This new bill, commencing July 1, 2020, would expand those requirements to apply to large group health care service plan contracts and health insurance policies and would impose additional rate filing requirements on large group contracts and policies. On and after July 1, 2020, the bill would require a plan or insurer to disclose with a rate filing specified information by geographic region for individual, grandfathered group, and nongrandfathered group contracts and policies, including the price paid compared to the price paid by the Medicare Program for the same services in each benefit category. The bill would eliminate separate reporting and disclosure requirements for a health plan that exclusively contracts with no more than 2 medical groups in the state.

On and after July 1, 2020, the bill would require a health care service plan that fails to file specified information to disclose other information by market and by geographic region. If a plan or insurer fails to provide all the information required, the bill would specify that the filing is an unjustified rate on and after July 1, 2020. The bill would authorize a large group contract holder that has experience-rated or blended coverage and meets specified criteria to apply to the Department of Managed Health Care or Department of Insurance, as appropriate, within 60 days of receiving notice of a rate change to review a rate change and determine if it is unreasonable or not justified, and would require the appropriate department to use reasonable efforts to complete the review within 60 days of receiving all the information required to make a determination.

The bill would require the Department of Managed Health Care to conduct a public meeting regarding large group rates in every even-numbered year. Because a willful violation of the bill’s requirements relative to health care service plans would be a crime, the bill would impose a state-mandated local program.

Read the full bill here: http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB731

One of our providers, Philadelphia Insurance Companies, conducted a new research study to examine how nonprofits purchase insurance and their primary challenges.

A large number of nonprofits participated in the study, in fact almost 200. Here are some of the key findings of the report:

• Insurance providers are evaluated through referrals, talking to peers, and face-to-face meetings with insurance representatives
• Nonprofits top 3 challenges are cultivating donors and stewardship, having adequate staffing, and retaining donors
• 46% of non-profits are shifting fundraising activities to the web and social media
• 43% are adjusting strategies based on analyzing donor actions

Download the full report here:  Full report

Fascinating article on the latest trends we can expect to see in 2020. Here is the list.

1. – Cellular beauty is here
2. – Nutrition will be clear once and for all
3. – Anxiety about our planet is on the rise
4. – Downtime will become productive
5.  – Digital detoxing
6. – Sustainable packaging will be used by big brands
7. – Healthy aging is accepted!
8. – Focus on raising independent kids
9. – Keto diet will be easily accessible
10. – The way we approach and discuss death will change
11. – Clean cereals are coming
12. – Real wellness is here 

Read all the details of each trend here: http://bit.ly/2LyYQKq

Never is it easy to transition Executive Director but you may be interested in reading the story of one E.D. and their transition. We enjoyed this story so much that we wanted to share it with you.
Some of the thoughts mentioned in the article included:
The critical elements to a successful E.D. transition include paying careful attention to how to inform your board, staff, media, and the community; how to conduct a search; events to say goodbye and hello; and how to document key contacts.

Read the full story here: bit.ly/364Qn9A

Gov.  Gavin Newsom has signed a measure into law that will greatly expand when employers are required to report workplace injuries to Cal/OSHA. The new law, AB 1805, broadens the scope of what will be classified as a serious illness or injury which regulations require employers to report to Cal/OSHA “immediately.” As of yet there is no effective date for this new law, but observers say regulations will first have to be written, a process that would start next year.

The definition of “serious injury or illness” has for decades been an injury or illness that requires inpatient hospitalization for more than 24 hours for treatment, or if an employee suffers a “loss of member” or serious disfigurement. The definition has excluded hospitalizations for medical observation. Serious injuries caused by a commission of a penal code violation (a criminal assault and battery), or a  vehicle accident on a public road or highway have also been excluded.

Compliance

Rules for reporting serious injuries and illness or fatalities are as follows:
• The report must be made within eight hours of the employer knowing, or with “diligent inquiry” should have known, about the serious injury or illness (or fatality).
• The report must be made by phone to the nearest Cal/ OSHA district office (note that a companion bill, AB 1804, eliminated e-mail as a means of reporting because e-mail can allow for incomplete incident reporting).

Because of the “diligent inquiry” component, employers should monitor any injured worker’s condition once they learn of an injury, particularly if they need to seek out medical treatment. A member of the staff should be on hand to monitor the employee and report to supervisors immediately if that person will need to be hospitalized. Employers should make sure that supervisors are made aware of the new rules so that any time a worker is injured to the point that they need to be  hospitalized, they know to notify Cal/OSHA within eight hours.

Also, if you have an employee that suffers a medical episode at work – such as a seizure, heart attack or stroke – you are required to report the hospitalization to Cal/OSHA. It’s better to err on the side of caution if an employee is hospitalized for any reason. Not doing so can result in penalties for failure to report or failing to report in a timely manner. Accordingly, it is important to educate management representatives, particularly those charged with the responsibility to make reports to Cal/OSHA, about the nuances of Cal/OSHA’s reporting rules.

One final note: The results of a serious injury or illness or workplace fatality will usually trigger a site inspection by Cal/OSHA, so be prepared if one should occur.

Worker’s Comp Insurance rates will likely continue sliding in 2020 after California’s rating agency submitted its recommendation that the state insurance commissioner reduces the average benchmark rates by 5.4%. If the recommendation is approved, it will be the rate ninth consecutive decrease since 2015 (some years had two decreases), which has resulted in the average benchmark rate for all class codes falling a combined 45% since then. 

The Workers’ Compensation Insurance Rating Bureau, which makes the filing at least once a year, said average claims costs continue falling due to the effects of reforms that took effect in 2014.  The Rating Bureau tracks workers’ comp costs in the state and makes the recommendations for changing the benchmark rates, which insurers use to price their policies. Every class code gets its own rate, which will change depending on the trends in claims costs and numbers for that class code.

WHY RATES ARE FALLING – Rates are still declining because:

• Old claims costs are less than expected.
• Claims are being settled more quickly.
• Drug costs continue falling sharply.
• Fewer liens on claims are being filed.

Insurers use the benchmark rates as guideposts for pricing their own policies, but in the end, they can price the policies as they wish. On top of the benchmark rate, insurers will add surcharges for various classes or regions, and add on administrative costs to arrive at their own rates. Also, rates will not fall for all employers.

 

 

 

 

 

Rates depend on a number of factors, including an employer’s claims history and region. Policies in Southern California, for instance, are often surcharged because of the amount of cumulative trauma claims filed in the region.  The state insurance commissioner will hold a hearing on the rate filing on October 14, and then make a final decision on the rate change.

What to do

Just because rates have been falling, do not waver in your focus on safety.  Here are some mistakes to avoid:

Complacency – When your premium falls, it’s easy to shift focus away from workplace safety, injury management and cost containment to other business matters. This is a mistake and can cost you in additional workplace injuries.
Focusing on just premiums – Indirect costs – including overtime, temporary labor, increased training, supervisor time, production delays, unhappy customers, increased stress, and property or equipment damage – represent several times the direct cost of an injury.
Expecting rates to stay low forever – Rates are cyclical. The key is to ride the low rates for as long as you can through unwavering attention to workplace safety and claims management.
Chasing low rates – One benefit you have from working with us is continuity, and jumping ship to another broker just to save a few thousand dollars on your premium is not always a smart choice, particularly if the new brokerage is not involved in helping you keep claims costs low.

 

 

Starting in 2020,  the threshold for California employers to be  eligible for experience rating (X-Mod) has been reduced by order of the state insurance commissioner. 

Commissioner Ricardo Lara in September approved the recommendations by the Workers’ Compensation Insurance Rating Bureau to lower thresholds for determining eligibility for experience rating and when a carrier needs to perform a physical audit of an employer’s payroll records.

NEW THRESHOLDS

Annual physical audit
As of Jan. 1, 2020: Any employer with $10,500 or more in annual premium.
Current threshold: $13,000 or more in annual premium.
Threshold for experience rating (to have an X-Mod)
As of Jan. 1, 2020: $9,700 in annual premium.
Current threshold: $10,000 or more in annual premium.

 

“Physical audit” is defined as an “audit of payroll, whether conducted at the policyholder’s location or at a  Remote site, that is based upon an auditor’s examination of the policyholder’s books of accounts and original payroll records (in either electronic or hard copy form), as necessary to determine and verify the exposure amounts by classification.”

The eligibility rating threshold is the amount of payroll developed during the experience period in each classification, multiplied by the expected loss rates for each class. If the total for all assigned classes is at or above the threshold, then the employer is eligible for an X-Mod.

Changes to dual-wage class codes

Lara also approved the Rating Bureau’s recommendations for changes to a number of construction dual-wage class codes. While most workers’ comp classes have one rate, in some classes the difference in claims costs between high- and  lowerwage workers is so great that a dual-wage  classification is needed.  In those cases, the workers above the threshold rate are assigned one rate, while those below that threshold are assigned a higher rate. The new thresholds are for 14 construction classifications, and any workers above the threshold will have a lower rate applied.

Governor Gavin  Newsom has signed a bill into law that will codify a court ruling from last year that set new ground rules for what constitutes an independent contractor, and which expands on that ruling.

There’s been a lot written in the media about the law, AB 5, and much of it misses the point. Some news reports have said it will spell the end of independent contractors in the state and that anyone a company hires to do a temporary job on contract must be treated as an employee.

Now that AB 5 is the law, state and federal labor laws will apply to independent contractors who have to be reclassified as employees.  That means they would be afforded all of the associated worker protections, from overtime pay and minimum wages to the right to unionize. Employers would have to cover them under their workers’ comp policies, and extend benefits to them as they do to other employees. The law also gives the state and cities the right to sue employers over misclassification.

AB 5 codifies and expands on a 2018 California Supreme Court decision that adopted a strict, three-part standard for determining whether workers should be treated as employees. Known as the “ABC test,” the standard requires firms to prove that people working for them as independent contractors meet certain standards:

THE ABC TEST
A) Must be free from the company’s control when they’re on the job;
B) Must be doing work that falls outside the company’s normal business; and
C) Must be operating an independent business or trade beyond the job for which they were hired.

 

The first prong aligns with the common-law test for employment and evaluates the degree of control exercised by the company over the worker.

The second prong examines whether the worker can reasonably be viewed as working in the hiring company’s business.

The third prong inquires whether the worker independently made the decision to go into business. The fact that the hiring company does not prohibit the worker’s engagement in such an independent business is not sufficient.

 

Occupations exempted include:

• Doctors
• Some licensed professionals (lawyers, architects, engineers)
• Accountants, securities broker-dealers, investment advisors
• Real estate agents
• Direct sales (compensation must be based on actual sales)
• Builders and contractors (who work for construction firms that build major infrastructure projects and large buildings)
• Freelance writers, photographers (provided the worker contributes no more than 35 submissions to an outlet in a year)
• Hairstylists, barbers (must set their own rates and schedule)
• Estheticians, electrologists, manicurists (must be licensed)
• Tutors (must teach their own curriculum)
• AAA-affiliated tow truck drivers. 

 

What employers should do

Legal experts recommend that employers:
• Perform a worker classification audit, and especially review all contracts with personnel.
• Determine which benefits and protections should be provided to any workers who are reclassified from  independent contractor to employee (think health insurance and other benefits).
• Notify any state agencies about changes to a worker’s status.
• Discuss with legal counsel whether you should also include a worker as an employee for the purposes of payroll taxes, workers’ comp insurance, federal income tax withholding,  ICA payment and withholding.

 

Note: Federal law remains unchanged. The IRS and National Labor Relations Board have their own independent contractor tests.

As the full threat of hacking and cyber attacks takes old, cyber insurance policies are evolving so that the primary focus is on business interruption coverage. When these policies first hit the market, they were mostly focused on covering the costs of notifying individuals whose personal data or credit card information may have been exposed, and of any regulatory penalties and other compliance costs.

But many companies, when hacked, suffer far more damage to their operations, including websites or important systems being rendered unusable. The larger danger to companies seems to be system failures resulting from a variety of novel attacks, including;

• Denial of service
• Brute force (an attack aimed at obtaining passwords)
• Malware or malicious code
• Ransomware
• Backdoor attacks
• Social engineering.

Business interruption policies have been around for a while, but they have typically focused on disruptions caused by supply chain issues and natural catastrophes that render businesses unable to operate. Often these interruptions can last for weeks or even months. The downtime for a business that’s been hit by a cyberattack is usually much shorter – a few days to a few weeks at the most.

Also, property policies or traditional business interruption policies have not extended property loss or  damage to electronic data, as data is not considered a physical or tangible object subject to loss or damage. Damage is triggered by a direct physical loss or damage.

Meanwhile, business interruption in a cyber policy is triggered by an electronic event such as a cyber attack, or hacking.  For cyber business interruption coverage to be triggered, there must usually be a direct link between a cyber attack and the interruption of business or a loss of sales. For example:

• Criminals destroy data or alter a website’s or database’s code in order to freeze or render the computer system or website unusable
• A denial-of-service attack renders a website inaccessible to customers and users.

A business interruption claim would not be triggered, however, if a hacker gained access to your database and rooted around for important company information and operations were not hampered and there was no loss of revenue.

Typical cyber business interruption provisions

• The policy will include a maximum payout for business interruption claims. This caps the payout under the policy. The cap may apply to each individual event or it may be an annual limit.
• Policies may include a separate deductible for business interruption claims.
• Policies may include a specific waiting period of hours or days before kicking in to pay a claim. If the event causes losses or a disruption that lasts less than the waiting period, the claim could likely not be paid.
• Policies usually will only pay for business interruption during the period that the company restores its systems.
• Coverage usually includes a number of exceptions, like not covering third party liability, fines and penalties and the costs of restoring a network.
• Most policies include exclusions as well, like loss of market or damage to computer systems caused by fire or other physical events that were not related to a cyber attack.

May not be aware that on October 12, 2017, President Trump issued an Executive Order promoting Healthcare Choice and Competition.

This took the form of a Notice to expand the flexibility and use of HRAs to provide more Americans with additional options to obtain quality, affordable, healthcare.

The proposed regulations remove the current prohibition on using HRA funds to purchase individual health insurance coverage; however, an array of stipulations apply to assure these new HRAs do not create an unstable individual market and that they coordinate with current Affordable Care Act premium subsidies.

Download and read the whole story:  (pass it on!)

2 new types pf HRAs expand Health reimbursement arrangements