Tag Archives: insurance

Workers’ Comp: What’s My “Mod”?

images(Post by Rick Dacri, April 14, 2016)

When discussing your workers’ compensation premiums, you’ll often hear about the importance of reducing your “mod.” But what is a mod? Your “mod” is your Experience Modification Rating. It is the number used by your insurance company to gauge both the past cost of injuries and the future chance of your risk of additional injuries. The lower the mod, the lower your workers’ comp premiums.

Here is a quick way of looking at it. Ask your insurance carrier what your mod is. If your experience mod is 1.00, you’re doing OK. If it is less than 1.00, that’s great and obviously desirable You’re saving money and running a safe operation. If it is greater than 1.00, you’ve got work to do, as this is costing you.

As an example, if your mod is .90, than you are 10% below your industry standard. If you are at 1.10, you are 10% above the industry standard. In the former case, your premiums will begin to drop. In the latter, you will find you are in a “penalty phase” in you rates will go up.

If you don’t know what your current experience modification rating is, contact your insurance carrier to find out.  If you need help reducing it, call me.

Other Posts you might want to read:

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Workers’ Comp Fraud, The Red Flags

flag(Post written by Rick Dacri, March 16, 2016)

I received a call from a client bemoaning the fact that one of his “problem employees” was now claiming he hurt his back moving a box. The client is sure that it is fraud, because the day prior, this same employee was put on final warning for absenteeism.

Fraudulent workers’ comp claims can run havoc with any manager and company. While the actual amount of fraud in the system is relatively low (1%-5% of claims), it is still quite costly…and they make managers crazy.

Let’s talk about some of the warning signs that you and your supervisors should watch for. Continue reading

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Offering Health Insurance: Is It Worth It?

(Post written by Rick Dacri on October 16, 2013)

Just taped a radio show on the Affordable Care Act. One of the other guests was a small employer. He is grappling with the issue of whether to offer his new employees health insurance or not because he is concerned with the cost and whether that cost will increase to an unaffordable rate next year. These candidates are saying they cannot accept the job without health insurance.

This is the classic dilemma faced by many employers. From a strategy standpoint, employers must balance costs against the ability to attract and retain good employees. He can keep his costs down by not offering insurance, but lose good employees, or he can potentially increase his costs by hiring and retaining quality employees.

While there are many nuances to this issue, all employers are faced with this balance—whether it is with health insurance or any benefit, or wages, or frankly the cost of materials.

With employees, hiring and retaining stars is critical. Productivity increases, customer service improves and profits usually follow. For this business owner, he needs to decide if that’s worth it by offering health insurance.

What would you do? Let us know in the comment section.

To learn how Rick Dacri can advise you, click Dacri & Associates.

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ACA: Leveraging the Affordable Care Act

Gavel, Stethoscope and Books on the American Flag with Selective Focus.

(This article was written by Rick Dacri and published in JobsinMe.com)

Understanding and implementing the Affordable Care Act has dominated the national conversation. Yet, while this is occurring, business executives have the arduous task of making sense of the law and then making the tough decisions that can work for their company, their workforce and, in many cases, the employees’ families.

Lost in the headlines, political grandstanding and conflicting implementation scenarios delivered by the experts is a strategic issue all executives should consider: what kind of company do I want to be? And then (from a tactical standpoint): how can I leverage health insurance to help me achieve this?

Legally Mandated for Large Companies

Health insurance is simply a benefit, just like any other benefit. It’s expensive and now for the first time, it is a legally mandated, just like workers’ compensation and unemployment compensation. As an organization, you must either provide insurance or send your employees to the health insurance exchanges to buy insurance on their own. Either way, there is a cost. If you’re small, your company is exempt, for now.

Using It to Your Advantage

But for a moment, let’s step back from the details to address an opportunity before you. Employees need health insurance. Many decisions in both seeking employment and remaining with an employer often come down to whether insurance is offered and its cost. Employers should look at health insurance as a powerful tool that they can leverage to recruit, retain and engage workers.

It is much more than simply another business cost. Dropping coverage or reducing employee hours to force them to go to the exchanges may yield short-term positive bottom line results, but is more likely to yield long-term negative consequences. Employees will go to work for someone else before shopping for their own health insurance coverage.

Building a Strategy, Culture

Employers should build a strategy around both wages and benefits. Know what makes sense for the business. Address the kind of work culture you want, around the brand that reflects who you are and who you want to be. Establish a clear philosophy around compensation and around employees that best reflects your brand. And remember, what impacts an employee often impacts the family.

Employers who take care of their employees, by either providing or even expanding coverage of those eligible for insurance, send a powerful message. They are betting that their employees will become fully engaged and loyal, resulting in increased employee retention, customer service and a corporate brand that draws job candidates like a powerful magnet. And all of this will result in increased sales and profits.

Rather than focusing on short-term savings by eliminating health insurance, these executives are wagering on their employees and the long-term health of their company by adding employees to the insurance rolls. This strategy focuses on nurturing their workforce and understanding that customer satisfaction requires happy, engaged employees.

It is the big picture approach. It’s a smart move; it’s strategic; and it makes good business sense. Employees are not going to stick around at a company that neither invests in them nor provides them affordable health insurance. The increased cost of health insurance coverage will provide a greater return on your investment.

If you want to know more about how I can help you, click Dacri & Associates.

If this post was of interest to you, you may want to read these:

  1. ObamaCare Good For Business
  2. How to Communicate with Employees About the Health Insurance Exchange
  3. HR HelpLine: When You Need Expert Advice

 

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How to Communicate w/ Employees About the Health Insurance Exchange

images(This post was written by Karen Aframe and Steve Gerlach of Bernstein Shur, September 5, 2013)

With the rollout of the Health Insurance Exchange (the “exchange”)—also known as the Health Insurance Marketplace—scheduled for this fall, and the employer’s exchange notice due by October 1, employers need to know how to talk to employees about the exchange. Here are some tips:

Comply with Notice Requirements

  • Exchange Notice. Effective October 1, 2013, employers are required to provide a notice to employees about the exchange including that they may have access to subsidies if their employer does not offer affordable health care. Model notices are available on the Employee Benefits Security Administration website.

How to Communicate

  • Focus on what matters now. The Affordable Care Act is an enormously complicated law; communicating too much to employees can be unnecessarily confusing. Don’t overwhelm employees with “what if” scenarios, or how things may turn out in 2018.
  • Plan for ongoing communication. Use all resources available to you and keep employees updated on current developments.
  • Keep it simple.
  • Make it accessible. Use intranet, social media, videos and real-life examples to help explain.

What to Communicate

  • Tell employees that the ACA is now the law. According to recent surveys by Kaiser Family Foundation, 40 percent of Americans do not know the ACA is the law.
  • Communicate that the ACA changes many rules about health insurance in 2014. For example:
  • Insurance companies must accept everyone who applies for coverage, regardless of health status.
  • The individual mandate requires that every individual must be covered or pay a fine.
  • Employers are required to provide employees with information regarding employees’ ability to purchase health insurance on the exchange.
  • Focus on the exchange.
  • Explain that exchanges are marketplaces where individuals and small employers can buy health insurance.
  • Explain that government subsidies are available for some individuals who purchase health insurance on the exchange, but that if the individual is offered coverage through his or her employer that meets certain minimum standards, the individual may not be eligible.
  • Communicate that the exchange may be helpful to some employees, e.g., part-time employees, seasonal employees, early retirees and temporary workers.

What To Avoid

  • Avoid discussing with employees the administrative burden or financial impact that the ACA is having on the company.
  • Avoid offering advice to employees regarding the type of insurance he or she should select.
  • Avoid inducing your employee to purchase health insurance through the exchange rather than through the employer or vice versa.

 Want to add to the story? Let us know in the comments or send an email to Rick Dacri at rick@dacri.com.

You may also enjoy these posts:

  1. Health Insurance: Decision Time
  2. ObamaCare Good for Business
  3. Affordable Care: What’s Delayed and What’s Not

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Filed under Compliance, Employee Relations, Uncategorized

Health Insurance: Decision Time

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(Written by Rick Dacri & published in the York County Coast Star, August 22, 2013)

It’s decision time. The deadlines for implementing the Affordable Care Act (ACA) are fast approaching. Delay, in hopes that Congress will suddenly derail it, is a mistake.

Most employers have moved beyond a wait and see approach and are taking steps to deal with the new rules and regulations. The Act is complex and employers should quickly meet with their health insurance brokers to get their advice and counsel. The focus must be on developing the correct tactics to handle the vast implications of the Affordable Care Act.

The news has been filled with stories of companies opting to drop their existing health insurance coverage, fire workers to fall below the 50 full-time equivalent (FTE) threshold for mandatory coverage or reduce employee hours below 30 to avoid offering coverage. The reality is very different. What I hear from my clients is that they definitely plan to continue providing coverage and this trend is affirmed by a recent International Foundation of Employee Benefits survey. 69% of participants indicated they would definitely continue coverage and another 25% said they are likely to do so. Only 4% said they are likely or leaning toward dropping coverage.

Employers who currently do not offer health insurance must now decide whether to continue that practice or not. Under the “play or pay” rules, Continue reading

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Health Insurance: Can You Mandate Full Premium Payments?

(Post by Rick Dacri, July 22, 2013)

This question came through my HR HelpLine.

 Client HR HelpLine Question: We currently pay the entire premium for each employee that is enrolled in our group health insurance plan. We recently had an issue arise when an employee had discussed with us that he might have elective surgery on his foot and would be out of work for an extended period of time. The employee decided against the surgery at this time, but it brought up an issue that we hadn’t previously considered. Can we put an addendum in our employee handbook that states that if an employee has elective surgery not related to any work-related injury and will be out of work for an extended period of time (say several weeks) that the employee is responsible for their health insurance premiums while not working? Also, if an employee takes a leave of absence can we do the same? What is the best way to handle this?

Expert Advice: Since you are an employer with 25 employees the federal Family and Medical leave Act is not applicable. That law would have mandated that you continue to provide coverage for the employee for up to 12 weeks at his normal contribution. You do, however, fall under Maine’s Family and Medical Leave Act. This law applies to private sector employers with 15 or more employees at a single location within the state and covers employees who have worked for you for more than 12 consecutive months. In this case, he has.  Under the Act, you must provide up to 10 weeks of unpaid family medical leave and your employee must be allowed to continue his health benefits while on leave at his own expense (continuation of group life and disability insurance must also be allowed). Obviously you could opt to continue to provide benefits for the employee at the employer’s expense too.

Before you change you policy to require your employee to pay the full cost of his health insurance, I would advise that you first discuss this option with your health plan carrier/broker to determine if your current summary plan description would allow the employee to pay the full premium while out on a leave of absence.

Once you hear from your broker and if your plan allows this, you should put in place a policy that specifically addresses the payment of health benefits while an employee is on a leave of absence. Finally, for extended leaves, COBRA rules kick in.

To summarize, you can mandate the employee to pay the full cost of the premium, as long as your plan document permits this. Assuming you opt to do this, create policy and communicate it to your workforce.

If you need expert advice, contact the HR Helpline. I provide practical operational advice, not legal advice, on how to address all your difficult employee issues. 

Other posts you might want to read:

  1. Compliance: 6 Problem Areas For Employers
  2. Affordable Care Act: What’s Delayed and What’s Not
  3. HR HelpLine: When You Need Expert Advice

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