

According to pharmacy benefit manager Express Scripts, increased usage of generic drugs helped slow growth in prescription drug costs for 2007, resulting in an estimated $5.2 billion in savings for benefit plan sponsors and their employees. In 2007, total spending on prescription drugs grew 4.7%, the slowest rate-of-growth ever reported by the company.

Data shows that average prescription costs increased just $1.09 to $54.34 in 2007, up from $53.25 in 2006. Factors contributing to higher costs included a 2.5% increase in overall utilization and 7.4% increase in average brand name drug prices, while average generic drug prices decreased 3.1%. Without the so called “generic effect,” the cost per prescription would have increased $3.58 to $56.83.

Generic purchasing power wielded its biggest impact on cholesterol drugs, the nation’s most-prescribed drug category. Both Pravachol(R) and Zocor(R) went generic in 2006, causing a significant shift in generic utilization of these drugs. Costs for cholesterol drugs overall fell 15.5% in 2007, averaging $67.32 per prescription versus $79.48 in 2006. Express Scripts reported that 48.9% of all prescriptions in 2007 for a cholesterol drug were for a generic, while 63.7% of all prescriptions filled were for a generic.

On a per-member-per-year basis, spending in 2007 increased from $762.76 to $798.76, including both plan costs and member co-payments. Had generic utilization remained constant, spending would have been $32.53 higher for each of the nation’s 158.5 million commercially insured employees.

To determine drug trend, Express Scripts includes both member co-payments and plan sponsor costs to calculate total cost. The company also accounts for changes in utilization, the relative rates at which brands and generics are used, price inflation, units per prescription and changes in the mix of chemical entities and dosage forms used.

Research such as this clearly shows the cost savings potential that generic drugs can offer to an employer’s health plan. Co-payment differentials that make generics significantly more cost-effective for employees and communications that educate employees on generics’ safety, effectiveness and affordability can lead to increased generic usage and, ultimately, help in moderating health plan costs.

Jul 01
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DURING OPEN ENROLLMENT, EMPLOYEES SEEK LIFE-STAGE APPROPRIATE ADVICE

By Employment Resources

In days past, open enrollment could be a relatively straightforward experience, both for employers and employees. Benefits choices were few, requiring simple communications and little decision-making. With the era of one-size-fits-all benefits packages almost a thing of the past, however, open enrollment has become a big deal. Employers devote considerable time and resources in selecting an array of benefits to offer to employees, along with the vendors to provide them. Employees need to figure out which of the benefits to choose, considering both what they think they need, and the cost.

According to a survey from MetLife, employees are looking for more help during open enrollment to pick the benefits that are right for them. Specifically, 59% would like their employer to suggest benefits that would be appropriate for someone in their “life stage” — single, married without kids, new family, established family, or nearing retirement. Other than a spouse, employees said they were most likely to view someone in their same life stage as the most important source of advice (22%), rather than HR (14%) or a professional advisor (11%).

Young singles were most interested in guidance, with 78% of those seeking HR advice saying they would like their employer to suggest life-stage guidelines to help them in benefits selection. According to life-stage guidance from MetLife for this group, having the money to survive an income loss should be a pivotal concern.

For dual income/no kids employees (DINKs), both disability and life insurance are key benefits, since the couple has become accustomed to relying on two incomes. Employees in this group also may be seeking a tax break, which pretax 401(k) plan contributions can provide.

Employees with new families should do a complete and careful review of their benefits during open enrollment, since the addition of dependents would have required a change in coverage categories, and also brought on the need for types of benefits that previously may not have seemed important, such as life insurance and dependent care.

Established families might be in the habit of knowing what benefits they need, but as family members get older future financial concerns loom closer on the horizon. Employees in this life stage should check to make sure that they’re on track for saving for expenses such as college education for the kids, long-term care and retirement, using any tax-favored vehicles or insurance products available to them through their employers.

For many employees in the pre-retirement life stage, it’s catch-up time. More than half (56%) of pre-retirees in the MetLife survey said they were somewhat or significantly behind where they wanted to be with their retirement savings. With dependents’ financial needs lessening, many pre-retirees are able to make larger 401(k) plan contributions. Though employees aren’t limited to open enrollment for making 401(k) plan changes, with the benefits-examination atmosphere that open enrollment inspires, it’s a good time to remind employees to review where their accounts stand. Also, pre-retirees who haven’t considered long-term care insurance might want to give it a serious look.

The MetLife survey also offered these observations:

  • Of the surveyed employees who wanted their employer to suggest the right benefits based on their life stage, 84% said they would be willing to share personal information — such as their age, marital status, number of children and income — that would allow the company’s benefits insurer or provider to offer customized advice on benefits selection.
  • Only 51% of the surveyed employees said they had actually read the entire open enrollment package.
  • Employees tended to hold their employer responsible for a bad open enrollment experience — 58% of those who felt negative or not confident about their enrollment decisions blamed their employer for this feeling.

This survey data provides food for thought on how to make the most out of open enrollment. Although open enrollment isn’t your only time to communicate with employees, it certainly is one of the most significant. Building employee goodwill by providing tools to help them make the best benefits choices can pay off in greater employee satisfaction throughout the year.

Jul 01
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PRACTICE SAFETY WHEN TRAVELING TO AND FROM WORK

By Workplace Safety

You rely on your company to provide a safe environment while you are on the job. However, your company relies on you to act safely when you are traveling to and from work.

No matter how you travel, every one is vulnerable to the possibility of an accident. However, of all the means of travel, walking probably provides the most risk. That’s because pedestrians are vulnerable to every form of moving vehicle. The American College of Emergency Physicians reports that 68,000 pedestrians were injured in traffic crashes in 2004. On average, a pedestrian is injured every eight minutes in the United States. That’s why it is imperative that if you walk to work, you follow the American College of Emergency Physicians’ recommendations for pedestrian safety:

  • Use sidewalks.
  • Know and obey safety rules (e.g., if a “don’t walk” signal starts blinking when you’re halfway across an intersection, continue walking).
  • Cross only at intersections and crosswalks.
  • Look left, right and left again for traffic before stepping off the curb.
  • Be sure you are seen by oncoming traffic.

Of course, pedestrians aren’t the only travelers who are vulnerable when commuting to work. Drivers also face a number of risks because they travel during rush hours when traffic is at its peak. In fact, InjuryBoard.com says that your commute home from work could actually be the most dangerous time to drive. The site goes on to note that although 12:00 a.m. – 3:00 a.m. Saturday and Sunday mornings are considered the two most deadly times to drive during the week, the deadliest time period overall is actually from 3:00 p.m. – 6:00 p.m. Monday through Friday. More drivers are on the road in the afternoons, and these drivers are generally tired from working, distracted by the problems that occurred during the day, and in a hurry to pick up their children or get them to an activity or event.

Even though afternoons pose a greater safety threat, all rush hour driving makes it necessary for you to practice extreme caution:

  • Leave early enough to get to work on time without having to speed.
  • Travel at a speed that is suited to the road conditions.
  • Obey traffic signs and signals.
  • Yield the right-of-way at intersections.
  • Don’t swerve from lane to lane.
  • Signal before you make a turn.
  • Stay in the right lane while driving so that cars can pass you on the left where you can see them.

Keep these tips in mind so that you can arrive at and return home from work safely, every day.

Jul 01
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PRACTICE GOOD HOUSEKEEPING AS ONE OF YOUR JOB RESPONSIBILITIES

By Workplace Safety

Good housekeeping at work means keeping both the facility itself and your own workspace clean, neat, and orderly. The reason housekeeping should be a priority is because it is the first line of defense in any company’s accident prevention strategy.

If housekeeping is to be effective, it has to be ongoing, not an activity that’s performed before management inspects the premises. Failure to keep up with necessary housekeeping tasks can result in employees:

  • Tripping over loose objects on floors, stairs and platforms
  • Being struck by falling objects
  • Slipping on greasy, wet or dirty surfaces
  • Hitting against projecting, or poorly stacked items
  • Cutting, puncturing, or tearing the skin of hands or other parts of the body

To maintain the facility properly, materials, supplies and parts must be stored in their designated storage areas when not in use, tools and equipment must be arranged in an orderly manner and placed away from traffic areas, scraps or debris in the department must be removed on a daily basis, and stairways and platforms must be kept clear. Attention should also be paid to keeping the aisles and passageways clear. Never store or stack materials in aisles.

When you keep the facility clean, you lessen the chances of both employee and visitor accidents because you will have removed the things that cause slipping, tripping, and falling. You have also lessened the likelihood that people will be involved in “struck by,” “striking against,” and “caught-between” accidents.

If your work area is in disarray because of a project you are working on, or if you cannot immediately clean your workstation, make people aware of the danger by posting signs that alert them to the potential risk.

In addition to accident prevention, there are other benefits to maintaining good housekeeping:

  • There is an easier flow of materials, which reduces handling and saves time.
  • Clutter-free and spill-free work areas expedite movement, again saving time.
  • There is a decrease in the number of fire hazards.
  • Exposures to hazardous substances are reduced.
  • There is a better control over tools and materials because you know where to find them.
  • Without obstacles in the way, it is easier to clean and maintain equipment.
  • The environment is more hygienic, which improves health.
  • There is a more effective use of space.
  • The likelihood of materials and equipment being damaged is reduced.
Jul 01
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NEVER CUT CORNERS WHEN IT COMES TO WORKPLACE SAFETY

By Workplace Safety

Some workers like to take chances when it comes to safety. They take needless risks in an effort to save time or cut their work load. But in the process, all they’re doing is subjecting themselves and others to hazards that could cause a serious injury.

Employees form bad habits when they continually perform their jobs in an unsafe way and don’t get injured. They become convinced that because of their skills they are incapable of being hurt. It’s this attitude that usually ends up doing them in, because they take even more chances until eventually a serious accident does occur. Unfortunately, many times that accident is fatal.

Most of a chance-taker’s careless acts can be broken down into one of the following categories:

  • Failing to follow proper job procedure
  • Cleaning, oiling, adjusting, or repairing equipment that is moving, electrically energized, or pressurized
  • Failing to use available personal protective equipment such as gloves, goggles, and hard hats
  • Failing to wear safe personal attire
  • Failing to secure or warn about hazards
  • Using equipment improperly
  • Making safety devices inoperable
  • Operating or working at unsafe speeds
  • Taking an unsafe position or posture
  • Placing, mixing, or combining tools and materials unsafely
  • Using tools or equipment known to be unsafe
  • Engaging in horseplay

Although OSHA does not cite employees for safety violations, each employee is obliged to comply with all applicable OSHA standards, rules, regulations, and orders. Employee responsibilities and rights in states with their own occupational safety and health programs are generally the same as for workers in states covered by Federal OSHA.

Employees should follow these guidelines:

  • Read OSHA notices at the jobsite
  • Comply with all applicable OSHA standards
  • Follow all lawful employer safety and health rules and regulations, and wear or use prescribed protective equipment while working
  • Report hazardous conditions to a supervisor
  • Report any job-related injury or illness to the employer, and seek treatment promptly
  • Exercise these rights in a responsible manner

If you are working with a chance-taker, ask them to stop and consider what jeopardy they are putting themselves and others in. Then buddy up with them to find a safer way to perform the task. Remember, an unsafe act doesn’t save time if an injury occurs.

Jul 01
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IDENTIFYING ENVIRONMENTAL EXPOSURES IS CRUCIAL TO RISK MANAGEMENT

By Construction Insurance Bulletin

Environmental claims are often unpredictable and despite the fact that associated liabilities can easily cripple a business, most contractors underestimate their potential magnitude. Without sufficient insurance protection, the consequences of such claims can range from costly business interruption to bodily injury and/or property damage lawsuits. The best way to account for this unpredictability is to manage the risks that can lead to environmental claims.

The only way to develop an effective risk management strategy is by conducting a thorough site pollution assessment to determine the various levels of exposure.

Time is a critical factor in this type of assessment. Exposures can exist from both past and future pollution release events. Of the two, past exposures can be more easily qualified and managed. Commonly referred to as “legacy exposures,” these previous events are the known/unknown issues associated with the history of a site. Some typical legacy exposures include:

  • Accumulations of small discharges
  • Inappropriate storage and handling practices
  • Poor structural integrity
  • Use of pesticides and herbicides

Legacy exposures might be dormant currently, but can re-emerge during site development, or operation expansion. They can even remain inactive on the property being developed while surfacing in neighboring properties. Such exposures could also be former release events that posed minimal risk initially, and required little remediation. However, now they require additional cleanup. Or the added remediation of these events could also be the result of a change in regulatory standards.

The second level of exposure results from the possible future occurrence of a pollution release event. Known as “operational exposures,” these risks can trigger a major cleanup effort, as well as bodily injury and property damage loss. These events can be sudden and easily identified, or they can be the outcome of a gradual process that has gone unnoticed.

The preferred way to manage these exposures is by transferring risk via an environmental insurance policy. Environmental insurance should be part of the risk management strategy of real estate owners, facility operators, and any other party with a financial interest in a site. An environmental policy can be written to cover only legacy concerns for transactions where there is a risk transfer from seller to buyer. It can also be written to cover only operational risks for a leased location, or if the insured feels that the site history does not warrant coverage for legacy events. Additionally, policies can also be crafted to provide full coverage for a single site or multiple locations.

Jul 01
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FREQUENT SCAFFOLD INSPECTIONS ARE A MUST, ACCORDING TO OSHA

By Construction Insurance Bulletin

At the end of each fiscal year, OSHA shines a light on its enforcement activities by releasing its list of the top ten most cited standards for the period. Leading the hit parade in 2007, was 2005 and 2006’s front-runner, scaffolding (29 CFR 1926.451), weighing in at a hefty 7,592 violations (as of October, 2007).

But lying beneath the surface of this statistic is a far more complex interplay of violations. According to the January-March 2008 edition of Safety Bulletin, published by SafetyResources.com, the top five sections of this standard that were cited include:

  • 1926.451 (g)(1) – Failure to provide fall protection
  • 1926.451 (e)(1) – Failure to provide proper access
  • 1926.451 (b)(1) – Failure to ensure adequate platform construction
  • 1926.451 (c)(2) – Failure to properly support scaffolding
  • 1926.451 (g)(1)(vii) – Lack of personal fall arrest or guardrail systems

If employers had focused their compliance efforts on these sections of the standard, they could have not only reduced worker’s compensation costs by lessening their employees’ exposure to some extremely serious workplace hazards, but they would have also significantly reduced their risk of receiving a citation.
Reducing exposure under this standard begins with having a “competent person” inspect scaffolds. OSHA clearly defines this individual as one who:

  • Has been trained to understand the requirements of scaffold standard 29 CFR 1926.451.
  • Is able to identify scaffold hazards.
  • Has the authority to take immediate action to correct defects and eliminate hazards.

This person is obliged to inspect the scaffold after it has been built, before it is used, and periodically during its usage. The term “periodically” is deliberately meant to be vague because the frequency of the inspections is determined by a number of factors such as the type of scaffold, weather conditions, how much usage it receives, how old it is, and how often sections are added, removed, or altered.

These factors influence how quickly safety-related defects can possibly develop. However, the term “periodic” is also meant to imply that inspections take place frequently enough so that problems are discovered before they become a threat to your employees’ safety.

OSHA also mandates that scaffolds be inspected for signs of defects before every shift. They should also be inspected after any event that could undermine their structural integrity.

To make inspection easier, Business & Legal Reports, Inc (BLR) compiled a checklist that they published in the April 25, 2008 edition of their email newsletter Safety Daily Advisor:

  • The scaffold does not block exits, egress, paths, fire alarms, and fire suppression systems.
  • The scaffold is erected at a safe distance from power lines.
  • Ladders, stairs, ramps, etc. provide safe methods for accessing the scaffold.
  • The scaffold is plumb and level, and resting on stable footing and a firm foundation (including base plates on supported scaffolds).
  • Diagonal cross bracing is used to support the scaffold’s legs.
  • All required guys, ties, or bracing is installed to maintain the scaffold’s stability.
  • Working level platforms are fully planked between guardrails, and secured to prevent movement.
  • Scaffold platforms are at least 18 inches wide.
  • Indoor scaffolds are made of fire-retardant wood or other suitable materials.
  • The scaffold’s platform is free of debris and slipping/tripping hazards.
  • Guardrails are firmly in place on all open sides/ends, where required.
  • Toe boards, screening, area barricades, or canopies are installed to provide adequate protection against falling objects.
  • Personal fall arrest systems are provided for all employees when they are working more than 10 feet above a lower level.
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