Preparing the Home Care Industry for 2021

This past year has brought significant changes to many industries as they navigated the effects of COVID-19. Below is an overview of the effects to the home care industry and what employers can do to be better positioned in the marketplace.

Impact to the insurance industry as a whole

Even prior to COVID-19, several key events occurred which began impacting pricing:

• 2018 California Wildfires – over $12 billion in losses severely impacted the reinsurance marketplace causing a ripple effect to insurers, many of which weren’t even in the property insurance marketplace.

• AB 218 – This law was signed last year which eliminated many of the statutes of limitation for people to file child abuse claims. Though this related to those who work with children, the same carriers who insure  the home care industry also work with industries serving children. Claims have risen 500% since January 2020.

• Social Inflation – Recent trends have shown an increase in litigation, claims costs and plaintiff friendly legal decisions.

What impacts will COVID bring?

• SB 1159 – The presumption that COVID claims will be compensable under workers’ compensation is severely impacting the costs towards California insurers. Recent estimates suggest over $2 billion has been paid to date.

• Healthcare companies hit hardest – The vast majority of the claims are coming from the healthcare industry. With the heighten risk, we’ve seen carriers exit the marketplace and a hardening of the market for those remaining.  

What can Employers do?

• Make sure all your documentation is in order. This includes:

  • Written COVID-19 Prevention Plan Template

  • If you have had any incidents – proper documentation regarding what was done in response to the incident and if any changes were made moving forward to keep incidents from happening again.

  • Post all CDC, state and local health department required information and postings.

• Make sure you are being properly represented to the marketplace. Most insurance carriers are improperly categorizing home care companies as healthcare risks. The exposures to a home care companies are far less risky than that of a hospital or health center. However, without proper discussion between your broker and underwriter, you will be categorized as a health risk. Make sure your broker is communicating the true exposure of where your employees work and what they do and the exposures they are truly facing to help you get the best pricing.

To discuss your situation and prepare for 2021, contact Rancho Mesa Insurance Services at (619) 937-0164.

6 Steps for California SB1159 COVID-19 Reporting

Rancho Mesa Insurance Services, Inc. has developed a six step guide to help employers navigate through the reporting of COVID-19 cases to their insurance carriers per California Senate Bill 1159 (SB 1159). The document will lead you through specific employee scenarios that will determine if you should report the claim.

California Governor Newsom signed SB 1159 into law September 17, 2020 and it is having several impacts on workers’ compensation and the presumption of the claim. These rules will continue, unless modified, until January 2023.

If the employer has fewer than 100 employees at a specific location and 4 employees test positive at that location, or if the employer has more than 100 employees and 4% of their total employees test positive, during a 14-day period at an employer’s specific location, the COVID-19 case is presumed to be work-related. Thus, the 4/4/14 rule. When in doubt, call your workers’ compensation carrier and discuss the specific situation. They will help you determine whether or not it is a workers’ compensation claim. 

To learn more about the elements of SB 1159, please listen to a recent StudioOne™ Safety and Risk Management Network podcast episode, in which President of Rancho Mesa, Dave Garcia, and President of Berkshire Hathaway Homestate Companies, discuss the bill’s impact on the workers’ compensation market.

Download “6 Steps for California SB1159 COVID Reporting” Form

Download “6 Steps for California SB1159 COVID Reporting” Form

4 Key Factors in Developing a Motor Vehicle Report Program

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

Auto liability is often one of the most substantial risks a business will have. Driver selection is one of the most important evaluations a business can do to prevent accidents. It’s been proven that drivers with a history of moving violations and accidents pose a higher risk for organizations. Best practices for reducing this risk allow only safe drivers to operate a company vehicle. In order to manage this process, a business should develop a Motor Vehicle Records (MVR) Program as part of their Fleet Safety Program to ensure safe employees are driving company vehicles. There are four key factors in developing an MVR Program

1. Obtaining the MVR.

2. Evaluating the MVR.

3. Applying the MVR.

4. Documenting the MVR.

Obtaining the MVR

Obtaining the MVR is the first step of determining whether a driver meets acceptability standards. Best practices recommend that all employees who drive on company time, whether that is driving a company vehicle or their own, should have their MVR requested and evaluated at least on an annual basis. Some companies choose to obtain the MVR of those employees who drive regularly and not those that drive on an incidental basis. It’s best to consult your attorney but many believe at least verification that a license is valid should be established for incidental drivers.

Evaluating the MVR

Now, the employer has obtained the MVR and it needs to be evaluated. Many insurance companies evaluate a MVR based on three criteria:

1. The age of the driver. The minimum age for a driver varies by insurance company. Generally speaking, the minimum age to be eligible to drive on a commercial auto policy is 21-23 years old. It is strongly recommended that your MVR Program adheres to a minimum age requirement because there is a much higher percentage of accidents by young inexperienced drivers.

2. The length of time driver has maintained a valid license. Driver experience is another factor that should be strongly considered while evaluating a MVR. Most insurance companies are looking for at least three years of driving experience. With younger generations obtaining their licenses later and later, you may run into issues of drivers not meeting the minimum experience requirement. There may also be drivers that have been licensed in other states, which would show little experience in the state where they are now licensed. It may be necessary to verify a driver’s previous license status in another state.

3. The number of violations and infractions the driver has on their license. This could be the single most important factor in establishing driver eligibility. Drivers who have a history of moving violations and accidents pose a higher risk to an organization. When evaluating a MVR report, it’s important to establish consistent requirements that are agreed upon by the organization and insurance company. A common acceptable MVR includes:

a. No more than two minor moving violations and one preventable accident in a three-year period. A minor moving violation includes speeding (i.e., 1-14 mph over posted limit), improper lane change, failure to yield, failure to obey traffic signal or sign, and an accident.

b. No more than two zero-point infractions such as cell phone ticket, seat belt ticket, and texting in the last three years.

c. No major violations in the past five years such as a DUI, leaving the scene of an accident, excessive speeds over 20 mph over limit, reckless driving, felony involving the use of a vehicle, and license suspension or revocation resulting from accidents or moving violations.

Applying the MVR     

Once the MVR has been evaluated, it’s time to determine which drivers are eligible and which are not. This can certainly pose a problem when implementing a new MVR Program with existing employees and drivers. A company may have to evaluate whether an employee’s driving responsibilities are suspended, if they need to be re-assigned to a non-driving position, or in certain circumstances might have to be terminated (such as a delivery driver). It’s also possible to consider a transitional period for those that are now considered ineligible. It is also important to consult the HR Department and company attorney when making these transitions.

Documenting the MVR

Proper documentation of a company’s MVR process should be consistent and contained in each employee’s file. The employee’s file should have any applications, the MVR, warnings or corrective actions taken, annual MVR reports, and any signed release forms.

A formal MVR Program is a vital piece to a successful Fleet Safety Program. It creates a barrier of minimum requirements that can often weed out potential unsafe drivers and future liability. If you need assistance in developing a Fleet Safety and MVR Program, please feel free to reach out to me at (619) 937-0174 or jhoolhan@ranchomesa.com. 

CAL/OSHA Adopts Written COVID-19 Prevention Plan

Author, Emily Marasso, Media Communications Assistant, Rancho Mesa Insurances Services, Inc.

On November 19, 2020, California’s Occupational Safety and Health Administration (Cal/OSHA) Standards Board adopted temporary emergency standards to protect workers from COVID-19. These standards are expected to go into effect November 30, 2020, upon approval from the Office of Administrative Law.

Now, what does this mean for California employers? It means employers must have a written COVID-19 Prevention Plan. This written plan must include and address specific key points outlined by Cal/OSHA. These standards require employers to establish a system for communicating information about prevention, positive cases to employees, how cases will be identified and evaluated, a process for investigation and responding to cases, correction of hazards, training, physical distancing requirements, face covering, site-specific controls, reporting/recordkeeping and access, preventing the spread of the virus to other employees and a defined return-to-work criteria after a COVID-19 recovery.

Rancho Mesa Insurance has developed a COVID-19 Prevention Plan template for its clients to assist in the implementation and compliance of the new standards. Updated versions may become available as the standards are approved by the end of the month.

In addition, Rancho Mesa’s Risk Management Center offers additional tools employers can utilize to make sure they are in compliance with the new standards. Track daily COVID-19 symptoms in the Audit Track screen and deploy free online COVID-19 training for all employees from any mobile device. Our library of COVID-19 resources continues to grow and is available for our clients to access from the Risk Management Center and the RM365 HRAdvantage Portal™.   

For information on how to access these resources, please reach out to your Client Services contact.

Download COVID-19 Prevention Plan Template

Download COVID-19 Prevention Plan Template

Safety Programs Can Reduce Workers’ Compensation Premiums

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

As California business owners continue incurring costs as they work their way through the maze of ever-changing COVID-19 regulations and protocols, prioritizing critical elements of your internal safety program can directly lower your insurance costs. Refocusing on key areas below will help present an effective, detailed submission to the marketplace that will lead to talking points with an underwriter for schedule credits and ultimately, lower rates and premiums.

Employee Benefits

Workers’ compensation underwriters pay close attention to employee benefit plans from a submission they are reviewing to quote. A deeper dive will create inquiries on overall employee participation, employer’s contribution to the plan, and whether established “wellness” plans are made available. High participation and contribution can show underwriters that employees value the benefits being offered and that the employer is investing in their most important asset, the employees. Lastly, industry professionals commonly link reduced fraudulent workers’ compensation claims to more robust, supported employee benefit programs.

Formal Safety Program

Developing a formal, documented Injury and Illness Prevention Program (IIPP) is truly just a baseline for managing risk for any business. The IIPP must be a living, changing document that contemplates random/periodic inspections, regular meeting intervals, safety orientation for new employees, and detailed investigative reports performed by field and management. Your program can be compared to a book that sits on the shelf and develops dust. Or, if you are focused on best practice techniques, it can be used as a tool for education, training, and risk mitigation. It should change as your company changes and incorporate the safety priorities instilled from the top down. Additionally, incorporating safety programs like Rancho Mesa’s RM365 Advantage Safety Star™ training program for foreman and supervisors help make your safety program go to the next level and really stand out in the insurance marketplace. Dynamic IIPPs stand out in a workers’ compensation submission process. They provide much needed detail to simple Yes/No questions on a supplemental application and show just how important safety is to the organization that is being underwritten.

Return to Work Program

Companies of all types will share that they support a return to work program when their injured employee is cleared for modified duty. That support needs to be taken a few steps further to improve your program. Create job descriptions for potential modified positions. Identify and engage with specific doctors within your network and ensure that these job descriptions are on file. This process can often help expedite employees back to the field, warehouse, office, etc. and ultimately lower temporary disability payments which can lower claim reserves. Use Rancho Mesa’s RM365 HRAdvantage™ portal to generate job descriptions and manage employee’s modified duty in the Risk Management Center.

Hiring Practices

Developing “gates” in the hiring process are often overlooked as too expensive or time consuming.  But, the costs of bad hiring decisions can linger for years, impacting your bottom line and employee morale. Employers must strongly consider pre-employment physicals and drug testing, typically performed post interview and before an offer is made. As the Compliance Director for Current Consulting Group LLC, Andrew Current said, “The average cost of a pre-employment drug test is $45. The average turnover cost for an entry level employee is $6,600.”  There is added benefit with workers’ compensation underwriters who view pre-employment checks as key controls to minimizing claim frequency and severity. Take advantage of the New Employee Onboarding Checklist and other resources in the RM365 HRAdvantage Portal.

Website Development

Most, if not all, workers’ compensation underwriters begin their review process by accessing the company in question’s website to learn more about their operation, exposures, risks, etc. Therefore, seeing your website through this same filter and utilizing your broker as an additional soundboard of information, consider these possible edits and/or redesign of your website:

• Add a “Safety” link or tab, allowing space for sharing your company’s philosophy on managing risk.

• Include a section on any safety awards or recognition that you may have received.

• Remove any pictures on your website that might create confusion or concern about your operation as it relates to safety and risk.

• Include examples of safety protocol that are unique to your operation (e.g. proper use of machinery, ladder usage, cleanliness of operating areas, etc).

Like any potential internal investment, companies must always balance whether the time and resource commitment will ultimately benefit their company. Many of the above recommendations require minimal resources and can pay huge dividends in consistently securing the most competitive workers’ compensation pricing, often a significant line item on a profit and loss statement. You may find cost savings in areas you did not know were possible that can help your business survive and remain profitable in these difficult times.

To discuss how your company’s safety program can affect your workers’ compensation premium, contact me at (619) 937-0172 or dfrazee@ranchomesa.com.

Risk Management and the Virtual Workforce

Author, Sam Brown, Vice President, Human Services Group, Rancho Mesa Insurance Services, Inc.

As American employers navigate the Coronavirus Pandemic, many business leaders quickly adapted to a virtual office and virtual workforce. While many organizations anxiously wait for the day employees can all safely head into the office Monday through Friday, employers must adjust risk management practices to account for the virtual workforce.

Cyber Crime

Prior to the pandemic, the FBI would routinely receive 1,000 cybersecurity complaints, daily. Since the COVID-19 outbreak began, the number of complaints has increased to 3,000 to 4,000 every day according to Tonya Ugoretz, deputy assistant director of cyber division of the FBI in a webinar hosted earlier this year. The most commonly targeted industries are health care, manufacturing, financial services, and public sector organizations. Stated plainly, cyber criminals are successfully exploiting weak virtual cybersecurity and poor execution on the part of remote employees.

Brett Landry of Landry IT, recently stated that 85% of employees circumvent “acceptable use” policies when using a company owned device, reinforcing the need for increased employee training.

Mr. Landry highly recommends employers update security patches on all devices, adopt a higher standard for password security, utilize two-factor authentication, and train employees how to recognize phishing and social engineering efforts.

How will a cyber liability insurance policy respond to this new threat?

Important questions to ask:

• Will my policy cover a remote exposure?

• Will my policy cover incidents involving personal devices?

• Is Social Engineering covered?   

• Will my policy respond if an employee does not follow company procedures?

Workers’ Compensation

Allowing employees to work from home has resulted in some employees moving out of state. When this occurs, the employer should report the new working address to the insurance company to ensure the workers’ compensation insurance policy will cover an injury. In some cases, the insurance company can add the new location. If not, then the employer may need to purchase a separate workers’ compensation policy for that employee’s new state.

In an effort to manage the risk of employee injury, employers should design and implement work-from-home policies. Effective policies will clearly define work hours, communicate standards for a home office, train employees on ergonomics, reinforce work and safety rules, and remind employees of the claim reporting process. Establishing the above expectations may help employees avoid injury and legal disputes over compensability.   

Directors & Officers Liability

Remember that a Directors & Officers Liability policy protects individuals from personal losses if sued for their role as a director or an officer of a company and not indemnified by the company. While a move to a virtual workforce doesn’t inherently put a board member at risk, big changes to company policy can result in missteps if employees do not receive proper communication and training. Ultimately, directors and officers are held accountable if company policies are not followed, highlighting the need for diligent execution of important company changes.

Rancho Mesa supports clients in developing employee manuals, work-from-home policies, and 2021 changes to labor law. Please contact me at (619) 937-0175 to discuss how Rancho Mesa can support your business or mission.

New Hires Pose Hidden Exposure

Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

Hiring is never an easy task, especially during a pandemic. Dealing with COVID-19 has made finding the right employees much more difficult for many business owners in the construction industry. Now is the perfect time to evaluate your hiring practices to ensure you don’t make a costly hiring mistakes that can affect your Experience Modification Rate (XMOD) and workers’ compensation premium long after the pandemic has passed.

It was not that long ago that our economy was thriving and we had an unemployment rate under 4% in California. Though, due to the shutdown, we have seen that number shoot up as high as 16.4% in April 2020 and settle back down to 11% by September 2020, according to the Bureau of Labor Statistics (BLS). So, while many industries saw massive lay-offs, the construction industry has continued to thrive, at least for the time being. That means many employers are now actively looking for both skilled and non-skilled labor in order to complete existing projects and plan for future contracts that have been awarded. That’s great news for the 11% of the population who are unemployed, but employers should still be cautious about hiring just anyone without utilizing best practices to minimize risk.

In September 2020, Rancho Mesa partnered with Culture Works to offer the “Remote Recruiting & Company Culture Webinar” where they went into detail on the best practices for remote recruiting. Watch an archived version of the webinar to learn practical steps for recruiting employees in today’s economic climate.

Finding the right employee for the job may not be as easy as it used to be. Some skilled workers may not feel comfortable working on a job site, even while safety precautions are being observed. And, others may have been offered higher wages and more benefits at other companies who are also in need of workers. So, employers are really at a disadvantage. They may weigh the benefits and risks of hiring people who are less experienced or those who don’t take job site safety very seriously.

Now is the time to implement best practices when hiring to insulate your company from potential problems. This could mean implementing drug testing, pre-hire physicals, reach out to previous employers for recommendations, and updating your employee handbook to making sure these employees are aware of exactly what the job description is that they are being hired to do and the company’s expectations.

Experience on the job and a history of safety training are indicators that a new hire is a good risk. However, we know that employees over 45 have a 23% higher chance of having a sprain, strain or tear than employees under the age of 45. They also have a 27% higher chance of having a slip, trip or fall according to BLS. This does not mean that you shouldn’t hire workers over 45. It just means that to minimize risk, provide employees with appropriate training. Implement stretch and mobility programs for your workforce to do daily to reduce the exposure.

Rancho Mesa offers clients the Field Mobility & Stretch and ABLE Lifting training that is designed to reduce strains and cumulative trauma claims. Getting your employees prepared for the work day before they pick up their tools is vital in staying ahead of claims and boosts employee morale. The best way to handle workers’ compensation claims is to prevent them from happening.

Knowing your exposure is vital in staying ahead of industry trends. If you have further questions do not hesitate to contact me at (619) 438-6900 or ccraig@ranchomesa.com.

CA Anti-Harassment Training Deadline Quickly Approaches

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

Lately, we've been getting a lot of questions about California's required anti-harassment training, who has to complete it, when it's due and how much it costs.

In September 2004, Assembly Bill 1825 set in motion the sexual harassment prevention training requirement for many California supervisors. In September 2018, former California Governor Jerry Brown approved Senate Bill 1343 (SB 1343) which expanded the requirement and launched a series of anti-harassment bills that now require those who employ “five or more employees, including temporary or seasonal employees, to provide at least two hours of anti-harassment training to all supervisory employees and at least one hour of anti-harassment training to all non-supervisory employees.”

History of the Requirement

Over the last several years, additional senate bills have been passed that modifies or clarifies the SB 1343 training requirements. Instead of giving you a play-by-play on how each bill has changed the requirements, I'm just going to tell you what is required as of today, November 2020.

You've probably noticed that we now refer to this new training as “anti-harassment training” instead of the old term, “sexual harassment prevention training.” The change came as a result of several bills that expanded the required content to include abusive conduct, unlawful employment practices of discrimination, and harassment of both a sexual and non-sexual nature. So, the anti-harassment training for California managers replaces previous versions of the sexual harassment and abusive conduct prevention training, developed prior to the passage of SB 1343 and Senate Bill 1300 (SB 1300).

For more information on the progression of the current requirements, read “California SB 1343 Expands Sexual Harassment Training Requirements,” published November 15, 2018, “California SB 1343 Expands Sexual Harassment and Abusive Conduct Prevention Training Requirements,” published on January 17, 2019, “Ensuring CA Sexual Harassment and Abusive Conduct Training is SB 1343 Compliant,” published on February 7, 2019, “Rancho Mesa Offers Free CA-Required Supervisor and Employee Anti-Harassment Training” published on May 8, 2019, “Providing Anti-Harassment Training Is the Employer’s Responsibility,” published on August 22, 2019, and “Senate Bill 778 Extends Anti-Harassment Training Deadline,” published on September 12, 2019.

Training Requirements and Deadlines

To make a long story short, for employers with five or more employees, supervisory employees must take the two-hour anti-harassment training every two years and non-supervisory employees must take the one-hour anti-harassment training every two years. This sounds simple enough. However, since we had multiple bills that added content to the requirements and extended deadlines (Senate Bill 778), it's not necessarily straightforward.

For example, if you have a supervisory employee who completed the old sexual harassment and abusive conduct prevention training in 2019, their next anti-harassment training is due in 2021. However, if they took any similar trainings prior to 2019, they must complete the new anti-harassment training by January 1, 2021. This also applies to non-supervisory employees. If a non-supervisory employee took the training in 2019, their next due date will be in 2021. However, if the non-supervisory employee has not taken the training or took a similar training prior to 2019, they are required to complete the anti-harassment training no later than January 1, 2021.

New employees must be trained within six months of hire and temporary employees must be trained within 30 days of hire.

Online Training

Rancho Mesa offers its clients free 100% online anti-harassment training for both supervisory employees and non-supervisory employees.

“It’s amazing Alyssa and her team have trained nearly 7,000 of our clients’ employees over the last 24 months and have been able to do that at no cost to them,” says Dave Garcia, President of Rancho Mesa. “Yes, it’s expensive, but we just feel it’s doing the right thing for our clients.”

The online training can be accessed from a computer, tablet or smartphone. This means our clients can get their required trainings from anywhere with an internet connection.

“It’s not only the cost savings for our clients that’s important, it’s also the way we are able to do the training utilizing any internet connected device,” says Garcia.  “Our clients’ productivity isn’t impacted by having to bring their workforce into a training area and out of the field, creating a loss of productivity. Additionally, with COVID-19, large training meetings would not be permitted.”

Since the anti-harassment training is completed online through the Risk Management Center, it provides automated recordkeeping and offers rescheduling to ensure as soon as an employee completes the training, they can be automatically rescheduled to complete the training again in two years. It also allows administrators to archive employee training records when an employee leaves the company and reactivate the records if they are rehired. 

Recordkeeping

Recordkeeping for anti-harassment training is important when there is an allegation of harassment or if an employee reports the employer for non-compliance. The Department of Fair Employment and Housing (DFEH) “accepts complaints from employees that their employers have not complied with the law." So, make sure you are providing the training and keeping records. It is also a best practices to train all employees, regardless if they have a certificate of completion from another employer, since it's the current employer's responsibility to make sure the employee is trained.

We offer an on-demand webinar that explains how to setup your employees in the Risk Management Center and assign the anti-harassment training.

For questions about the anti-harassment training requirements or to enroll your supervisors and employees, contact Rancho Mesa’s Client Services Department at (619) 438-6869 or send an email to aburley@ranchomesa.com.

COVID-19 Workers Comp Surcharge Coming to California

Author, Sam Clayton, Vice President, Construction Group, Rancho Mesa Insurance Services, Inc.

Adding frustration to the growing concerns for businesses dealing with COVID-19, the Workers’ Compensation Insurance Rating Bureau (WCIRB) has recommended California employers pay a COVID-19 surcharge on their 2021 workers’ compensation policies. 

If approved, this new COVID-19 surcharge will vary by industry and have a minimum of $0.01 and hit a maximum of $0.24 per $100.00 of payroll. The industries with less of a COVID-19 exposure can expect a lower surcharge. While industries with a higher exposure can expect a greater increase. The additional surcharge my not seem like a lot, but multiplied by a company’s payroll, it can be significant to a company’s bottom line. Additionally, this surcharge will apply to all California employers, regardless if they had any COVID-19 illnesses.

The Workers’ Compensation Insurance Rating Bureau (WCIRB) approved the surcharge after growing concerns that the number of COVID-19-related workers’ compensation claims will continue to increase. It’s been estimated this year that 11% of all workers’ compensation claims in California have been COVID-19 related. The surcharge will help the insurance carriers mitigate the growing cost of the claims that could not have been anticipated when rates were calculated for 2020 policies. Even though COVID-19 claims will not be included in California’s companies’ Experience Modification Rates (i.e., XMOD, EMR), carriers will look to a number of variables in order to adequately price for an individual company’s premium. Those will include:

1. Overall claims experience

2. COVID-19 claims experience

3. The COVID-19 protocols and practices that are in place

Rancho Mesa, California union employer groups, as well as several carriers including the State Compensation Insurance Fund (State Fund), oppose the surcharge idea. Our feeling, as well as many of the others, is that most carriers are now underwriting specifically for COVID-19 by evaluating the businesses’ COVID-19 claim history and safe guards. Thus, there is no need for an additional surcharge.

In the next few weeks, we will release a follow up article that will highlight the best practices employers can implement now to minimize the COVID-19 impact to their organization and 2021 workers’ compensation renewal pricing.

For questions about workers’ compensation and the COVID-19 surcharge, contact me at (619) 937-0167 or sclayton@ranchomesa.com.

AB 685 Creates New Notice and Reporting Requirements

Author, Sam Brown, Vice President of the Human Services Group, Rancho Mesa Insurance Services Inc.

On September 17th, 2020 Governor Gavin Newsom signed into law Senate Bill 1159 (SB 1159) and Assembly Bill 685 (AB 685), both COVID-19 related bills.

Both pieces of legislation will impact how employers respond to incidents of COVID-19 infections. This article will help business owners and officers understand AB 685’s heightened occupational health and safety rules. Employers also need to understand how AB 685 grants California’s Occupational Safety and Health Administration (Cal/OSHA) greater enforcement powers.

Posting Requirements

AB 685 requires California employers to provide the following four notices within one business day of being informed of a potential COVID-19 exposure:

1. Provide a written notice to all employees, and to the employers of subcontracted employees, who were at the same worksite within the infectious period, notifying the employee that they may have been exposed to COVID-19. It must be reasonable to assume the employees will receive the notice within one day, whether that is through email, text, or written notification.

2. If the employee population includes represented employees, then the employer must also send notice to the exclusive representative of the affected bargaining unit.

3. The employer must also provide notice of any COVID-19 related benefits or leave rights under federal, state, and local laws, or in accordance with employer policy. The employer must also notify employees of their protections against retaliation and discrimination. 

4. The employer must notify all employers, the employers of subcontracted employees, and any exclusive representative, of the employer’s plan to complete a disinfection and safety plan in accordance with federal Centers for Disease Control guidelines.

Employers are required to maintain records of these notices for at least three years. Failure to comply with the notice requirements may result in a civil penalty.

If an employer learns of an “outbreak” as defined by the California Department of Public Health (“CDPH”), the employer must also notify the appropriate public health agency within 48 hours with the names, occupation, and worksite of any “qualifying individuals” related to the “outbreak.”

Two exceptions to the notice and reporting requirements:

1. Health facilities as defined in Section 1250 of the Health and Safety Code, are not required to report an “outbreak” within 48 hours.

2. The notice requirements do not apply to exposures by employees whose regular duties include COVID-19 testing and screening, or care to individuals who have or who are suspected to have COVID-19, unless the “qualifying individual” is also an employee at the same worksite.

Authorized Shutdown

Under AB 685, if Cal/OSHA determines that a workplace or operation within a workplace exposes employees to a risk of COVID-19 infection, creating an imminent hazard to employees, Cal/OSHA is authorized to prohibit entry to the workplace or the performance of operation in question.

If your organization would benefit from guidance on these new employer requirements, please contact Rancho Mesa Insurance at (619) 937-0175.  

Sources:

https://www.lcwlegal.com/news/governor-newsom-signs-sb-1159-and-ab-685-into-law-impacting-covid-19-related-workers-compensation-coverage-and-creating-new-notice-and-reporting-requirements-related-to-covid-19-workplace-exposures

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB685

Safe Cloud Computing for Contractors

Author, Drew Garcia, Vice President, Landscape Group, Rancho Mesa Insurance Services, Inc.

Even prior to the COVID-19 pandemic, many construction companies were utilizing some form of cloud-based systems to effectively streamline business operations and increase accessibility of information. While hosting sensitive data in the cloud has many benefits like shared access to data, applications and storage, there are some risks contractors should take into account before relinquishing their data to the cloud.

A leading provid//er of Cyber Liability insurance, CNA references three key risks companies utilizing cloud technology need to be aware of in an recent article, “Cloud computing 101: Getting clear about the cloud.” CNA explains data protection, data loss/disruption and inappropriate access are risks business take on in exchange for the benefits of cloud computing.

Data Protection

Protecting data is essential for any organization. Customers’ personal and payment information may be stolen by hackers once the data is stored in the cloud or even while in transit. So, your data in the cloud must be secured through encryption to prevent the data from being usable if stolen. As the cloud customer, the company should manage the encryption keys to ensure only authorized users can decrypt the data.

Data Loss / Disruption

You may be thinking about moving your data to the cloud as a way to protect it from electrical outages, fire, flood and other natural disasters. However, your cloud hosting provider can be left inoperable due to similar calamities. Before hosting your data in the cloud, review your host’s back-up and redundancies to ensure there will be a copy of your data available if something should happen to the host’s servers. Have a plan in place to help navigate your most critical information in the event something like this occurs. 

Inappropriate Access

When storing data in the cloud, it is imperative the company ensures stringent and complex user authentication. This may mean passwords are changed frequently or two-factor authentication is deployed to ensure hackers can’t find their way to your data. When you manage a large user-base, the risk rises. Ensure former employees no longer have access to your data by changing security rights or disabling their account. Complex user authentication can be an effective deterrent to keep those who should not have access to your information from finding their way into your network.

Assuming your information is safe and secure in the cloud is misleading. Be proactive in protecting your information and round out your risk management program with a strong cyber liability program that can fulfill your cloud based risk needs.

For more information about the CyberOne™ program, contact Rancho Mesa.

Article edited 4/19/2021.

SB 1159 Is Now Workers’ Compensation Law

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

As expected, California Governor Newsom signed Senate Bill 1159 (SB 1159) into law Thursday, September 17, 2020 and it will have several impacts on workers’ compensation and the presumption of the claim. Below is an outline of some of the more important elements of SB 1159. In simple terms, just remember three numbers, 4/4/14 - I’ll explain, later. Additionally, these rules will continue, unless modified, until January 2023. So, SB 1159 may be around for a while.

If an “outbreak” occurs, for the presumption of the claim to rest with the employer (meaning it will be presumed the person testing positive for COVID-19 contracted it at work and is therefore eligible for workers’ compensation benefits), there are several factors that need to be meet for that to occur.

If the employer has fewer than 100 employees and 4 employees test positive, or if the employer has more than 100 employees and 4% of their total employees test positive, during a 14-day period at an employer’s specific location, the COVID-19 case is presumed to be work-related. Thus, the 4/4/14 rule. When in doubt, call your workers’ compensation carrier and discuss the specific situation. They will help you determine whether or not it is a workers’ compensation claim. 

Rob Darby, President of Berkshire Hathaway Homestate Companies, the second largest writer of workers’ compensation insurance in California and I discuss SB 1159 in a recent StudioOne™ Safety and Risk Management Network podcast episode “SB 1159 Impacts Workers' Comp Market.” A week before Governor Newsom signed the bill, Rob and I discussed the impacts of the bill to get an early insight. Take a listen - I think you will find it useful.

Now comes possible confusion with SB 1159. What is considered an outbreak? What is the definition of a specific location?

Outbreaks

The section of the law (Labor Code 3212.88) applies to any employee other than frontline workers and healthcare workers who test positive during an “outbreak” at the employer’s place of business, if the employer has 5 or more employees.

COVID-19 is presumed work-related if an employee worked at the employer’s place of business at the employer’s direction on or after July 6, 2020 and both the following elements are met:

• The employee tested positive for COVID-19 within 14 days after working at the employer’s location.

• The positive test occurred during an “outbreak” at the employer’s specific location.

An “outbreak” is defined as a COVID-19 occurrence at a specific employment location within a 14-day period AND meets one of the following:

• If an employer has 100 employees or less at a specific location and 4 or more employees test positive for COVID-19;

• If an employer has more than 100 employees at a specific location and 4% of the employees test positive for COVID-19;

• The local public health department, State California Department of Public Health or Occupational Safety and Health Administration (Cal/OSHA) or school superintendent orders the specific place of employment to close due to risk of COVID-19 infection.

A specific location or place of employment is a building, store, facility or agricultural field where an employee performs work at the employer’s direction. An employee’s home is not considered a specific place of employment unless the employee provides home health care services to a client at the employee’s home. An employee may have more than one specific place of employment, if they worked in multiple locations within the 14-day period before their positive test.

There is a 45-day timeframe to determine if a positive COVID-19 case meets the above standard.

Outbreak Reporting Requirements

When an employer knows or reasonably should know that an employee has tested positive for COVID-19, they must report the incident to their workers’ compensation carrier.  They should be prepared with the following information to give the carrier.

• The fact that an employee has tested positive, regardless if work-related or not.

• Employers should not include any personal information regarding the employee who tested positive for COVID-19 unless the employee asserts it is work-related or files a claim form.

• The date the specimen was collected for the employee’s COVID-19 test.

• The specific address or location of the employee’s place(s) of employment during the 14-day period preceding the date the test specimen was collected.

• The highest number of employees who reported to work at the specific location(s) in the 45-day period before the last day the COVID-19 positive employee worked there.

It best practices to follow all local, state and federal guidelines for safe workplaces. However, even with the best intentions and precautions, COVID-19 may accidentally spread to employees. Again, when in doubt, report an employee COVID-19 case to your workers’ compensation carrier and allow them to determine how to proceed.

For questions about SB 1159 and how it with affect your organization’s workers’ compensation, contact your broker or reach out to Rancho Mesa at (619) 937-0164.

Strengthen Your Risk Profile During COVID-19

Author, Jeremy Hoolihan, Account Executive, Rancho Mesa Insurance Services, Inc.

COVID-19 continues to have a stronghold on the US economy and it is likely that we will see the impact for many years to come. While the effects of COVID-19 on the workers’ compensation marketplace vary among the different business sectors, the Workers’ Compensation Insurance Rating Bureau (WCIRB) has approved a filing that will increase the 2021 pure premium advisory rates by 2.6%. Understand that this recommended rate increase comes against a backdrop of record profits in workers’ compensation prior to COVID-19. There are also three COVID-19 presumption Bills (AB 196, AB 644, and SB 1159) that could create presumptions that cases of COVID-19 are a compensable consequence of work, which will likely cause additional turmoil in the marketplace.

With impending rate increases on the horizon, it’s more important now than ever to be proactive when it comes to your company’s risk management program. Carriers are already tightening up their underwriting guidelines and limiting schedule credits. In order to earn the most competitive pricing possible, a business must differentiate itself from other businesses. Below are three strategies you can use to strengthen your risk profile during COVID-19.     

Improve the Safety Program

Now is not the time to take your focus off of safety in the workplace. In fact, I would argue that there should be even more focus on safety. Some items to focus on relating to a safety program include:

1. Update your Injury and Illness Protection Program (IIPP) and have it reviewed by a labor attorney.

2. Establish a safety committee consisting of ownership, supervisors, managers, your insurance broker, and insurance company (i.e., loss control representative). This will assist with identifying workplace hazards, discussing claims or near misses that have occurred and creating safety meeting topics that can be discussed at future employee safety meetings.

3. Ensure that safety meetings are occurring at least every 10 working days, but preferably weekly. Using safety topics identified by the safety committee, managers can pinpoint proper trainings for employees.

Update Employee Handbook

With employment requirements, policies and procedures continually changing, it’s easy to fall behind on new regulations like adding an Emergency Paid Sick Leave Policy or Expanded Family and Medical Leave Policy, in your employee handbook. Rancho Mesa offers access to a living handbook builder through the RM365 HRAdvantage™ portal. By creating a living employee handbook through the portal, updating the document with new policies is as easy as reviewing and approving the suggested changes provided by experienced human resources professionals. 

Continue Your Risk Management Education and Certifications

With many businesses slowing during COVID-19, consider filling that down time with required accreditations and continued education courses.  Some examples include:

1. Anti-harassment Training: By the end of 2020, businesses with 5 or more employees are required to provide Anti-harassment training to all employees. Owners, supervisors, and management are required to complete the two-hour course, while all other employees must complete a one-hour course. Rancho Mesa offers free online Anti-harassment training for both supervisors/managers and employees. The courses can be accessed by computer, tablet, and a smart phone. 

2. Continued education or achieving professional designations: It’s also a good time to consider working on continued education courses such as renewing forklift certifications, OSHA trainings, as well as any professional designations. To reinvest your efforts in continued education, now, while business is still slow due to COVID-19, could position your business to hit the ground running when the economy opens up again.

3. Safety Star Certification – With underwriting guidelines tightening and worker’s compensation premiums expected to increase due to COVID-19, Rancho Mesa’s RM365 Advantage Safety Star Program™ can build your risk profile and differentiate your business from others. The program is designed for supervisors, foreman, safety coordinators, upper management, administrators, and directors of human resources. To earn the Safety Star certification in Construction Safety, you must complete the required Incident Investigation and Analysis online module plus at least two other modules of your choice from the approved list. This certification is also a marketing tool your broker can use to show your commitment to safety.

Proactively improving your safety program, employee handbook, and continuing education during the pandemic will allow you to hit the ground running once COVID-19 restrictions are lifted. It can also position your business to mitigate increasing premiums with the ever tightening workers’ compensation marketplace. 

If you need any assistance in implementing a sound risk management program, please reach out to me at (619) 937-0174.

Employers Enlist Assistance from HR Experts while Navigating Perils of COVID-19

The COVID-19 pandemic has brought a slew of unknowns to employers across the country, especially as it relates to human resources questions and Employment Practices Liability (EPLI). Rancho Mesa’s RM365 HRAdvantage™ Portal has been a favorite of our clients ever since its release in 2019. The portal continues to grow in popularity as employers face new challenges as workplace standards and employee interaction changes, almost daily.

The most popular tool in the portal gives clients access to live certified Senior Professionals in Human Resources (SPHR) and Professionals in Human Resources (PHR) advisors via phone or through the portal’s messaging tool. Not only will the HR experts answer human resources questions, they will also follow-up with written documentation of the advice so you can refer back to their recommendations.

If an effort to ensure compliance and reduce the chance of an EPLI claim, Rancho Mesa clients are reaching out to our experts for advice on how to navigate human resource issues before they turn into a legal nightmare.

A recent client inquiry included a question about: “required postings and notifications regarding COVID-19 and how to deliver them to remote employees.” The HR experts provided guidance on how to address the client’s specific situation like getting state notices to employees who are working from home.  

Another client asked “what to do if an employee refuses to come to work when restrictions are lifted.” The advice pointed to the federal Families First Coronavirus Response Act (FFCRA) and possible city ordinances or state law that may dictate how to handle the specific situation. In addition, other factors were highlighted that take into account the employee’s personal risk factors and the Occupational Safety and Health Administration (OSHA) rules for safe workplaces.

Additionally, our team is answering questions like “Can employers require employees to get tested for COVID?” or “What accommodations am I required to make for employees working from home?”

Getting reliable answers to important human resources questions quickly can mean the difference between a happy and healthy workforce, and a possible EPLI claim.

With so much uncertainty facing our clients, many have found comfort and confidence in knowing they have reliable human resources experts available to advise them as they navigate these uncharted waters. 

If you have any further questions about EPLI coverage, please contact Rancho Mesa Insurance Services at (619) 937-0164.

Common Sense Strategies for Lowering Risk and Managing Liability

Author, Daniel Frazee, Executive Vice President, Rancho Mesa Insurance Services, Inc.

While business owners spend thousands of hours becoming experts in their own field, most know very little about the intricacies of purchasing commercial insurance. Consider exploring these topics further as you prepare for your upcoming renewal cycle.

Buying Too Little Property Insurance

Property coverage can often be the least expensive piece of a comprehensive insurance program. Yet the impact financially to a business or property owner can be devastating if you are under-insured. Take time to understand any coinsurance clause that may exist within your policy and the real world impacts that could occur if any penalty is imposed by the carrier if you have failed to maintain a minimum amount of insurance. Ensuring that your property limits are more than adequate can truly be a cost-effective approach when there is a significant loss.

Overlooking Potential Savings of Higher Deductibles

In layman terms, purchasing insurance simply transfers risk from one party to the other in exchange for premium dollars. Deductibles are a form of self-insurance that represents the costs you are responsible for before your coverage starts. Typically, the higher your policy’s deductible, the lower annual premium because you are absorbing more financial risk if and when a claim occurs. With this in mind, discussing your risk tolerance with your leadership team and your broker can allow for healthy dialogue leading into rate negotiation.

Not Buying Enough Liability Limits

A common term circling around the insurance industry is Social Inflation. This generally refers to the rising costs of insurance claims that are a result of societal trends and views toward increased litigation, plaintiff friendly legal decisions, and large jury awards. As W. Robert Berkley Jr., chief executive officer of commercial property and casualty insurer W.R. Berkley Corp told analysts, “Social inflation is real. It is here and the industry is beginning to pay attention.” This is a waving red flag that insurance buyers should begin considering higher liability limits by adding an Umbrella policy or increasing existing limits. Businesses can implement plans to mitigate risk. But, lawsuits and the amount of damages plaintiffs will seek remain unpredictable.

The Impacts of “Carrier Jumping”

Building a strong, viable business is centered on relationships. It is those relationships that you lean on most when you need an insurance carrier to come through for you, a consultant to solve a problem, or a key partner to deliver when times are difficult. That philosophy applies more than business owners might realize in the insurance industry. Jumping from carrier to carrier, year to year, to get the cheapest policy might save on the short-term, but this approach can negatively impact your marketability in the long-term. 

First, it is important to understand that underwriters see your carrier and claim history as a part of their risk profile review. In determining their real opportunity to win your trust, they’ll look closely at your willingness to create a longer term partnership and your historical trends with carriers will provide immediate answers. 

Secondly, remember the phrase “when you need an insurance carrier to come through for you.” A critical part of building a relationship with your carrier is developing relationships with their loss control and claims teams. When claims occur, which are inevitable, you want and need that comfort level to know that your vendor will handle it properly and timely.

Start simple when it comes to your approach with buying commercial insurance. The topics above are only the beginning of this process but can have meaningful impact on appropriate coverage and limit levels, pricing, and claims handling.

For more information, contact me at (619) 937-0172 or dfrazee@ranchomesa.com.

The Importance of Timely Workers’ Compensation Claims Reporting

Author, Casey Craig, Account Executive, Rancho Mesa Insurance Services, Inc.

Injuries, accidents, and mistakes happen. When a work-related injury occurs, a common reaction from many business owners is an instinct to NOT report the injury to their workers’ compensation carrier for fear of increasing their company’s Experience Modification (EMR). However, they couldn’t be more wrong. Timely reporting of all claims is the first step in controlling claim costs and lowering their EMR.

Best Practices would demand that all claims get reported within 24 hours, if at all possible. By doing this, it provides the best possible outcome and will impact the claim in several positive ways:

Reducing Fraudulent Claims

One of the biggest frustrations in the workers’ compensation industry for most employers are the number of fraudulent claims that find their way into the system. Immediate accident investigation, witness statements and pictures followed by reporting the claim to the carrier within 24 hours of the injury, will give the employer and the carrier the best opportunity to deny a claim. The insurance carrier only has 90 days from the date of injury (not from the date reported) to deny a claim. This shortens that time-frame and allows more fraudulent claims into the system.

Lowering Litigation Rates

Another area employers find both frustrating and costly are the number of litigated claims that occur within the workers’ compensation system. Litigated claims on average will add 30% to 35% to the ultimate cost of a claim. While there are many ways employers can impact this area, perhaps the most controllable is the timely reporting of any injury. To further support this, it has been proven that the litigation rate for claims goes up 300% if the claim is reported 5 or more days after the injury occurred.

Identifying Claim Trends Early

By not reporting all claims or by reporting them late, employers can develop unreliable data in their effort to identify claim trends and root causes. Without this information, businesses in all sectors run the risk of a severe injury occurring from an area that could have been addressed if all claim data was accurate and analyzed.

When an injury occurs, do a thorough accident investigation that details all events that caused the injury and immediately call your workers’ compensation carrier. This one habit alone will help you lower claim costs and manage your EMR.

To learn more about this process, including benchmarking and analytics that can help control your loss ratio and lower premiums, please reach out to me, Casey Craig at (619) 438-6900 or ccraig@ranchomesa.com.

Court Agrees Temporary COVID-19 Standards Are Not Needed

Author, Emily Marasso, Media Communications Assistant, Rancho Mesa Insurance Services, Inc.

On June 11th, 2020, the D.C. Circuit Court denied the American Federation of Labor and Congress of Industrial Organizations’ (AFL-CIO) lawsuit against the Occupational Safety and Health Administration (OSHA) for not issuing an emergency temporary worker safety standard due to COVID-19.

As a volunteer labor union group that works to improve the lives of the U.S. workforce, the AFL-CIO wants OSHA to issue a temporary worker safety standard addressing the risks of COVID-19 in the workplace. However, an Emergency Temporary Standard is authorized by OSHA under certain limited conditions. It must be determined that workers are in danger of exposure to toxic substances or agents that can be physically harmful. Plus, a temporary standard then serves as a proposed permanent standard.

The D.C. Circuit Court denied the lawsuit against OSHA due to the fact that government officials are learning new information about COVID-19 weekly, if not daily. An appropriate response to the union’s concern is not a fixed rule, at this time. And, a standard specific to COVID-19 would likely not need to become a permanent standard in the future.

Furthermore, the U.S. Department of Labor states, "We are pleased with the decision from the D.C. Circuit, which agreed that OSHA reasonably determined that its existing statutory and regulatory tools are protecting America's workers and that an emergency temporary standard is not necessary at this time.”

While a new standard to combat COVID-19 isn’t necessary because of existing standards, OSHA has provided many resources for employers to assist in maintaining worker safety. Their “Guidance on Preparing Workplaces for COVID-19” provides information on the virus, how it could affect a workplace, steps employers can take to reduce the risk to employees, and additional services and programs available to employers. The “Guidance on Returning to Work” offers steps for reopening, applicable OSHA Standards, and a frequently asked questions section. In addition, employers can find news updates and resources on OSHA’s COVID-19 webpage.

California Workers' Comp Carriers React to Commissioner's COVID-19 Amendment Approval

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

With California Insurance Commissioner Lara’s recent approval of a special regulatory filing introduced to alleviate the burden COVID-19 workers’ compensation (WC) claims threaten to have on California employers, we reached out to several prominent carrier executives to share their thoughts.

The amendments address accounting for employees whose job duties have changed to clerical work, which is typically a less expensive workers’ compensation insurance classification than the jobs they were performing prior to Governor Newsom’s March 19, 2020 Stay-at-Home Executive Order. It also excludes payroll for furloughed employees who are not working, but collecting a paycheck. It creates a way to identify COVID-19 cases within the California workers’ compensation system and excludes the cases from the Experience Modification Rate (XMOD) calculation.

When asked about the amendments scheduled to take effect July 1, 2020, Margaret Hartmann, Senior Vice President and Chief Marketing Officer at Berkshire Hathaway Homestate Companies, California’s second largest workers’ compensation insurance carrier, said “Lara’s approval of the WCIRB [Workers’ Compensation Insurance Rating Bureau] proposal was not surprising. These are not unreasonable, at least from the perspective of ratemaking and predicting future experience of employers once COVID passes.”

Bryan Anderson, Senior Vice President at The Zenith explained the WCIRB’s amendments to the California Unit Statistical Reporting Plan and XMOD calculation were “not likely to change under any normal circumstances but the Bureau made these recommendations to address the unique pandemic situation that California (and the world’s) businesses find themselves in."

Another industry leader Paul Zamora, ICW Group’s Senior Vice President for Workers’ Compensation Underwriting said, “We support Commissioner Lara’s decision to approve the recommended changes by the WCIRB.  We believe the rule modifications accurately reflect changes in exposures created by COVID-19 and will provide the appropriate relief needed by California businesses.”

The changes were expected by California’s workers’ compensation insurance carriers as a mechanism to adjust employers’ insurance rates, since COVID-19 claims aren’t necessarily an indicator of a company’s safety record. 

“Under normal situations,” Anderson explained, “workers’ compensation covers only those occupational illnesses that are created from the work environment. In this instance, that understanding changed with the Governor’s Executive Order requiring employers to accept compensability for Covid-19 claims unless they can prove they are not work-related.”

Hartmann added, “This is clear cost-shifting to the industry, which we expected. The combination of a broad WC presumption, possible additional legislation extending these presumptions past July 5th, excluding COVID from ratemaking and XMODs, means that the insurance industry will absorb the lion’s share of COVID costs that can be assigned to WC.”

Zamora points out “it’s imperative that business owners understand the rule changes and adopt new practices, particularly with respect to the record keeping criteria associated with two of the changes. By adopting new record keeping procedures to apply to the new rules, policyholders will have the necessary audit documentation to realize the full value of Commissioner Lara’s decision.”

This means employers should start documenting employees’ hours worked under each class code, now, and not wait until a final audit.

“Hopefully, these measures will play a small part in helping California employers as they try to recover from the devastating impacts of this pandemic,” Hartmann concluded.

“I think this solution is a testament to the strength and objectivity of the Bureau, the companies it represents and to the integrity of the Workers’ Compensation Industry in California,” said Anderson.

Gene Simpson, CompWest’s Vice President of Underwriting and Marketing, added, “To confront the challenges presented by the COVID-19 pandemic to California employers, regulatory authorities, insurance carriers and employers must work together on effective solutions.”

While the amendments should reduce workers’ compensation premium costs for California businesses in the short-term, only time will tell how lower revenues and higher costs due to COVID-19 claims will impact California’s workers’ compensation insurance premiums in the future.

For a greater understanding of these changes and how they will impact your company, please contact our team at (619) 937-0164.

OSHA Recording Requirements for COVID-19 Cases

Author, Alyssa Burley, Media Communications and Client Services Manager, Rancho Mesa Insurance Services, Inc.

As businesses begin to reopen across the country, employers are now faced with the real possibility that one or more of their employees may be diagnosed with COVID-19. Those who are familiar with the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) recording requirements may be wondering how to handle an employee COVID-19 case on their OSHA logs.

California’s Division of Occupational Safety and Health (better known as Cal/OSHA) has released information for employers on the subject and it appears they are using their existing criteria for determining the recordability of an employee COVID-19 case.

According to Cal/OSHA, “California employers that are required to record work-related fatalities, injuries and illnesses must record a work-related COVID-19 fatality or illness like any other illness.” To be recordable on the 300, 300A and 301 forms, the COVID-19 case must be work-related and result in one of the following:

• Death.

• Days away from work or transfer to another job.

• Medical treatment beyond first aid.

• Loss of consciousness.

• A significant injury or illness diagnosed by a physician or other licensed health care professional.

The criteria that most employers may have a hard time determining is if the COVID-19 illness is actually work-related. Cal/OSHA addresses this in its Frequently Asked Questions webpage. First, the employer must determine if there was “an event or exposure in the work environment [that] either caused or contributed to” the COVID-19 case.

In order to determine if a case is work-related, employers should consider factors like:

• The type and duration of contact the employee had at work with other people including co-workers and the general public.

• With the implementation of physical distancing and other controls within the workplace, what is the likelihood of exposure?

• Did the employee come in contact with anyone showing signs and symptoms of COVID-19, while working? 

These considerations will help an employer determine whether or not the COVID-19 case is work-related and thus recordable. According to Cal/OSHA, it is best practices to err on the side of recordability when in doubt about how an employee was exposed to COVID-19.

If it is determined that an employee’s illness was work-related, yet, for a variety of reasons testing or the results from a test is unavailable and the employee has been determined to have COVID-19, “an employer must make a recordability determination” as to whether or not to record the case. While a positive COVID-19 test result would trigger recordability by the employer, a positive test is not always necessary to record the case in the OSHA logs.

Keep in mind, the above information is for OSHA recording of work-related COVID-19 cases only, which may be different from guidance for workers’ compensation claims.

Cal/OSHA states that “Governor Newsom’s Executive Order N-62-20 addresses eligibility for workers’ compensation benefits... The Order does not alter employers’ reporting and recording obligations under Cal/OSHA regulations.”

Rancho Mesa’s Risk Management Center offers employers the ability to track their COVID-19 cases electronically and generate the applicable OSHA 300, 300A and 301 forms along with an incident report and First Report of Jury (Form 5020).

To learn more about the Risk Management Center, contact our Clients Services Department at (619) 438-6869.

Commissioner Lara Approves WCIRB Proposed Amendments Addressing COVID-19

Author, Dave Garcia, President, Rancho Mesa Insurance Services, Inc.

California Insurance Commissioner Lara has approved, as filed, the proposed special regulatory filing submitted by the Workers’ Compensation Insurance Rating Bureau (WCIRB) concerning proposed amendments addressing the Coronavirus Disease (COVID-19). The special regulatory filing is effective July 1, 2020 and will apply retroactively starting March 19, 2020, the day California Governor Newsom issued the Stay-at-Home Executive Order N-33-20. Those amendments are as follows:

New COVID-19 Rule: Clerical Office Employees

Part 3, Section III, General Classification Procedures, was amended to add Rule 7, Coronavirus Disease 2019 (COVID-19), to permit during a statewide California COVID-19 stay-at-home order the following: The division of an employee’s payroll between Classification 8810, Clerical Office Employees, and a non-standard exception classification when the employee’s work is exclusively clerical in nature and the non-standard exception classification does not include Clerical Office Employees. This amendment will conclude 60 days after the Stay-at-Home Executive Order N-33-20 is lifted.

New COVID-19 Rule: Basis of Payroll

Part 4, Section IV, Exposure Information, Rule 1, Classification Code, and Rule 4, Exposure Amount, were amended to report payments excluded from remuneration pursuant to new Rule 7, Coronavirus Disease 2019 (COVID-19). Payments made to an employee while the employee is performing no duties of any kind in service of the employer are to be excluded from payroll when the payments are equal to or less than the employee’s regular rate of pay. This amendment will conclude 30 days after the Stay-at-Home Executive Order N-33-20 is lifted.

New COVID-19 Rules: Claims Reporting

Part 4, Section V, Loss Information, Rule B, Loss Data Elements, Sub rule 4, Catastrophe Number, was amended to add Catastrophe Number 12 for the reporting of COVID-19 claims. Appendix III, Injury Description Codes, Section B, Nature of Injury (Positions 3-4), and Section C, Cause of Injury (Positions 5-6), were amended to add a Nature of Injury code and a Cause of Injury code for COVID-19 claims. This amendment includes claims with an accident date after December 1, 2019, reported on a Unit Statistical Report due on or after August 1, 2020, and reported with a Catastrophe Number 12.

Exclusion of COVID-19 Claims from Experience Modification

Section VI, Rating Procedure, Rule 2, Actual Losses and Actual Primary (Ap) Losses, was amended to specify that all claims directly arising from a diagnosis of Coronavirus Disease 2019 (COVID-19) shall not be reflected in the computation of an experience modification.

For a greater understanding of these changes and how they will impact your company please contact our team at (619) 937-0164.