Archive for May, 2010

OSHA Recordables – test your knowledge, part 2

Tuesday, May 11th, 2010

We’ve recently been challenging ourselves with OSHA recordable quizzes posted by the smart folks at the Advanced Safety and Health News Blog. We found them interesting enough that over the next few weeks, we will pose the scenarios / questions and you can test your knowledge. Click the headlines to go to the respective blog post and learn the answers.
Recordkeeping Quiz #6: counting days
Scenario: One of your employees injured his foot at work on a Thursday. Your physician said he could not work and scheduled a follow-up appointment on the following Tuesday. The physician would then determine if your employee could return to work or would need to be away longer. The employee was not scheduled to work on Saturday or Sunday, but was scheduled to be at work on Monday.
Question: Since your employee was not scheduled to work on the weekend, do you need to record this time as part of the days away from work?
Recordkeeping Quiz #7: are flu illnesses recordable?
Scenario: Your business is in the middle of flu season and many employees are calling in sick. Two of the employees are claiming that they have been diagnosed by their doctors with the H1N1 flu. They say they contracted the flu at work from a co-worker who was also diagnosed with the H1N1. The two employees want you to record their illnesses because they say they got the flu at work.
Question: Are you required to record these flu related illnesses?
OSHA Recordkeeping Quiz #8: maximum recordable days
Scenario: One of your employees suffered a very serious broken leg due to an accident at work. She had surgery and is in rehabilitation. Her physician cannot give a definite date or even an estimate of when she will be able to return to work. She may be out of work for many months, but is expected to fully recover and be able to work in her job again.
Question: Is there a maximum number of days that should be recorded on the OSHA 300 Log for cases such as this one?
OSHA Recordkeeping Quiz #9: posting the entire 300 Log
Scenario: You are the Safety Manager for your company and are responsible for completing the OSHA 300 Log. It is time for you to have your new Plant Manager sign the “Summary of Work-Related Injuries and Illnesses” Form 300-A so you can post it as required by the standard. You spent quite a bit of time explaining to him how the whole OSHA recordkeeping process works, and he demonstrated quite an interest in what you were doing and the types of injuries your plant was experiencing.
As you are leaving his office, he makes the following statement to you: “When it comes to safety, we have no secrets around here. I think it would be a great idea if you post the entire 300 Log along with the Summary so people see just exactly what type of injuries we are having.”
Question: How should you respond to his statement?

NCCI’s View From the Bridge

Monday, May 10th, 2010

At its annual conference in Orlando, the National Commission on Compensation Insurance (NCCI) recently presented an overview of the state of workers compensation insurance across the country . Dennis Mealy, NCCI’s chief actuary, presented to a standing-room only crowd, which is notable in itself, as the normal crowd for an actuary would fit in the proverbial phone booth.
Anyone with an interest in workers comp should take a peak at Mealy’s presentation. As is often the case, viewers will pull out different nuggets, depending upon their points of view. Here’s what jumped out at me:

  • From 2008 to 2009 workers comp premiums dropped by 11.8%. No surprise, as premiums are tied to payrolls and the latter have tanked along with the economy. In addition, average premium rates have declined steadily since 2003, as no politician wants to approve a rate hike.
  • Net written premium from 2007 to 2009 is down 23%.
  • The payroll for manufacturing has been on a steady decline over the past two decades.
  • The payrolls for manufacturing and contracting comprise 20% of comp payroll nationwide, but generate 40% of the premium. Again, no surprise, as the manual rates in these areas are higher then the rates in other occupations.
  • Investment gain – the crucial money made off the float of premium dollars – dropped to 7.1% in 2008, after averaging nearly 15% in prior years.
  • The combined ratio for workers comp is running around 110 – in other words, for every dollar insurers collect in premium, they are spending $1.10.
  • Insurers continue to offer premium discounts in order to secure new business or retain existing business (what my colleague Tom Lynch refers to as “eating their young”).
  • Frequency of injuries continues to trend downward.
  • The average cost of indemnity per lost-time claim and the average medical cost per claim continue to rise.

There you have it: premium dollars are down, investment returns are down, and losses are up. These days it’s not easy making money in workers comp. On the other hand, the economy seems to be recovering; the prospect of virtually universal health coverage could well have a positive impact on comp; and despite all the problems, residual markets remain small.
As is usually the case, insurers are betting that they can beat the odds of a tough market: by writing only the best businesses, by preventing injuries through loss control, by managing claims aggressively and by investing prudently.
There’s Always Tomorrow
What you see from the bridge depends upon what you are looking for: where the despairing see reasons for jumping, the optimist simply enjoys the view. The risk transfer business requires optimism (for everyone, that is, except the actuaries). The great insurance wager never really changes: carriers are betting that premium dollars collected will ultimately exceed what they have to pay out in losses. The negative results of the last few years are viewed as an aberation. Just wait ’til Tomorrow:
The sun’ll come out
Tomorrow
So ya gotta hang on
‘Til tomorrow
Come what may
Tomorrow! Tomorrow!
I love ya Tomorrow!
You’re always
A day
A way!
For insurers, that “tomorrow” hopefully includes more favorable rates, improved return on investment, employers truly committed to safer workplaces, employees who really pay attention, and, while we’re making a wish list, selfless attorneys. You gotta love tomorrow!

Trusts in Trouble

Friday, May 7th, 2010

We recently blogged the collapse of the self-insurance trust market in New York. When CRM Holdings, a Bermuda based operator of self insurance groups (SIGs), folded like a house of cards, the New York comp board went after the healthy SIGs to cover CRM’s liabilities. They hit these innocent folks with a whopping $11 million assessment. As a result, a number of SIGs abandoned the New York market, only to learn two years later that the comp board’s assessments were illegal. Oh, well. It seemed like a good idea at the time.
Now we move a few miles to the east and find a similar situation brewing in Connecticut. Municipal Interlocal Risk Management Agency (MIRMA) has been writing comp policies for municipalities since 2002. The great thing about comp is that it’s so easy: offer coverage at rates lower than competitors, collect the premiums and pay the claims as they come in. Unfortunately, the premiums MIRMA has been collecting are not covering the claims generated by the insured municipalities. So MIRMA is in the uncomfortable position of trying to collect additional funds from cash-strapped municipalities. For example, North Branford owes $600,000, Westbrook owes $158,000; and Killingworth owes $71,188. In these trying times, that’s not exactly chump change.
The legislature passed a bill to give the municipalities more time to come up with the money. The bill would have amended the amount MIRMA was required to keep in its reserves, and thereby allow the towns to pay the amounts they owe, interest free, over four years. Governor Jodi Rell is not buying that approach; she vetoed the bill. The governor issued a statement:

MIRMA has been undercapitalized since its creation. Although it has been given several years to remedy its financial situation, it has failed to do so. Now, providers are not being paid and injured workers are at risk of not being treated. MIRMA can no longer exist in its current state of outright capital inadequacy.

The governor went on to state that MIRMA stopped paying workers’ compensation claims simply because it does not have the money to pay, which is “wholly unacceptable.” She wrote that MIRMA’s deficit has grown by more than 300 percent in the last six years, and is predicted to reach well over $15 million by 2013. That might seem small by CRM standards – their deficit was upwards of $50 million – but then again, Connecticut is a lot smaller than New York.
Untrustworthy Trusts
The governor has ordered a complete review of MIRMA’s finances. I could write the report without even looking at the books. In their effort to build market share, MIRMA underpriced their policies. They probably spent a lot on marketing and frills. To balance the books, they under-reserved claims, hoping to cover the cash short-fall by building market share. It worked until it didn’t. Now they have run out of money, so they cannot pay the claims. If the auditors have a sense of history, they will conclude that MIRMA operates like a subsidiary of CRM.
NOTE: CRM, still operating in California, appears to be on the ropes.
Connecticut’s short term solution – requiring the insured municipalities to come up with the money – is fair, if hardly feasible. At least Connecticut is not going to penalize the municipalities who declined to participate in what appears to be MIRMA’s modified Ponzi scheme. That’s good. But it remains to be seen how cash-strapped municipalities – already facing substantial budget cuts – are going to come up with these substantial sums of money.
When it comes to self-insurance trusts in the Empire and Nutmeg states, it’s time to put away the beer kegs and cancel the golf outing: the party is over.

Tasty Buffet at Cavalcade of Risk

Wednesday, May 5th, 2010

The latest edition of Cavalcade of Risk is up, hosted by Healthcare Economist. The menu is short and sweet, full of tasty morsels. If you have an appetite for risk, you’ll want to delve into these items:

  • Did Goldman Sachs do anything wrong?
  • When does a double digit increase in health premiums reach the point of gouging?
  • Does travel insurance cover volcanoes?
  • The answers – or, at a minimum, well-informed opinions, reside here.

    OSHA Recordables – test your knowledge

    Tuesday, May 4th, 2010

    We’ve recently been challenging ourselves with OSHA recordable quizzes posted by the smart folks at the Advanced Safety and Health News Blog. We found them interesting enough that over the next week or so, we will pose the scenarios / questions and you can test your knowledge. Click the headlines to go to the respective blog post and learn the answers.
    OSHA Recordkeeping Quiz #1: horseplay
    Scenario: Two of your supervisors completed their work for the day and had entered the change trailer to change clothes and proceed home. There was some bantering back and forth concerning how to beat the traffic at shift’s end. The discussion escalated into a physical confrontation where one supervisor allegedly pulled a knife and struck the other in the right bicep, causing a laceration that required sutures to close.
    Question: Is the injury the one employee received an OSHA recordable or not?
    OSHA Recordkeeping Quiz #2: go-cart racing
    Scenario: An employee is injured while participating in go-cart racing, which occurred during an off-site company sponsored team-building event. Employees were required to attend the off-site meeting and lunch, but were then free to choose among the following options: (1) participating in the team-building event; (2) returning to the office to finish the work day; or (3) taking a ½-day vacation.
    Questions: Is an injury incurred during the go-cart racing considered to be work-related? Is the answer any different if an employee elects to stay for the go-cart racing but is not required to participate and is injured while watching the racing?
    OSHA Recordkeeping Quiz #3: personal tasks
    Scenario: An employee knits a sweater for her daughter during the lunch break. She lacerates her hand and needed sutures. She is engaged in a personal task.
    Question: Are lunch breaks or other breaks considered “assigned working hours?” Is the case recordable?
    Recordkeeping Quiz #4: injuries in company parking lots
    Scenario 1: Employee A drives to work, parks her car in the company parking lot and is walking across the lot when she is struck by a car driven by employee B, who is commuting to work. Both employees are seriously injured in the accident.
    Scenario 2: Employee C commutes from home to work and parks his personally-owned vehicles in the company controlled parking lot. The employee opened the driver side door and started to exit his car when he caught his right foot on the raised door threshold. The employee subsequently fell onto the parking lot surface and sustained a right knee cap injury that required medical treatment.
    Question: Is either case work-related?
    OSHA Recordkeeping Quiz #5: damage to dentures
    Scenario: One of your employees was hit in the mouth by an object while he was performing his normal work duties. However, his dental bridge was damaged. He has not wanted any medical or dental treatment.
    Question 1: Would damage to a denture in the presence of no other discernible injury be considered a recordable injury requiring entry on the OSHA 300 log even when medical treatment is not administered?
    Question 2: In the context of repair to a denture, what type of activity would be considered medical treatment?
    Question 3: Would simple repair to a denture meet the threshold for the definition of medical treatment?

    Annals of Compensability: PT Stands for Pole Therapy?

    Monday, May 3rd, 2010

    Christina Gamble worked at the family friendly Red Robin restaurant in Quakertown PA. She claimed to have fallen and hurt her back. She quit on the spot and went to work for Target, where she worked for two weeks. She filed a workers comp claim for the restaurant injury, which slowly wended its way through the Pennsylvania system until she was awarded benefits nearly a year after the initial injury. Gamble said she was unable to work because standing and changing positions was difficult. She collected over $20,000 in indemnity.
    An anonymous tip sent investigators to C.R. Fanny’s Gentleman’s Club and Sports Bar in Easton, where Gamble worked out the kinks in her back by removing her clothing and writhing around a pole. C.R. Fanny’s (read the name aloud for full effect) is noted for its not-exactly highbrow entertainment such as applesauce and Jello wrestling, along with a “frozen thong contest” that is beyond the descriptive powers of this particular blog.
    Gamble has been indicted for two counts of insurance fraud and theft by deception. She told investigators that she became an exotic dancer because she and her husband were under enormous financial pressures.
    As is so often the case, a number of questions arise:

  • Why was the injury deemed compensable in the first place?
  • With Gamble quitting her job at the restaurant, did anyone at Red Robin or the insurance company pay any attention to this claim?
  • Did Gamble’s doctor attempt to test her physical mobility in any way – for example, using the unorthodox “sliding down the back of a chair” test?
  • Lastly, can Gamble find the proverbial Philadelphia lawyer to take her case, arguing, for example, that pole writhing might indeed be appropriate treatment for a gimpy back and that frozen thongs were an ingenious method of applying ice in the general vicinity of the injured body part?
  • Ms. Gamble should have followed immortal Will Rogers’s advice on gambling: “Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.” (I wonder what Will would have thought about AIG…)
    NOTE: Thanks to Pennsylvania reader Rick G. for the heads up on this story.