Consider Employee Lending To Return Employees to Work

Thank you to Crystal Witham for the following item

“Mitigating workers compensation claims cost can be tricky. The best way to control challenging cases is managing an effective return-to-work program. How many times have we heard that? What about, "If you would just return this employee to a job within his restrictions, it would help with your experience modifier rate?" What if you are too small and do not have opportunities within your company?

There are charitable organizations that need volunteers desperately in order to continue the valuable work that they do for their communities. They need people to answer phones, schedule interviews, perform light janitorial tasks, and sell items in their used goods stores. Once an injured employee is released to return to some level of activity, this is an opportunity for an employer to "lend" that employee to a charitable organization. It shows the employer to be a good citizen and offers a much-needed service to the community. The employer pays the employee wages and may be eligible for a tax benefit, plus the workers compensation claim is being managed toward resolution. When the employee has reached full duty or a point in healing that the employer can accommodate, s/he can go back to his/her job or another employer. In most states, this is considered a suitable job offer.

What is the value? The bottom line is that by returning an employee to a job, the healing process is enhanced. Employee lending starts the act of work hardening by getting the employee back to the routine of going to a work environment. The employee becomes productive again, and the reconditioning process is in place.”

Crystal Witham ABA, ADR Senior Injury Management Consultant CM-Services Inc 207-487-3736 crystal.witham@cm-services.com

Florida WC 6.8% Rate Cut

NCCI are recommending an overall average rate decrease of 6.8% effective 1/1/2010. NCCI attributed the rate decline primarily due to a significant reduction in claims frequency, although there are signs the pace of improvement has moderated.

If approved, the rate decrease would be the seventh consecutive decline since the Legislature passed reforms to the state's workers' compensation system in 2003. The cumulative overall statewide average rate decrease since 2003 would total 63.2%.

So what will the final number be? So far the initial filing has always been rejected in favor of a larger decrease. Aare we looking at another double digit rate decrease?

But when is enough enough? Carrier have been making noise already that Florida is not a preferred state, but now are we going to start finding carriers withdraw from the state?

And what about the poor agents and brokers? 63.2% rate decrease, also means 63.2% commission decrease – add to that payrolls plummeting in certain industries and some agent have lost 80%+ of their workers compensation revenue stream!

We do not yet have the initial numbers for the Longshore class codes, but will post as soon as they are available.

Security Guards Now Longshore

In K.L. v. Blue Marine Security BRB No. 08-0789 (Apr. 16, 2009) the BRB was asked to review whether Claimant was excluded from coverage under Section 2(3)(A) of the Act, as the statute expressly excludes from coverage "individuals employed exclusively to perform office clerical, secretarial, security, or data processing work" .

The Board held in this case that Claimant was not excluded from the Act's coverage because he was not exclusively performing "office" security work. The Board determined that there was substantial evidence to support that Claimant was not working in an office or administrative space, but was instead working on a vessel subject to various marine hazards. It further determined that the exclusions in Section 2(3)(A) were intended by Congress to be interpreted narrowly, and noted that Claimant "was not confined, physically and by function, to an office or other administrative area on land." It thus found that Claimant "is not the type of security officer intended to be excluded pursuant to Section 2(3)(A) as he was exposed to traditional maritime hazards." and thus was held to be covered under the Longshore Act.

This at first glace seems to fly in the face of  the act itself, but we now have a precedent that really says only Security guards who work EXCLUSIVELY in an office can now be excluded.   How many of those are there?

LONGSHORE REFORM 2009

It has finally happened. After 9 years Longshore reform has, at least in part, passed as part of the “Stimulus” package.

The change that passed amounted to a sentence or two out of the original six-page bill. Without the definitions and qualifications within the original bill, there are many questions. In addition, the immediate nature of the change left many scrambling for answers. Most of the answers available to date are collated in www.USLH.org including a simple matrix of who is and is not covered after the change.

In addition, we have updated www.LongshoreFactor.com to reflect the changes.

There is clearly more work to do… but this is a huge step forward for those who work repairing/servicing larger recreational vessels.

Why the stimulus bill? Whilst this was difficult to understand up front, it is now clear that this is the classic stimulus – it provides significant premium returns and savings in the LONGSHORE premium for the eligible employees. In fact Florida (which probably has the largest single number of eligible employers), will see savings of 55% of the Longshore premium for repair/service of recreational vessels. A significant amount in the pocket… even better, this is one of the few parts of the Stimulus Act that does not cost the American Taxpayer a dime. (Wish there were more?)

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So many Marine employers have now removed their significant exposure from LONGSHORE… but should they simply cancel LONGSHORE coverage? We say no.

Despite the change in the act, it is very dangerous to work without LONGSHORE coverage for three reasons:

1. You cannot take that great job on the commercial vessel when offered.

2. You will not have coverage for an attorney to defend you in the event one of you injured employees tries to challenge the change in the act and brings an action for LONGSHORE coverage.

3. You will not have defense costs OR coverage for an injured employee who tries to claim that the vessel they are working on was commercial in nature.

The good news is that virtually every LONGSHORE market out there is now offering an “incidental” LONGSHORE endorsement. The numbers vary from carrier to carrier, but most are looking at allocating a minimum of 1% of the payroll (ex sales/clerical) to Longshore subject to a $1,000 minimum. The better news is that this will only add a couple of hundred dollars or so to the bottom line of most policies and to me that is a bargain, even if it is only to provide the service of a specialty LONGSHORE attorney.

Recreational Marine Exemption

The long awaited expansion of the exemption for certain recreational marine employees under LONGSHORE might finally be in sight.

The Economic Stimulus bill recently passed by the U.S. House included a provision that would amend Section 2(3)(F) of the LONGSHORE and Harbor Workers' Compensation Act (33U.S.C.902(#)(F) by

(1) Striking ", repair, or dismantle"; and

(2) By Striking the semicolon and inserting ", or individuals employed to repair any recreational vessel in connection with the repair of such vessel;"

The amendment, if passed in the Senate, would not limit the length of the recreational vessel being repaired or dismantled but retains the 65 ft limit for boat builders/manufacturers. (See page 129 of the bill) and thus drastically expand the exclusion for employees repairing recreational vessels >65 ft

The full bill can be read at http://www.ligmarine.com/file/HR1.pdf

Welcome

Welcome to the LIG LONGSHORE blog. Information and opinions on the LONGSHORE & Harbor Workers Compensation Act Insurance and related topics.

LIG is the at the center of LONGSHORE Insurance and as such we have a unique perspective on this class.

This blog is an informal collection of observations and opinions on this sector and should not be considered legal advice or opinion in any way.

As an additional resource we offer www.Longshorefactor.com which is a quick way to determine if a risk has a LONGSHORE &/or Admiralty exposure.