Health Care Reform GPS: Trusted Guidance Offers the Surest Path

The passing of Health Care Reform Legislation in March served as a finish line for most lawmakers. For the rest of us – especially regulators, attorneys, insurance carriers, brokers, medical professionals, and other advisors – our finishline is years in the future as each of us is likely to have an overwhelming need for innumerable provision interpretations.

Understanding the law’s scope begins by mapping a timeline for each provision that will unfold in the upcoming months and over several years. Interpretative guidance and implementation steps from federal regulators, specifically the Department of Health and Human Services (HHS), Department of Labor (DOL), Internal Revenue Service (IRS) and the Centers for Medicare Services (CMS), are currently being drafted.

The HHS and DOL recently released interim rules providing guidance that address initial provisions. The Extension of Dependent Coverage is of particular interest to employees as it expands coverage access to their families. It also demonstrates the scope just one provision can have. The following is a snapshot of the 30 pages of HHS, DOL and IRS guidance that applies to only this one provision of the law:

• Applications to both fully insured and self-funded group health plans
• Financial dependency, living with parent(s), residency, marriage and student status cannot be factors in determining eligibility
• Employers and carriers must provide qualified adult dependents a 30-day special enrollment opportunity even if an enrollment period is not typically available
• Plans may continue to have different coverage tiers, e.g., employee plus child, and charge rates based on the number of enrolled individuals; however, plans cannot charge a surcharge for the addition and coverage of adult dependent children
• When adult dependent children reach age 26 under the plan, if otherwise eligible, dependents will be eligible to elect COBRA continuation coverage

Furthermore, several initial provisions or consumer protections are effective for plan years beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans), such as:

• Ban on lifetime limits (dollar value)
• Raising dependent coverage to age 26
• Restrictions on annual limits
• Elimination of pre-existing condition exclusions for anyone under age 19
• Ban on coverage rescissions

These protections apply to all plans, both “grandfathered” and new. Interestingly, grandfathered plans do not need to comply with select provisions, unlike new plans. Grandfathered rules, however, were established to allow smooth transition to reform requirements and were never intended as permanent exclusions.

The interim final rules, released in June, suggest that most employers will abandon grandfathered status by 2014 as a result of plan flexibility, such as co-payments or carrier changes, which are often necessary to control costs. Thus, employers will need to weigh the cost benefits of future plan changes against retaining a grandfathered status.

These issues will only become more complicated in 2014 with the arrival of state-driven, internet-based healthcare exchanges. These new market options will demand employers to invest resources in understanding plan designs and employee premium contributions and wages; all of which can impact potential employer penalties and employee subsidies.

Health care reform is here to stay. Navigation through its evolving regulatory guidance is at the starting gate and the interim final rule maps indicate a detailed maze is next to come. Inevitable twists will complicate the pathway when interpreting the ongoing releases of provisions. Thus, a network of trusted advisors, who can help discern key communications, forecasts, projections and evaluations, is the surest way to arrive safely at the finishline. •

For more information, please contact:
Todd Miller
Senior Vice President & Branch Manager
614 744-4242  |  tmiller@oswaldcompanies.com

Chronic Conditions Take Toll on Worker Productivity

From front offices to out in the field, virtual piles of cash are accumulating at companies.

This money, which goes mostly unnoticed and often is accepted as the norm, is from lost productivity caused by employees on the job who are suffering from chronic health issues, yet are not sick enough to need rest at home.

Presenteeism has always been an accepted, common workplace reality; however, in a global economy, it is now a business threat. This condition doesn’t appear on any financial statements and, consequently, too often hasn’t received attention from management.

This is sure to change. A global marketplace demands this cash be returned to the balance sheet.

Studies are proving that eradication of this threat can deliver gains in quantity and quality of work, which translate into improved organizational effectiveness. Better yet, it also means greater profitability in this age of global competitiveness and inelastic pricing.

Window to profitability
Presenteeism, which can be caused by chronic ailments such as asthma, allergies, migraines and arthritis, is distracting employees and limiting their potential.

Studies on presenteeism published in the Journal of the American Medical Association calculate that U.S. companies are suffering annual losses of $150 billion in at-work productivity.

The same studies indicate these losses are more costly than health care, workers’ compensation, disability or absenteeism — all of which receive more management attention.

A Bank One call center once measured its allergy-related presenteeism, according to a report in Harvard Business Review. Objective measures, such as time spent on each call, were used. During peak ragweed pollen season, the productivity of allergy sufferers dropped by 7% below those of co-workers without hay fever. When ragweed wasn’t problematic, the two groups operated at the same levels.

Solutions
Based on our experience of helping clients understand the prevalence and cost of presenteeism, solutions for these issues invariably share three basic tenets:

• Measurements on the prevalence and cost of the problem that prioritize the specific health issues by cost effect. This way program impact can be measured and its return on investment realized.
• Education for employees about the effects of poor health maintenance on health-related costs and productivity. Any economist knows that better information improves market efficiency. Thus, health information and knowledge of cost implications can be a powerful tool in transforming a company culture.
• Tools and resources so employees can better manage health risks and chronic conditions with confidence, empowering them to become more assertive participants in their interactions with health care providers.

The American Institute for Preventive Medicine has shown that for every dollar invested in improving an employee’s health care knowledge, the employer can anticipate an average return of $16. These returns arrive on the bottom line, strengthening profitability and competitiveness.

The message for employers: Nurture the most important link in your organization’s value chain — your people. Don’t ignore the drain on profits caused by taking a “laissez faire” approach to health management. Address presenteeism head-on as an opportunity to increase your competitive advantage, improve employees’ quality of life and strengthen bottom-line performance. It’s a true win-win proposition. •

For more information, please contact:
Marc S. Byrnes
Chairman & CEO
216 367-8787  |  mbyrnes@oswaldcompanies.com

Home for the Holidays: House parties increase liability, lawsuits

Do you plan to host a holiday, New Year’s Eve or football party in the coming months? Please stop to consider the consequences when a guest is injured or, worse yet, if someone overindulges at the punch bowl and later becomes involved in an accident. The fact is we live in a litigious society, so a well-meaning party host can be found liable in court for these incidents and many others.

While we don’t seek to dampen anyone’s holiday enthusiasm, everyone — especially those with considerable assets — needs to think seriously about potential liabilities when hosting a party.

Awareness lacking
Of particular concern are lawsuits related to alcohol consumption. Roughly one-third of homeowners are unaware that they can be held responsible for accidents resulting from an alcohol-related vehicle accident, according to a recent national survey. “It is frightening to see such a lack of knowledge,” said Madelyn Flannagan, vice president for education and research, Independent Insurance Agents & Brokers of America.Hosts are held liable in many states if a guest or any third party is injured in an alcohol- related accident following a party. These incidents often result in liability payments for the injured’s medical bills, vehicle repair costs and claims for wrongful death.

Nobody is immune

Surveys also indicate that nearly half of homeowners believe they are not liable if a guest becomes seriously ill from catered food consumed at their home and 22 percent did not know they could be held responsible if a guest was injured on their property. But in fact, party hosts can be held responsible for tainted food and other injuries; many times the plaintiff only needs an aggressive lawyer and a sympathetic jury.

Nobody is immune from a liability claim. Although some protection is provided by homeowners or renters policies, these could prove inadequate when settling claims. Therefore, we recommend an umbrella policy. The policy amounts usually range from $1-$5 million and typically cover losses beyond what other policies pay, including personal injury lawsuits and liquor law liability. Umbrella policy coverage isn’t tied to your property or vehicle; you are covered wherever you go, although it typically does not cover home-based business activities.

Household employees 

In addition, you need to know that when full- or part-time domestic staff (e.g., housekeeper, cook, nanny) works at the party, they are considered an employee of the host and state laws may require providing them with workers’ compensation insurance in case they are injured on the job. Even if workers’ compensation coverage is not required, it would be a wise decision to purchase a policy because a homeowners policy might not provide coverage.

No single measure can eliminate personal liability when hosting a party. However, the risks can be reduced with a combination of adequate advance planning, common sense, discrete monitoring of guest activities and, of course, taking the steps necessary to properly insure the occasion.

Before the rush of the holiday season, perhaps now is a good time to schedule a comprehensive review of your homeowners insurance program. It takes only a few minutes and requires only a phone call or e-mail to get started. •

For more information, please contact:
Kimberly A. Binder-Lucarelli, CIC
Director of Personal Risk, SVP
216 367-8582  |  klucarelli@oswaldcompanies.com

Gray is the New Green: Profiting from an Older Workforce

The number of workers aged 65 and older has increased by nearly 50 percent since the 1980s. Savvy employers are preparing to capitalize on this growing phenomenon, rewarding graying employees for contributing their experience, knowledge and stability by adapting the work environment to be sensitive to their station in life.

According to the research brief Claims Characteristics of Workers Aged 65 and Older by NCCI Holdings Inc., the percentage of the U.S. working population aged 65 and older increased from roughly 10 percent in 1986 to nearly one out of five workers in 2008. Several factors are contributing to this trend, including:

• Improvements in health care and self-care that are enabling Americans to live and work longer.
• A wide-ranging skills shortage that has prompted some employers to recruit older workers and/or create programs for retired employees to continue working on a part-time basis.
• Recent economic strife causing many workers to postpone retirement or retirees to rejoin the work force.
• A gradual upward adjustment of the Social Security retirement age from 65 to 67, which began in 1983 for workers born in 1938 or later. 

 The good news is that older workers can enhance the stability of an organization’s work force and provide a conduit for the transfer of valuable skills and knowledge to younger employees. Undoubtedly, their presence will become more commonplace in a variety of work settings, so employers need to take action now to prepare for this changing demographic.

Preparing to Profit 

Here are some suggested opportunities for improvement that will make workplaces safer and more productive for older employees:

Lighting and visual assistance: Eyesight naturally falters with age. Fortunately, technological advances in lighting, equipment customization (such as larger type settings and adjustable monitors) and magnification tools can address this.

Ergonomic assessments and adjustments: Ergonomic efforts can be expanded to address bones and joints that are more sensitive (or even impaired) due to aging.

Flexible schedules: Older workers are sometimes managing chronic-but-non-debilitating health problems, or simply find they are more productive and feel better working for shorter periods. It is worth it to adjust schedules to maintain peak performance and safety.

Robotics and other assistance devices: Investment in equipment that replaces humans in conducting physically stressful tasks (i.e., heavy lifting or repetitive motion) not only reduces the chances of injury but also standardizes such activities.

Falls/trips/slips are by far the most common injury for workers over the age of 65, comprising nearly half of the claims from the group, according to the NCCI research. Consistent with this are a higher percentage of fractures, concussions and related injuries in this age group compared with all workers. The older group also is more likely to injure their arms/shoulders or multiple body parts.

Training is Key
The data reveal a need to increase prevention planning and training for these types of injuries in all workplaces and for all employees. Often, falls/trips/slips result from a person other than the injured practicing unsafe behavior, such as not cleaning up spills or crowding walkways with boxes and other materials. Reported injuries are highest for this age group in goods-and-services-related industries, but this could reflect the higher percentage of older workers in those segments.

One of the most effective ways to prepare for the increase in older workers is to undergo an overall risk assessment for the organization, keeping in mind the particular needs and vulnerabilities of the group. This will provide a road map of actions for readying the physical workplace and the organization’s financial security.

More so, these preparations will position a company to smoothly adopt an older work force without interrupting productivity or profitability and while capitalizing on the wealth of intangibles this group is prepared to deliver to the benefit of all stakeholders.•

For more information, please contact:
Mike Agnoni, Risk Consultant
330 329-3886  |  magnoni@oswaldcompanies.com

Don't Walk Away from Business Purely for Environmental Reasons

Started by Mary Busby, Environmental Practice Leader at Oswald Companies

If a real estate deal or financing for a deal seems problematic simply due to environmental issues at the property, you don't have to walk away from this revenue.

Environmental liability insurance and risk management tools can work to solve these issues and can bring greater value to the transaction by reducing the environmental "number" in the equation to a hard cost that, when stacked against the value of the deal, will often appear nominal and appealing.

These protections are also transferrable and can help facilitate a sale to the next buyer at a price that does not include a discount due to environmental concerns.

I facilitate these sorts of transactions every day by reviewing environmental reports, analyzing the environmental issues, and positioning these issues in a light that is most favorable to moving a deal forward. Sometimes, the answer doesn't involve insurance, yet sometimes it does.

Once educated on what this can do, you are certain to increase your business.

I am a licensed attorney who has also served as a senior environmental underwriter for the largest environmental insurance carrier, as the environmental risk manager for one of the largest commercial real estate development firms, and as the director of the due diligence practice of a well-respected environmental consulting firm. I now run the Environmental Practice at Oswald Companies, one of the largest independent insurance brokerages and risk management firms in the country.

This allows me to look at environmental issues from all aspects to find the best solution and to leverage our strong relationships in the market to get things done.

Invovling me early is best, but if you are already far down the road and ready to walk away for environmental reasons, it still may not be too late. Sometimes, it just takes another perspective.

For more information, contact
Mary Busby: 216 367-4920  |  mbusby@oswaldcompanies.com