Even quality workmanship is not immune to potential claims of property damage or bodily injury. All operations carry the risk that injury or damage may occur as a result of the work, leading to costly lawsuits. Considering the complicated mix of contractors and subcontractors that contributes to each project, who is liable for this risk?
In insurance terms, “your work” as used in an insurance policy is a broadly defined term that includes operations performed by the policyholder or on the policyholder’s behalf, including material, parts or equipment in connection with the operations. Operations or work performed on behalf of the policyholder means work done by a subcontractor is considered the contractor’s work. Therefore, faulty electrical work performed by an electrician that causes a fire or other damage could be considered the contractor’s liability, but would be covered under a standard commercial general liability (CGL) policy.
Because a contractor or other involved party could be held liable for defects in a subcontractor’s work years after it has been completed, and filing the claim under the contractor’s CGL policy could cause the premium to rise, many construction contracts require subcontractors to provide insurance coverage for claims resulting from their completed work for a finite period of time, typically the one- to five-year range. Typical contracts also require that the subcontractor name the owner, the architect, the general contractor and other third parties as “additional insured” parties, entitled to coverage under the insured subcontractor’s CGL policy. Naming additional insured parties requires a separate endorsement to that policy.
This means that as a subcontractor, you can be held liable for claims of property damage or bodily injury resulting from a defect in your work. It is also critical to maintain this coverage into the future; failure to do so could lead to a breach-of-contract lawsuit brought by the contractor or other party.
It is important to understand this commitment when signing the contract – the insurance commitment doesn’t end with the project. Further, in the event of a large claim, the subcontractor could be faced with a substantial increase in premiums on the policy.
What can you do to reduce the risk of a claim being filed against you for a defect in your completed work? To avoid litigation, it is crucial to know local regulations and adequately document proper performance. Know your company’s documentation practices relative to each subcontract, and carefully keep records of all processes.
Respecting the Contract
It is crucial for subcontractors to respect this requirement if included in the contract. Failure to do so could result in breach-of-contract lawsuits. Naming additional insured parties can be complicated, and it is very important to work closely with The Buckner Company to ensure that your contractual obligations are satisfied.
Installing floor joists and decking can be a dangerous task if precautions are not taken to prevent falls. It is important to protect workers engaged in “leading edge” work to ensure that they do not fall through openings to lower levels. Read on to learn about the risks associated with these jobs and ways to prevent injuries on the site.
Risks While Installing Floor Joists and Decking
Floor joists are typically set directly over foundation walls or framed walls. If workers stand on the joists or walls without fall protection, they can fall through to lower levels. Fall hazards are likely to be present if the structure has multiple stories. The use of effective fall protection can prevent a serious fall.
Employers must provide a training program for each worker who might be exposed to fall hazards. The program must enable each worker to recognize fall hazards and train each worker in the procedures to follow to minimize these hazards. For fall protection training requirements, refer to 29 CFR 1926.503, Training Requirements for Fall Protection. This regulation was the fourth most-cited standard by OSHA in the residential building construction subsector (NAICS 2361) during the 2013 fiscal year. In all cases, employers must evaluate the hazards and take steps to reduce the risk of falls.
Planning for the use of fall protection equipment can help employers protect workers from falls. Before beginning a job, identify fall protection needs. Once appropriate fall protection systems have been identified, have those systems in place before the workers report to the job.
Using the Right Equipment
Employers generally must ensure that workers use fall protection meeting OSHA requirements whenever they work 6 feet or more above a lower level (29 CFR 1926.501(b)(13); this was the most-cited OSHA standard in the residential building construction subsector in 2013). Guardrail systems and personal fall arrest systems are available that can provide workers the flexibility they need during floor joist and decking installation. Some systems are more efficient than others because, in many cases, the employer can use the same system for both tasks. Employers may also choose to use scaffolds or ladders for floor joist installation and decking.
Note: OSHA’s fall protection requirements for residential construction work performed on scaffolds and ladders are specified in Subpart L and Subpart X respectively, not in 29 CFR 1926.501(b)(13).
Scaffolds, erected on the inside or outside of the house, can be used while workers install floor joists. Engineered bracket scaffold systems and job-built scaffold systems can provide workers with stable work platforms when they install joists and possibly while they attach some of the decking. These types of scaffolds can be adjusted to a comfortable work height. Always follow the manufacturer’s instructions or consult a qualified person to ensure that the scaffold systems are used safely on the site.
Employers must ensure that employees on scaffold systems 10 or more feet above a lower level are protected from falls. 29 CFR 1926.451, General Scaffold Requirements, was the second-most-cited standard by OSHA in the residential building construction subsector, costing employers an average of over $1,400 per violation in 2013.
Mobile scaffolds can be an effective method for lifting workers up while providing protection from falls. For work on the first floor of a residence, mobile scaffolds can be placed on the cured concrete basement floor. From the elevated platforms, workers can install primary beams and floor joists, and they may also be able to tack some of the decking into place. For complete requirements for scaffolds, refer to 29 CFR 1926 Subpart L – Scaffolds.
Ladders (A-frame and platform)
Workers can use A-frame and platform ladders to install joists and decking. Platform ladders can provide workers a stable work base and give them more flexibility while maneuvering and positioning joists into place. Always follow the manufacturer’s instructions for the safe use of, and load limits for, ladders in use. The average cost per citation for 29 CFR 1926.105, Ladders, was nearly $1,200 in 2013.
Personal Fall Arrest Systems (PFAS)
Once the first row of subfloor has been secured, a PFAS can be used. A PFAS is designed to safely stop a fall before the workers strikes a lower level. The system includes three major components:
- An anchorage to which the other components of the PFAS are rigged
- A full-body harness worn by the worker
- A connector, such as a lanyard or lifeline, linking the harness to the anchorage. A rip-stitch lanyard, or deceleration device, is typically a part of the system.
For more information on the requirements for a PFAS, see 29 CFR 1926.502(d).
Strap anchors and specially-made leading edge retractable lifeline systems are also options to consider.
OSHA requires that anchors for a PFAS should either be able to hold at least 5,000 pounds per worker or maintain a safety factor of at least two (twice the impact load) and be used under the supervision of a qualified person. Always follow the manufacturer’s instructions or consult a qualified person when installing anchors to ensure that they are strong enough to hold the sudden weight of a falling worker. There are anchorages available on the market that can meet OSHA’s strength requirements if they are installed in accordance with the manufacturer’s instructions, with the right number of properly sized nails or screws.
Remember that workers must use full-body harnesses in fall arrest systems. Body belts can cause serious injury during a fall, and OSHA prohibits their use as a part of fall arrest systems.
Fall restraint systems prevent falls by keeping the worker from reaching a fall hazard. While fall restraint systems are not mentioned in OSHA’s fall protection rules, OSHA will accept a properly used fall restraint system in place of a PFAS when the restraint system is rigged so that the worker cannot get to the fall hazard. In effect, if properly used, the system tethers a worker in a manner that will not allow a fall of any distance. A fall restraint system is comprised of a body belt or body harness, anchorage, connectors and other necessary equipment. Other components typically include a lanyard, and may also include a lifeline and other necessary equipment. A self-retracting lanyard is not appropriate for a fall restraint system unless the worker cannot fully each the fall hazard when the lanyard is fully extended.
Always follow the manufacturer’s instructions or consult a qualified person to ensure proper installation of anchor points. OSHA recommends that fall restraint systems have the capacity to withstand 3,000 pounds of force or twice the maximum expected force that is needed to restrain the worker from exposure to the fall hazard.
As a result, fall restraint may be a viable way to provide fall protection in situations in which the employer has concerns about the adequacy of available anchorage points for fall arrest equipment.
Guardrails can be used to protect workers from falling through walls, floor openings or window openings that are 6 feet or higher above a lower level. During multi-story construction, many employers provide fall protection by installing guardrails to exterior wall sections prior to erecting them into place. This ensures perimeter protection before workers begin activities on each floor. Placing joists and adding subfloors can be accomplished while workers are protected from falls.
Written Fall Protection Plans
When working at heights of 6 feet or greater, if the employer does not use ladders, scaffolds, aerial lifts or fall restraint systems and can demonstrate that it is not feasible or would create a greater hazard to use conventional fall protection (guardrails, safety nets or a PFAS), the employer must develop a written site-specific fall protection plan in accordance with 29 CFR 1926.502(k). The plan must be prepared by a qualified person. This person could be the owner, the supervisor or any other worker who has extensive knowledge, training and experience with fall protection and is able to solve problems relating to fall protection.
The site-specific fall protection plan must document, for each location, why the use of conventional fall protection equipment is not feasible or will create a greater hazard. The plan must also describe the alternative methods that the employer will use so that workers are protected from falls. Workers and their supervisors must be trained on the proper use of those other fall protection methods.
Contact The Buckner Company today to learn more about protecting your workers from falls on the construction site.
Chances are your organization has a process for making significant purchases. But does that process include medical care for injured employees? Probably not. Without any guidance, your injured employees may seek care from their family doctors or other general practitioners in your health care network. However, these care providers may not be optimally qualified to treat occupational injuries.
By partnering with an appropriate medical provider you can improve injured employees’ access to occupational health care and enhance the effectiveness of their treatments. You can also reduce your workers’ compensation costs by returning employees to productive work as soon as possible.
Choosing the Right Provider
Relying on the credentialing process of your group health network may not be enough to assure your employees are receiving the best occupational medical care. Just because a provider is credentialed through a network doesn’t mean that they are best qualified to treat workplace injuries.
Without a pre-arranged plan, your employee may end up with a medical provider who does not give adequate consideration to a work-focused physical examination. You want a provider who will establish causation for the injury and develop a treatment plan to achieve maximum medical improvement in the shortest period of time.
The key is to recognize the important differences between the occupational health delivery system and the general medical community. Your company needs to find and partner with medical providers that share the following characteristics:
- Occupational health delivery and injury management are among their core practice areas.
- Their mission and vision support your goals of keeping your employees safe, healthy and on the job.
- They use evidence-based protocols, such as those established by the American College of Occupational and Environmental Medicine (ACOEM), to find the optimal treatments and outcomes for your employees, and to benchmark and monitor treatment outcomes and utilization.
Early Return to Work
In recent years, the frequency of workers’ compensation claims has declined, yet workers’ compensation costs continue to climb. Medical, lost time and other claim costs continue to trend higher despite employer safety initiatives and persistent government efforts at policy reform.
Partnering with the right medical provider is one way to combat this trend. Study after study has shown that workers who return to work within three or four days are much less likely to file lost time claims than those with longer absences. Providers who understand this important dynamic – and who make prompt recommendations for returning employees to work with any appropriate restrictions – are your primary allies in keeping claim costs down.
Your relationship with medical providers will help you control costs in several specific ways – some of which may not be obvious:
- Employees will return to work sooner, thus keeping the claim “medical-only” in many cases. Medical-only classification rules vary by state, but this has a significant impact on the workers’ compensation modification factor.
- The medical-related costs of the claim will be reduced because the treatment plan is more effective.
- The indemnity-related costs of the claim (the payments associated with lost time) will be reduced because the treatment plan results in the employee returning to work sooner, or on modified duty.
- Your employees will be more likely to approach an approved occupational medical provider with a positive attitude and expectations. This decreases the potential for a “malingering” claim and potential litigation.
Developing a relationship with the proper provider may seem daunting, but with a little forethought you will be able to build a successful relationship that will offer continued benefits. To begin:
Develop a contact list of medical providers: Once you have your list, contact the providers by phone. Get the names of the medical director, clinic director, business manager or clinic marketing staff. Don’t be intimidated by communicating with medical professionals. Most clinics are eager for new business and will be more than willing to discuss options with you.
Qualify Providers: The purpose of your visit to the provider is two-fold: you want to share more information about your company, its operations and its Return to Work program goals, and you want to learn if this provider will meet those goals. It is a good business practice to qualify medical services vendors the same way you would qualify the vendors of any other important products or services your business needs. In your discussions with a clinic, be clear that your focus is not to negotiate a deeply discounted fee schedule. Instead, communicate that you are offering to provide regular business to the clinic in exchange for their commitment to certain requirements.
Execute Performance Agreements Between Selected Providers and Your Organization: Once you have conducted your evaluation of the clinics and selected the one(s) that best suit your needs, it’s time to execute clinic and employer performance agreements to define your mutual expectations. These non-binding agreements are simply a reminder to all parties of the objectives of the relationship. You may need to negotiate the finer details, but the general purpose of the agreement should be acceptable to the majority of practices.
Execute Return to Work Agreements with Employees: After clinic and employer performance agreements have been completed, you should execute a return to work agreement with your employees. State law will determine the level of autonomy your employees have when choosing a provider. However, this agreement helps ensure that your employees are informed of the relationship your company has in place with medical providers. It is important for employees to understand that these providers were selected because they are well qualified to serve injured workers and the return to work process. Even if you are in a state where employees can select any physician, this agreement will still alert them to the distinction between occupational health medicine and general internal medicine.
Monitor Performance: With a strong clinic relationship, you can expect improvements in several measurable aspects of the return to work process. Look for:
- A decrease in the various parameters measuring average time between events
- A decrease in the percentage of off-duty workers
- A decrease in the number of lost workdays
- A decrease in the indemnity portion of losses
- A decrease in the number of injuries exceeding expected disability duration
If you are not observing improvements, discuss the data with the clinic to determine whether process changes can improve the analytical measures.
In all states but Washington, workers’ compensation insurance uses a remuneration process as the basis for determining the workers’ compensation exposure. Payroll is the most common part of remuneration; however, other components are included as well, such as vacation pay and meals. Most states abide by the rules established by the National Council on Compensation Insurance (NCCI), though some have chosen not to utilize the NCCI as a rating agency. Therefore, their remuneration is defined differently. Employers should check with their local state regulators to find out what rules apply.
Inclusions and Exclusions
Under the NCCI, remuneration INCLUDES the following components:
- Payroll, both salary and hourly
- Overtime pay (less the premium portion)
- Holiday, vacation and sick pay
- Contributions required by law to statutory insurance or pension plans which would be paid by the employee
- Incentive plans and profit-sharing plans
- Payments made to employees for employee-supplied hand and power tools
- Rental value of housing provided to employees
- Value of lodging provided by employers
- Value of meals provided by employers
- Payments for employee savings plans, retirement or cafeteria plans that are made through salary reductions from employees’ gross pay or through annuity plans
- Davis-Bacon or a similar wage laws (contractors paying prevailing wages who are able to deduct from workers’ compensation payroll to determine premiums made to health and pension plans for contracted workers)
- Expense reimbursements to employees that were not a verifiable expense
Under the NCCI, remuneration DOES NOT INCLUDE the following components:
- Tips and gratuities received by employees
- Payments made by employers for group insurance plans
- Values of special awards paid for inventions and/or discoveries
- Dismissal or severance pay (except for time worked or accrued vacation pay)
- Value of employer-provided aircrafts
- Value of employer-provided automobiles
- Value of employer-provided aircraft flights (free or discounted)
- Value of employer-provided incentive vacations given to contest-winning employees
- Employer-provided discounts on properties or services
- Employer-provided tickets to entertainment events
- Payments to military reservists called to active duty status
- Work uniform allowances
- Sick pay (if not from a non-related third party)
Under NCCI rules, the only pay that can be adjusted to be considered normal salary or hourly pay is overtime, either time and a half or double time. Most states comply with the NCCI overtime rule; however, Pennsylvania and Delaware do not allow overtime premium portions to be removed from payroll calculations.
Overall, a workers’ compensation premium begins with an estimated premium and once the policy expires, the insurance company will determine the actual premium through remuneration. To avoid mistakes during the audit process, request a copy of the auditor’s notes – this serves as an explanation of how the auditor determined remuneration and how values were placed in various classifications. For more information on workers’ compensation insurance, contact The Buckner Company.
Waddell’s signs are a group of physical signs designed specifically to detect non-organic components to lower back pain. A non-organic problem or symptom is one that deviates from the usual presentation of a particular disease.
When Dr. Gordon Waddell first developed these signs in the 1980s, physicians used them to detect malingering patients, especially those trying to fake injuries for workers’ compensation benefits. However, doctors today widely recognize that this brief examination serves simply as a preliminary step to help identify patients whose conditions may require a more detailed assessment.
Some employers misunderstand Waddell’s signs, thinking they are tests doctors can use to detect workers’ compensation fraud among employees with all types of injuries. In fact, Waddell developed these signs to apply exclusively to lower back injuries and did not intend for the five signs to be completely indicative of malingering. As an employer, it is important for you to understand how physicians use Waddell’s signs and why the presence of any of the signs may — or may not — indicate workers’ compensation fraud or impact the employee’s ability to return to work successfully.
The Five Signs
- Tenderness – The patient has skin surface tenderness that is not related to a particular skeletal or neuromuscular structure, meaning it occurs over a wide area or extends across several unrelated structures.
- Simulation Tests – The patient complains of pain in the lower back when the examiner presses down on top of the head or rotates the shoulders and pelvis together on the same plane, neither of which should produce this type of pain.
- Distraction Tests – The examiner does the same test twice, once while distracting the patient, and he/she only complains of pain in one test. The most common example is when a patient complains of pain on a straight leg raise, but not if the examiner extends the knee in the same motion while testing the reflexes.
- Regional Disturbances – This can either be a regional weakness or a regional sensory change. Either way, it involves dysfunction over a widespread area that cannot be explained based on anatomy or neurological patterns.
- Overreaction – This is an exaggerated pain response to a stimulus, which may include verbalization, facial expression, muscle tension and tremor. It also includes any response that the patient does not reproduce when the examiner gives the same stimulus later.
What They Mean
In short, a high Waddell score – meaning the presence of three or more of the signs explained above – indicates possible symptom magnification or illness behavior. One or two signs present generally do not indicate non-organic symptoms, though if you are truly concerned, you could require the employee to go in for more conclusive, concrete tests.
Several researchers across medical disciplines have found that non-organic signs and positive Waddell tests occur more frequently in lower back pain patients who are anticipating or are already receiving, financial compensation during the injury.
Also, there is a connection between Waddell’s signs and the ability – or desire – of employees to return to work. Several doctors have recently studied the impact of Waddell’s signs on the workplace. In one study, at least one non-organic sign was present in 47 percent of patients whose work status did not improve. Comparatively, a non-organic sign was only found in 12 percent of patients who demonstrated significant improvement. Another study found that of patients with non-organic symptoms whose doctors give a vague diagnosis or a nebulous treatment plan, less than 40 percent return to work.
The bottom line is that it is crucial for employers to communicate their intentions and efforts to physicians so they understand the importance of the employee returning to work. Rather than trying to nail employees for workers’ compensation fraud using Waddell’s test, which may not indicate malignance in many cases, funnel your efforts into a solid, comprehensive return to work program. Studies around Waddell’s test all indicate that the most important factor in avoiding fraud and getting employees healthy is requiring and enforcing return to work duties. Letting employees know that being injured is not a free ride is vital to your company’s cost containment strategy.
If you need assistance in creating or updating your return to work program, contact us at (801) 937-6700 today. The Buckner Company can ensure your employees stay healthy and that injured workers get back on track as quickly as possible.
The Occupational Safety and Health Administration (OSHA) created the Office of Small Business Assistance to help small business employers understand their safety and health obligations, access compliance information, provide guidance on regulatory standards and to educate them about cost-effective means for ensuring the safety and health of worksites.
OSHA encourages all businesses to establish safety and health programs, and find and fix hazards to prevent workplace injuries and illnesses. To assist in your safety efforts, OSHA offers many resources designed specifically for smaller employers, including:
- OSHA’s Non-Retaliation Policy
- Information inquiries received by the agency regarding safety and health regulations or other safety-related subjects will not trigger an inspection for your small business.
- There are a few rare exceptions to the policy, such as the employer notifying OSHA of the presence of an imminent danger or the occurrence of a fatality. However, OSHA policy is to provide assistance to help employers prevent and reduce workplace fatalities, illnesses and injuries.
- Penalty Reductions for Small Business
- OSHA considers the size of the employer, among other factors, when determining the penalty to be proposed for any violation. OSHA has always had detailed procedures in place for making this determination, which are currently outlined in the OSHA Field Operations Manual (FOM). The FOM states that proposed penalties may be reduced by the following percentages for smaller businesses:
- Up to a 60 percent penalty reduction may be applied if an employer has 25 employees or fewer
- Up to a 40 percent reduction if the employer has 26-100 employees
- Up to a 20 percent reduction if the employer has 101-250 employees
Benefits for Your Business:
As a small business owner, you are privy to some perks provided by OSHA. In addition to the possibility of lower fines, small businesses also receive the following benefits:
- Exemptions from Recordkeeping
- Employers with 10 or fewer employees are exempt from most, though not all, OSHA recordkeeping requirements for recording and reporting occupational injuries and illnesses.
- OSHA offers free assistance in identifying workplace hazards and establishing or improving safety and health management systems corporation-wide. Employers in high-hazard industries or those involved in hazardous operations receive priority. Largely funded by OSHA, consultation programs are run by state agencies and offer an array of services.
- Key services offered by consultation include:
- Help in recognizing hazards in the workplace.
- Suggested approaches or options for solving a safety or health problem.
- Sources of help available to a company needing further assistance.
- Written reports that summarize the findings of on-site reviews of safety and health.
- Assistance in developing or maintaining an effective safety and health management system.
- Training and education for a small business, its employees at the workplace and, in some cases, away from the worksite.
- Recognition by OSHA’s Safety and Health Achievement Recognition Program (SHARP).
- An effective workplace safety and health management system at a small business worksite(s) will enable the small employer to:
- Recognize and remove hazards from the worksite.
- Protect workers from injury and illness.
- Prevent loss of life.
- Cultivate informed employees who take responsibility for their own safety, their coworkers’ safety and for worksite safety as a whole.
- Improve employee morale.
- An increased understanding of workplace hazards and remedies will put small business managers in a better position to:
- Comply with federal and state safety and health requirements.
- Become more effective at their jobs.
- Increase productivity rates and assure product quality.
- An exemplary workplace safety and health management system is good business sense that also makes financial sense because it will allow a small business to:
- Learn first-hand that the cost of accident prevention is far lower than the cost of accidents.
- Improve the bottom line by lowering injury and illness rates, decreasing workers’ compensation costs, reducing lost workdays and limiting equipment damage and product losses.
OSHA’s Office of Small Business Assistance can be contacted by the following:
- By phone – 202-693-2220
- Write to the U.S. Department of Labor at 200 Constitution Avenue, NW, Room N-3700, Washington, DC 20210.
- On the Web at www.osha.gov/dcsp/osba/index.html
Other Cooperative Programs
Information about OSHA’s cooperative programs is available from any OSHA Regional Office, OSHA Area Office or by contacting OSHA’s Directorate of Cooperative and State Programs at the U.S. Department of Labor, Occupational Safety and Health Administration, 200 Constitution Avenue, NW, Room N-3700, Washington, DC 20210, phone 202-693-2200.
Voluntary Protection Programs (VPP)
OSHA’s VPP provide an opportunity for labor, management and government to work together cooperatively to further the goal of providing effective safety and health protection in the workplace. The VPP grant recognition to worksites that provide or are committed to providing effective protection for their employees through implementation of systematically managed safety and health programs. The Star Program is for worksites that have at least one year’s experience with an effectively implemented safety and health program. The Merit Program is for employers working toward an effectively implemented program. The Demonstration Program is for worksites with programs at Star quality but with some aspect of their program that requires further study by OSHA. All participants work in partnership with OSHA and provide models for OSHA as well as for their industries.
OSHA Strategic Partnership Program (OSPP)
OSPP is designed to enable groups of employers, employees and employee representatives to partner with OSHA and enter into an extended, voluntary, cooperative relationship in order to encourage, assist and recognize efforts to eliminate serious hazards and achieve a high level of worker safety and health.
OSHA Alliance Program
Alliances are goal-oriented, written agreements between OSHA and organizations to work together to prevent workplace injuries and illnesses. Organizations include employers, employees, labor unions, trade or professional groups, educational institutions and government agencies. Alliances focus on one or more of the following goals: training and education; outreach and communications; and promoting the national dialogue on occupational safety and health.
Other Sources of Assistance:
Voluntary Protection Programs Participants’ Association (VPPPA)
The VPPPA is a private organization made up of VPP participant companies. The VPPPA has members in most states and is willing to provide information, outreach and mentoring to help worksites improve their safety and health programs. Chapters of the national association have been formed in most OSHA regions, and members of these chapters also are willing to provide the kind of assistance provided by the national organization.
Small Business Development Centers
The U.S. Small Business Administration (SBA) administers the Small Business Development Center Program to provide management and technical assistance to current and prospective small business owners. There is a Small Business Development Center (SBDC) in every state, the District of Columbia, Puerto Rico, Guam, Samoa and the U.S. Virgin Islands, with more than 1,000 service centers across the country. SBDC assistance is tailored to the local community and the needs of individual clients and designed to deliver up-to-date counseling, training and technical assistance. Services could include helping small businesses with financial, marketing, production, organization, engineering and technical problems.
National Institute for Occupational Safety and Health (NIOSH)
NIOSH is a research agency in the U.S. Department of Health and Human Services, whereas OSHA is a regulatory agency in the U.S. Department of Labor. NIOSH conducts research and makes recommendations to prevent work-related illness and injury. NIOSH has produced a useful guide, Safety and Health Resource Guide for Small Businesses, with telephone numbers, e-mail address, websites and mailing information to enable small businesses to contact government agencies, private organizations, consultants and others who can help with occupational safety and health issues. The NIOSH toll-free phone number is 800-356-4674, or visit www.niosh.gov.
Trade Associations and Employer Groups
Due to the increase in job safety and health awareness resulting from OSHA activities, many trade associations and employer groups have put a new emphasis on safety and health matters to better serve their members. If you are a member of such a group, find out how it is assisting its members. If you are not a member, find out if these groups are circulating their materials to nonmembers.
Trade Unions and Employee Groups
If your employees are organized, set up some communications, as you do in normal labor relations, to get coordinated action on hazards in your business. Safety and health is one area where advance planning will stimulate action on common goals. Many trade unions have safety and health expertise that they are willing to share.
The National Safety Council and Local Chapters
The National Safety Council (NSC) has a broad range of information services available. If you have a local chapter of the NSC in your area, you can visit www.nsc.org to see how you can use materials pertaining to your business.
Financing Workplace Improvement
The SBA is authorized to make loans to assist small businesses with meeting OSHA standards. Because SBA’s definition of a “small” business varies from industry to industry, contact your local SBA field office to determine whether you qualify.
Understanding and utilizing a consulting actuary provides a competitive advantage for risk management professionals. While there is no guaranteed way to predict the future, an actuarial analysis looks at historical data to provide you with a forecast of coming financial situations, giving you the opportunity to prepare for upcoming expenses. It can also help you justify current programs and negotiate lower rates with insurance providers.
Budgeting and Setting Reserves
An actuarial analysis is imperative to appropriately account for outstanding liabilities relating to risk financing programs. First, an analytically sound estimate of ultimate incurred losses is required to fully recognize the amount of the liability. Next, an estimate of the timing of the payments in a cash flow analysis is needed to appropriately budget the cash requirements. Budgeting without reference to an actuarial analysis can lead to significant financial mistakes, which leave an organization unprepared to handle a loss. Financial Accounting Standard 112 (FAS 112) requires that certain employment benefits, such as workers’ compensation, be accounted for according to specific standards. This can be met by an actuarial analysis.
Alternative Loss Financing Decisions
Selecting an appropriate loss financing plan involves a wide ranging set of issues. But there is one point everyone agrees on: the losses are the largest and most significant piece of any plan. Since the losses are being financed, the loss estimate has the biggest impact on which program is the best option. Therefore, an actuarial analysis is a critical first step to any loss financing decision. Once a plan is selected, whether it is self-insurance, a captive, a large deductible program or some other type of loss-sensitive alternative, an actuarial analysis is commonly an annual — or in some cases more frequent — project.
Determining the effectiveness of a loss control or loss prevention program can take years. But with the use of an actuarial analysis and pure loss rates (the dollars of loss per unit of exposure), effectiveness of a program can be gauged more quickly. Actuaries can review data from years prior to a program’s implementation and determine an average loss rate to be used as a benchmark. Then a new pure loss rate can be computed soon after the completion of the first year of the program. Comparing the new pure loss rate against the benchmark will help you assess the effectiveness of the program, and this comparison can be updated annually for an ongoing assessment.
Negotiating Security Requirements
The negotiation of security requirements is one of the most critical situations in which an organization can benefit from a relationship with a consulting actuary. The methodology that an insurance company uses to establish the amount of a security requirement is not always obvious. The risk manager should work with a consulting actuary to complete a thorough actuarial analysis that considers the unique circumstances of the organization. This would include numerous factors such as changes in reserve philosophy, growth or downsizing, new loss control programs, mergers or divestitures, potential claim recoveries, unique characteristics of specific divisions within the company and other such factors. An actuarial analysis is the most powerful negotiating tool an organization can use when discussing security requirements with an insurance company.
The health care reform law, known as the Affordable Care Act (ACA), makes significant changes to the U.S. health care system, including new coverage requirements, patient protections, and cost limitations. These changes generally apply to group health plans and health insurance issuers, but not to certain “excepted benefits.”
This Legislative Brief provides an overview of the types of plans that are subject to the ACA.
Group Health Plans and Health Insurance Issuers
In general, the ACA’s market reforms apply to group health plans and health insurance issuers offering group or individual health insurance coverage.
Generally, a plan is a group health plan if it provides health care and is maintained by an employer. Most employer-provided group health arrangements (whether insured or self-funded) will be group health plans for purposes of the ACA.
A “health insurance issuer” is an insurance company, insurance service or insurance organization, including a health maintenance organization (HMO), that is licensed to engage in the insurance business in a state and is subject to state insurance law.
“Health insurance coverage” means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise, and including items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer.
- Exemption for Group Health Plans with fewer than Two Current Employees
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) includes an exemption for plans with fewer than two participants who are current employees (including retiree-only plans that cover fewer than two participants who are current employees). The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (the Departments) have confirmed that this HIPAA provision also exempts these plans from the ACA’s market reforms.
Accordingly, under the terms of these statutory provisions, group health plans that do not cover at least two employees who are current employees (such as plans in which only retirees participate) are exempt from the Affordable Care Act’s market reform requirements.
- Excepted Benefits
HIPAA established certain categories of “excepted benefits” that generally are not governed by the HIPAA portability regulations. Employee benefits that qualify as excepted benefits under HIPAA are also not subject to the market reforms under the ACA, including the ACA’s prohibition on annual limits and preventive care coverage requirement.
The current HIPAA regulations establish the following four categories of excepted benefits. The benefits in the first category are excepted in all circumstances. In contrast, the benefits in the second, third and fourth categories are excepted only if certain conditions are met.
- Benefits That Are Generally Not Health Coverage
The first category includes benefits that are generally not health coverage, such as:
- Coverage only for accident (including accidental death and dismemberment);
- Disability income coverage;
- Liability insurance, including general liability insurance and automobile liability insurance;
- Coverage issued as a supplement to liability insurance;
- Workers’ compensation or similar coverage;
- Automobile medical payment insurance;
- Credit-only insurance (for example, mortgage insurance); and
- Coverage for on-site medical clinics.
- Limited Excepted Benefits
The second category of excepted benefits is limited excepted benefits, which may include limited-scope vision or dental benefits as well as benefits for long-term care, nursing home care, home health care or community-based care. In general, these limited benefits qualify as excepted benefits if they are provided under a separate policy, certificate or contract of insurance, or are otherwise not an integral part of a group health plan.
As set forth in the 2004 final HIPAA portability regulations, benefits are deemed not to be an integral part of a group health plan (whether benefits are provided through the same plan or a separate plan) only if the following two requirements are satisfied:
- Participants must have the right to elect not to receive coverage for the benefits; and
- If the participant elects to receive coverage for the benefits, the participant must pay an additional premium or contribution for that coverage.
Limited-scope dental benefits are benefits substantially all of which are for treatment of the mouth (including any organ or structure within the mouth). Limited-scope vision benefits are benefits substantially all of which are for treatment of the eye.
On Dec. 20, 2013, the Departments issued proposed regulations that would amend the limited excepted benefits category. The proposed regulations would expand limited excepted benefits by:
- Allowing self-insured plans to cover dental and vision benefits as excepted benefits without an extra premium payment;
- Permitting limited group wraparound coverage of individual coverage as excepted benefits; and
- Recognizing certain EAPs as excepted benefits.
Health Flexible Spending Arrangements (FSAs)
Benefits provided under a health flexible spending arrangement (health FSA) may also qualify as limited excepted benefits in certain circumstances. Health FSAs qualify as excepted benefits if they satisfy the availability AND maximum benefit requirements, as follows.
- Availability Requirement—Other non-excepted group health plan coverage (for example, coverage under a major medical group health plan) must be made available for the year to the class of participants by reason of their employment.
- Maximum Benefit Requirement—The maximum benefit payable under the health FSA to any participant for a year cannot exceed the greater of:
- Two times the participant’s salary reduction election under the health FSA for the year; or
- The amount of the participant’s salary reduction election for the health FSA for the year, plus $500.
- Non-coordinated Excepted Benefits
The third category of excepted benefits, referred to as “non-coordinated excepted benefits,” includes both coverage for only a specified disease or illness (such as cancer-only policies) and hospital indemnity or other fixed indemnity insurance. To qualify as excepted benefits, a hospital indemnity or other fixed indemnity insurance must pay a fixed dollar amount per day (or per other period) of hospitalization or illness regardless of the amount of expense incurred.
To be exempt under the non-coordinated excepted benefits category, benefits must:
- Be provided under a separate policy, certificate or contract of insurance;
- Not contain any coordination between the provision of the benefits and an exclusion of benefits under any group health plan maintained by the same plan sponsor; and
- Be paid with respect to an event, without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same plan sponsor.
On Jan. 9, 2014, the Departments issued an FAQ addressing whether fixed indemnity insurance may be considered an excepted benefit. With respect to group health insurance coverage that does not meet the definition of fixed indemnity excepted benefits (because it provides benefits other than on a per-period basis), coverage that supplements other group health plan coverage may, nonetheless, qualify as supplemental excepted benefits.
Furthermore, HHS intends to propose amendments to the regulations that would allow fixed indemnity coverage sold in the individual health insurance market to be considered to be an excepted benefit if it meets the following conditions:
- It is sold only to individuals who have other health coverage that is minimum essential coverage;
- There is no coordination between the provision of benefits and an exclusion of benefits under any other health coverage;
- The benefits are paid in a fixed dollar amount regardless of the amount of expenses incurred and without regard to the amount of benefits provided with respect to an event or service under any other health coverage; and
- A notice is displayed prominently in the plan materials informing policyholders that the coverage does not meet the definition of minimum essential coverage and will not satisfy the ACA’s individual mandate requirements.
If these proposed revisions are implemented, fixed indemnity insurance in the individual market would no longer have to pay benefits solely on a per-period basis to qualify as an excepted benefit.
Until HHS finalizes this rulemaking related to these proposed amendments, HHS will treat fixed indemnity coverage in the individual market as excepted benefits for enforcement purposes if it meets the conditions above in states where HHS has direct enforcement authority. For states with primary enforcement authority, HHS encourages those states to also treat this coverage as an excepted benefit and will not consider that a state is not substantially enforcing the individual market requirements merely because it does so.
- Supplemental Excepted Benefits
The fourth category of excepted benefits is supplemental excepted benefits. These benefits must be supplemental to Medicare or CHAMPVA/TRICARE coverage (or similar coverage that is supplemental to coverage provided under a group health plan) and provided under a separate policy, certificate or contract of insurance.
To qualify as “similar supplemental coverage,” the coverage must be specifically designed to fill gaps in primary coverage, such as coinsurance or deductibles. Similar supplemental coverage does not include coverage that becomes secondary or supplemental only under a coordination of benefits provision.
- Expatriate Health Plans
On March 8, 2013, the Departments issued an FAQ that provides transition relief for expatriate health plans with respect to certain ACA provisions.
For purposes of this temporary transitional relief, an expatriate health plan is an insured group health plan with respect to which enrollment is limited to primary insureds who reside outside of their home country for at least six months of the plan year and any covered dependents, and the plan’s associated group health insurance coverage. Coverage provided under an expatriate group health plan is considered a form of minimum essential coverage.
According to the FAQ, for expatriate plans with plan years ending on or before Dec. 31, 2015, the Departments will consider the requirements of subtitles A and C of Title I of the ACA satisfied if the plan and issuer comply with:
- The pre-ACA version of Title XXVII of the Public Health Service Act (PHS Act); and
- Other applicable law under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (Code) including, for example:
- The mental health parity provisions;
- The HIPAA nondiscrimination provisions;
- The ERISA section 503 requirements for claims procedures; and
- Any reporting and disclosure obligations under ERISA Part 1.
In a separate set of FAQs, the Departments announced a limited non-enforcement policy for expatriate plans with respect to the summary of benefits and coverage (SBC) requirement. They acknowledged that expatriate plans may experience administrative challenges and costs in preparing SBCs (for example, due to distinct benefits and claims systems). As a result, the Departments stated that they will not take any enforcement action against a group health plan or group health insurance issuer for failing to provide an SBC with respect to expatriate coverage during the first year that the SBC requirement applies.
Many companies operate wellness programs to keep their employees productive and their insurance costs down. Some wellness programs include incentives or rewards to promote healthy lifestyle choices and discourage behaviors that are detrimental to employees’ good health.
The Affordable Care Act (ACA) established new guidelines to regulate and encourage the use of workplace wellness programs. Beginning in 2014, these rules allow employers to increase incentives or rewards offered as part of a health-contingent wellness program, provided the program follows certain guidelines.
While it is important to note that companies must follow specific guidelines if they choose to offer a wellness program, they are not required to provide a program to employees.
Types of Wellness Programs
Not all wellness programs are the same. Some offer incentives to all enrollees, while others concentrate on rewarding specific health or fitness goals. The incentives available to employees can differ significantly depending on the type of wellness program instituted at your company.
Under the ACA, workplace wellness programs can be divided into two general categories: participatory wellness programs and health-contingent wellness programs.
Participatory wellness programs are open to any employee who wishes to participate. If any reward is offered, you will not have to meet specific certain goals to obtain it. You receive the reward simply for enrolling.
Participatory wellness programs can include:
- Smoking cessation programs (regardless of whether the employee quits smoking)
- Gym membership reimbursement
- Undergoing diagnostic testing and screenings (regardless of outcomes)
- Health education classes or seminars
These types of programs can be reimbursed, subsidized or incentivized by your employer as a reward if it chooses to do so. There is no limit to the type of reward given for participating, as long as the reward is not dependent on an outcome.
Health-contingent wellness programs are programs that reward employees for achieving a specific health goal. There are two types of health-contingent wellness programs:
- Activity-only wellness programs require an individual to perform or complete a health-related activity to obtain a reward (for example, walking, diet or exercise programs). While you are obligated to perform an activity to obtain a reward, you will not have to achieve or maintain a specific health outcome, like losing weight or reducing your blood pressure.
- Outcome-based wellness programs require an individual to attain or maintain a certain health outcome, like meeting exercise targets or not smoking, in order to obtain a reward. Generally, these programs have two tiers: a measurement, test or screening as part of an initial standard, and a larger program that then targets individuals who do not meet the initial standard with wellness activities.
Health-contingent Wellness Program Rewards
There is a maximum reward that can be given under a health-contingent wellness program.
For 2014, rewards for most programs and goals can equal up to 30 percent of the cost of the employer’s health coverage for an employee and his or her dependents.
However, if the program is specifically designed to prevent smoking, the total amount of incentives offered can equal up to 50 percent of an employee’s cost of health coverage.
Employers are required to offer alternative standards for employees who cannot reasonably be expected to complete health-contingent programs due to a medical condition.
For activity-only wellness programs, health plans can require employees to have a physician verify that their health condition makes it medically inadvisable to participate in the activity-only wellness program as designed.
For outcome-based wellness programs, health plans cannot ask for a physician to verify that the initial standard is medically inadvisable or too difficult because of a medical condition.
The availability of the alternative must be disclosed in wellness program materials.
With all the equipment you may use to do your job, ensuring that your body is protected is extremely important in agriculture. This applies to every part of your body, especially your feet. Since you are often exposed to conditions that could potentially be hazardous to your feet, wearing safety footwear is essential in protecting your feet against injury.
There are several factors that determine what type of footwear is appropriate for you:
- Job activity
- Equipment handled
- Potential hazards
- Requirements for the position
What’s Your Type?
There are several types of safety boots made for workers operating under specific conditions:
- High-cut: protect feet and ankles from sparks, molten metals and chemicals
- Steel toe, reinforced safety toe or reinforced toecap: cushion feet in case of contact with heavy materials
- Reinforced metal soles: protect feet against punctures from nails, screws or scrap metal
- Steel mid-soles: protect feet against puncture from sharp objects
- Non-slip soles (rubber or wooden): protect worker from slipping on wet surfaces
- Insulated footwear: protect feet against extremely cold temperatures
- Metal-free footwear: worn when working around electricity
- Treated footwear: protect against chemicals
The Right Fit for You
Once you determine what safety footwear is needed, select the boot with the right fit for your foot. Follow these tips when making your selection:
- Walk around to ensure comfort
- Examine toe room—there should be ½ to 1 inch from the big toe to the front of the shoe with your heavy work socks or arch supports
- When laced completely, the boot should fit snug around the heel and ankle
Keep Them Like New
To maintain your boots, apply a water-resistant protective coating. Also regularly check for wear and tear to ensure that your feet are always fully protected.