Coronavirus – Our toolkit to answer all your questions


We have put together a full toolkit answering all the questions you may have regarding the Coronavirus. Let us know if you still have any other questions.

 

CDC guide for the workplace

The CDC developed a guide for the workplace. Download it here.

FAQ’S on laws enforced by the CA Labor Commissioner’s Office

Get all the answers regarding the Coronavirus Disease (COVID-19) here.

Information from the California Employment Development Department

Read everything about the Corona Virus from the EDD here.

Prevention information from SHRM

Read here.

Questions about your Commercial Insurance Coverage?

In light of recent news about COVID-19 (coronavirus), several clients have asked us questions about coverage. Every claim is reviewed based on the facts of the particular claim. It is the facts of the claim which dictate whether there is coverage or not under the language of the policies. With that caveat, and with an encouragement to review the policy forms as they apply to the particular claim,  this is a general summary:

  • Business income it is not recoverable under the property policy for the coronavirus, most policies  both contain a virus and bacteria exclusion that can be found in the property section.
  • Commercial General Liability policy may respond to the extent the member is found negligent and a claim is not otherwise excluded.
  • Workplace Violence/Crisis Incident/Outside Aggressor Coverage found in the General Liability does not apply.

 


Top New Laws and Regs Affecting Businesses – January 2020 RISK REPORT


The new decade is starting off with a tsunami of new laws and regulations that will affect California businesses. Companies operating in California will have to be prepared for significant changes or open themselves up to potential litigation, fines, and other risks.

Here’s what you need to know coming into the new year:

1. AB 5

The controversial AB 5 creates a more stringent test for determining who is an independent contractor or employee in
California.  Known as the “ABC test,” the standard requires companies to prove that people working for them as independent contractors are:

A) Free from the firm’s control when working;
B) Doing work that falls outside the company’s normal business; and
C) Operating an independent business or trade beyond the job for which they were hired.

Legal experts recommend that employers:

• Perform a worker classification audit, and review all contracts with personnel.
• Notify any state agencies about corrections and changes to a
worker’s status.
• Discuss with legal counsel whether they should now also include them as employees for the purposes of payroll taxes, workers’ compensation insurance, federal income tax withholding, and FICA payment and withholding.

2. Wildfire safety regulations

Cal/OSHA issued emergency regulations that require employers of outdoor workers to take protective measures, including providing respiratory equipment, when air quality is significantly affected by wildfires. Under the new regs, when the Air Quality Index (AQI) for particulate matter 2.5 is more than 150, employers with workers who are outdoors are required to comply with the new rules. These include providing workers with protection like respirators, changing work schedules or moving them to a safe location.

3. Arbitration agreements

Starting Jan. 1, the state will bar almost all employee arbitration agreements. AB 51 bars employers from requiring
applicants, employees and independent contractors to sign mandatory arbitration agreements and waive rights to filing
lawsuits if they lodge a complaint for discrimination, harassment, wage and hour issues. Businesses groups sued to overturn the law on the grounds that it is preempted by the Federal Arbitration Act.

4. Overtime rules

New federal overtime regulations are taking effect for non-exempt workers. Under the new rule, employers will be required to pay overtime to certain salaried workers who make less than $684 per week – or $35,568 per year – up from the current threshold of $455, or $23,660 in annual salary.

5. Consumer privacy

Starting Jan. 1, under the California Consumer Protection Act, businesses that keep personal data of residents are required to safeguard that information and inform website users how their personal data may be used. The law applies to firms with $25 million or more in annual revenues or those that sell personal information as part of their business.

6. Return of the individual mandate

A new law brings back the individual mandate requiring Californians at least to secure health insurance coverage or face tax penalties. This comes after the penalties for not abiding by the Affordable Care Act’s individual mandate were abolished by Congress in late 2017. Starting in 2020, California residents are required to have health insurance or pay excess taxes. This will affect any of your staff who have opted out of your group health plan as it may mean they are going without coverage, unless they have opted to be covered by their spouse’s plan. If you have staff who didn’t enroll in your plan for 2020, they may have to wait until your group’s next open enrollment at the end of the year. That could force them to pay tax penalties.

7. New audit, X-Mod thresholds

The threshold for physical workers’ compensation audits for California policies incepting on or after Jan. 1 is $10,500 in annual premium, a drop from $13,000. This means that any employer with an annual workers’ comp premium of $10,500 or more will be subject to a physical audit at least once a year. On top of that, the threshold for experience rating (to have an X-Mod) has also fallen – to $9,700 in annual premium as of Jan. 1, from $10,000.

8. Harassment training partly pushed back

Employers with five or more workers were required to conduct sexual harassment prevention training for their staff by the end of 2019 under a California law passed in 2018. A new law extends the compliance deadline for some employers who had already conducted training prior to 2019. The original law, SB 1343, required all employers with five or more staff to conduct sexual harassment prevention training to their employees before Jan. 1, 2020 – and every two years after that. If you have never trained your staff, you should have done so in 2019.

But if you have, here are the new rules:
• If you trained your staff in 2019, you aren’t required to provide refresher training until two years from the time the employee was trained.
• If you trained your staff in 2018, you can maintain the two-year cycle and comply with the new Jan. 1, 2021 deadline. You did not have to repeat the training in 2019.

9. Hairstyle discrimination

A new law makes it illegal for employers to discriminate against employees and job applicants based on their hairstyle if it is part of their racial makeup. The CROWN Act (Create a Respectful and Open Workplace for Natural Hair), defines race or ethnicity as “inclusive of traits historically associated with race, including, but not limited to hair texture and protective hairstyles like braids, locks, and twists.” This new definition of race means that natural hair traits fall under the context of racial discrimination in housing, employment and school matters.

10. Reporting serious injuries

A new law broadens the scope of what will be classified as a serious illness or injury which regulations require employers to report to Cal/OSHA “immediately.” The new rules being implemented by AB 1805 are designed to bring California’s rules more in line with Federal OSHA’s regulations for reporting. It will mean that some injuries that were not reportable before will be, such as:
• Any inpatient hospitalization for treatment of a workplace injury or illness will need to be reported to Cal/OSHA.
• An inpatient hospitalization must be required for something “other than medical observation or diagnostic testing.”
• Employers will need to report any “amputation” to Cal/OSHA. This replaces the terminology “loss of member.” Even if the tip of a finger is cut off, it’s considered an amputation. As of yet, there is no effective date for this new law, as enabling regulations have to be written – a process that will start this year.


Workers’ Compensation – Bureau Recommends Further Rate Cut


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.

 

 


Two New Types Of HRAs Expand Health Reimbursement Arrangements


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 

 


Changes to Original Medicare Deductibles – Effective January 1, 2019


Effective January 1st, 2019, there will be changes to the original Medicare Deductibles, coinsurance and out-of-pocket
limits.

The Centers for Medicare & Medicaid Services (CMS) announced the 2019 Original Medicare cost share amounts on October 12, 2018.  We are pleased to share with you the cost share changes to Original Medicare.

 

Medicare Hospital Coverage (Part A) – Use for ALL States

 

 

 

 

 

 

 

 

Medicare Medical Coverage (Part B) — Use for ALL States

 

 

 

Medicare Supplement Plan Specific Deductibles and Out-of-Pocket Limits (for all states except Wisconsin)

 

 

 

 

Medicare Supplement Plan Specific Deductibles and Out-of-Pocket Limits (Use for Wisconsin only)

 

 

 

 

 

If you have any questions, please reach out to us!

 

 

 


ACA Penalties 2018


On November 2, 2017 the Internal Revenue Service (IRS)  issued revised FAQs on the employer shared responsibility
provisions under the Affordable Care Act (ACA). Question sets 55-58 now detail the procedure the IRS will use to begin issuing proposed penalty assessments to employers that failed to comply with these provisions in 2015.

Though the IRS was previously silent on the details of penalty assessments, this new information serves as a reminder to employers that compliance enforcement is a priority for the IRS.

Employer Shared Responsibility Provisions

Under the ACA’s employer shared responsibility provisions, Applicable Large Employers (ALEs) are required to o*er health coverage to full-time employees and their dependents that both provides minimum value and is a*ordable. Penalties may be assessed against an
employer that either fails to o*er health coverage to enough of its full-time employees and dependents, or o*ers coverage that fails to provide minimum value and/or meet affordability standards.

In 2015, ALEs were required to o*er coverage to at least 70% of its full-time employees and dependents, and the monthly cost to the employee for self-only coverage could not exceed 9.56% of the employee’s income. ALEs with fewer than 100 full-time employees had transition relief available.

Penalty Assessment Process

The IRS will use Letter 226J to notify employers that it determines, for at least one month of the year, had a full-time employee enrolled in a health plan for which a premium tax credit was allowed. The Letter will include an estimated monthly penalty amount along with a list of full-time employees for whom the penalty applies. Information provided by the employer on 2015 ACA reporting Forms 1094-and 1095-C will be used by the IRS to make these determinations. The IRS intends to issue Letters 226J for the 2015 year in late 2017.

An employer that receives a Letter 226J will have an opportunity to respond to the IRS in writing to either agree with or dispute the IRS’s proposed assessment. In the event a penalty is ultimately assessed, the employer will receive Notice CP220J and will need to
make its payment pursuant to the instructions included therein.

Action Items

While it’s too late for employers to enact compliance strategies that could prevent a 2015 penalty assessment, there are several important considerations for employers going forward:

  • If a Letter 226J is received, employers have 30 days to respond to the IRS, in writing, that the employer either agrees with the assessment or disagrees, in whole or in part. Failure to timely respond will result in an automatic assessment of the IRS’s proposed penalty amount.
  • Employers should designate a contact person within the organization to handle responses to the IRS should a Letter be received. Accurate record-keeping will be essential, both for past and future years.
  • The IRS now has a process through which to administer penalties. Thus, employers should take seriously their ongoing obligations under the ACA, including 2017 ACA reporting.

In an effort to make health coverage more a*ordable and accessible, the Affordable Care Act (ACA) implemented parameters to the premium rating methodologies used by insurers in the individual and small group markets. Insurers in these markets can vary premium based on
age so long as the insurers adhere to the proper age band rating procedure.

This procedure has remained unchanged since 2014, but pursuant to a rule issued by the Department of Health and Human Services (HHS), the rating methodology will change come 2018.

Change to Rating Methodology

Changes to the age band rating methodology will begin to take effect in 2018. Presently, the methodology requires that insurers assign a single banded premium rate for all individuals ages 0-20, with single ratings applied to each year of age from 21 upward (to age 63). Under the new methodology e*ective in 2018, insurers can apply a single banded premium rate for all individuals ages 0-14 and begin to assign a single rate to each year of age as early as age 15. As a result, insureds will begin to see a premium increase upon turning age 15 rather than age 21.

Impact on Employers

Employers in the small group insurance market will be affected by this rating change. In most states, a small group employer is one with 50 or fewer employees. However, California deBnes a small group employer as one with up to 100 full-time and full-time equivalent employees. Thus, a wider swath of employers in California will be impacted than in other states. The new rating methodology will likely bring a premium increase for 2018 renewals for most small group employers. While employers can do little to change their classification as a small group employer and, consequently, the age band ratings that apply, there may be other plan design strategies that could counteract the rising premium costs. Employers should carefully review premium increases expected in 2018 and explore cost-control measures in other areas of their plan.

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The state of health insurance: group plans and individual


After months of failed efforts by Congressional Republicans to eliminate the Affordable Care Act, President Trump in October stepped in with two sweeping changes that are reverberating throughout the health insurance system.

The main order he issued immediately eliminates subsidies that are paid to health insurers that participate in government-run exchanges to reduce deductibles and copays for lower-income customers buying individual and family policies.

While some pundits say the move will create chaos in the individual market, they differ on the likely fallout for group policies.

But Trump did sign two other orders that could have a direct effect on the group market over time, but not immediately:

  • One would attempt to expand the use of health reimbursement accounts (HRAs), which employers could pay into so that employees can use those funds to purchase health coverage on the open market.
  • The other would allow employers to band together to create “association” plans, which would offer plans that are not as comprehensive as dictated by the ACA.

Cost-sharing fallout

Nineteen states have already sued to challenge the cost-sharing reduction subsidies, saying the ACA does not appropriate funding for the subsidies and hence they are illegal. Without them, insurers will likely have to significantly increase their premiums or pull out of the health insurance exchanges.
While the order means many people purchasing plans on the individual market will see drastic rate hikes, the order doesn’t directly affect group plans.

The American Benefits Council, a national trade association based in Washington, D.C. that advocates for employer-sponsored benefit plans, said that the move to cut off the subsidies could spur some insurers to increase their fees for large employer plans in order to make up for the lost revenue in the individual market.

“Employers rely on a healthy and viable individual health insurance marketplace since an unstable market could result in further cost-shifting from health-care providers to large employer plans,” the council said in a prepared statement.

“Additionally, erosion of the ACA exchanges would make individual market coverage a less viable option for part-time workers, early retirees, and those who would otherwise elect to secure coverage through the individual market rather than sign up for, or remain on, COBRA,” it added.

But that sentiment is not universal.