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June 2012

Jun 01
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IMPORTANCE OF SAFETY PROGRAMS & OSHA COMPLIANCE

By Workplace Safety

A recent major OSHA citation incident has been getting the attention of many workplace leaders. A company in Houston was cited with six other-than-serious violations, three repeat violations, and 10 serious violations. The cost of these issues totaled more than $160,000. The incident is a good reminder to employers everywhere that having a solid safety program is crucial.

The Houston company that was cited failed to retrain employees on hearing protection use and to refit them for hearing protection devices. When annual tests were conducted, the results showed that some employees suffered notable hearing loss. The company also failed to secure dock boards that forklifts were driving on. In addition to this, the company did not provide the MSDS sheets that OSHA requires. If inspectors find that the probability of death or physical harm is high, a serious citation is issued. These are always things that a vigilant employer would have noticed. This Houston company also received repeat violations for failing to maintain an electrical conduit, which was pulled back. They also did not provide machine guarding for a wood chipping machine’s rotating shafts. In the prior two years, the company was fined more than $100,000 for other violations.

These same mistakes can happen anywhere. In some cases, they might be a result of workers being in a rush. For example, if a busy employer does not describe injuries adequately that happen on the job, a citation can be issued. Limited details might seem like concise ways of describing incidents, but it is important to include as many details as possible. Communication and documentation are very important in maintaining workplace safety. Having log books where employees are required to initial important tasks is essential. In the case of the cited Houston company, not documenting the workers’ unsafe exposure to hearing hazards without adequate protection was a big mistake.

When a company violates safety regulations repeatedly, the health of workers is put at risk. Although the world is much more informed because of the availability of information on the Internet, employers should never assume that workers know how to stay safe on the job. Many employers also do not understand fully how to avoid citations. Having a detailed safety program is important, and the program should be reviewed frequently. For information about implementing a solid safety program, discuss this important issue with our agents. Reviewing a safety plan is also important. Many companies upgrade equipment, and safety standards can change. It is important to keep current with all safety regulations. Employers can also contact OSHA for in-depth information. Providing a safe workplace is the employer’s responsibility, and the price of failing to do so is very high.

Jun 01
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5 SAFETY MISTAKES TO AVOID WITH LOCKOUT/TAGOUT

By Workplace Safety

Lockout and tagout procedures are designed to keep workers safe while energized systems and machinery are being serviced. OSHA requires all companies performing routine maintenance on energized systems to adhere to special standards. The specific OSHA standard outlining the need for a structured lockout/tagout plan is 29 CFR 1910.147. Although this standard is required of all such businesses, at least 50,000 workers are injured each year as a result of equipment startup accidents. In addition to this, at least 120 incidents result in death. Here are the top five reasons employees are hurt or killed during lockout/tagout procedures.

Failure to Disconnect Power Sources. Many workers mistakenly believe that turning off a switch eliminates the immediate power supply to equipment. However, power is still able to travel through a short circuit. If the switch is defective, a considerable amount of power can still come through.

Failure to Stop Equipment. When workers become accustomed to a piece of equipment, they can develop a false sense of total control over it. If they also fail to restart or stop the equipment regularly, this creates a recipe for disaster. Whether the reason is a fear of lost productivity or a false sense of security, the end result might be a fatal accident. Always make sure employees follow instructions for stopping or restarting any piece of electrical equipment.

Failure to Deplete Residual Energy. Machinery and large electrical devices use a battery or capacitor to store energy. If the power switch is shut off, there is still a risk of getting shocked by the equipment, and it is possible to get shocked even after it is unplugged. To ensure the safety of employees, it is necessary to release or block stored energy completely.

Failure to Clear Work Areas. Before restarting equipment, many workers fail to clear away debris. A dangerous tool with the capability to fall and hit someone is just as dangerous as an unlocked machine.

Failure to Ensure a Safe Path. When restarting equipment, it is important to make sure all co-workers are out of the path of danger. Many workers’ injuries are caused by fellow employees who fail to ensure a safe path prior to restarting a machine.

The easiest way to avoid these mistakes is to consider two rules of OSHA’s 29 CFR 1910.147 regulation. The first is that employers should review lockout/tagout procedures carefully each year. They should also create a detailed report documenting their inspections. In addition to this, employers should discuss the results with an employee authorized to operate the equipment. Be sure to include the date, inspector’s name, employees involved and the process being inspected.

The second requirement to consider is that all authorized personnel should be trained properly for lockout/tagout procedures. If an employee changes jobs, retraining is required. This is also true if a new machine or process is brought in. In addition to this, employees must be retrained if energy control methods are changed, if an incident occurs or if procedures have not been followed properly.

Jun 01
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HOW TO CREATE A SAFER WORKPLACE

By Workplace Safety

Every workplace has safety hazards. Whether the hazards are slick floors, dangerous equipment or even a sharp edge on a file cabinet, they exist everywhere. It is the employer’s responsibility to find these hazards and implement ways to minimize safety risks. When employees are safe, they are more productive.

For example, consider a workplace with dim lighting. If employees must assemble sharp objects in such a workplace, the dim lighting could lead to multiple injuries.

Safety programs are important for every workplace. They involve forming and implementing various safety measures. For example, a factory manager who orders upgraded equipment would need to identify the safety risks of the new devices. They would need to develop a safety plan for employees who must use the equipment. However, not all job risks are in factories or even in offices. If a worker must travel, employers need to identify what types of risks the employee faces during trips. Dangerous neighborhoods, icy roads or risky tasks are all issues employers must consider for traveling employees. One of the most overlooked workplace dangers is unstable employees. Whether they have personal or work-related issues with co-workers, unstable workers might be the perpetrators of workplace violence incidents. It is important for employers to discuss these issues with employees, and they should know what signs to look for in a dangerous employee.

One of the best ways to offer incentives for reducing on-the-job accidents is to offer employees a share of insurance premium reductions. In addition to this, it is important to develop a solid plan that includes applicable points from the following list of suggestions:

  • Make sure all violence threats are reported and investigated promptly.
  • Carefully match applicants to the best jobs for their individual abilities and skills.
  • Mark all exits, passages and aisles clearly, and make sure they are kept clear of debris.
  • Comply with all OSHA IIPP requirements.
  • Install enhanced security systems to prevent burglaries, stop fires and monitor activities.
  • Install slip-resistant surfaces on stairs, and make sure each staircase has handrails.
  • Make sure lighting is optimal.
  • Keep a first aid kit in an accessible place, and post emergency instructions in visible areas.
  • Never allow productivity measures to compromise the safety of employees.
  • Make sure safety equipment has electrical grounding, guards and easy-to-use power switches.
  • Elect a safety officer, and conduct safety meetings regularly.
  • Require drug tests for new employees and for existing employees after accidents.
  • Make sure all furniture and office equipment pieces are designed ergonomically.
  • Perform a criminal background check on all candidates who are applying for positions of responsibility for infants or the elderly.
  • Conduct pre-hire and annual DMV checks on all employees who drive on the job.
  • Set smoking rules, and be sure to encourage anti-tobacco campaigns.
  • Provide employees with protective gear required for their jobs, and provide instructions for proper use of protective wear.
  • Meet all hazardous materials reporting requirements.
  • Communicate emergency response plans with employees.
  • Require ill employees to go home instead of letting them work with dangerous equipment.
  • Perform routine inspections on equipment for functionality.
  • Address the issue of indoor pollution problems by requiring regular inspections and maintaining proper ventilation.
Jun 01
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HEALTH BENEFIT CHANGES TO EXPECT IN THE NEAR FUTURE

By Employment Resources

Healthcare cost increases are expected in the near future. However, many employers are pursuing measures to improve their employees’ health. Recent research shows that employers are also taking steps to manage the rising costs of medical plans. The recent survey found that health care costs are expected to rise by almost 6%. When compared with the average costs recorded five years ago, current numbers reflect an increase of 40% for employees. For employers, the increase was almost 35%. Since they must cover a larger share of costs than active employees, workers who retire early face even more financial challenges. Retirees who are not yet eligible for Medicare might expect to pay more than $4,200 each year for single-only coverage. For family coverage, the amount jumps to $10,500.

Health Benefit Design Options. Expect to see significant changes in employers’ health benefits during the next few years. About 40% of employers feel that employees should be accountable for their individual health. This is one of the top strategies, and it is constantly growing in popularity. The same percentage of employers plan to review their health coverage offerings. They also plan to make sure they are complying with the PPACA. There are many different choices employers face. With new strategies emerging, they are each more likely to find a specific strategy that works best for their unique workforce demographics and company objectives.

Do not expect to see workplaces discontinue coverage plans just yet. Less than 5% of employers are considering discontinuing coverage for active employees. However, 45% of employers are likely to extend coverage to a portion of the workforce and recommend state exchange options for others. However, it seems that changes are likely to continue beyond the next several years. About 25% of employers do not feel confident that they will be offering Health insurance in 10 years. By that time, they expect that state exchanges will greatly impact health plans. They will also impact retiree offerings.

Employer contributions to retiree medical plans will continue to deteriorate in the future. Most employers will introduce account-based alternatives, which are similar to 401(k)s. These plans will allow employees to put away money for their medical costs after retirement. Currently, 10% of employers have retiree medical programs. However, that number is expected to dwindle to less than five percent in the next few years.

Encouraging Employee Accountability. By encouraging employees to be accountable, employers greatly reduce the cost of health benefits. They also notice their employees are more productive. In addition to encouraging accountability for individual health, employers are encouraging accountability for the amount of services employees consume. Companies that do this have seen a small increase of about 2% in costs over the last four years. Expect to see more encouragement toward evidence-based care, decision-making support tools and specialty treatments in the near future. Employers are quickly discovering the advantages of teaching employees to be conscientious about their own health decisions. Financial rewards are also used to encourage healthy lifestyles.

Growing Benefit Trends. Employers are still struggling with the shaky economy. The cost of inflation only makes their problems worse. However, there are several tactics emerging, which they plan to use for cost control. These tactics include the following:

  • Changes in pharmacy plans.
  • Spousal and dependent coverage surcharges.
  • Vendor management and more transparency.
  • Growth in account-based health plans.

The future is certainly full of change. Some changes may bring better benefits for employees and employers. However, the changes are designed for individuals to build a better knowledge of personal health. To learn what options are available and what to expect, discuss concerns with an agent.

Jun 01
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EMPLOYER OPEN ENROLLMENT RESPONSIBILITIES

By Employment Resources

Health insurance companies offer group participants a limited amount of time each year to make changes to their group health plan. That period of time – typically one to two months per year, is called “open enrollment.”

Why open enrollment? Open enrollment periods are important for helping to control an insurance industry phenomenon called “adverse selection.” This occurs when people wait until they are actually sick to purchase insurance. When this happens, it drives up premium costs for the entire group and makes group insurance plans unworkable. By limiting eligibility for plan changes to certain times during the year, workers have an incentive to enroll in plans right away. This is an important measure to take – especially for group plans with guaranteed underwriting. This keeps costs down for plan participants and sponsors alike.

Employer Responsibilities. As a plan sponsor, you have certain responsibilities prior to and during your open enrollment periods:

  • Take reasonable steps to alert your workers to the open enrollment period well in advance. Examples of reasonable steps include emails, employee newsletters, public bulletin boards, and notices included with paychecks.
  • Provide plan information. You should ensure that you distribute specific information about your various plans to your employees well in advance of the open enrollment period.
  • Maintain minimum enrollment levels. Most plans require a certain percentage of eligible employees to enroll in the plan – typically 50% to 75%. This is not usually a problem, as long as employers educate their workers about their available health plan options and encourage them to enroll.
  • Provide necessary enrollment documents. Your insurance carrier can help you with this effort by providing you with the number of enrollment packets you anticipate you might need.
  • Safeguard Personally Identifiable Information. Plan sponsors might occasionally have access to sensitive information about workers’ medical information. It is a violation of federal law to compromise this information in any way.

Employee Responsibilities. Your employees also have responsibilities:

  • Educate themselves. Your employees should take the time to learn about the various options in the plan, including co-pays, deductibles and exclusions.
  • Take advantage of initial or open enrollment eligibility periods.
  • Enroll in COBRA, if they are eligible and require continuing coverage after leaving your work force.
  • Enroll family members, either during open enrollment period or during their initial eligibility period as new hires. If they fail to enroll during one of these periods, they cannot go back and add family members to the plan, but must wait until the next open enrollment period.

Our responsibilities. Our customer relations staff and agents stand ready to help you meet your responsibilities in preparing for your open enrollment period. Specifically, we can help you with enrollment forms, brochures and fact sheets, and answers to your plan-related questions. For more information, please don’t hesitate to contact our office.

Jun 01
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HAVE YOU CONSIDERED FULL-REPLACEMENT CDHP?

By Employment Resources

The Corporate Executive Board, an advisory and research company, and HighRoads, a compliance and health care costs services provider, assembled 2011 data from almost 11,000 medical plan designs and the medical plan rates of more than 30 million Americans. The data showed that an average of $187 dollars per year in out-of-pocket expenses was saved when an employee used a high-deductible Consumer-Driven Health Plan, or CDHP. The savings for families averaged $204.

However, when compared with Health Maintenance Organization (HMO) plans and traditional Preferred Provider Organization (PPO) plans, CDHP premium and out-of-pocket savings might be too little, as well as the deductible being too high, to spur employees to make the change. Even with substantial communications related to high-deductible CDHPs, PPOs are still the most widely offered and popular plans, representing 39% of employer plans. HMOs represented 27% of U.S. employer plans and CDHPs linked to Health Savings Accounts (HSAs) represented 17%. Other data included:

  • Traditional, non-high-deductible plan premiums averaged $132.11, exclusive provider organization (EPO) plans averaged almost $112, HMO premiums averaged almost $133, and PPO premiums averaged almost $150 (employee-only/per month).
  • At an average premium of almost $63 (employee-only/per month), CDHPs were significantly lower than other plans.
  • When compared to PPOs, CDHP plans were accompanied by lower yearly out-of-pocket costs. For CDHPs, the average yearly out-of-pocket cost was $2,128 for individuals and $5,656 for families. For PPOs, the average yearly out-of-pocket cost was $2,315 for individuals and $5,860 for families.
  • The average in-network co-pays with non-CDHP plans were $103 per emergency room visit, $31 per specialist visit, and $19 per primary care provider visit.

By effectively educating employees about potential cost savings from CDHPs, employers can offer employees more control and flexibility related to health care decisions and help them decrease their out-of-pocket yearly expenses.

Implementation Tips For Shifting to Full-Replacement CDHP. Some businesses are offering one or more CDHPs since just encouraging employee enrollment might not be sufficient to create the enrollment numbers necessary for significant cost reduction. Towers Watson/National Business Group on Health found that 8% of employers are currently offering full-replacement CDHPs to some portion of their workforce.

Most experts recommend employers consider several factors before making such a commitment. For example, employers should consider their low-income workers. Do they have families and will they need an employer contribution to a HRA or HSA to ensure they’re protected from exorbitant out-of-pocket costs? Employers should also assess and weigh the challenges that will come from full-replacement CDHP against the costs of crafting a plan to drive voluntary participation rates. Should a full-replacement CDHP be the best option, here are a few suggestions:

  • Use focus groups to test full-replacement CDHP. Listen to the employees. Find out what they might need to utilize the plan. Such feedback can be helpful as communications are drafted.
  • Don’t forget the big picture. Employers need to clearly and effectively explain how the change is connected to the business’s overall benefits strategy. For example, is there a wellness factor that could be interlinked to the full-replacement CDHP? Employees also need to see how the change plays into their personal big picture, such as from being shown the strong connection between health care decisions and retirement decisions and the benefit of health care expense saving with a tax-advantaged HSA.
  • Address the change head-on and keep stakeholders involved in the process. If rumors get started before an announcement is made to employees, it can create confusion and be detrimental to employee support. A news release, whether it be from a media relations firm or internally through HR, should be sent to explain the what and why of the change. Be sure to keep managers, supervisors, and if applicable, union officials in the loop.
  • Make any choice among CDHPs meaningful. Also, be sure that the options are differentiated thoroughly so that employees can clearly determine which option is best for their needs and be confident in their final decision.
  • Use a combination of print and news media to reach all the workforce generations. Keep in mind that Twitter, Facebook, blogs, and other online portals are freshly-streamed, inexpensive media portals to engage employees.
  • Communicate early and frequently, and don’t forget to actually listen and respond. Don’t be surprised by an array of employee reactions. Some employees might be open to CDHP, while others might be fearful or angry. Anticipate all the reactions. Give employees a portal, such as a call center line, to vent, but also give them sufficient information and time to embrace the change eventually. Communication should begin at least three months before annual enrollment and include CDHP tip sheets and user guides.
  • Relating is key. Young, single workers aren’t going to plan the same way a middle-age parent or older individual does. Testimonials within communications can help employers reach their multi-demographic workforce.
  • Whether using print or other media to communicate employee benefits, ensure it’s done year-round to keep the stream of information fresh and up-to-date.
Jun 01
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IGNORE THIS LAW — AND YOU COULD WIND UP BEHIND BARS!

By Risk Management Bulletin

If your employees perform certain incidental work-related duties on, along, or near, navigable water, you must carry Workers Comp insurance under the U.S. Longshore & Harbor Act. (USL&H). You might have noticed the fuzzy words “work-related duties, “incidental,” and “navigable.”

Corporate officers who violate this requirement could face fines of up to $10,000 — or even face or a year in jail.

Let’s explore how the vague words in the USL&H might impact your business. A “navigable” waterway is any body of water that ultimately empties through its tributaries into the Gulf of Mexico, Atlantic or Pacific Oceans. This means that the waterway can start one mile or 1,000 miles or more from the gulf or either of the oceans.

Consider the terms “incidental” and “work-related.” Who knows how a court might interpret them? Consider these examples:

  • Making deliveries to a dock
  • Going onto a dock or boat to deliver or fix equipment
  • Carpenter responsible for repairing boxes and barrels used in shipping
  • Transporting to pier with the accident occurring on public roadway before reaching the pier
  • Truck driver loading on dock
  • Welder injured on public highway leaving employer’s facility
  • Machinist working 2.5 miles from water past several public streets
  • Waterfront security guard
  • Employee injured in structural steel shop 2,000 feet from water
  • Unloading fish adjacent to navigable water
  • Injury on public thoroughfare administered and maintained by Port Authority of N & NJ
  • Pier under construction
  • Plumber, carpenter, or electrician working on or near water

If one of your employees suffers an injury near a navigable waterway, he or she can sue you or a company officer — even if the employee was near the waterway for only one hour!

Even worse, such lawsuits don’t limit employees to Workers Comp benefits. They can recover compensatory damages (for pain and suffering) as well as punitive damages — not to mention the fines and jail time mentioned above.

To help you avoid this “on or near the water” exposure, please feel free to get in touch with us.

Jun 01
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BANNING CAMERA PHONES IN THE WORKPLACE

By Risk Management Bulletin

More and more companies are restricting employee use of personal cell phone cameras at the office for fear that these ubiquitous devices might create legal headaches. Improper photos at work might lead to job-related claims, as well as compromise company trade secrets.

For example, if an employee takes inappropriate photographs of co-workers without their permission, the secret photos or videos could amount to sexual harassment or an invasion of privacy. Even if this doesn’t create a legal problem, the appearance of the photos or videos on social media could still make some employees uncomfortable or embarrass them.

Another worry relates to a soured working relationship. A disgruntled employee might want to embarrass a boss or gather evidence for filing a legal claim. All sorts of photos — from a supervisor getting upset with an employee to overall working conditions — could become fodder in an employment dispute. For companies with patented products and closely protected manufacturing processes, any information leaked to a competitor might be extremely damaging. Companies need to protect against cell phone cameras used to copy confidential documents or record other internal information.

What can an employer do? A big first step is to adopt a written policy that controls employee use of cell phone cameras at work. Determine which employees need cameras as part of their jobs. It might be a good idea, for example, if truck drivers carried cameras in case they have to photograph an accident for insurance purposes. Employees permitted to use camera phones at work should agree that the employer has the right to review all photos and videos on the camera, and can delete any work-related photos. The employer should also prohibit employees from posting work-related photos on the Internet. For those workers who don’t need to use camera phones at work, it’s okay to ban their use outright.

The easiest way to address camera phone use is to update your employee handbook. Once you’ve done this, follow up with either a company-wide memo or a discussion with employees about why you’re restricting camera phone use. The key is enforcement. Don’t develop the policy unless you’re willing to enforce it in every instance that it’s violated.

Jun 01
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RISK MANAGEMENT FOR DISASTERS: THE INSURANCE SOLUTION

By Risk Management Bulletin

If disaster strikes, how well you protect your business against risk can make the difference between survival and extinction. Once you’ve identified the risks involved, you have three basic options:

  • Reduce or eliminate them (avoidance)
  • Accept them (acceptance)
  • Limit the financial damage by assigning the risks to an insurance company (risk transfer — or insurance).

Unfortunately, risk management protection through insurance often fails to go beyond Commercial Liability and Property coverages. For example, Key Person Life policy(ies) on one or more key executives will reimburse your business against potential financial losses from their death. Business Interruption coverage can help keep you up and running after a disaster by covering payroll expenses and protecting against the loss of suppliers and buyers, You should also consider other types of business insurance to minimize the damage from a catastrophe.

In deciding on the policies that best fit your needs, ask yourself:

  • Are your coverage amounts and deductibles appropriate?
  • For what types of disasters (perils) are you insured? Which perils are excluded specifically?
  • Does your insurance provide adequate protection to senior management against litigation from inadequate business continuity planning?
  • Does your coverage factor in inflation, improvements, and building code changes?
  • Is your coverage for “replacement cost” or “actual value” (cost less depreciation)?
  • Will your Business Interruption insurance pay loss of income and payroll expenses?
  • Is your documentation (serial number, date of purchase, cost, receipts, photographs, etc.) current and detailed enough for your insurance company?
  • Do you have the originals of all policies secured in a fireproof cabinet, or off site, with copies readily available?
  • Are you covered for loss of power or other critical services?
  • What about coverage for a denial of access order issued by civil authorities?
  • Does your insurance cover losses from a disruption of transportation services?
  • If the Disaster Management Team makes a “disaster declaration,” will your insurance cover the costs charged by your alternate site vendor? What about the extra personnel and other costs associated with activating and operating the alternate site?
  • Do you carry enough Life insurance on key executives?
  • If you implement an effective Business Continuation Plan will your insurance premiums go down? Have you reviewed your coverage with your professional insurance advisor within the past year?

Our risk management professionals would be happy to help you answer these questions — and more. Just give us a call.

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