As a work comp agent, you undoubtedly have an intuitive feel for how business size and industry are factors affecting your clients and prospects in the economic recovery. But also consider the hard data and how it can guide your own business strategy.

Earlier this month, NCCI released its 2011 Workers Compensation Issues Report, a 12 part, 50 page document that addresses a wide range of topics affecting the industry today.

The report is available in its entirety in two formats:

• pdf download (one file per report part)
• or a “virtual book” format which has some really cool features – but which I found awkward to use, primarily because of challenges with the zoom function, which I tried in two browsers. However, this may have just been pilot error!

The report is extensive, covering overall market topics such as economic conditions and recovery, legislative impacts, and claims studies. So how does it relate to those of you who are selling and servicing work comp accounts?

First of all, the report says that while the P&C industry is generally starting to look more favorable, the signals specifically regarding workers compensation are mixed. I’ve no doubt most of you can easily confirm that! While the report may support much of what you intuitively know, I think it does provide some hard data that I’ve translated into some key questions to ask yourself as you look for opportunities with your own book of business.

Are your clients and contacts still in business?

Yes, this sounds like a big “duh” question, but I ask it because of this trend included in the NCCI report: After business bankruptcies tripled between 2006 and 2009, the rate of bankruptcies appears to be have dropped significantly in 2010 (based on 3rd quarter data). Of course when a business goes bankrupt, that’s an entire book of business that’s lost – not just to another broker, but to the entire industry.  While the bankruptcy rate might be viewed as news that’s more not-negative than truly positive, here’s another hopeful statistic: While the job creation rate is slow, it is currently a positive trend, nationally, which leads me to the question:

Are your clients and prospects beginning to hire again?

Some states are still worse off than others, but overall, payrolls are recovering. The rate of business startups is at a 15 year high. Admittedly, many of these startups are coming from otherwise jobless entrepreneurs who may not be hiring employees and needing workers comp insurance soon.

I think all of these factors combined suggest that it’s time for agents to be touching base with former clients and contacts and keeping an eye on this part of the recovery picture. It also wouldn’t be a bad idea to think about specific markets that may be experiencing a higher rate of entrepreneurship or recovery, as suggested in this CNN article.

For more on payroll trends and other factors concerning the recovery, read the NCCI issues article The Road to Recovery: The Workers Compensation Insurance Industry in the Aftermath of the Great Recession by Robert P. Hartwig, PhD, CPCU.

We all know it can be hard to get psyched for a conversation you think may be negative. But your outreach to those who have been most affected by the recession will pay off in the long run. With that in mind:

Are you especially checking in with your smaller clients and prospects? 

It’s no secret that the recession has been harder on small businesses than large ones, with small businesses laying off proportionately more employees. Since small businesses, which have fewer self-insurance options, actually buy more full-coverage workers compensation policies, this has also produced a premium decline NCCI estimates at 4-6% over the last two years. (Precarious Market Outlook Prevails by Stephen J. Klingel, CPCU)

Are you especially keeping tabs on clients and prospects in manufacturing or contracting?

More than 40% of workers comp premiums come from manufacturing and contracting, although these sectors employ only about 20% of all workers. Particularly hard-hit by the recession, these industries alone account for a 4%–6% decline in workers compensation premiums, NCCI estimates.  (Precarious Market Outlook Prevails by Stephen J. Klingel)

“Strong rebound” unlikely

Unfortunately, as Klingel says,  a “strong rebound” in workers comp is unlikely. I think that means you’re going to work as hard as ever for new and renewing business, but there are indicators that the balance of 2011 and 2012 will bring a steady, if slow, increase in opportunities.

Are these helpful ideas? How are you looking to sustain and grow your work comp business in today’s economic climate?

As always, we love to see your comments here on the blog, or you’re welcome to email me personally at kory.wells@zywave.com.

- Kory Wells, WorkCompEdge Blog Editor

The U.S. workers comp system turns 100 this year. We join industry leaders in examining work comp trends for the future, especially in experience rating.

It was significant to see how the same issues came up repeatedly with the majority of these eight writers examining future trends in workers comp. These themes included:

The tangle of the economy, growing healthcare costs, and healthcare reform.

Trends in these areas relate to the increase of medical costs as compared to indemnity costs, the corresponding decrease in claims frequency, and how workers comp may eventually be impacted by health care reform or other reforms at the federal and/or state levels:

General healthcare costs are growing as a share of U.S. GDP, and in workers’ compensation, there has been a gradual shift in the balance of medical/indemnity costs towards medical…Are we starting to see a bottoming of the reductions in claim frequency? Stephen J. Klingel, NCCI Holdings, in A Changing Workforce Among Many Challenges

Clearly, understanding medical loss components and their respective trends are going to play an increasingly important role in our industry. Reserves established on prior development models will ultimately prove inadequate in most cases. – Mike Britt, Accident Fund Insurance Co. of America, in Medical Losses, Top Line Growth Top Challenges

The changing nature of our work and workforce

Several writers pointed out the trend toward more service jobs and automation and away from construction and manufacturing jobs. The aging work force and the obesity epidemic also made the list of trends for many of the writers:

The workforce is getting older and less physically fit. Many Baby Boomers can’t afford to retire and will stay in the workplace longer. This is not such a big issue for clerical employees, but will be a problem for those who are engaged with physical labor. Obesity, diabetes, and high blood pressure are on the increase which complicates and extends injury recovery. – Frank Pennachio, The WorkComp Advisory Group, in Safer Workplaces, But Older Workforce

Improved technology

This, of course, is a category that very much interests me:

The industry needs to develop new strategies for identifying cost drivers, controlling medical costs, and understanding the impacts and implications of trends. To develop these strategies, insurers should tap into new ways of collecting data, such as using transactional reporting and data reporting standards, and new technologies, such as predictive analytics. – Arthur Cadorine, ISO, in Demographics, Healthcare Reform, Economy and Data Will Help Define Future

Corporate silos that have separated risk management from benefits management are breaking down. Agencies that offer a broad range of skills and integrated knowledge will be able to compete. – Preston Diamond, Institute of WorkComp Professionals, in For Agencies: Not Business as Usual

We believe there are substantial benefits waiting for the company that digs into its data, gains a better understanding of its customers and their environment, and takes the innovative action necessary to capitalize on those opportunities. Mike Britt, Accident Fund Insurance Co. of America, in Medical Losses, Top Line Growth Top Challenges

How do these trends relate to experience rating analysis?

To me, these trends are very much about the data and how it can be used in mod analysis – which, with the right data, can be a step beyond claims analysis.  Here are a few ideas and question I have. I’d love for you to respond through a blog comment or by emailing me at kory.wells@zywave.com with your ideas.

• It will become more important than ever to include demographic data with basic loss information in a mod analysis. Of course, all that’s needed to calculate a mod, in terms of claims, is to know the loss date, the loss amount, and if it’s a type 6 medical-only loss (for the majority of states). But the power of mod analysis comes from associating each loss with its demographic data. I hope you realize that in ModMaster, if you load “optional” information into the large loss page, you can produce numerous reports which “slice and dice” the data to show how certain demographics have affected the mod. This can help the employer see, for example, that “operating equipment” and “failure to follow procedure” are contributing the most to the mod points – and therefore premium. Or that “hand injuries” are a particular problem in their organization, which may point to an ergonomic issue that needs improvement. How often do you load “optional” information into the large loss page of ModMaster? What are the challenges to you doing so?

• New demographic data associated with the claimant’s medical profile needs to be included in mod analysis data. The trends above seem to indicate an option to input and report on data such as age and weight (which I talked about in Is It Time to Report Height and Weight on Workers Comp Claims) – into ModMaster. This certainly gets into the integrated knowledge and better sharing of data mentioned by the writers above. It also points to the integration of analytics to action, such as the opportunity for certain claimants to be flagged for specific wellness programs to help assure the best possible outcomes. I see this working something like an enhanced version of the WorkCompEdge Proposal Report in ModMaster. That report has been a big hit – even with users who don’t use WorkCompEdge – because it doesn’t just say “here are your problem areas.” It goes further and says “here are the things you need to do to address those problem areas.”

• Loss reserves will become a more important component of mod analysis. If, as Mike Britt suggests, reserves are going to start proving inadequate, this could mean that reserves will more often be adjusted upward year to year for a the three years that a loss is in the mod. Or, it could mean that a backlash effect causes reserves to spike. Currently you can enter paid and reserve components on large losses in ModMaster (to do so, you must enable ERM-6 reporting in the System Administration area.) Honestly, though, we don’t do much with reserves on reporting. Do we need to enhance this area so that you can see trends in reserving that may improve dialog with employers and claims adjusters?

Finally, as the comments by Preston Diamond and Mike Britt indicate, the future is in going both deep and wide with the data. If you’ll forgive the shameless self-promotion, I can’t resist pointing out that Zywave’s acquisition of Specific Software is combining their very strong benefits background and technology infrastructure with our work comp expertise to, in time, produce exactly that capability. But your ideas and feedback will be, as always, important to us providing both innovative and practical solutions. Let us hear from you!

- Kory Wells, WorkCompEdge Blog Editor

If you're a professional involved in any aspect of workers comp, you need to know about the Work Comp Analysis Group on LinkedIn. It's outstanding for its peer-to-peer discussions.

Today I want to give you a more specific reason to join LinkedIn, and that’s the Work Comp Analysis Group, a great, free resource available only to LinkedIn members (join the Work Comp Analysis Group now if you already belong to LinkedIn). With over 6,800 members, this group is the largest online discussion community dealing exclusively with workers compensation issues. But it’s not just the number of members that make this group stand out: it’s the quality of the discussions.  Topics with activity in the past month have included:

• Are you responsible for work comp loss prevention? If so – and you only had one loss prevention action available – what would that one action be? (currently 27 comments)
• Can someone give examples of “measurable” outcomes for work comp case management, and how to measure them? (currently 51 comments)
• Is it time to stop the spine fusion juggernaut? If so, how? (currently 10 comments)
• What are some ways to save on workers comp insurance? (currently 35 comments)
• Experience with telecommute comp claims? (currently 19 comments)
• Carve-outs in workers compensation:  I am looking for information on construction industry carve-outs and collectively bargained workers comp from anyone with personal experience. Has it been successful? Pros/cons? (currently 5 comments)
• New opinion disallows attorney fees on MSA portion of WC buyout. How will this affect settlements? (a new discussion today, currently 1 comment)

As this sampling indicates, the scope of topics includes safety, medical and legal issues, and more, such as news items related to workers comp at both the state and national level. Subgroups for Canada, Australia, and the National Workers’ Compensation and Disability Conference & Expo are also available.

Any group member can start a discussion by simply typing a question or by linking to an article of interest. While any other group member can reply, posts that are essentially an advertisement for a product or service are against the group’s no-spam policy, and it’s rare that I see this policy violated.  (I confess: occasionally I think it’s quite legitimate for me to chime in on a conversation in which our products, ModMaster and WorkCompEdge, should be mentioned, but I do so quite carefully, as I so value my membership in the group.) Group members can control how often they receive email notifications of new and updated discussions; a once-daily summary is recommended and quick to scan for items that may interest you.

The group also has a companion site of resources at workcompanalysisgroup.com, but its exceptional offering is the intelligent exchange of information between workers comp professionals. Congratulations to Mark Walls of Safety National for starting and nurturing this great resource.

So if you haven’t yet, join LinkedIn today (a basic membership is free, I remind you). Then, when you’re signed in, join the Work Comp Analysis Group. Members must be approved, but if you’re a client of ours and you’d like an invitation that bypasses the approval process, just send me an email at korywells@specificsoftware.com.  The group is now soliciting ideas for the THE TOP 50 (or more) BEST WORKERS’ COMPENSATION COST CONTAINMENT TIPS. I know our readers have ideas they can share!

- Kory Wells, WorkCompEdge Blog Editor

Zywave has acquired Specific Software Solutions, makers of ModMaster software

You can read the official press release on Zywave’s corporate news page (pdf format) or on the Specific Software site.

If you’re not familiar with Zywave, get to know more about the company at zywave.com, on Twitter, on Facebook, and on LinkedIn.

On a personal note, I’m pleased to report that Zywave is welcoming all former Specific Software employees into its family, and we’ll still be operating out of the Nashville area. Since Zywave is based in Milwaukee, my transition priorities include acclimating the staff to my Southern accent and expressions and introducing everyone I can to the finer points of sweet iced tea, the fuel of choice for at least a few of us here in the Nashville office.  I’m sure the staff in Milwaukee will have some recommendations for us, too – perhaps starting with our acquisition of some real winter coats for our trips to the home office.

As always, we encourage our clients to let us know any questions.

- Kory Wells, WorkCompEdge Blog Editor

Well, hold on to your hats – uh, make that your mobile devices, because our latest freebie is the WorkCompWisdom mobile application for workers compensation news, available now! It features, for all to enjoy:

• Workers comp news from Insurance Journal, the Workers Comp News Network, Joe Paduda’s Managed Care Matters blog, and other resources. (If you’d like us to consider adding your blog or news feed, send me an email.)
• An RSS feed that features the articles from this blog
• A social media link that connects you to our Twitter, Facebook and YouTube pages, where we’re frequently sharing news and ideas related to workers comp, agency marketing, risk management, and more.

Try the WorkCompWisdom mobile app for workers compensation news at your fingertips. It will connect you to ModMaster support, too!

If you’re our client, you’ll also enjoy the app’s Click to Contact link, which will connect you to our product FAQs, websites, support email address, and of course, our support phone number – all features designed to make it even easier for you to get help regarding ModMaster, WorkCompEdge, or our other software products.

You can access the general mobile browser version of the WorkCompWisdom app at http://bit.ly/wc-app

You should also be able to browse the apps on your phone and find the WorkCompWisdom app. But in case you need help, here are some phone-specific versions of this free app:

• Google Android: http://www.buildanapp.com/dld/JINQZXq65TE/WorkCompWisdom.apk
• Blackberry: http://www.buildanapp.com/dld/VBZdr3nWGMg/WorkCompWisdom.jad
• Blackberry 4.7 (Storm or later models): http://www.buildanapp.com/dld/9DW7-YYRnWA/WorkCompWisdom47.jad
• Blackberry 4.5: http://www.buildanapp.com/dld/8VBgofcCxv4/WorkCompWisdom45.jad
• Windows Phone: http://www.buildanapp.com/dld/1W0SSo-SMU4/WorkCompWisdom.CAB

We may be newer to mobile apps than you are, so don’t hesitate to let us know if you see ways for us to improve the app, or if you have questions!

- Kory Wells, WorkCompEdge Blog Editor

As the year draws to a close and  “best of 2009″ lists permeate the media – best films, songs, books, news stories, and so forth – we’ve decided to make our own contribution with a list of the best new features in our ModMaster software that calculates the workers compensation experience modification rate.

There's a long list of ModMaster enhancements we've implemented this year. Here are some of the best!

We’ve based this list on both our web stats, which give some indication of our most popular features, and on the comments of our tech support staff who talk to and email with ModMaster users every day. Our staff asked to include a few features that were actually introduced in 2008 based on some of our more frequent questions, such as, “What’s the loss limit in my state?”

For the record, we distributed 13 updates to ModMaster this year. All 13 included new expected loss rates and other data from NCCI or other bureaus as it became available, and five of those updates also included software enhancements – from things as minor as expanding the width report fields to accommodate larger estimated premiums to several all-new reports. Of course we mention each of these new features in our update documentation as they are released, but we know you sometimes get busy and might’ve missed one or two. So, without further ado, and working our way to #1, here are the top 10 new features you simply MUST know are available in ModMaster.

10. Enhancements to the Aggregate Loss Sensitivity report

We’ve tweaked the mathematical rounding behind this report so that the premium estimates – which can get very large in some cases – are more consistent from one analysis point to the next. We’ve also added new fields to the report to show the aggregate loss amount, the change in the estimated mod, and the change in the estimated premiums.

9. The ability to import payroll data when you’re on the Payroll form in ModMaster.

As opposed to the import function on our Utilities menu that requires you to import setup, payroll, and loss data, the import button on the toolbar of the Payroll form allows you to import payroll into an existing file. This may be handy in cases where you obtain loss information from one source (such as Zywave) and then want to import payroll from another source. You might also use this function to import only payroll data for the newest policy period after performing a File Utilities/Rollover of an existing mod file.

Learn more about all of our import options

8. The ability to use the up and down arrows on your keyboard to move between fields on nearly all ModMaster forms.

This functionality falls into the “makes life easier” category. While it’s been available on the Payroll and Small Loss pages for some time, we didn’t have it on all of the “spreadsheet” views of the Large Loss page. Now, no matter which spreadsheet view you choose from the toolbar of the Large Loss page, and no matter which type of calculation you are doing (NCCI-type, PA/DE, or NJ), you can quickly move up or down a column of data using the arrows keys, just like you can in a spreadsheet.

View a quick video clip about the spreadsheet views in ModMaster

7.  The ability to view loss limits for each state.

When you have a large or catastrophic loss, perhaps that involves a multiple claim accident, employers liability, or USL & HW (U.S. Longshore and Harbor Workers) often the question arises as to exactly what the loss limit is in the applicable state. Although that information can be derived from some ModMaster reports, now it’s easily available to check BEFORE you enter all of the data for a mod calculation. Simply go into the System Administration menu in ModMaster, then click the “Loss limits” link and specify the desired state to see the state per claim and state multiple claim limitations, plus limits for employers liability, and USL & HW claims.

6. New group and grand totals on the Cause of Loss, Injury Type and Loss Identifier reports

Many of our enhancements are implemented because of a user’s suggestion, and this is one of them. Now you can see the total number of losses that fall into a certain category, the total cost of those losses, and their total impact on the mod.

5. The new WorkCompEdge Proposal report

Even if you’re not using WorkCompEdge, this is a great report to help you analyze and suggest what changes a company needs to make to improve its mod. Learn more about it in this article.

4. Support for New Jersey non-”F” classes.

Ironically enough, these classes are preceded - rather than followed – by a “F” and then a payroll code.  ModMaster now makes a 50% adjustment to the manual rate and excess element factors for the indicated code, per the Longshore and Harbor Workers’ Rule 4a in Part Two, Section 1, Page 8 of the NJ manual.

3. Support for the new 1/1/2010 California loss split.

While of course we always make any changes that we need to in order to generate a correct mod in all of the states ModMaster supports, we’re proud of the timely analysis our actuarial staff performed on this and the related California rate changes. Read our California 1/1/2010 Mod Calculation Change Advisory.

2. The new $1,000 WorkCompEdge “Agency Plus” license option

While it isn’t strictly a software change, this new license option is significant. Our agency users can now boost the power of ModMaster with the extensive training and resources of WorkCompEdge.  Learn more about WorkCompEdge licensing.

1. The new Mod Comparison report

Hands down, this is the big winner for 2009, considering all the excitement and feedback it generated. This report lets you compare 2 different mod files, and based on user feedback, we’ve already enhanced it to include total payroll and an average expected loss rate. Read Comparing Two Workers Compensation Mods.

What’s your favorite feature of ModMaster, or something new that you learned about ModMaster from the blog this year? As always, we love to hear from you. Happy holidays from all our staff, and we’ll see you here on the blog in 2010!

Sometimes we think of technology only as an expense, but when it’s well-implemented, it can be an effective time and money saver. Today’s blog features news about a cost-effective work comp webinar at which you can train a room full of people at one low price; Kindle delivery of our blog; and a free newsletter that will bring you more technology tips on a regular basis.

Interested in workers compensation training?

Bill Wilson from the Big "I" Virtual University will be offering a comprehensive experience rating webinar in January.

Better understand – and communicate with others about – the experience rating mod, premium overcharges, expected loss rates, loss runs, and more.  Our friend Bill Wilson, Director of the Big “I” Virtual University (VU), will be offering a Workers Compensation Experience Rating Webinar on January 14, 2010, from 2:00 – 4:00 p.m. EST. We heartily recommend that you check it out (and no, we don’t receive any type of compensation for making that recommendation). Here’s a description of the class from the VU:

What do these numbers have in common: $30,000. $16,000. $23,000. $199,957? They’re all real-life examples of premium overcharges due to workers compensation experience mod errors. In each case, a bidding agent was able to take these accounts away from an existing agent who was not vigilant in monitoring the insured’s mod. In this webinar, Bill Wilson, CPCU, ARM, AIM, AAM, director of the Big I’s Virtual University will show you how to decipher a mod worksheet and explain it to an insured or prospect. You’ll learn what information is needed to monitor, check and project mods, how to calculate a mod from scratch, and how to identify and correct worksheet errors.

More specifically, Bill will explain what experience rating IS and what experience rating is NOT. This is critical to understanding how an insured can have a relatively high mod with what appears to be good loss experience. Through exercises, you’ll be able to determine when an account is eligible for experience rating…and when it’s not (something good to know if the insured has a debit mod). Also examined is the impact of ownership changes on the mod when someone sells a business to a newly created corporation in an attempt to revert to a 1.00 mod.

Using a carpentry contractor as an example, this webinar will identify the sources of information you’ll need to check or calculate mods, from the worksheet to loss runs and audit reports. Then you’ll examine every single entry on a mod worksheet, from Expected Loss Rates to D-Ratios and Weighting to Ballast values. You should then be able to explain these items in a way your insureds can understand.

At that point, another example business will be used to go through a complete exercise of calculating an experience mod from scratch. Following that is a discussion of related issues such as when changes can be made to the mod after policy inception, the impact of loss frequency on a mod, how deductible plans work, the importance of loss control, and an overview of interstate rating.

The webinar will conclude with a comprehensive analysis of a final business where you’ll use loss runs, audit reports, and other information to find multiple errors on their mod worksheet. Included in this webinar is a full PDF workbook (with separate appendix) which has dozens of real-life examples and exercises. All of the errors addressed in this program actually happened to real insureds and you’ll learn how to find and correct them.

For more information or to register, go to https://www1.gotomeeting.com/register/581283377.

Do you use a Kindle (or other ereader)?

A few of you have already noticed and subscribed, but we wanted to point out that the WorkCompEdge blog is now available on the Kindle.  Kindle blogs are fully downloaded onto your Kindle so you can read them even when you’re not wirelessly connected. And, unlike RSS readers which often only provide headlines, blogs on the Kindle give you full text content and images and are updated wirelessly throughout the day. Check out the Kindle edition of the WorkCompEdge Blog on Amazon today. And, if you use a different ereader (or get one for Christmas!) let us know – we’ll certainly investigate making the blog available in other formats.

Technology Tips for Your Insurance Agency

Steve Anderson is our neighbor just down the road in Franklin, TN, but it seems he’s always traveling to a consulting or speaking gig, a conference, or a training event related to insurance and technology.  Steve offers a free weekly technology tip newsletter your agency shouldn’t miss. Just this week, for example, the newsletter talked about lower-cost alternatives to Adobe Acrobat, a tool that’s needed but cost-prohibitive to some smaller agencies. Learn more and sign up at http://steveanderson.com/.

As you may recall, we launched WorkCompEdge last fall – just in time for the economic crisis. Since the downturn affected many sectors, including insurance and risk management, we’ve been especially grateful to our WorkCompEdge founding members and to all of our ModMaster customers who evaluated WorkCompEdge. Time and again, we’ve heard similar feedback, however, and that’s led us to make some changes to our WorkCompEdge licensing options we think you’ll be excited about. Here are the highlights:

Our new Agency Plus license represents some cool savings over previous WorkCompEdge license options for agencies and similar providers. Thanks for giving us your feedback!

IF YOU ARE AN AGENCY, BROKERAGE, INSURANCE COMPANY, CONSULTANT, PEO, TRUST, ETC.

For only $1,000 per year, the new and very affordable WorkCompEdge Agency Plus license offers agencies and similar providers the opportunity to access WorkCompEdge for internal training and coordination of service activities in 15 different areas that affect work comp costs, including:

* hiring practices,
* safety,
* the premium audit,
* mod verification and analysis,
* medical clinic relationships,
* return-to-work,
* and much more.

As you probably know if you’re a regular reader of this blog, site access includes to-the-point educational modules PLUS strategy and tools to help you evaluate a company’s entire work comp picture.

For an additional $500 per client, you can add the option for your clients to have direct access to WorkCompEdge and the WorkCompEdge Safety Training Center.

The Agency Plus license can be purchased as an add-on to your annual ModMaster subscription, or you can contact us for a prorated license until the time your subscription is due for renewal.

IF YOU ARE INTERESTED IN AN AREA “EXCLUSIVE” LICENSE TO WORKCOMPEDGE

For agencies who are eager for exclusive access to the benefits and competitive advantage of WorkCompEdge, we’ve enhanced the Member Agency Exclusive license to include custom marketing support, flexible employer seats, unique educational opportunities, and more. A number of our founding members have already converted to this license, which is priced at $850 per month. Some markets – including Albuquerque, Atlanta, Buffalo, Shreveport, and parts of Maryland, Minnesota, and Wisconsin – are already closed.

IF YOU’RE AN EMPLOYER

WorkCompEdge is still available through your favorite agent, broker or consultant on terms they specify. It’s also available directly from us for $500 per year.

FAQs

Q: If someone else gets an exclusive license in my area, does that affect my ModMaster subscription?

A: Absolutely not. It only affects your ability to be a registered WorkCompEdge user. You will still be an important ModMaster client, participate in our forthcoming WorkCompWisdom program, and glean valuable knowledge from our blog and other resources.

Q. Exactly what are the fifteen modules in WorkCompEdge?

A. A graphic showing all of the modules is at http://www.specificsoftware.com/wce/videointros.htm. Click on any of the module titles to see the short video introduction to that module. At $1000, we believe you’ll get your money’s worth by using even ONE of these modules!

MORE DETAILS

Learn more about the new WorkCompEdge license options at http://www.specificsoftware.com/wce/pricing.htm

If WorkCompEdge interests you, act soon! To order or inquire further, contact Helene Pellett at 800-929-4052 x 205 or helene_pellett@specificsoftware.com

by Kory Wells, WorkCompEdge Blog Editor

We’re grateful that several hundred of our readers and clients took the time to participate in our recent survey “How Do You Stay Informed and Connected?” We’re still compiling the results, but for today, I want to focus on one trend that was glaringly evident: professionals in the insurance industry (which made up 98% of our respondents) are not taking advantage of social media sites like LinkedIn and Twitter. Now, admittedly, Twitter is still pretty new, so it may be understandable that more folks in the insurance industry haven’t yet experimented with it. But LinkedIn? A whopping 85% of our respondents say they’re not using LinkedIn. While we understand that social media may not be for everyone, at least exploring the possibilities – particularly if you are in business-to-business (b2b) sales or service – should be an objective for every business, period. So let’s talk more about LinkedIn today.

Well, yes, a lot of us probably do. But as with other social media, LinkedIn is not about being a substitute for relationships. LinkedIn is about nurturing existing relationships and helping you find new business relationships. It lets you visually see who among your contacts may themselves know a prospect you’ve been wanting to meet. It’s also about helping other people find you!

Here’s one member’s comment from a LinkedIn blog entry

I also was a bit skeptical of LinkedIn at first. When I found out the ways to really use it, however, I discovered that it’s a great way to not only find and get introduced to people through your network for business opportunities, etc., but also a way for the people you DO know to recommend your services which can be viewed by the public.

Every time I meet with a new client or come back from a networking function, I tell them about LinkedIn via email with a brief layman’s overview of what it can do, then follow with an invite to connect. I have received more recommendations this way and also been introduced to several new people who I wouldn’t have gotten the privilege of knowing, had I not been using this service.

Not enough time

If you spend time nurturing relationships through phone calls, emails, lunches, business mixers, centers of influence, and other methods, you really should consider adding LinkedIn to the mix. LinkedIn is not something you have to nurse every day. Yes, you will have to spend a little time building your profile. If you’re not the most tech-savvy person, hopefully someone in your office is, and can help you get started. As an almost immediate benefit, creating a profile will help you and your company get a little more love from the search engines. You can also join groups that discuss topics of interest to you. For all this activity, you can receive a summary on the frequency you choose. I get emails from LinkedIn once a week, and usually check in only once or twice a week. It really doesn’t take that long to scan status updates and group activity to see if there’s anything I want to respond to.

Haven’t seen my clients or prospects using it

First of all, LinkedIn has over 43 million members, so have you really looked for those clients and prospects – and the people you know who can lead you to them? If someone you’d like to connect with truly isn’t on LinkedIn and you have their email address, you can invite them to join – and thereby establish yourself as a leader in the relationship. You can send them a personal message with the invitation, and they’ll immediately see your profile, which helps communicate the professional you are. Obviously, if you have their email address, you can email them directly, but in our own experience here at Specific Software, this is simply a little bit different way to approach people, and it’s often successful.

Security issues or no access from work

I know that some of you work in large corporations that have tight control for different software/network security reasons. I don’t have the expertise to argue for or against such policies. Doing business in the virtual world certainly has its risks. However, if the decision to prohibit access is more of a cultural decision in your corporation, I’d certainly question that. I can understand Facebook and MySpace being off limits in some work environments, but LinkedIn? No way.

Summary

I hope this is enough to pique your interest and give LinkedIn a try – and not for just one day. You need to keep revisiting it for several weeks to get the feel and benefits of it. You can start by connecting with our CEO Tim Coomer at http://www.linkedin.com/pub/timothy-coomer/2/a99/6 or me (Kory Wells) at http://www.linkedin.com/pub/kory-g-wells/3/975/787

Also, here are some other resources that may be helpful for you to get even more ideas and details about using LinkedIn:

Business Week: Why Social Media Is Worth Small Business Owners’ Time

Search Engine Guide: Why LinkedIn is the One Social Network I Couldn’t Work Without

Social Media Guru: Why LinkedIn?

I’ll give you a few weeks to digest this and experiment for yourself. Then it will be time to talk about Twitter!

Listen/subscribe to this blog on the WorkCompEdge podcast feed

Maybe you’re in an agency that’s considering WorkCompEdge. Or maybe you’re already an agency member. Integrating WorkCompEdge into your sales and service processes is admittedly a task that takes some thought and – that dreaded word – change. WorkCompEdge member Garry Watts of the Winona Agency acknowledges it isn’t easy. “I’m a producer,” he says, “and we don’t think ‘process-oriented.’” But, in a new audio interview available here on our corporate websiteand as a podcast feed, Garry also goes on to offer encouragement for – and his experience with – implementing WorkCompEdge.

Today’s blog marks the first time we’ve published the blog as a podcast. Would you like all WorkCompEdge blog entries delivered as a podcast? Let us know!

“WorkCompEdge seemed to be a missing link for us,” he says. “We think the return on investment is very high.”

WorkCompEdge contributor Frank Pennachio, another agency owner and work comp trainer, also lends his thoughts on how WorkCompEdge helps agents lead and engage employers and how various work comp training programs integrate with WorkCompEdge.

(For our Member Agencies, Frank and Garry will be continuing this discussion in more depth in a web-enabled roundtable discussion in July – watch your inbox for more details.)

Thanks to Jack Burke, president of Sound Marketing and host of the popular insurance programs “Audio Insurance Outlook” and “Insurance Talk Radio,” for conducting the interview.

For you podcast subscribers out there, this blog marks the first time we’ve pushed audio to a podcast feed. Be sure to subscribe, and let us know if you’d like all blogs available as a podcast! It won’t always be Jack’s professional voice, but we’re willing to give it a try if the interest is there!

Subscribe to the WorkCompEdge podcast feed

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

Workers compensation consultant, writer and trainer Margaret Spence of Douglas Claims and Risk Consultants has founded National Return to Work Week and is observing it now (May 11-15, 2009) for the first time with a free virtual conference. Here are a few of the seminar topics coming up in the remainder of the week:

• Physician Where Art Thou – Medical Management
• Best Practices – Workers Compensation and Beyond – From a Defense Attorney’s Point of View
• I’m Injured and I Can’t Come Back to Work
• Engaging Employees With Disabilities – Getting Them Back to Work

“Kory,” you might say, “it’s a whole week of free events. And this is Wednesday afternoon. Why didn’t you tell me about this sooner?”

“Well,” I would say sheepishly, “that might have something to do with me not opening every email I receive in the most timely manner. Not yours, of course.”

But all is not lost! The seminars we’ve missed are recorded and also available. These include:

• Disability is a Daunting Task – Right?
• The Flip Side: Attorneys and Return to Work
• Vocational Retraining: a Viable Return to Work Option

and many more. Speakers include attorneys, an ergonomics specialist, a medical doctor, human resource professionals, Ms. Spence, WorkCompEdge contributor Frank Pennachio, and others.

Visit www.brighttalk.com/summit/nationalreturntoworkweek

This initiative mirrors many of the principles we advocate in WorkCompEdge, and we congratulate Ms. Spence on her leadership and vision.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Part 4 of the series “The Power of Intentionality”: Part 3

Those of you who are regular readers know that my early career was spent as a systems analyst in the defense industry. If you’ll bear with me mentioning it again, that job taught me something that applies to today’s blog: focusing on one piece of a large, complex system can easily lead to weakness in other parts of the system. And, elements that will challenge a system – such as ballistic missiles – will find the weak parts of the system and potentially take advantage of them.
Is your work comp focus too narrow?

With work comp being as big and complex as it is, it hardly feels like I left defense systems. Many of the same principles apply, and here’s the principal weakness I see with how employers try to manage work comp: During the past several decades, employers and the risk management industry have focused on safety as the ultimate solution to lower workers compensation costs. But despite the tremendous effort put into safety training – and the significant gains in work place safety – many employers still struggle with workers compensation losses as a significant and often unpredictable expense.

• hiring someone with a medical history that comes back to bite you
• having the attitude that accidents are inevitable
• assuming that human resource and medical personnel communicating with an injured employee is enough
• not understanding how important it is to get an employee back to work, even if on modified duty
• being satisfied with a mod of 1.0
• buying work comp insurance with a “low bid” mentality
• and so much more!

 

Editor’s note: I’m here to confirm that Tim really can juggle, although as far as I know, he’s exaggerating about the flaming sword routine. However, if you talk to him, ask him about his unicycle!

The principles of juggling apply to managing many components of a big system such as work comp:

1. You have to touch each object on a regular basis. In other words, you can’t focus just on safety, or just on return-to-work, or just on the mod. There are 15 WorkCompEdge modules, and eventually, you should be using all or most of them.
2. You have to manage your speed. For example, this is why we recommend quarterly reviews of data in the Verify Your Mod module and workbook. This is why your actions in the first 24 hours following an injury are so important.
3. You have to manage your accuracy. If your payroll isn’t classified correctly, you may be paying too much in premiums. If your losses aren’t classified as medical-only when applicable, your mod may be much higher than you deserve. If claims aren’t closed in a timely way, it can affect your mod. These are just a few examples.
4. The right kind of object will make juggling easier. You don’t start out juggling flaming swords (I’ll post the YouTube video of me doing that soon.) The right tools and automation are going to help you maximize your success. Enough said!
5. Starting with a small number of objects is easier. This is why we have our Getting Started quiz, to help you prioritize which issues you should consider first.
6. Of course, you get better – and can juggle more – with practice. This is why module after module in WorkCompEdge urges you to come back and reassess on a regular basis.
7. And finally, at any given time, you have to have a mind’s eye view of where each object is. As you practice more, you develop this ability – and even an intuition – that helps you continue to improve.

 

http://www.SpecificSoftware.com
http://www.WorkCompEdge.com

Prior to my career in defense, I fueled planes at an airport, where there would sometimes be fairly long delays between flights destined for our terminal. During the downtime, I taught myself to juggle. I still keep beanbags in my office to entertain and relax myself (and to challenge our blog editor Kory Wells, who has yet to get the hang of it).

Layoffs have become an unfortunate reality of everyday life in America. While historically layoffs are often due to legitimate competitive practices (and in some cases corporate heartlessness), I don’t have to tell you that almost all layoffs in the past 18 months have been due to the severe economic downturn. A full article addressing layoffs and terminations, discrimination, duties of the employer to comply with state and federal laws, and more about the human costs on both the laid off and remaining employees is available to WorkCompEdge members on our wiki. For this blog, let’s take a further look at work comp claim issues associated with layoff situations:

Don’t just do the paperwork: employers mustover communicate in layoff situations. These are human beings whose lives have just been turned upside down. The surviving employees will give the employer the benefit of the doubt and their commitment to the employer if the employer tells them the truth and treats the employees who are leaving with fairness and compassion.

It is a documented fact that an impending or even threatened layoff increases workers compensation claims…especially in a tight job market. Individuals faced with a reduction in their income, temporary unemployment benefits and the likelihood of unaffordable health insurance may look to workers compensation as a way to ensure their income is sustained in the face of a layoff or termination. Even the rumor of layoffs and company reorganizations is enough to scare some employees into filing a work comp claim. But note: simply because an employee files a claim after his or her employment ends does not necessarily mean that the claim is fraudulent. Some employees, previously worried that filing a claim would affect their job security, go ahead and file once they are terminated. Whether the injuries are real or imagined, the fact is, workers compensation claims increase during and after a layoff.

Employers can’t completely stop illegitimate claims from being filed, but there are steps they can take to prepare for defending against such claims – and thereby minimizing costs. The following techniques, a list I’ve tweaked from an article by the Louisiana Workers Compensation Corporation to include my own experience, can avoid or minimize claims cost following downsizing, terminations or layoffs.

1. Communicate with Your Insurance Carrier

Let your insurance carrier know about any downsizing plans your company has. The carrier should be more than willing to strategize with you on ways to thwart any fraudulent claims. Report any suspicions you have about a claim, along with all the reasons for your suspicions, to your workers compensation carrier. The earlier you voice concerns, the better the opportunity to investigate, gather medical evidence and discuss strategy on defensible positions.

2. Focus on the Things You Can Control

The workers compensation system was designed to protect the employee and the laws favor the employee. However, measures can be taken to minimize cost and limit the life of the claim. Often this is the goal – reducing cost and the life of the claim – which can be frustrating to employers. The reality of workers compensation claims is that they are not won by hitting a home run. Rarely is there one isolated piece of information that “knocks it out of the park” and provides an ironclad denial. Claims are won through a series of singles. Documentation of anecdotal evidence (the employee was fine on the last day of employment; no one saw the individual get hurt; the employee was observed using the body part he or she is alleging is not functional etc.) and objective evidence (the independent medical exam’s x-ray or MRI shows no injury) builds your defensible positions and gets you to home base (which is usually a negotiated settlement). The value of the claim will be substantially less with well documented information. The claims take patience and persistence to resolve as bringing the employee back to work (the most common resolution to workers compensation claims) is not an option in a layoff situation. The lack of this option complicates the claims handling. The efforts and costs expended to defend suspect claims is difficult but worth the aggravation as it far outweighs suffering the enormous cost of a permanent long term workers compensation claim.

3. Revisit Your Accident Reporting Policies

Require all employees to report accidents immediately, no matter how minor.

4. Recommit to Thorough Accident Investigations

Accidents in times of company turmoil can be especially upsetting, but this is not time to get lax on your procedures. Investigate accidents immediately after they’re reported. Separate witnesses from each other and the injured employee to get the whole story – and signed statements. Remove or restrict access to any equipment or other physical evidence involved until it can be examined. Address any other hazards which may have contributed to the accident as soon as possible.

5. Be Vigilant About Your Recordkeeping

Many of the workers compensation claims filed after employment ends are occupational disease in nature. Claims for hearing loss are common after layoffs. Be vigilant about your industrial hygiene recordkeeping, including baseline levels of noise, airborne particles, in-door air quality, chemicals and dust exposures. Also be sure not to neglect equipment condition or housekeeping inspection logs. Make sure records are not destroyed, since employees’ payroll, schedule and accident reports may become evidence in a claim after their employment has ended.

6. Use Wellness Exams and Videocams to Document Employees’ Health

Many employers contract with their workers compensation medical provider to conduct physical examinations to determine an employee’s overall health and fitness status preceding a layoff. Employers may also videotape work areas to document employees performing their usual duties. These tools can help establish an employee’s health and activities at the time employment ends. A cautionary note – information obtained about an employee’s health must not be used as a reason to terminate or lay off the individual. This would violate the Americans with Disabilities Act.

7. Ask Employees to Confirm They Haven’t Had Unreported Accidents

As part of an employee’s exit interview, have the employee sign a form stating whether they have been involved in any unreported accidents on the job. This is an important document that can help defend any claims arising after employment ends.

8. Invest in Employee Assistance Programs

Terminations can easily and understandably thrust employees into an antagonistic frame of mind that can lead to fraudulent claims, but this can be mitigated if the employer communicates caring in the exit interview – and provides some real programs to support those sentiments. Consider job fairs, resume counseling, placement services, on-site therapy, and other services that demonstrate your concern for your terminated employees’ welfare.

9. Consider Stepping Up Security Measures

As we all know from unfortunate events reported in the media, workplace violence is a real concern following layoffs or terminations. Any employee hurt on the job through violence of another current or prior employee will result in a workers compensation claim. Examine the level of security you can provide for remaining workers. Use exit interviews to assess an employee’s attitude and tendency towards violence, and take all threats seriously. Employees probably should not have unescorted access to work areas following a layoff or termination.

10. Watch for Potential Fraud Indicators

Familiarize yourself with the warning signs of fraud developed by the National Insurance Crime Bureau:

• the employee is disgruntled after being fired or laid off
• the employee has been told his or her employment is about to end
• the employee is having financial difficulties
• the accident is not witnessed
• the injury involves subjective complaints of pain with no ability to obtain objective medical evidence

Your claims adjuster is undoubtedly familiar with these, but, as noted in our first point, your awareness and good communications will facilitate optimal claims handling.

Conclusion

Although none of these tips may actually prevent an employee from making a workers compensation claim after leaving an employer, they can assist in defending against such claims. The more evidence to present to the judge that there was no mention of any accident until after employment ended or was announced to end, the stronger the defense will be.

Employee reductions can pose a significant challenge for employers and often a devastating turn of events for employees. It is important for employers to have a layoff strategy broken down into goals and an action plan for the company. The layoff can be so overwhelming an employer may forget the overall company’s vision and strategy. Each employer should ask the question; “How do we not just survive but thrive after a layoff? How do we inspire our remaining employees to achieve amazing things… to continue their focus and innovation and not be paralyzed by these troubled and uncertain times?” First, every employer must over communicate in these situations. The employer should reiterate the vision and strategy of the company and the action taken (layoffs), although painful for everyone, accomplishes the mission.

Next, keep in mind; these are human beings whose lives have just been turned upside down. The surviving employees will give the employer the benefit of the doubt and their commitment to the employer if the employer tells them the truth and treats the employees who are leaving with fairness and compassion.

Don’t miss the full article on this topic, available to WorkCompEdge members, on our wiki.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Our blog earlier this week about staffer Tony King’s marathon training and intentionality seems to have started a trend: WorkCompEdge regular contributor Maureen Gallagher is also preparing for a big physical challenge ahead of her, and we’re hoping WorkCompEdge readers might help. Maureen, who’s also a partner with Neace Lukens, is going to be fighting childhood heart disease – and testing her own physical limits – in the grueling Carew Climb, part of the Skyscraper Vertical Mile challenge, on Sunday, February 22 at Cincinnati’s Carew Tower.

Specifically, that means she’ll be climbing and descending the Tower’s forty-five floors ten times, with another eight floors and six steps thrown in just to round off the total distance to one mile up and one down—a total of 3,780 stairs in under three hours. And by auctioning off each one of those stairs, she’s hoping to raise enough money to send twenty kids to camp through Hope With Heart as well as raising money for the American Lung Association, the Climb’s sponsor.

Established as a summer camp experience, Hope With Heart provides year round support and friendships for its campers. The camp, now in its tenth year, is unique because it accepts high-risk children with limited life expectancies. The camp has children with varied heart problems such as valve replacements, pacemakers and transplants. Providing a recreation and social eight-day camp experience for children ages seven to fifteen, Hope With Heart has transformed the lives of more than 400 children with serious heart disease through the generosity of contributors.

In our last blog before the holidays, I was telling you about the materials in Jim Rohn’s Weekend Leadership Event. I wanted to mention Mr. Rohn one more time, in view of the resolutions that some of us may have made for the new year. Let’s talk about some of Mr. Rohn’s suggestions related to personal growth. What? Do I hear you groaning? No, I’m not trying to talk you into some new fitness or sales goal. I’m suggesting instead that the principals and observations that Mr. Rohn makes about personal growth easily translate to challenges employers face – and to the work comp resolutions you’ve made for the new year. You have made some resolutions, right?

Successis nothing more than a few simple disciplines, practiced every day. – Jim Rohn

Discipline is remembering what you want. – David Campbell Founder, Saks Fifth Avenue,quoted in 100 Ways to Motivate Others by Steve Chandler and Scott Richardson

Will these changes get you to success overnight? Most of the time, no – but as with personal goals, if you change your thinking and your habits, your world will change!

First, he says, you have to study how to stay healthy

If you’re an employer struggling with work comp costs, it’s critical that you decide to engage in the study and practice of business processes that will eliminate your work comp issues. This is a commitment to read the latest blogs, journals, and books (and all that handy WorkCompEdge content, if you’re a member) and to understand what a “healthy” business with low work comp costs looks like.

Second, you have to actually do what it takes to become and stay healthy

Of course we all know that only reading about good business and work comp practices isn’t enough. One employer recently told me that if they conducted a drug test on every job applicant they wouldn’t be able to hire anyone! Now, that seems like a problem to me – did I miss something? I wanted to ask if they had considered the liability cost of a deadly accident. To use the personal health analogy, you can’t be slamming back the junk food at lunch every day and not expect to eventually pay the price… which leads me to my next thought.

Daily habits matter

It may not happen until your forties or fifties, but a daily lunch of junk food will catch up with you. Conversely, let’s say you’re 30 pounds overweight and switch that junk food lunch to salad and fruit. Changes won’t happen overnight, but changes will occur. The point is, you can get away with errors in judgment for a while and fall into a false sense of “it doesn’t really matter.” But, as Mr. Rohn says, “everything matters.” Eventually, sloppy business practices – such as ignoring good hiring methodologies, expecting that a perfect safety rating is not realistic, or failing to train supervisors on their “soft skills” when dealing with injured employees – will cost an employer an enormous amount.

Do the disciplines

The daily, weekly and monthly business processes which we describe within WorkCompEdge will begin to transform a business and lower work comp losses. Will these changes get you to success overnight? Most of the time, no – but as with personal goals, if you change your thinking and your habits, your world will change!

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Editor’s note: In today’s blog, Tim has a “baker’s half dozen” of ideas for you. “Baker” reminds me of homemade rolls and cookies, which in turn reminds me of the rapidly approaching holidays. This is our last blog for 2008. We’ll be taking a break for the next couple of weeks, but we’ll be back in the new year with more ideas to inspire work comp cost and productivity improvements. We are grateful for your readership, comments and emails and wish you and yours every blessing of the season. – Kory Wells

“In what I’d call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. So what are those half dozen things in workers comp?

I am an avid goal setter. Each year in December I spend a lot of time setting specific goals for the coming year. This year, I decided to invest some time in viewing about 24 hours of material from Jim Rohn called Jim Rohn’s Weekend Leadership Event. I would strongly recommend this DVD set (and, no, Mr. Rohn doesn’t know me from a hole in the wall and I get no incentive for recommending his material).

I love the way Mr. Rohn presents complex concepts in a straightforward manner. Each word he uses is carefully chosen, and the message is always precisely on target. Today, I was listening to him discuss “fundamentals.” In what I’d call a corollary to the 80-20 rule, Mr. Rohn suggests that about a half dozen facts and ideas will make 80% of the difference in any area you study. If someone says, “Let me teach you the 50 fundamentals” you need to be concerned, he believes. This concept challenged me to wonder: what are the half dozen fundamentals of controlling workers comp costs for a typical employer?

I’ve developed the following list and provide these without explanation and in no particular order. I invite you to comment, or even to suggest I’m wrong (nicely, of course): Are these the principles that would make your list? Perhaps more importantly, do you even have such a list? And how do you get motivated to make a list – and then do something with it? This is a dicussion we’ll continue in the new year!

#1 – Have robust hiring practices that include the use of a conditional offer of employment and a robust medical screening that does not let 100% of the people through.

#2 – Actively measure and intentionally improve the safety culture of the workplace.

#3 – Have a well-trained injury management coordinator with clear authority and responsibility to oversee the rapid recovery and return-to-work of any injured employees.

#4 – Train supervisors to understand the importance of their relationships with employees and to optimally manage the post-injury supervisor / employee relationship.

#5 – Have a robust return-to-work program that ALL employees are aware of (there is some hidden psychology here) that gets employees back to work before indemnity payments start – a big benefit in ERA states!

#6 – Establish and nurture a working partnership with a medical clinic that will ensure effective medical screenings and, in the case of an injury, the right treatment plan that will lead to the most rapid return to work possible.

#7 – (I’m going for a baker’s half dozen here.) Work with a WorkCompEdge Member Agency that is like-minded about these fundamentals and can help you implement needed business changes.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

In America, we have a Uniform Plumbing Code to protect the health of the nation (not to mention the sanity of plumbers and builders) and a Uniform Commercial Code enacted in all 50 states for a standard method of dealing with business law questions involving commerce. Unfortunately, no such code exists for our nation’s employers and employees for the purposes of work comp.

Knowing how the pieces fit together is especially challenging in work comp due to the lack of a national standard.

As states passed work comp laws starting in the early 1900s, each state established its unique work comp system. This resulted in a mishmash of laws, benefits, compensability and eligibility from state to state. There are many different, non-uniform work comp laws in the United States (state, territorial and federal). The state and territorial laws, which exist in every state, Puerto Rico and the U. S. Virgin Islands, are especially non-uniform in terms of which kinds of employments are covered, dollar amounts of wage benefits payable for different kinds and degrees of disability.

The complexity of our varied work comp system presents challenges for employers in three key areas:

• Establishing proper coverage in jurisdictions in which the employer has operations or other jurisdictions the employer has employees working, living or traveling in
• Understanding what jurisdiction benefits the employee can collect
• Determining what rates (premiums) will apply. (This subject mirrors in its complexity the coverage and benefit structures of the various state and federal laws. We will briefly discuss pricing and only as it relates to extraterritorial issues).

A full article addressing these areas in detail is available to WorkCompEdge members here on our wiki in pdf format.

The hodgepodge evolution of work comp laws has resulted in uneven or nonexistent uniformity across state jurisdictions, which creates challenges for employers when confronting extraterritorial issues, including questions of coverage, benefits and pricing.

Work comp coverage in various jurisdictions may depend on where workers reside, employer operations sites, licensing, and the willingness or reluctance of carriers to accept “broad” language in the work comp policy.

On the Information Page of a work comp policy, the insurance agent for the employer must have the insurance carrier list the states the employer operates in or expects to operate in at the inception of the policy. In a separate section, states are listed where an employer expects it may have employees working but the work in those states will begin after the effective date or renewal date of the policy (with some exceptions). The policy requires that the policyholder (employer) must notify the insurance company at once if the employer begins any work in any state listed in this section. Broad wording (suggested in the full article on this topic) is recommended to assure coverage in most jurisdictions even in unforeseen circumstances.

When a state is listed on the work comp policy, essentially we have attached hundreds of pages of work comp statutes and laws and thousands of pages of case law for that state. Add multiple states and I would argue that, although the basic policy is only about six pages long, the addition of statutes and case law make the work comp policy the largest and most complex policy an employer buys.

Employees working, living, traveling in or through other jurisdictions frequently present special work comp challenges including state specific time limits, variations in benefits, state law, reciprocity agreements and other issues.

To compound the challenges, work comp pricing is often driven by pressure to minimize work comp costs. This presents risks to employers as carriers may deny claims or charge some or all of a claim back to an employer. Errors in extraterritorial issues can result in devastating financial consequences to employers.

Knowing how the pieces of work comp policy and law fit together is especially challenging due to the lack of a national standard. For agents and employers, it is critical to understand each state’s work comp laws, customs and practices and, in doing so, to secure the broadest coverage possible. They also need to understand that any claim can result in a dispute as to which benefits apply as well as other extraterritorial issues. In these cases, it is best to work through these issues constructively with employees rather than engage in a standoff.

If you’re a WorkCompEdge member, I hope you’ll refer to the full article on our wiki for much more depth on the subject of extraterritorial issues.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Trick or treat, WorkCompEdge blog readers. In the spirit of Halloween, this week we offer some scary stories contributed by our staff. Some are true and some are imagined, but all illustrate concepts of which employers should beware. Can you tell which is which?

Of course, we think the scariest thing of all is an employer who doesn’t use WorkCompEdge!

Category 1: Do we really want this employee returning to work?

The employee who tried to siphon liquid chemicals with his mouth.

The skull and crossbones must not have been enough. Now there has to be a label that says
“use an approved siphoning device.”

The employee who instigated an assault that led to work comp claims for himself and another employee.

Talk about needing an improvement in corporate culture.

Category 2: They said that?

Employer: “What’s wrong with putting our gear machine operators in code 8810?”

8810 is the common code for office and clerical workers. A manufacturer classifying all employees in this category would probably be charged with, let’s see, falsifying business records and committing a fraudulent practice.

Employer, in incredulous tone: “That’s the sixth work comp claim this employee has made?”

Needless to say, they hadn’t been doing much with claims management.

Employer, on buying work comp insurance: “I went with the low bid.”

Cliches are usually true. You get what you pay for.

Employer, on buying work comp insurance the next year: “I don’t know why my premiums went up so much this year.”

It’s called experience rating. Your agent should be helping you understand it.

Agent to employer: “The mod? I really can’t explain it, but I know it’s better if it’s low.”

Time for a new agent!

Of course, we think the scariest thing of all is an employer who doesn’t use WorkCompEdge! But in all seriousness, whether you’re a member or not, take our Getting Started with WorkCompEdge quiz. It’s nineteen questions that will help you assess the areas in which your company may be getting tricked – and what WorkCompEdge modules you should treat yourself to first.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

If you don’t recognize the acronym “GFM,” never fear: I couldn’t resist throwing a new one out into cyberspace. AcronymFinder.com says GFM can stand for, among other things, “gaming FM (radio)”, “general field marshal,” and “global financial market,” but around the office we’re using it as a convenient way to refer to the current “global financial meltdown.” As a pilot and former rocket scientist, I find acronyms tend to lighten the subject at hand… terms such as MAD (Mutually Assured Destruction), BMDS (ballistic missile defense system), or one of my personal favorites CFIT (controlled flight into terrain) don’t seem quite as threatening if you only use the initials. So, GFM is a “lighter” way to refer to a situation that’s very serious indeed.

During this GFM, it’s important to remember that historically,  employees who are stressed about job security or have personal financial difficulties tend to file more workers compensation claims.

The past few weeks have been incredibly dramatic and sobering: I feel like my brain has been rewired and I’ll never see the world in the same way again. Many of our staff here are thankfully young enough that we have some time for our retirement funds to recover, but most of us also have concerns at a level we’ve never had before regarding the cost of children’s college educations, major purchases and investments of any type, etc. We’re hearing from our personal and business contacts that we’re not alone. So, I thought I would survey the WorkCompEdge team and share with you how we view the impact of the GFM on workers comp – for both employers and insurance agencies. Here are some thoughts from our team:

Employers

Employers should be alert for a possible increase in workers compensation claims. Historically, employees who are stressed about job security or have personal financial difficulties tend to file more workers compensation claims. To avert such a possible increase, we have these recommendations for employers:

• Be especially vigilant at this time about nurturing supervisors’ relationships with their employees, even when there may be negative news to report. Effective, proactive communication with employees is never more critical than now, when fear and rumors can undermine a company’s culture.
• Pay close attention to any claims that are filed: show care and concern for the injured employee. An injured employee is often under a lot of stress, but those stresses may have extra weight in this economy and therefore lead the employee into a downward, self-defeating spiral.
• Even if your business is off, don’t relax your return-to-work policy. For both the financial benefit to your company and the injured employee’s recovery, it’s paramount that you get employees back on the job in some capacity. A claim that is partially due to emotional stress or depression will be greatly exacerbated by sitting at home.
• Finally, this is a great time to reinvigorate or launch an employee wellness program. Get your workers walking at break time; hire a massage therapist for a special on-site chair massage day; make healthy snacks and decaf beverages available in your breakroom to ward off junk food binges some research suggests may be related to stress.

WorkCompEdge modules that are particularly applicable to the above points include:

• Before and After an Injury – The Crucial Role of the Supervisor’s Actions and Attitudes
• Expedite Return-to-Work – It’s Critical to Health, Morale, and Your Bottom Line
• Build True Safety Culture – It’s More Than the Incentive of the Month
• A New Paradigm – Promoting the Health of Your Workers

Agencies

Your employer clients may be hurting financially, but this may mean they’ll be open to new ideas that will make a difference. The coming months will likely be an excellent time to move away from “low bid” philosophies and demonstrate how WorkCompEdge can be an effective tool to lower costs. Use the “Learn the lessons” module to show the employer the potential savings that come with lower losses and a lower experience mod. Then, sit down with the employer and use the WorkCompEdge ModMaster report or the online survey to help map out a strategy for implementing WorkCompEdge.

It looks like we’re going to be dealing with a recession for a while. Ask yourself, “What do my employers clients need most in recessionary times?” We think that one answer is lower fixed costs and a healthy productive workforce – exactly what WorkCompEdge can deliver – but we’re very interested in hearing what you think. Through our products WorkCompEdge and ModMaster, how can we help you help them?

For All Our Readers

Whether you’re an employer, agency, or other insurance professional, it may be time to understand that the best investment you can make is in your own company and in yourself. We want to know how we can help you do that. What challenges do you think the GFM will bring to workers comp in the coming months?

Please, let us hear from you – on the blog comments or by email to me, Tim or our blog editor, Kory.

http://www.WorkCompEdge.com
http://www.SpecificSoftware.com

Blog editor Kory Wells and Specific Software CEO Tim Coomer are both on vacation this week. They told me I was in charge, so I thought we’d try something a little different while they’re gone. How about some audio for a change of pace?

Today, Jack Burke of Insurance Talk Radio…tomorrow Katie Couric, Charlie Gibson, Brian Williams…maybe even Letterman? Hey, WorkCompEdge is big…and in his interview of Specific Software CEO Tim Coomer, Jack calls it “a dynamite product.” Play the audio interview now

Jack Burke, president of Sound Marketing and host of the popular insurance programs “Audio Insurance Outlook” and “Insurance Talk Radio,” recently interviewed Tim about WorkCompEdge. Listen and hear them discuss:

• a brief history of Specific Software Solutions and SIGMA Actuarial Consulting Group
• why we built WorkCompEdge
• the community aspects of WorkCompEdge
• how we’re educating agencies about WorkCompEdge
• how the content of WorkCompEdge is geared toward employers but brings opportunities to agencies
• open enrollment and exclusivity options
• the cost of WorkCompEdge
• the value of WorkCompEdge
• the three main goals of WorkCompEdge
• the next step in learning more

WorkCompEdge has both a wide scope and a lot of depth. Jack calls it “…a dynamite product,” and says there’s “definitely a need for it in the marketplace.” Whether you’re new to WorkCompEdge or still evaluating it, I think this interview will help you learn about it in a new way.

Play the audio interview now

http://www.workcompedge.com/
http://www.specificsoftware.com/

Are there really that many “bad employees” out there crippling the workers comp system?

The prevailing message I received at a recent two day workshop on workers compensation is that there are. But I don’t agree.

The workshop was conducted by a renowned risk management organization and primarily attended by risk managers, claims people, and safety managers from large, self insured organizations. The Bad Employee, mentioned again and again, was synonymous with one who malingered in recovery, experienced a delayed recovery, or committed fraud.

“How easy it is to make people believe a lie, and how hard it is to undo that work again!” – Mark Twain(Photo from Wikimedia Commons)

I keep asking myself why so much emphasis was put on the Bad Employee as a major, if not primary, cause of costs and problems in the work comp system. Addressing that question prompts several additional questions in my mind:

1. Why is it that in the information age it is so difficult getting good information to people who can make a difference?
2. Is it because the person doing the telling has something they want to sell you and can benefit from such erroneous myths?
3. Is it because dusting off and rolling out the same old tired stuff is easier and takes less effort?

I realize that these questions point to a range of ills, from operational legacies to intellectual laziness to the much more serious intentional deceit. My dad, who got smarter as I got older, used to say that a person’s position depends on his position. In other words, a person’s point of view depends on his or her station in life or business. Is it too cynical to think that service providers think they can make more and easier money off the Bad Employee story as opposed to a an alternative, more credible story?

Truthfully, I’m not that cynical most days. I think it’s more the case that the Bad Employee just makes a good story, an easy scapegoat. But I know for sure that these workshop leaders vigorously defended the current methods of management in the workers compensation system. Are we all thinking the same ways on these issues, or are we simply overdue for new thinking to reach all levels of the work comp business?

There are ample amounts of academic and actuarial research written over many years that tell a story different from the Bad Employee one. But, as Mark Twain said, “How easy it is to make people believe a lie, and how hard it is to undo that work again!”

In addition, John Kenneth Galbraith said, “Faced with the choice between changing one’s mind and proving that there is no need to do so, almost everyone gets busy on the proof.”

In future blog entries, I’ll be talking about the many challenges in the work comp system and some ideas that I have for facing those challenges. WorkCompEdge staff and other industry professionals will also be contributing their views. But this blog will only thrive if we have input from our readers as well. So please consider today’s question: Do you think Bad Employees are the root of all problems in the work comp system? Is a malingering employee a Bad Employee? Post a comment to the blog and let’s get a discussion started!

http://www.WorkCompEdge.com

We’d like to welcome to our WorkCompEdge beta users, and anyone else interested in topics related to workers comp. WorkCompEdge will be in beta testing through November 17, 2008, but you won’t have to wait that long for riveting new blog entries: we’re excited to announce that effective July 1, we’ll be posting to the blog at least once a week on a variety of topics.

• Myths and Misunderstandings in Workers Comp
• Chronic Pain: Reasons to Be Optimistic
• Are Bad Employees Really the Main Problem in Workers Comp?
• Is Your Company Saving Itself to Death?

We hope you’ll look forward to hearing from Frank, our own staff, and other industry experts here in these entries. And, if you’d like to contribute a blog entry on a topic related to any of the 15 WorkCompEdge modules, please send me an email. I’ll be glad to hear your ideas.

Until July,

Kory Wells
Blog Editor

http://www.WorkCompEdge.com

The challenge for any organization that wants to lower their workers comp costs is where to begin and what do I need to do. As we approach the launch of WorkCompEdge.com, it is exciting to see confirmation of what we are doing in an organizations like Kitty Hawk.

http://www.WorkCompEdge.com