W/C Reform Bill Signed
On September 18 Governor Jerry Brown signed SB863, a bill providing broad changes to California’s workers compensation system. The bill attracted broad support from both Democrats and Republicans and it was forged from an unusual alliance of labor and large employers.
The changes are due to be put into effect on January 1, 2013. The bill will increase permanent disability awards by an average of 30% per claimant. The existing award structure was widely seen to be insufficient.
To offset the increased cost, the bill will reduce litigation costs by creating a binding independent review system; this review system should also substantially shorten the timeline for approval of treatment plans, which can currently take as long as two years.
The bill also seeks to save substantial costs in the lien filing system. A new $150 fee has been imposed that must be included with the filing of a lien. This fee will bring in significant revenue and will also decrease the number of liens filed. As much as $600 million annually could be saved through the lien filing changes.
The bill also seeks to reduce costs by prohibiting PD add-ons for psychological conditions, sexual disorders and sleep dysfunction.
There is considerable uncertainty as to how the numbers will actually work out but it seems likely that overall cost savings can be achieved, bringing some relief to California employers who currently are paying workers comp rates that are among the highest in the nation.
The Power of Habit
A fascinating book is Charles Duhigg’s “The Power of Habit”. Good habits are critical not just for individuals but for companies as well. A major ingredient of a company’s success can be having profitable habits instilled with the company’s employees.
Starbucks teaches their employees to deal with difficult customers with routines that they try to instill as habits. The result is fewer unhappy customers and less disruption in their stores.
People who learn how to create positive habits and break bad habits can see major life improvements.
People often struggle for years to break bad habits. The key is to understand the habit cycle and how to alter it, not break it.
Let’s say someone has a problem with eating ice cream late at night (Ok, I admit it, that’s me). In my case, trying to break this bad habit with will power alone has been unsuccessful over an extended period of time.
Mr. Duhigg states that rather than just trying to abstain, I should be finding a substitute that works. The best substitution may be something that isn’t obvious. An obvious solution might be substituting yogurt for ice cream, but a more effective substitute could be sitting down to play the piano every time the craving comes on, the point is to experiment with different substitutions and learn what works best.
Good luck getting rid of your bad habits! And you may want to give Mr. Duhigg’s book a try.
Woman Files $1.7 Billion Claim Against City of Santa Monica
Denise Barton has filed a $1.7 Billion dollar claim against the City of Santa Monica saying that their “smart” parking meters are making her sick.
Deb Hossli, who works for Santa Monica’s Risk Management Dept. said that a liability adjuster for the city is investigating the claim to determine if it should be honored or rejected.
Come to think of it, I wasn’t feeling too well after I stood next to that cell phone tower last week…….
Proposed Overhaul of California’s Workers Comp System
A proposed major overhaul of California’s workers comp system was negotiated by the California Labor Federation and major self insured employers such as Disney and Safeway. The 170 page bill was introduced in the state legislature on Friday, August 24.
The aim of the legislation is to provide an increased level of benefits to workers who are injured on the job, with the cost of these increased benefits estimated at $700 million per year. The goal is that this will be paid for with efficiency savings of $1 billion or more per year.
The proposed bill is attracting opposition from injured workers groups who claim that the bill will actually reduce disability compensation and medical care access.
The efficiency savings claimed by the bill are also receiving scrutiny, the Workers’ Compensation Insurance Rating Bureau has estimated that the bill will result in savings of only $400 million, not the $1 billion claimed.
In order to be passed into law in its current form, the bill must be passed by this Friday at midnight.
Top Methods for Advancing Your Career
Upgrade Your Tech Skills
We live in a tech driven world. Upgrading your tech skills will enable you to communicate better with your clients. You may learn ways to complete tasks faster and more efficiently. This is a great way to impress your superiors and to make yourself more attractive to a potential employer.
Ask For More Responsibility
Only a small percentage of employees ask for more responsibility. If you do, it will make you stand out from the crowd, just make sure you don’t take on more than you can possibly handle.
Improve Your Negotiating Skills
Learning to negotiate a better deal on behalf of your company will improve your company’s bottom line and improve your chances to move up the company ladder. A good start to improving your negotiating skills is investigating the many articles on negotiating skills available on line.
Having beneficial business relationships, both inside and outside your company is one of the best ways to ensure you will have an upward career trajectory.
Federal Reserve Sells the Last of its AIG Assets
Last Thursday, August 23rd, the Federal Reserve Bank sold the last of the assets it acquired to bail out AIG in the 2008 financial crisis. The Fed announced that taxpayers earned a profit of $17.7 billion as the Fed was able to sell the assets at a higher price than they acquired them for.
The Treasury Department still owns 53% of AIG, but that is down from an ownership stake that at one time was 92%.
Between the Fed and the Treasury Dept. combined, the government bailed out AIG to the tune of $182 billion. All that is remaining of the investment is the Treasury Department’s stake which is currently valued at $25 billion. The Treasury has been periodically selling off their AIG stock. Overall, the government estimates that it will earn a $15 billion profit on the AIG bailout.
Skills Vs. Culture Fit – Which is More Important?
We talked in an earlier blog post about the importance of establishing an employer brand, encouraging values that are instilled company-wide.
If a company is establishing company-wide values, such as the value of putting team first, it makes great sense to hire people that can easily adapt to those values. It may be much easier to train employees on particular technical skills, than to try and instill values that conflict with an employee’s values.
Many successful companies consider values first when recruiting, and technical skills second.
New Workers Comp Reform for California?
Legislators in Sacramento are considering new workers comp reform. California’s workers comp system still has serious shortcomings despite the landmark 2004 reform.
Although workers comp rates have fallen dramatically from the sky high rates that existed in 2003, California’s workers comp rates are still the 5th highest in the nation and it’s rates are considerably higher than neighboring states, putting California at a competitive disadvantage.
In 2003 employers in California paid on average an obscenely high 6.45% of payroll in workers comp premiums. By 2010 the average rate had come all the way down to $2.68. The average rate in Colorado however, is just $1.39, slightly more than half the average rate in California, the average rate in Arizona is $1.71 and in Nevada $2.13.
Despite California’s high rates, insurance carriers still are not faring well in this line of business with combined ratios running from 125% to 130% over the last three years. This means that insurers are paying out 25% to 30% more in claims and expenses than they are receiving in premiums, not including investment income.
The level of combined ratios is unsustainable and creates fear that we may be headed to another crisis of carrier insolvencies. 25 workers comp carriers became insolvent in California in 2004 and 2005 combined. This highlights the urgent need for further reform.
Advantages of Hiring Older Workers
Being in the recruiting business, we know that age discrimination is real. It can be considerably more difficult getting hired after age 50. This is due at least in part by the belief held by many that older workers are less productive than younger workers. But is this true? In fact, particularly for office workers, it is a misconception that older workers are less productive.
Studies of older office workers consistently show that they are as productive as younger workers and carry some advantages. Older workers tend to be more loyal than younger workers. Their greater experience often means they can hit the ground running on tasks that may require a learning curve for a younger worker. Older workers also take less sick time than younger workers and are less likely to quit.
More experience means that older workers often have learned how to better manage relationships in an office environment.
The good news in our aging workforce is that on average older office workers are just as effective as their younger counterparts and in many cases can be even more effective.
Tristar to Buy REM
Tristar Risk Management, the nation’s largest privately owned third party claims administrator, announced on April 13, that it is buying Risk Enterprise Management (REM). REM also supplies third party claims services.
Tristar, headquartered in Long Beach, CA, currently has over 600 employees in 22 branch offices. REM is headquartered in New Jersey and has 22 offices across the U.S.
The combined firm will have revenues in excess of $100 million dollars and will have just slightly less than 1,000 employees.
The REM name will not be used moving forward, and the combined firm will operate as Tristar Risk Management.
Should You Talk Politics at Work?
It is well known that it is often a good idea to exercise discretion when discussing religion or politics at a social gathering. But should one discuss politics at work?
According to a CareerBuilder nationwide survey, only 36% of workers discuss politics at work, indicating that many are exercising discretion at work.
Being a bit careful appears to be a very good idea, as 23% of employees that have discussed politics at work have reported that they have gotten into a heated argument with a colleague or boss.
These arguments frequently lead to awkwardness or poor relationships, ample reason to tread carefully when discussing politics in the workplace.
Is Your Company Creating a Strong “Employment Brand”
In order to attract the top talent in the marketplace it is important that a company create an image of being a great place to work.
An employment brand starts from the top. Management must decide what actions it is going to take, what culture it is going to instill, to create a positive work environment.
Management must then ensure that all managers and supervisors buy into the vision. The company culture must be applied consistently across the enterprise and over time. Some of the key things looked for by employees are:
- Flexible working hours
- Opportunity for Advancement
- Interesting work and opportunity to present ideas to management
- Learning and Training opportunities
Creating a positive employment brand can have many positive benefits such as reduced turnover costs, more engaged and productive employees and access to higher level candidates.
Top Workplace Myths
Myth: If a boss bullies an employee, he/she can be sued under “hostile workplace” rules.
Truth: Bullying an employee is bad management but it’s usually not against the law. The only time it is against the law is when the the bullying is caused by the employee’s race, religion, gender or other protected class.
Myth: Employers must provide employees with paid time off.
There is no law requiring that employers provide sick time or vacation time. Of course it is very important that employers provide paid time off, for ethical reasons and in order to attract talented workers.
Myth: Your employer can’t reassign you to a completely different job
Truth: Your employer can require you to perform any job. Only a contract that specifies your work duties gives you protection from being assigned to any task at your employers discretion. If your employer asks you to perform a job that you refuse to do, your employer can just terminate your employment.
Why Temping Can be a Good Idea
Temping can be a very good idea for people who do not have a permanent position. Temping can build your professional network, which can lead to opportunities in future years.
Temping eliminates gaps in your resume, many employers look more favorably on resumes that show no breaks in work history.
Temping gives you the opportunity to gain valuable new knowledge from each company you work for. This can upgrade your skills and make you a more attractive candidate to potential employers.
Another benefit of temping is that it keeps your skill sharp. A long layoff can mean your skills will deteriorate.
Many people enjoy temp work more than permanent employment because the frequent changes mean boredom has less of a chance to sink in, also, there will be opportunities to take a week off here or there.
In summary, temping can actually offer several advantages over permanent work, and while there are disadvantages as well, for many people temping is preferable to permanent employment.
Jobless Claims Dip but Too Many Still Unemployed
The Bureau of Labor Statistics reported that U.S.nonfarm payrolls grew by 243,000 jobs in January, substantial better than the 203,000 increase seen in December.
While these numbers are encouraging, the number of unemployed is still much too high. The unemployment rate dropped to 8.3 percent in January, from 8.5 percent in December.
But these numbers do not include workers who have dropped out of the labor force, if they were included, the unemployment rate might be over 10%.
One of the key problems in reducing the unemployment rate is that residential construction is coming back very slowly. In past recessions, construction jobs returning would be a key factor in reducing unemployment, not so this time around.
Also, because job losses in this recession were so rapid and so deep, the economy has a lot farther to go in order to get back to a more normal rate of unemployment.
Hundreds of Former NFL Players Suing Over Head Injuries
There are currently 21 lawsuits with hundreds of former NFL players signed on, alleging that the NFL deliberately hid information regarding the damage done by concussions and other head injuries.
One of the lawsuits alleges “”Rather than warn players that they risked permanent brain injury if they returned to play too soon after sustaining a concussion, the NFL actively deceived players, by misrepresenting to them that concussions did not present serious, life-altering risks”.
In 2010, 154 concussions were reported during the NFL season.
Brent Boyd, a former defensive lineman for the Minnesota Vikings is the only living player suffering from chronic traumatic encephalopathy, a degenerative brain disease often referred to as CTE. More than a dozen former NFL and NHL players have suffered from the disease.
The NFL is hoping that all the cases will be consolidated into one case that will be heard in Philadelphia.
The Experienced Claims Adjuster Designation is a Worker’s Compensation Claims Examiner’s “license to drive” in California. This is a program that is administered by the insurers.
The Designation requirement often creates problems for long term temps and for W/C Examiners who have been out of the market for a few years and want to return.
In our next newsletter we will begin a series on the Designation, its requirements, and the training required to maintain its currency.
Mother of All Liability Cases Speeds Towards Trial
70 Lawyers meet each day in New Orleans to study documents and compare notes on the mother of all liability cases, the federal lawsuit against BP, Transocean and a number of other firms involved in the massive gulf oil spill of 2010.
More than 120,000 claimants have joined on as plaintiffs in the lawsuit which has a scheduled trial date of February 27.
Much of the case, which is expected to reach the Supreme Court, will involve who was primarily at fault, BP, the owner of the rig, or Transocean, who was operating the rig.
In all, there are approximately 250,000 claimants, the 120,ooo claimants in the trial, and a slightly higher number that applied for restitution from the BP 20 billion dollar compensation fund.
California Workers Comp Market Hardening
We called insurance broker Pat Barnes, AVP of Tutton Insurance who is heavily involved with the W/C market for his contractor clients. For 2012 Pat sees a hardening and tightening California W/C market. Pat is estimating his client’s average W/C rates will increase 12 – 20 percent this year. Pat makes the point that increases will vary by line, while contractors may see increases toward the upper end of the range, increases for manufacturers will likely be more moderate.
Pat sees the market tightening particularly for risks where elevated height is involved, such as where scaffolding is used. With fewer carriers competing, rates are strongly increasing.
Mr. Barnes pointed out that the recession has worsened workers comp loss ratios as some workers have filed work comp claims to create income as they fear work may be in short supply.
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Use of Temporary Workers Steadily Increasing
Harris Interactive recently conducted a survey of American businesses which analyzed use of temporary workers. The study revealed companies have been steadily increasing the use of temporary workers since 2009. 28% of firms used temps in 2009, 30% in 2010 and 34% in 2011.
36% of firms say they plan to use temporary workers in 2012, with 35% saying they will most likely convert temporary workers to permanent employees during the year.
Health Insurance Companies Must Justify Rate Increases of 10% or More
As part of the health care overhaul, the Federal Government for the first time has the power to require health insurance companies to justify rate increases of 10% or more. The U.S. Department of Health and Human Services or a state agency reviews the justifications to determine whether or not they are “reasonable”.
If the rate increase is not deemed to be reasonable, the health insurer then has the option to modify the rate increase. If they choose not to moderate the rate increase, they must send an explanation to their insureds explaining the rate increase. 36 states have the authority to reject the rate increase, 14 states do not.
California currently does not have the authority to overrule rate increases.
Federal health officials announced in a statement January 13, 2012, that rate increases proposed by Trustmark Life Insurance for five states have been deemed “unreasonable”.
Bizarre “Flying Body” Liability Case
An Illinois appeals court has ruled in a bizarre case involving an 18 year old man of Japanese origin who was hit by a train in the Edgebrook section of Chicago.
It was raining as Hiroyuki Joho crossed over the tracks. He was hurrying to catch a train, his visibility obscured by the umbrella he was carrying. Witnesses reported that Mr. Joho was smiling as he was struck by the train. A large portion of his body flew 100 feet and struck 58 year old Gayane Zokhrabov. Ms. Zokhrabov broke her leg and wrist and injured her shoulder.
Ms. Zokhrabov sued the estate of Mr. Joho, arguing that his negligence caused Ms. Zokhrabov’s injuries. A judge originally dismissed Ms. Zokhrabov’s suit, saying that Mr. Jojo could not have anticipated Ms. Zokhrabov’ injuries. The appellate court disagreed, in effect saying that Mr. Joho was negligent in crossing the tracks in front of the train and the suit could proceed. Remarkably, in 1951 there was a similar case in Illinois, when a postal worker was injured by the body of an elderly woman who had been hit by a train. The postal worker was driven into his mail cart and broke his leg. Instead of suing the estate of the woman, the postal worker sued the railroad alleging the train was operating an unsafe speed. The postal worker was successful in his suit and was compensated for his injuries.
(Summarized from a Dec. 29 article in the Chicago Tribune)
PRG Referral Contest
Looking to replenish your cash stores after the Christmas Holidays? PRG is running a referral contest for the month of January. Do you know any Workers Comp Examiners, Supervisors or Assistants who are in need of a new position, either temporary or permanent?
Go to our Facebook page, click the “Like” Button at the top of the page, and you are signed up for the contest! Just email us your referrals. Contest rules are on our Facebook page.
Catastrophe Losses Lead to Down Underwriting Year for 2011
Tornadoes caused the largest catastrophe losses in 2011, leading to $27 billion in total catastrophe claims for the first nine months of the year, according to an article from Zacks Investment Research. This was a huge increase over 2010 in which there were just 14 billion in cat losses for the entire year and 2009 when there were just 10.5 billion in losses for the year.
Data shows that for the first nine months of 2011, there were $34.9 billion in underwriting losses for the U.S. insurance industry, 5x greater than the underwriting losses of one year ago. After tax net income was only $8 billion for the first nine months of 2011 as compared with $27 billion for the first nine months a year ago.
“75% of Management is Hiring the Right People”
Owner of 5 businesses, author and New York Times columnist Jay Goltz recently held a webinar in which he stated “75% of Management is Hiring the Right People”. Talented employees drive innovation, help to retain key accounts and attract new accounts. For service businesses particularly, the employees are the business.
With the right employees a business will grow, with the wrong employees, many businesses will disappear.
The question then is, how to locate talented employees? Running ads will frequently attract only those who are out of work at any particular time. In order to gain access to talented job candidates who are already working, often the best strategy is to work with a seasoned recruiting firm who specializes in your particular niche.
AIG repays $972 Million to U.S. Government
AIG paid the Treasury Department $972 in November as partial payment on the debt incurred from the 2008 bailout. AIG received $182 billion from the government and Federal Reserve. AIG has paid back $18 billion so far. The Treasury Dept. now owns a 77% stake in AIG.
Engaged Workers are Happier and More Productive
“Employees who are engaged in their work are fully connected with their work roles. They are bursting with energy, dedicated to their work, and immersed in their work activities.” According to an article published by Arnold B. Bakker, Erasmus University Rotterdam, Institute of Psychology If the goal is to get happier, more productive workers, how is this achieved?
According to Mr. Bakker, an organization gains engaged workers in two ways. One way is to hire people who are already psychologically healthy and engaged. Another way is to structure the work environment to increase engagement. The work environment should supply social support, frequent feedback on work performance, opportunities for working with autonomy, job variety and opportunities for growth. Perhaps the key lesson here is that companies should reach out to their employees to make them feel they are a key part of the organization and that their insights, creativity and job growth are valued assets.
Another interesting outcome of the study was that the most engaged workers are often in organizations where the work demands are very high.
U.S. Unemployment Rate Drops to 2 ½ Year Low
In November the U.S. unemployment rate dropped to it’s lowest level in 2-1/2 years according to the U.S. Labor Department. The jobless rate lowered to 8.6% from 9% in October. Nonfarm payrolls increased by 120,000 jobs, the Labor Department said on Friday, and the jobless rate dropped to 8.6 percent, the lowest since March 2009, from 9 percent in October.
In another positive sign for the economy “Black Friday” sales for the weekend Thursday through Sunday came to $52.4 billion, up from $45 billion last year, according to the National Retail Federation. Sales for Black Friday alone were up 6.6% from 2010, a much better showing than 2010’s .3% increase. Consumer sales account for 70% of the U.S. economy..
Is Digital Advertising Effective for Hard to Fill Jobs?
The short answer is that for positions where there is a small supply of candidates, digital advertising usually doesn’t work well. Workers who are in positions that are in high demand, look at advertising, digital and otherwise, much less than workers who are in low demand positions. When workers are in demand they often just wait for recruiters to call them, having their pick from a variety of opportunities, they don’t need to search on their own.
Often, the best strategy for finding the right candidate for that tough to fill job, is to employ a recruiting firm that has extensive experience recruiting for the position you are trying to fill. A recruiting firm specializing in your niche will have a list of high quality candidates they can immediately call. This can save a great deal of time in filling the position, and as we all know, time is money.
Church Pastor Kills Farmers Agent A former church pastor plead guilty to the murder of Randy Stone, a Farmers agent from western Missouri. The former pastor had a long time affair with David Stone’s wife, and the government is charging that the lovers colluded in killing Mr. Stone. Mr. & Mrs. Stone were long time members of David Love’s congregation. Mrs. Stone has been charged with conspiracy to commit murder in her husband’s death.
Preparing for a job search? A common and unfortunate error is emailing a resume that is not in a commonly used format. Microsoft Works would be an example of a format that should not be used. Employers often tell us about not being able to open a resume in Works or other rarely used formats. Do not underestimate the impact of a very attractive and well designed resume. This tells the hiring manager that you are someone that is capable of producing high quality work.
Make It Real – Avoid the terms that one sees so commonly on resumes such as “excellent verbal and written communication skills”. Anyone involved with hiring has read that many, many times and immediately discounts it. It’s imporant to list your strong points on your resume. Think carefully about what your strengths are and write about them in a way that is original.
Use Bullet Points Bullet points are easier to read than paragraphs, if you use them your words are more likely to be read and more likely to be comprehended.
Use Descriptive Titles Your title could be “Workers Comp Examiner”, or it could be “Managed Workers Comp Claims for 5 Key accounts”, the second title is much more likely to get noticed.
Typography – Use a font that is large enough. Many hiring managers are middle aged or older and have a much easier time with larger fonts. 12 points is a good choice.
25% of Middle-Class Americans Say They’ll Work Until They’re 80
25% of middle-class Americans worry they’ll need to work until they’re 80, according to a Los Angeles Times article of November 16. 75% said they plan to work past 65, of those 50% said they need to work and 25% said they wanted to continue working. This article was based on a survey released by Wells Fargo & Co. The conclusion of the survey was that a large percentage of Americans are very poorly prepared for retirement. 30% of workers in their 60′s have less than $25,000 in savings. Many Americans also said that they needed to strongly cut back on spending