Alaska Workers Compensation Rates in 2019 are going down!

The Largest Decrease for Workers Comp Insurance Premium in 40 years for Alaska Business Owners

In 2019, Alaska Workers Compensation Insurance Rates are expected to fall the most they have in 40 years. The governor office announced this past October that workers’ compensation insurance premiums should decrease by an average of 17.5 percent statewide starting the first of January.  This decrease follows a 5.4 percent decrease in 2017 and workers’ compensation premiums are down roughly 25 percent since 2015. These reductions amount to an estimated $35 million in savings for the Alaska Business Community. According to Alaska Governor Bill Walker, “These proposed rate reductions are welcome news for Alaska businesses — lower workers’ compensation costs reduce the burden on the small businesses that strengthen our economy,” Walker said in a formal statement. “Thank you to the Alaska state Legislature and the Department of Labor and Workforce Development for their work on payment reform, contributing to significant rate reductions for 2019.”

Mount McKinley, Denali National Park, Alaska

What Caused Alaska Workers Compensation Insurance Rates to Decline?

There were a number of factors that contributed to the large decline in Alaska Workers Compensation Insurance Rates. Claim frequency and favorable medical costs continued to decline in 2018 which were two of the major factors contributing to declining rates. The claims frequency means that across the board there were less claims filed in 2018 compared to previous years. This is a favorable measurement for insurance carriers because this decreases the costs related to paying out insurance claims and processing those claims. Declining medical costs is largely because of streamlined processes throughout the medical facilities operating within the workers compensation system.

There was also legislation passed in 2018 that will contribute to lower rates in 2019 and for the foreseeable future. The legislation was House Bill 79 (HB79). the legislation clarified who is classified as an independent contractor and who needs to be covered by workers’ compensation insurance. This bill made it easier to obtain exemptions, to acquire reporting data, and to make payments.

Alaskan Cruise Ship

What can Business Owners do to Maximize Alaska Workers Compensation Insurance Rates?

There are many ways a business owner can save, in addition to the savings the Alaska Business Community is receiving from workers compensation premiums declining. Here are 5 things a business owner can act upon to maximize savings on Alaska Workers Compensation Insurance.

  • Make sure your Business is Classified Properly
  • Implement a Safety Program
  • Incorporate a Return-to-Work Program in the Safety Program
  • Consider Pay-as-You-Go Workers Compensation
  • Partner with an Independent Insurance Agent

Proper Classification Codes

In any given year, there are more than 700 different classification codes for businesses and employees to use when it comes to workers compensation insurance. Making sure your business is classified correct is a step that can save a lot of headaches during a mid term or end of term audit. Proper classification can prevent your business from over or under paying premium throughout the year. If you under pay throughout the year, it can cause your business to owe additional premium at the end of the term. Even if your business over pays through out the year and gets a credit on their policy, it means your business has had unnecessary cash flow tied up in workers comp premium payments. This is money that could be used on other necessary business needs.

Well-Documented Safety Program

A safety program can help a small business lower what they pay for commercial insurance by decreasing the frequency and severity of workers compensation insurance claims. The safety program does not have to be exhaustive. It can be as small as part of the new staff training program and a few 15 minute huddles each week. It is important to have these meetings documented. Your insurance agent can use this documentation to get you an additional discount when purchasing coverage. The documentation can also be used when a business experiences a year in which there are several claims or one large claim. Usually when this occurs your can expect your insurance premium to rise. If you have a documented safety program, your independent insurance agent can use it to show the claims are more of an outlier and not a sign of more claims to come.

A Return-to-Work Program

A return to work program is a great way to show your employees you care about them and help them get back to their daily routine quicker. When executed properly, a return to work program can help get your injured workers back on the job, even in a limited capacity, and back a part of their regular work routine. This is the best way to keep insurance claims under control and help keep your experience modification rating low.

Pay-as-You-Go Option

Some businesses may benefit from Pay as You Go Workers Compensation. Most traditional workers comp policies require 25 to 33 percent of the entire premium up front just to get coverage in place. With the Pay as You Go Option, most businesses can get coverage in place for as little as a few hundred dollars. This allows cash strapped businesses to get coverage in place, but use their needed cash flow for other more urgent business needs.

Partner with an Independent Agent

An independent agent is always the best way to find the most comprehensive insurance coverage at the lowest rate possible. Especially if the independent agent has several years of experience and relationships with multiple insurance carriers. They can use this knowledge and these relationships, to know which carriers are actively looking to quote your industry and and force carriers to compete for your business.

Oregon Workers Comp Rates are Declining in 2019

A 9.7 % Decrease Marks 6 Consecutive Years of Declining Oregon Workers Compensation Rates

Workers Compensation Rates for the business community within the state of Oregon are declining by an average of 9.7 percent in 2019. The rates went in to effect the first of January and they mark the 6th consecutive year that workers comp rates have declined for Oregon Business Owners. Over this six year period Oregon Workers Compensation Rates have declined by 40 percent from 2013 to 2019. The average pure premium rate will be $1.12 per $100 of payroll for workers compensation coverage. In 2018 this rate was $1.28 per $100 in payroll. Comparatively, the cheapest state for coverage is in Texas at $0.75 and the most expensive state in Alaska at $2.74. As of 2018, the last year rankings were made, the state of Oregon was the 45th least expensive state to purchase coverage.   Utah, West Virginia, Arkansas, Indiana, and North Dakota are the only states that have cheaper rates than the state of Oregon.

Portland, Oregon

Why are Oregon Workers Compensation Rates declining in 2019

There are several contributing factors to declining workers comp rates for Oregon Businesses. Lower medical care costs and less severe claims in recent years are two of the strongest contributing factors. Cameron Smith, Department of Consumer and Business Services (DCBS) Director, “Everyone from employers and workers to insurers and government has played a role in making workplaces safer and keeping business costs low.  As the numbers show, Oregon’s comprehensive approach continues to pay off.”

There are additional measures that are contributing to positive rates in recent years. The Workers Compensation Division for the state of Oregon have increased several efforts that include enforcing employers to carry insurance, keeping medical costs under control, and helping injured workers return to work sooner. Additionally, in Oregon the state government has recently put a focus on preventing on-the-job injuries by enforcing workplace safety and health rules, as well as advising employers about how to improve worker safety and health. Governor Kate Brown stated, “Oregon continues to demonstrate that it’s possible to maintain low employer costs while providing strong support to workers. We must remain committed to working together to balance employer rates and worker benefits, and to help injured workers heal and return to work quickly.”

Oregon Business Owners enjoy a strong workers compensation system that provides the state with favorable rates on premium, but business leaders should still look to maximize savings. Partnering with an independent insurance agent is always the best way to get comprehensive coverage at rock-bottom rates.

Kentucky Workers Compensation Rates are Declining by 10.8 % in 2019

The Business Community in Kentucky Will be benefiting from improved Workers Compensation Rates 2019

In Kentucky, the business community will pay significantly less for Workers Compensation Premium next year. The rates will actually be 10.8 percent less in 2019. The decline in premium will apply predominantly to the industries of manufacturing, office, clerical, and contracting. These means some industries will see less of a decrease and some industries or individual businesses may see no decline at all.  No matter what industry a business operates in, the business community overall will benefit from better Kentucky Workers Compensation Rates 2019.

Kentucky Bluegrass on a Horse Farm.

Why are Kentucky Workers Compensation Rates Declining in 2019

There are a number of reasons why Kentucky Workers Compensation Rates in 2019 will be declining by more than 10 percent.  Some reasons contributing to the decline in premium throughout Kentucky is stability in written premium, lower combined ratios throughout the state, and lower loss-time claim frequency. Additionally, the strongest factor contributing to declining workers comp premium rates is House Bill 2.  According to the Department of Insurance Commissioner Nancy Atkin, “much of the decrease in costs to the passage of House Bill 2, which made significant reforms to the workers’ compensation system for the first time in over twenty years”. Many of the statutes in the previous workers compensation system were ruled unconstitutional by the state supreme court. These rulings brought about instability throughout the workers compensation market in the state. House Bill 2 stabilized that market.

Bourbon Barrels holding Kentucky Straight Bourbon Whiskey

Kentucky Workers Compensation System Over Haul

House Bill 2 passed in 2018.  This was the first attempt to make significant changes to the workers compensation system in the state of Kentucky in more than 20 years. Jeffrey Junkas, assistant vice president, state government relations for PCI said, “House Bill 2 is designed to help contain underlying costs and improve the state’s workers compensation system.  HB 2 makes changes impacting medical expenses and benefits. It also takes steps to address the opioid crisis with an evidence-based pharmaceutical formulary and medical treatment guidelines to ensure timely delivery of appropriate medical care to injured workers.”

In addition, the bill increases the maximum compensation rates for employee temporary total disability, permanent total disability, and permanent partial disability benefits. It improves access to vocational rehabilitation services, and makes improvements in the dispute resolution system. These changes will improve efficiency of the system and provide better services to both businesses and injured workers.

One big difference to the system that was brought on during the overhaul in 2018 was a 15-year benefit cap from the date of injury.  This cap would apply only to workers who meet certain conditions and are filing claims for permanent, partial disability because of on-the-job injuries. Many of these workers eventually return to the labor force and do not collect the full 15 years worth of benefits. Currently, they are entitled to medical benefits for the duration of the disability. This could be for the rest of their life in some situations. House Bill 2 does allow injured workers who meet these conditions to file for recertification. If they are approved the new system would allow them to continue receiving medical benefits.

Kentucky Fried Chicken

What Can Kentucky Business Owners do to Maximize Savings?

Depending upon the class code and the experience modification rating of an individual business the rating may be larger or smaller than the average decrease. There are a number of things a business can do to control what they pay for workers compensation insurance premium.

Safety Programs

Safety Programs are the single most effective way to limit what a business pays for commercial insurance. Separate from what it does for the businesses bottom-line, it is simply the right thing to do. Taking care of the health and well-being of your employees and customers should be at the heart of any businesses mission. Taking care of your staff will allow them to be more productive while also lowering the frequency and severity of insurance claims made by the business.

Light Duty Work

The best way to get employees back on the job and back to full-time work is to have light duty work prepared for those employees. Humans are creatures of habit and our work day routine is a big part of our most employees routine. The longer an injured worker stays off the job, the longer they have to create new habits away from the job. Having a plan for many types of light duty work in order to get injured workers back on the job and back in to their workday routine.

Classify Properly

In order to maximize savings when it comes to all forms of commercial insurance, it is important to first make sure all employees are classified properly. Many businesses have employees who partake in drastically different areas of the business. Some of those businesses have employees who work in office or clerical work, other employees who are salesman who spend a lot of time out at third party locations, and still other employees who work doing physical labor. All of these employees need to be placed in the proper classification code and their payroll needs to be strictly measured.

Shop Around Your Policy

In order to maximize savings, it is important to shop around your policy periodically. It is not a good idea to switch carriers each year based upon a small decline in premium. Long term relationships still do mean something when you have to file a claim.  At the same time, it is important to make sure your carrier is competitive with the market.

Use an Independent Agent

Shopping around your insurance policy can be a time consuming endeavor. If your time is valuable, partnering with an independent insurance agent can be a way to get multiple quotes from multiple carriers all in one place. Partnering with an independent agent can allow you to get back to running your business while the insurance agent shops your policy so you don’t have to.  This can maximize savings while getting your business more comprehensive coverage.

Connecticut Workers Compensation Rates are Going Down in 2019

17% Decrease for Workers Comp Rates in Connecticut

Connecticut Workers Compensation Rates will be declining in 2019 by an average rate of 17 percent. Marking the fifth straight year rates have declined throughout the state of Connecticut. Over the past five years rates have declined by an average of 3, 4, 11, and 14 percent. Altogether, these decreases amount to the Connecticut Business Community paying 50 percent less than five years ago. According to Katharine L. Wade, the Connecticut Insurance Commissioner, “This steady drop – nearly 50 percent over the last five years – has helped business owners with one of their critical operating costs – workers’ compensation insurance.”

Rustic Barn in the Scenic Connecticut Countryside

What Contributed to Declining Connecticut Workers Comp Rates

A number of factors have contributed to the significant decline in Workers Comp Rates. In relation to the reasons for the decline Wade said, “The rates reflect an ongoing decrease in the number of workplace injuries and claims filed. We are also seeing, on average, lower medical costs per claim.” The decrease in workplace injuries is predominantly related to business owners throughout the state of Connecticut paying more attention to workplace safety. The state is also seeing lower medical costs per claim.

Additionally, a consistent decline in claim frequency since 2010 and per case indemnity costs continue a slow but consistent decline, from $31,611 in 2013 to $29,193 in 2016. An indemnity claim protects an employee against damages. The Workers Comp Policy offers medical coverage, lost-wage replacement, permanent disability benefits, vocational rehabilitation, and even death benefits for family members. Within the insurance industry, professionals categorize claims into two classes: indemnity and medical-only. An indemnity claim occurs when an employee becomes injured on the job and cannot return to work until the injury heals or the injury becomes permanent. A medical-only claim applies when the employee immediately returns to work after the injury.

USB Building in Stamford, Connecticut

What is Unique about the Workers Compensation System in Connecticut?

Connecticut was one of the first states to enact Workers Compensation Legislation in 1913 with the Workers’ Compensation Act (also known as Chapter 568 of the Connecticut General Statutes). The primary purpose of the Act has always been to provide wage replacement and medical treatment for employees who have been injured, disabled, or killed while on the job. While the state of Connecticut was an early adopter of the workers compensation system, this was a time period when many states began to adopt some form of workers compensation system throughout the first few decades of the twentieth century. With the onset of the industrial revolution, states realized that there was a need for a strong workforce. One way states went about guaranteeing there would always be a strong and healthy workforce in their state was to develop some form of a workers compensation system. Just five years ago in 2013, the state of Connecticut celebrated 100 years of such a system. 

The basic structure of the original law still survives despite four major revisions and numerous smaller modifications. Connecticut is a No Fault State meaning the workers compensaiton system provides benefits to employees no matter who was at fault for the injury or illness.  Within the state of Connecticut injured employees are provided medical treatment, wage replacement, vocational rehabilitation, jon retraining, dependents death benefits, and relapse benefits.

Picture of the state map of Connecticut with the word Connecticut written in cursive.

What can Business do to Maximize Declines in Connecticut Workers Compensation Rates?

Implement a Safety Program

A Safety Program is the single most effective way to limit the frequency and severity of insurance claims within a business. Limiting claims can have a long term positive impact to your business when it comes to purchasing commercial insurance. This is because it will have a positive impact on the businesses experience modification rating, which is one of the most impactful measurements underwriters use when they decide if they are going to offer your business coverage and how much to charge for that coverage.

Include a Return to Work Program

Incorporating a return to work program into your safety program is a great way to positively impact your experience modification rating for years to come. This is because the quicker an injured employee returns to work, the more likely they are to return to permanent work. This is how a business can limit the damage to the business when it does experience an injured worker.

Shop Around Your Policy

Shopping around your policy is something you should do periodically. If not every year, at least every few years in order to make sure your current insurance carrier is competitive with the current market. It is not a wise decision to switch each year based upon a modest decrease in premium, but it is wise to keep your rate competitive.

Partner with an Independent Agent

One of the best ways to shop around your insurance policies is to partner with an independent insurance agent. An independent agent can shop around your policy for you and they have the inside knowledge to know which carriers are hungry to quote your industry or the coverages you are looking for. This can save you time and money when purchasing commercial insurance.

 

Florida Workers Comp Rates Remain in Flux for 2019

Florida Workers Comp Rates 2019 are headed in a positive direction.  

In 2019, Florida Workers Comp Rates are improving for the business community throughout the state.  The decline amounts to a deduction of 13.9% and will contribute to a savings for business in Florida of approximately $454 million. This is good news because the Florida Workers Compensation System has been in flux for a number of years.  This decrease is the third such decrease over the previous year and a half.  Previous to these three decreases, the workers compensation rates had increased by 14.5% in 2016.

Florida Workers Comp Insurance Rates 2019

What Caused Florida Workers Compensation Rates 2019 to Decrease?

Florida Workers Comp Rates 2019 are decreasing because of significant improvements in experienced losses by insurance carriers. This means the insurance carriers paid out less in claims. Some within the industry credit safer workplaces, enhanced efficiencies in the workplace, and an increase in the use of technologies for the decrease in costs.

What is Unique about the Florida Workers Compensation System?

The most unique aspect of the Florida Workers Compensation System is that Florida is a No Competition State. This means Florida is one of the few remaining states in the country where every insurance company offering coverage within the state are required to offer the same rates and discounts as all other carriers. State mandated rates mean employers do not have to shop around as much as more competitive states. Business primarily need to be concerned about finding an insurance carrier willing to offer coverage on the voluntary market with the most cash flow friendly payment options and the business needs to avoid the Florida State Fund.

Pond with a waterfall and palm trees in the background at a Miami, Florida Golf Course.

Why have the Workers Comp Florida Rates 2019 Been in Flux?

For the past few years, workers compensation rates within the state of Florida have been in flux for a number of reasons. Two State Supreme Court Decisions have contributed to the instability. Those cases were Castellanos v. Next Door Company and Westphal v. City of St. PetersburgCastellanos vs. Next Door Company made a previous 2009 ruling invalid, meaning judges no longer had to stick to the mandatory fee schedule and now can award additional compensation for attorney’s fees when offering judgments within the workers compensation system.  The Westphal Case, had a ruling that ruled the 104-week statutory limitation on temporary total disability benefits is unconstitutional. This ruling extended this period to a 260-week limitation. This 260-week limit is more in line with states throughout the country and significantly increased the amount carriers had to pay for permanently disabled injured workers.

Another factor that has caused the workers compensation system in the state of Florida to be out of whack is State Senate Bill 1402.  This bill accounted for 1.8% of the recent increase in premium by increasing the cost for updates within the Florida Workers’ Compensation HCPR Manual.

In addition to these issues, in 2017 the Florida Insurance Regulators took over Guarantee Insurance Company (The states assigned risk workers comp provider) because it had become insolvent.  This left 1250 businesses in the state of Florida scrambling to find a workers comp carrier.

Epcot Center, Disney World, Orlando, Florida

What could be in store for future rates?

Hurricane Michael Relief

In response to Hurricane Michael, Florida Governor Rick Scott issued an emergency order that make sure “additional protections” are in place for Florida policyholders – including freezing any rate hikes for 90 days.

The order requires that insurers:

  1. Provide an additional 90 days to policyholders to supply required information to their insurance company. Many Floridians were displaced during this dangerous storm, and providing additional time to submit information to insurance companies gives them needed flexibility.
  2. Rescind for 90 days all non-renewals or cancellations issued to policyholders in the days leading up to Hurricane Michael. This gives policyholders 90 days to either renew their insurance policy, or find a new policy; and
  3. Freeze any and all efforts to increase rates on policyholders for 90 days.

Independent Medical Review Program

Florida is looking in to implementing a 6-year-old independent medical review program for workers compensation claims. This program has been enacted by the state of California and has been a resounding success. Under this program disputes about the medical treatment of injured workers are resolved by physicians instead of by the courts. California has found this has enabled for a more efficient resolution of claims while reducing the need for lengthy and costly judicial processes.

New State Senate Promising to Revisit Florida’s Workers Comp Laws

The new President of the Senate in the state of Florida, Bill Galvano, is promising to revisit Florida’s workers’ compensation insurance laws. At a recent ceremony shortly after taking over as President of the Senate Galvano said, “I don’t want to be in a situation where they spike and then we are running to fix it at that point”. Statements like these from the leadership of the Florida legislature show the decision makers in the house are looking forward to attempt to provide a stable market for the business community and eliminate the volatility businesses have seen in recent years for Florida Workers Comp Rates.

Turtles and Alligator at Busch Gardens, Florida

Florida Workers Comp Requirements

There are several requirements for businesses operating within the state of Florida. First and foremost, non-construction companies with four or fewer employees are required to purchase employees. It does not matter if those employees are full or part-time. All construction related businesses are required to secure coverage no matter the number of employees within the business. Sole Proprietors and Partners are not required to cover themselves and are exempt from coverage. A corporation and LLC may exempt officers if each owner owns less then 10 percent of the stock in the business. Sole Proprietors and Partners are not required to cover themselves and they are automatically excluded. These people can elect to be covered using form DWC-251. Corporate Officers of non-construction businesses can exempt from coverage if they own stock and hold an office on the board of directors. LLC Members of non construction businesses are treated as employees, but may be exempt of they so choose.

Miami, Usa, Beach, Miami, Miami, Miami

What can Florida Business Owner do to Maximize Savings?

Shop around your Policy

It is not a wise decision to switch carriers every year for a slight decrease in premium. This is because when a claim does occur a carrier will take in to consideration how long you have been a customers of theirs when they are deciding to raise your rate or deny your business coverage. At the same time, it is important to make sure your business is getting a competitive rate. The best way to do this is to partner with an independent agent who can shop around your policy for you.  This can save you time and usually result in lower premium payments on more comprehensive coverage.

Invest in Safety Protocols

Safety is the name of the game in any business. It is what is best for your employees as well as your customers. It is also important when it comes time to purchase commercial insurance. a safer business will have less claims and the claims it does have will be less severe. A small investment in a safety program can pay huge dividends when looking for the lowest Florida Workers Comp Rates.

Choose the Pay as You Go Option

Pay as You Go Workers Compensation Insurance is an excellent option for seasonal and cash strapped businesses. This option allows businesses to get coverage in place at a significantly lower rate than a traditional workers comp policy. Once a policy is in place, the premium is paid monthly based upon the actual payroll from the previous month.  This is a great option if your business operates in an industry that has a hard time forecasting payroll for a number of reasons. If your payroll is significantly lower one month the payment will reflect that and the same will occur in months when your workforce represents more man hours. Finally, a Pay as You Go Policy prevents most mid-term audits from occurring because the payments are more accurate from month to month and not based upon an estimate from previous years payroll.  This prevents an unwelcome surprise from occurring at the end of a term when a business under pays premium throughout the year and has an unexpected payment to end the year.

 

Indiana Workers Compensation 2019

Indiana Workers Compensation Rates are going down by an average of more than 7%. 

Indiana Workers Compensation Rates 2019 will be going down by an amount of 7.6 percent on average for businesses throughout the state. The Department of Insurance approved the decrease in the month of October and the benefits go in to effect the first of January 2019. This savings is estimated to amount to a savings of more than $60 million for Indiana Businesses.

Indiana Workers Compensation

Why are Indiana Workers Compensation Rates 2019 Declining

Many things go in to what a business pays for workers compensation insurance. The experience modification rate of the business and the strength of the assigned risk provider in the particular state equate an enormous amount towards what a carrier decides to charge a business for coverage.  Indiana Workers Compensation are decreasing because of lowering frequency of worker injuries. The department of insurance also credited a robust job market as a reason for lower rates because as the economy grows people open more businesses which create a larger base for insurers to collect premiums.

Indiana Farm In Winter

How can Business Owners Maximize saving on Indiana Workers Compensation Rates 2019?

Shop Around Your Indiana Workers Compensation Policy

It is never a good idea to switch carriers at the drop of a hat because of a small drop in premium. At the same time it is equally important to shop your policy around periodically to ensure your carrier is offering a competitive price. An efficient way to do this is to partner with an independent agent.

Use an Independent Agent

Partnering with an independent agent is always a great way to ensure maximum savings on the most comprehensive coverage available. An independent agent is a good partner because they can shop your policy around to multiple carriers in an attempt to get better coverage at lower rates by forcing the carriers to compete for your coverage. An independent agent will allow you to focus on running your business while your agent shops around your insurance policy.

Ensure Your Business is Classified Properly

Far too many businesses have employees that are not classified properly. If you have different types of employees than it is important to discuss this with your insurance agent at renewal. This can be an issue if you have some employees who are in office/clerical positions yet other employees who may be in other positions that are more physical in nature. When employees are classified improperly, it is typically cleared up during the post term audit.  Even when t his mistake gets cleared up during the end of term audit, it still causes the business to either over pay throughout the year or have an unexpected additional payment at the end of the term. In order to not over or underpay your insurance premium, make sure you are placed in the proper classification code.

 

California Workers Compensation Rates 2019

Prices are Declining for California Workers Compensation Rates in 2019 

California Workers Compensation Rates 2019 are going to cost the business community less than in 2018. The average rate of $1.63 per $100 in payroll by Jan. 1 will be approximately 72 percent lower than when rates peaked in 2015. In 2015 the recommended rate was $2.81 per $100 in payroll.  According to California Insurance Commissioner Dave Jones, “Cost savings in the workers’ compensation system have helped insurers and employers deserve to share in the cost savings through lower premiums,” This is the lowest rates for workers compensation insurance have been in the state of California in five years.

Iconic Golden Gate Bridge, atracts businesses to San Francisco. Those businesses will be paying less for California Workers Compensation Rates 2019.

What is contributing to Lower California Workers Compensation Rates 2019?

California has some of the highest rates for workers compensation insurance in the country the California Workers Compensation Bureau WCIRB has pointed to a high frequency of permanent disability claims as a reason for higher costs. Also, California has a higher than average cost of handling claims and delivering benefits. This contributes to the state having higher rates for workers compensation premium. Businesses in the state of California spent $16.2 billion on workers’ compensation just last year.

In 2019, California Workers Compensation Rates are continuing to decrease for the fifth straight year primarily because of reforms made to fight the opioid epidemic, low inflation for medical and pharmaceutical costs, and increased fraud investigations. The amount paid out for opioids in 2018 was nearly a fifth of what it was in 2013. This drop was from $15,687 to $3,204 per 100 claims, according to WCIRB, the California Workers Compensation Insurance Rating Bureau. A large part of the reason for the decrease in what the workers compensation system paid out for opioid prescriptions is because California enacted a program called CURES (Controlled Substance Utilization Review and Evaluation System). CURES is a database of Schedule II, III and IV controlled substance prescriptions dispensed in California serving the public health, regulatory oversight agencies, and law enforcement.The CURES Program requires dispensing pharmacies, clinics, or other dispensers of Schedule II through IV controlled substances to provide specified dispensing information to the Department of Justice on a weekly basis in a format approved and accepted by the DOJ. This has significantly decreased the amount of opioid abuse throughout the state and that has benefited the workers compensation system.

Iconic Hollywood, California

What can Business Owners do to continue saving on California Workers Compensation Rates 2019

California Workers Compensation Rates 2019 are decreasing for the fifth straight year. This represents a decrease of 72 percent over this time period, but businesses in California still pay more for workers comp coverage than nearly all states throughout the country. Because of these high rates, it is important to maximize savings in any way possible. Here are five ways business owners can alter the way they do business in order to save on commercial insurance.

Make sure your business is classified properly

Far too many businesses are classified improperly for purposes of workers compensation insurance. This is attributed to a number of reasons, but many times it is because a business owner rushes through the quoting process when purchasing Workmans Comp Insurance California. An insurance agent can only act upon the information they are given by the business owner when they are shopping for the best coverage to fit a business owners needs. If the business owner does not explain many intricacies of their business, the business may be classified improperly and pay more or less for coverage throughout the year. This mistake usually gets cleared during the end of term audit, but it can cause a business to owe additional premium. Even if the business over pays and is issued a refund, it means the business has tied up valuable cash flow in unnecessary premium payments throughout the year. These unnecessary payments could have been used on other more important business expenses.

Implement a Safety Program

A Safety Program can help limit the cost of workers compensation insurance in California because it will limit both the frequency and severity of claims. When you business has less claims and the claims you do have are small, the insurance carrier is more likely to offer your business a favorable rate for premium.

Start the Safety Program the day employees are hired

Safety Programs should be a part of your company culture. This should not start after a month in which a few accidents occur. Safety should be part of the training program from the moment an employee starts on the job. The more the business (especially the key employees) talk about safety, the more likely that message is to fester throughout the organization.

Add a Return-to-Work Program to your Safety Policy

A Return to Work Program can significantly impact your experience modification rating in a positive way. When an employee is hurt and not able to work they are much more likely to develop new habits outside of their daily work routine. The longer they stay off the job, the more likely the injured employee is to become long term unemployed. This can have a drastic impact on the experience modification rating of the business. Businesses that are able to get an employee back on the job, even in a limited capacity, are more likely to have those employees return to permanent work.

Communicate with your Insurance Carrier and Healthcare Provider

Communication is key when it comes to navigating the workers compensation system. This is true for the business owner, the injured worker, the insurance agent as well as the underwriter who represents the insurance carrier. The business owner has a responsibility to help the injured worker navigate the workers compensation system and get the care they deserve while not able to work. It is important to keep your agent in the loop throughout this process even though it is the responsibility of the carrier to administer the program. Keeping the agent in the loop can help in the unfortunate event that the carrier is not living up to their end of the bargain. If the agent knows about this process throughout, they can help hold the carrier accountable.

Surfing the California Coast

What are the Requirements for Workers Compensation Insurance Coverage in the State of California?

In California, all employers are required to purchase workers compensation coverage regardless of the number of employees. Sole Proprietors are not automatically included in coverage, but can elect to be included using the Acord 130 Application. Partners are automatically included on policies and they are not allowed to be exempt. Corporate Officers who happen to be the sole shareholder are excluded from coverage, but they have the ability to elect coverage if they so choose. All LLC Members who work within a business are included for coverage, but non-working LLC Members are excluded from coverage unless they elect to be covered using the Acord 130 form.

What are the Payroll Requirements for Business Owners in California?

According to California regulation, Sole Proprietors who elect to include themselves on workers comp coverage must use a minimum payroll amount of $52,000 and a maximum of $133,900 for rating purposes as of January First, 2019. Partners, Officers and LLC Members who do not excluded themselves from coverage must utilize a minimum payroll of $52,000 and a maximum of $133,900 for the purpose of rating workers comp premium.

 

Logo for the Insurance Shop LLCMy Insurance Question is a blog published by the insurance experts at the Insurance Shop LLC.  If you are in the market for any form of commercial insurance give us a call at 1-800-800-4864 or start a quote here: Start a Quote with The Insurance Shop

 

Workers Compensation Insurance Rates Tennessee 2019

Steep Decline in Workers Compensation Insurance Rates Tennessee 2019

For the sixth year in a row, the Tennessee Business Community will benefit from a decrease in the amount they pay for workers compensation insurance premium. Earlier this month, the Tennessee Department of Commerce and Insurance (TDC&I) announced an approval of a 19% decrease in pure premium rates for Workers Compensation Insurance Rates Tennessee 2019. This reduction is in addition to previous reductions of 12.6% and 12.8% that were approved in 2017 and 2018. This current reduction will go in to effect on the first of March 2019.

Workers Compensation Insurance Rates Tennessee 2019

What Caused a Reduction in Workers Compensation Insurance Rates Tennessee 2019?

The main reasons for a reduction in Workers Compensation Insurance Rates Tennessee 2019 is because employers are seeing fewer significant workplace injuries, a decrease in lost-time frequency, and the overall average cost per case as well as the medical cost per case have decreased.

Johnny CashMany within the industry in the state of Tennessee are complimenting the reforms made to the workers’ compensation system in 2013. These reforms especially contributed to a decrease in lost-time frequency. This means injured workers are spending less time off the job and are returning to full-time work more quickly and more often than in years past. In addition to a decrease in lost-time, both indemnity average cost per case and medical average cost per case have remained “relatively stable” according to representatives from the National Council on Compensation Insurance (NCCI).

Because the insurance carriers have benefited from less costs some of the savings are being redistributed to the business community in the state of Tennessee. These savings are being redistributed in the form of lower Tennessee Workers Compensation Insurance Premiums. Since 2013, Tennessee has seen a reduction of 48% on average for workers compensation premium over the past five years.

Before the most recent reductions in premium, Tennessee was the 28th most affordable state in the country for workers comp coverage according to a biennial study done every two years by the state of Oregon. When this study is released again in March of 2019 Tennessee can expect to be much lower in the rankings.

 

Smokey Mountains Panorama Workers Compensation Insurance Rates Tennessee 2019

What is a Ghost Policy?

Have you heard the term Ghost Policy?

It is typically referred to in regards to workers compensation insurance.  A Ghost Insurance Policy is a term used to describe a specific type of workers’ compensation insurance policy. This type of policy is issued to individual business owners that have no direct coverage value. It can be a great policy for small contractors and subcontractors who have no employees or subcontractors.

Ghost Policy

What is a Ghost Policy?

A Ghost Policy is a minimum earned premium policy. A policy of this nature commonly costs between $750 and $1000 annually. This is depending on the state the policy is issued and several factors related to the industry the business operates.  One major difference from a traditional workers comp policy is that a Ghost Insurance Policy has no payroll calculated into the premium.  It also excludes all owners from the policy.  This is where the term “Ghost”comes from.  Now the premium will vary by carrier and includes the state expense constant, There are minimum premium amounts required to administer a policy.

Why might someone want a Ghost Policy?

While many business owners might think it is a waste of money to purchase this type of a policy, but it may be a preferable alternative to going without coverage for a number of reasons.  A Ghost Policy enables a business owner to have a certificate of insurance issued.  Many contracts require a certificate of insurance in order to secure financing and to do business legally in many states.  In addition, a Ghost Insurance Policy can cost a fraction compared to a policy including the owner. Also, in most cases, a Ghost Policy provides employer liability protection in the event an employee is hired or a payment is made to an uninsured subcontractor. Uninsured Subcontractors are especially important to protect your self and your business from, even if you only interact with subcontractors infrequently. Trusting that a subcontractor is self insured is a good way to get your business in to a situation no business owner wants to be in.

Ghost policies don’t provide coverage, so why would I want one?

The biggest reason small contractor or subcontractors benefits from a Ghost Insurance Policy is to meet state legal requirements or to provide a certificate of insurance to another client or general contractor. Many other businesses, customers, and other contractors require an independent contractor to provide a certificate of insurance in order to enter into a contract with them. The fact that the business does not hire employees is inconsequential to them. They want to have a certificate of insurance in place to make sure they are not held liable for damages or bodily injury that occur within the contract. Many independent contractors do not employ any other people.  These contractors want to prevent high workers compensation premiums just to cover themselves with traditional comp coverage. Unfortunately, in some states these contractors are required to show some proof of insurance coverage. In most instances, a Ghost Policy will help them meet these requirements the most cost effective way.

Residential Cleaning

How a Residential Cleaning Company Can Benefit From Pay as You Go Workers Comp

A Woman Working at a Residential Cleaning Company. Workers’ Compensation Insurance is required by law for businesses in most states. So is General Liability in most industries. For that reason, these two policies are the bare minimum coverage a business needs to be in business. Now for a cash-strapped, seasonal, or start-up business; coming up with the initial payment to get coverage in place can be difficult. Because of this issue, many carriers have come up with alternative payment options for these necessary coverages. The most popular alternative payment option is Pay as You Go Workers’ Compensation. One industry in particular that benefits from this option is the residential cleaning industry. Here are four ways residential cleaning companies benefit from choosing the Pay as You Go Option for Workers Comp Coverage.

  • Pay-as-You-Go has lower up-front costs.
  • Pay-as-You-Go frees up cash for more pressing business needs.
  • Pay-as-You-Go allows businesses to pay premium monthly.
  • Pay-as-You-Go prevents most audits

Residential Cleaning Companies depend upon their employees to keep their customers happy.

Lower Up Front Costs

When a cleaning company decides to go with a traditional workers compensation policy, they are required to make a large lump sum payment just to get coverage in place. They later have to make nine monthly payments at the end of the term. These payments are based upon an estimate of payroll from last year. If your business has plenty of cash on hand and your employee hours are regular from year to year this may not be much of a problem. Most residential cleaning companies do not have regular payroll or mounds of cash on hand. If this sounds like your business than the Pay as You Go Option is a great way to get coverage in place without tying up too much cash.

Frees Up Cash

Now if you are a business that is not rolling in cash, you may need to consider the Pay as You Go Option.  This type of alternative payment method for workers comp coverage allows you to not only lower your up front costs, but it allows you to free up cash throughout the year by paying your premium in real-time each month based upon the accurate payroll from the previous month. This is instead of paying premium based upon an estimate of payroll from last year or the three previous years. This estimate can cause you to severely over or under-pay on premium.

Allows Monthly Payments

Allowing payments of premium each month can help your business in many ways. One of the best ways it helps is by keeping your payments accurate from paying them in real-time. When workers comp premiums are paid on an estimate basis, it can cause you to severely under or over-pay throughout the year. This gets cleared up whenever an audit takes place and an audit takes place at the end of each term, but if you under pay throughout the year it can cause your business to have a surprise payment at the end of the term. Even if you are one of the lucky businesses who over-pays and gets a refund at the end of the term, you still have had additional cash tied up in premium payments throughout the year. This is cash that could have been spent on more pressing needs.

Buying the proper chemicals is an essential part of any successful residential cleaning company.

Prevent Audits

An additional benefit your residential cleaning business can gain from choosing the Pay as You Go Option is to prevent audits mid-term. Because the payroll is calculated monthly by a payroll company it is accurate. This eliminates the need for a mid term audit because the payroll company is auditing the premium payment each month. The Pay as You Go Option also makes the end of term audit much more smooth because the payments have been done based on actual payroll each month. Your staff will spend less time gathering data to compare your actual payroll with the estimated payroll and premium payments based on that estimate. If you have ever underpaid premium and owed a significant amount at the end of the term, you appreciate the accuracy this program provides.