Leveraging a Safety Program to Get the Best Rates in a Hard Market

Source: HNI Blog

With a hard market on the way for the insurance industry, it's more important now than ever to shore up your safety program (although developing a safety culture should always be a focus, no matter what the market conditions.) With market conditions growing continuously more difficult, a safety program can have a significant impact on your premium.

Whether you're starting a safety program for the first time or looking to improve your existing program, the following are the critical elements of a successful program.

How Does A Safety Program Affect Your Insurance Premium?

The total value of an effective safety program is difficult to measure. How can you calculate the value of accidents that didn't happen? From working with hundreds of businesses over the years, however, I can assure you that companies with a commitment to safety have experienced far fewer premium increases than companies with poor safety programs. In almost every case, an effective program pays dividends.

Even if you already have a safety program, make sure you're continuously improving and keeping it fresh. There is danger in becoming complacent and taking an effective safety program for granted when it's achieving its natural goal of managing your risks. If you eliminate or decrease your safety resources, be prepared to incur more losses.

We like to break losses down into three categories: workplace/employees, third-party liability and property/assets. You can impact each of those areas with a safety program, either by creating or improving one.

A Top-Down Commitment to Safety Is Crucial

Effective safety programs begin with management's safety philosophy and commitment to creating a safety culture. Continuous reinforcement is important to effectively getting this across.

Do an honest assessment of how management's view on safety is perceived. Is safety the top priority, or is it sacrificed from time to time for increased productivity? Are leaders presenting conflicting messages?

Unclear priorities from senior leadership on this will create confusion among employees and jeopardize the success of a safety program. This is a very common problem.

Safety is Everyone's Job

Involving employees in your safety program is the key to its success. Begin with the recruitment of individuals who share your safety philosophies and subject them to drug/alcohol testing.

Once you have the right people, you will need to establish a strong and consistent training program. Training should be ongoing, and although annual or semi-annual safety meetings are good, monthly training programs are even better. Depending on the size and type of your operation, you might consider short meetings each week to provide a constant reinforcement of your safety message.

Gaining respect and trust from your employees can be difficult, so recognizing and rewarding them for excellent safety practices is crucial to your program's overall success. On the other hand, an unsafe employee can be detrimental to your company's success. Discipline and, at times, termination have to be a part of your safety program as well.

Although safety should be everyone's job at the company, empowering safety supervisors or a safety committee who are responsible for ensuring a safe workplace. Establishing ownership of the program is critical and provides focused leadership for the effort.

Prove it: Make Sure You're Documenting Safety Efforts

Consistent and organized documentation will help you communicate your safety efforts to underwriters and protect your business in the event of a loss. Beyond that, it is also the best way to communicate and reinforce your message to employees.

Start by establishing program goals and share them with your workforce. Written policies, rules and regulations should also be shared and enforced with employees. It is a good idea to post the policies along with the goals in a visible location.

By properly reporting and monitoring employee injuries and accidents, you can minimize the impact to your Worker's Compensation experience rating. Complete reports immediately following an injury or accident and follow the progress of your claim with the adjuster. You can minimize total claim costs by controlling the medical expenses and providing an early return to work program.

"Never Stop Improving" Your Safety Program

Safety has to be an ongoing effort - don't get complacent. Embrace the new Lowe's slogan "Never Stop Improving" as the mantra of your safety program.

Conduct regular inspections to identify hazards and/or problem areas within your organization. Form a team composed of safety supervisors and management who have the experience to identify dangers and have the resources and authority to correct them immediately.

Keep safety efforts fun to prevent things from getting stale. Celebrate with employees when you achieve milestones such as X days incident-free, and look for ways to reward successes (instead of just punishing the mistakes).

Remember, no matter what insurance environment we're experiencing (hard or soft market), reducing your losses always improves your bottom line.

Look at your safety expenses as an investment. Your return on investment will vary from year to year. In light of your total cost of risk, you will find your safety program is a necessary investment that will provide a valuable return.

10 Rules for Machine Safety

by Chris Kilbourne

Do your employees understand the fundamental machine safety rules? Here are 10 rules supervisors can present at their next machine safety meeting.

Never remove or try to defeat machine safeguards.

2.   Don't create new hazards, such as allowing objects to fall into the moving parts or by creating a new pinch point.

3.   Report problems with machine safeguards to your supervisor immediately.

4.   Never leave machines unattended with parts still moving. Remember that parts may still be moving after the machine has been turned off.

5.   Remove guards only when the machine has been locked out and tagged out.

6.   If possible, lubricate machine parts without removing the safeguard; otherwise, turn the machine off and lock it out before lubricating.

7.   Operate equipment only when guards are in place and properly adjusted.

8.   Do not use unauthorized or damaged guards.

9.   Do not wear loose clothing, jewelry, or long hair around machines—these increase the risk of being caught in the machinery.

10. Ask your supervisor if you have any questions about a machine safety or how to work with machine guards safely.


Closing the Gap Between Safety as a Value and Safety Culture

by Chris Kilbourne

There is a gap between the value of worker safety and the culture of safety in many organizations. Closing the gap is a major concern for safety professionals and executive managers.

Jeff Ruebesam, VP of Global Health, Safety and Environmental at Fluor Corporation, spoke about his company's use of leading indicators to measure employee engagement and continuous improvement, and as a way to evaluate manager’s performance toward safety goals. His company employs the indicators at both the site level and at the executive/corporate level.

At the site level, he tracks and analyzes trends of the following indicators of safety:

  • Training
  • Job safety analysis of the activities of work crews
  • Hazard recognition and elimination (find and fix)
  • Weekly and daily inspections
  • Near-miss reporting


Near-miss reporting was difficult to measure because workers feared retribution if they reported a potential safety problem. It got easier after managers gained the trust of workers by demonstrating there would be no consequences of such reporting, made it easy and simple to report, and managers made it a priority

At the executive/corporate level, indicators that are measured include:

  • Program development and coordination
  • Management action—monitoring site operations and consistently administering a system of rewards and consequences of actions
  • Completion of employee training, communications with employees, and culture initiatives
  • Execution of activities in the field
  • Executive compensation formulas that include metrics for safety performance

When asked about the top three actions he thinks any CEO should take to improve safety, Ruebesam replied:

  • Physically show up on the shop floor to talk to workers—word spreads quickly through the company that the leader is engaging with workers.
  • Establish consistent measurements of performance and hold people accountable for them.
  • Express pride in the safe performance of their workers to the general public and/or the rest of their industry.




OSHA Log Summary Reminder – Feb. 1 Deadline

It’s that time of year: Feb. 1 marks the deadline for you to tabulate your annual OSHA Log Summary (OSHA Form 300A) and post it in a common area wherever notices to employees are usually posted.

The summary must list the total number of job-related injuries and illnesses that occurred in calendar year 2012 and logged on the OSHA 300 Form. And don’t forget to leave the Summary posted until April 30, 2013.

Reporting is as easy as 1, 2, 3!

If you’ve been logging your recordable incidents throughout the year, creating the OSHA Form 300 (Log of Work-Related Injuries and Illnesses) and OSHA Form 300A (Summary of Work-Related Injuries and Illnesses) are a snap.

  1. Open your  site to access your full OSHA reporting and analysis capabilities.
  2. From the site’s home page, select Forms to open the OSHA Forms page.
  3. Simply select the form or forms, the division and the year of the form you wish to create. Select Create Forms and a printable PDF file of the form you selected will be created.

Please Note:  OSHA may request the current year’s Log of Work-Related Injuries and Illnesses, and up to five previous years’ worth of logs.

Certifying your form

Before your 300A form is complete, it needs to be signed by a company executive to certify that he or she has examined the form and reasonably believes, based on his or her knowledge of the process by which the information was recorded, that the annual summary is correct and complete.

Who does OSHA consider a company executive?

-    An owner of the company (only if the company is a sole proprietorship or partnership)

-    An officer of the corporation

-    The highest ranking company official working at the establishment

-    The immediate supervisor of the highest ranking company official working at the establishment

If you need additional assistance, have questions about recordability, or would like to compare your loss performance trends against national benchmarking data per SIC code, contact us today at 920-921-5921 for more information.

Provided by: Hierl Insurance Inc.  258 S. Main Street  Fond du Lac, WI  54935  

 920-921-5921     http://www.hierl.com

How Ergonomics Can Save You Money

Source: http://safetydailyadvisor.blr.com

By Chris Kilbourne

More companies are beginning to view ergonomics as an overall business tool. And they’re saving money.

According to veteran ergonomics consultant Dan MacLeod, the value of ergonomics is often underrated—especially when budget time rolls around. Macleod, however, has catalogued many ways ergonomics can save money.

  • Dramatic reduction in workers' compensation costs. Good ergonomics programs cut comp costs an average of 60 percent and up to 90 percent in some cases.
  • Improved productivity. According to MacLeod, ergonomic improvements commonly raise productivity by 10 to 15 percent.
  • Fewer mistakes and less scrap. People working in awkward and uncomfortable postures commonly make mistakes. At one business, a $400 mechanical device eliminated a $6,000 annual loss in scrap caused by employees who had been unable to consistently perform a demanding physical task. The return on investment was 1500 percent!
  • Improved efficiency. Ergonomics improves efficiency due to improved working posture, less exertion, fewer motions, and better heights and reaches.
  • Less fatigue. Fatigue has long been known to result in lost productivity. Ergonomics specialists seek the causes of excessive fatigue and ways to reduce or eliminate them.
  • Reduced maintenance downtime. For example, providing clearance, reducing exertion, and reducing motions can speed up the time in which operations can be brought back online.
  • Protecting human resources. Loss of key personnel due to ergonomics injuries can be a costly problem, especially in smaller organizations.
  • Identifying waste. By evaluating elements such as motion and exertion, it is possible to identify and eliminate wasted activity.
  • Offsetting the limitations of an aging workforce. Making ergonomic adaptations can help older workers be as productive as younger ones, if not more so.
  • Reduced turnover. Employees working in uncomfortable environments that cause them pain are more likely to seek other employment and leave.
  • Reduced absenteeism. Absenteeism can be an indicator of the early stages of a musculoskeletal disorder. "Work that hurts doesn’t exactly encourage people to come in every day," says MacLeod.
  • Improved morale. Frustration, aches, and pains caused by ergonomic problems are likely to affect morale—and not in a good way!
  • More engaged employees. Ergonomic improvements directly benefit employees, and this serves as a positive reinforcement for participation.
  • Improved labor relations. Ergonomic issues can be a source of positive labor/management problem solving. This collaboration can extend to other aspects of the work environment.
  • Resurgence of "methods engineering." Methods engineering is an old business efficiency technique that seeks to reduce costs and optimize reliability by analyzing task performance. Ergonomics brings these ideas back in a valuable "new and improved" format, says MacLeod.
  • Linking to LEAN. Ergonomics, with its emphasis on waste reduction, can help businesses advance their LEAN programs.
  • Keep regulators at bay. OSHA has issued some historically high fines for ergonomics violations.


MacLeod adds that humans have been "doing ergonomics" for thousands of years. It's a proven practice. He points to examples such as the stone ax and the wheel.

In addition, ergonomics can provide valuable insights that can lead to other improvements. Any new perspective in the workplace helps leaders identify ways to improve and motivates them to make improvements that result in higher profits.


Avoid the PPACA Riptide with Sound Advice

By: Lesa Caputo, Benefit Advisor

Beneflex Insurance Services, A UBA Partner Firm

Is there a “safe harbor” to avert the health care reform “cliff”? If there were, I think that all employers would unanimously be steering their vessels in that direction right about now! Unfortunately, there is not a harbor big enough to house those lost in the sea of health care reform, and many employers are still feeling like they have a new “cliff” to set their sights on.

With the exchanges set for open enrollment on Oct. 1, 2013, there are as many new questions arriving each day as there are answers. However, at the end of last month, employers received a small Happy New Year gift in the form of proposed regulations from the IRS. These new rules addressed many of the outstanding issues relating to the Patient Protection and Affordable Care Act (PPACA) “play or pay” mandates, and included the following clarifications:

- The announcement of a “substantial compliance” measure for employers who do not offer coverage to all of their full-time employees. If an employer offers coverage to at least 95 percent of its full-time employees (and their dependents - defined to only include children under age 26, but not spouses, beginning in 2015) it will be considered to be offering coverage to all full-time employees. (The employer will owe the $3,000 penalty on a full-time employee in the excluded 5 percent if the employee receives a premium subsidy.)

- A transition period during 2013 to allow employers who currently only cover employees to extend coverage to dependents. Such employers must be on track to offer coverage to both employees and dependents and take the actual steps to do so during their 2014-15 plan year.

- For non-calendar year plans (that are currently in place on Dec. 27, 2012), some relief has been provided in that the play-or-pay mandates will be effective on the first day of the play year commencing after Jan. 1, 2014.

- Controlled-group rules apply for purposes of determining whether an employer is a large employer (more than 50 full-time-equivalent employees) and that the "reduction of the first 30 employees" for purposes of the play-or-pay mandate penalties will be done on a controlled -group basis. HOWEVER, the determination and assessment of the penalty will be done on a member-by-member basis.

- Employers with fiscal (noncalendar) plan years may amend their Section 125 plans to treat mid-year transfers into the exchanges or new elections of employer-provided coverage as qualifying change in status events.

How?U.S. employers continue to paddle their canoes upstream, despite the strong current of business challenges, and health care reform is on the horizon as one of the many cliffs to avoid. While it is easy for employers to become consumed with the looming enormity of health care reform compliance and forecasting, it is critically important that they not fall victim to this full-time task. Employer clients consulting with UBA Partner advisors are being given the tools and the outlook to rise above the clouds and see the landscape of health care for all its “beauty” and to plan for a future that is navigable.

- UBA benefit advisors use a sophisticated and intelligent predictive modeling tool designed by health actuaries to demonstrate the different scenarios under the pay-or-play mandate and the associated cost impacts. The customized impact study qualifies the effects of PPACA in 2014 and 2018 for longer-term planning.

- Keep perspective of the big picture by stepping back to analyze how benefit costs benchmark to other employers of similar size, industry and geography with the UBA Health Plan Survey - the nation’s largest annual health plan benchmarking survey. As employers are honing in on potential per employee penalty costs, a highly credible reference as to how total annual plan costs respond to PPACA’s effects will be most valuable.

- Everywhere you look, consolidation for economies of scale in doing business are taking place. UBA sees the value of its approved Strategic Partnerships, which drive down premium costs. Employer clients represented by UBA advisors feel the effects of that collaboration as well. As carriers are looking for their most cost-effective options for doing business in the health care reform era, they are considering the productiveness of their broker relationships, and UBA advisors are valued for the collective premium they represent.

Whether fiscal or health care, there will always be a “cliff” to worry about. But just remember this - many of us stayed awake the night of Dec. 31, 1999 with Y2K concerns, but on that beautiful morning of Jan. 1, 2000, indeed our alarms did work and the world continued to spin on its axis. Cliff averted!


6 Steps to Evaluating Your Disaster Plan

Source: http://blr.com/

Since you never know when a disaster will hit and how it will affect your workplace, the key is to be prepared. And a first step for that is to evaluate—or reevaluate—your disaster plan.

Here are six steps to take to insure a comprehensive review of your workplace disaster preparedness plan.

Step 1. Assign priority and responsibility.

Make it clear that management gives the project high priority and support.
Assign one person to coordinate the task force or work group that will evaluate hazards and prepare plans. Select and appoint the participants. Most organizations try to involve a wide representation of managers, supervisors, and employees.

Be sure to involve human resources, as well as safety, security, and operations. When a disaster occurs, employees will come to HR.

Establish goals and timelines for completion of your review and update.

Step 2. Evaluate your facility's challenges and hazards.

Evaluate your situation to determine likely or potential problems. Certain challenges could face almost all organizations—fires, injuries, medical emergencies, and violence.

Address threats that are specific to your geographic location, including flooding, mudslides, earthquakes, hurricanes, tornadoes, and other weather-related problems.

Categorize and list threats related to your specific operations, such as dangerous equipment, dangerous environments (e.g., confined spaces), and hazardous substances.

Consider neighboring facilities and the threats they may pose.

If your buildings are some distance from fire, police, and emergency services, ascertain if providing extra training and equipment will help employees deal with emergencies until responders arrive.

After approval, put the plan in writing, and share pertinent parts with employees.

Step 3. Delineate steps for avoidance and prevention.

Once threats are identified, think of measures that will prevent or contain them.
Establish new rules or procedures as needed, such as increased security or more vigilance in enforcement of safety rules.

Determine if more training in areas such as first-aid and CPR, hazardous materials response, or handling threats of violence may be required.

Devise site-specific preparations for protecting materials, equipment, and data.
Take steps to provide technological or physical protection for IT, including redundant systems and off-site capabilities.

Meet with local emergency services organizations, including fire and police, and invite them to do a "walk-through" of your facility to familiarize themselves with the layout and help identify potential problems.

Step 4. Plan for actions during and after a disaster.

Prepare for evacuation

·         Install and/or test the emergency alert systems.

·         Review evacuation routes and designate assembly sites and reporting procedures.

·         Inform employees, contractors, and others who frequent your facilities about the alert signal and the evacuation plan.

·         Detail equipment shutdown procedures and identify employees who will stay to accomplish them.

Establish a command post


·         The location (on- and off-site)

·         Who will be in charge

·         Alternate communication methods including your website and intranet

·         Who will deal with police, fire, and hazardous materials responders

·         Who will deal with the media

Prepare for ongoing operations

In your planning, determine ways you will keep the business going after a disaster, including alternative sources of power, water, utilities, etc.

Find sources of temporary space, computer capability, phones, and other means needed to do whatever you normally accomplish.

Step 5. Practice your procedures.

Conduct practice drills to ensure that every employee knows what to do. Determine if drills uncover flaws in your plan.

Step 6. Make regular reviews.

Your standing procedures should include annual reviews of your plan. People leave, phone systems change, partitions are built, and so on. Also note if new technologies, equipment, hazardous substances, etc. have been introduced.


Who Knew? Patients’ Share Of Health Spending Is Shrinking

Source: http://www.kaiserhealthnews.org
By Jay Hancock
KHN Staff Writer

Consumer-driven medical spending may be the second-biggest story in health care, after the Affordable Care Act. As employers give workers more "skin in the game" through higher costs from purse and paycheck, the thinking goes, they'll seek more efficient treatment and hold down overall spending.

But consumers may not have as much skin in the game as experts thought, new government figures show.
Despite rapid growth in high-deductible health plans and rising employee contributions for insurance premiums, consumers' share of national health spending continued to fall in 2011, slipping to its lowest level in decades.

"I'm surprised," says Jonathan Gruber, a health economist at the Massachusetts Institute of Technology. "All the news is about the move to high-deductible health plans. Based on that logic … I would have expected it to go up."

True, medical costs are still pressuring families. Household health expense has outpaced sluggish income growth in recent years, says Micah Hartman, a statistician with the Department of Health and Human Services, which calculates the spending data.

But from a wider perspective, consumer health costs continued a trend of at least a quarter-century of taking up smaller and smaller parts of the health-spending pie. Household expense did go up. But other medical spending rose faster, especially for the government Medicare and Medicaid programs.

Economists measure three kinds of consumer health costs: insurance premiums paid through payroll deductions or for individual policies; out-of-pocket costs for deductibles and co-pays; and Medicare payroll taxes. Such outlays fell to 27.7 percent of the health care economy in 2011, down from 28 percent in 2010 and from 32 percent in 2000, according to the national health expenditures report issued by HHS last week.

That's in spite of the fact that one worker in three is covered by a plan with a deductible of at least $1,000, up from one in 10 in 2006, according to the Kaiser Family Foundation. (KHN is an editorially independent program of KFF.) Among small firms, half the workers are now in high-deductible plans.

One factor holding down costs even for families with consumer plans has been patent expirations for expensive, commonly used medicines such as Prevacid and Flomax.

"People these days are spending a lot less out-of-pocket on prescription drugs," said Peter Cunningham, director of quantitative research at the Center for Studying Health System Change. "A lot of that has to do with the shift from brand name to generics."

Nobody thinks consumer-driven medicine has run its course. Insurers and employers are still building tools for patients to shop for care by comparing costs for MRI scans, for example, or researching hospital quality records.

High-deductible plans are expected to win a large share of the business sold next year through the health law's state insurance exchanges. Many companies say they intend to offer high-deductible insurance -- especially plans with tax-favored health savings accounts -- as the only option.

"I've heard of nothing but acceleration" of employers into consumer-directed health insurance, said Roy Ramthun, a benefits consultant who was a senior health policy advisor in President George W. Bush’s administration. "More local units of government, school districts and even some union plans are starting to move more aggressively into these areas."

High deductible plans are already getting credit for helping with an overall slowdown in medical spending growth. Among other factors, economists suspect that the prospect of higher wallet costs has made consumers even more likely than usual to avoid doctor visits in the middle of a sluggish economy. (Public health officials fear this will backfire with a later spike in illness.)

Sooner or later, households’ share of the medical-cost pie will start to get bigger, analysts say. The declines have been getting smaller, suggesting the trend will reverse.

One reason is continued growth of high-deductible plans. Another is that, starting in 2014, the health act requires individuals to start buying coverage or pay a penalty. Another is that federal health spending has risen more than three times as fast as consumer health spending since 2007, which can’t continue.

Even with recent tax increases on high-income households, the huge Medicare program for seniors and the disabled is growing at an unsustainable pace, says Joseph Antos, a health economist at the pro-markets American Enterprise Institute. That means Medicare, too, will need to seek higher premiums, deductibles or co-pays from the patient’s pocket, he said.

"Medicare is on a fiscal slide," he said. "Things are going to have to happen. Eventually, whether you call it premium support or not, we’re going to have to move to some kind of budgeted system in Medicare."