PIAA Takes Lead in Helping Fix Workers’ Comp Exposure for Ohio Employers

PIAA wrote the following article on 6/27/14 with news on the resent Ohio Workers Compensation program.  The article is as follows:

GOVERNOR SIGNS BILL TO PROTECT BUSINESSES WITH EMPLOYEES WHO WORK IN OTHER STATES

Did you know some states do not recognize Ohio’s workers’ compensation insurance coverage? Many Ohio business owners have no idea that they are at risk for compliance audits and fines when their employees travel to other states for business.

As of June 16, 2014, this issue is on its way to no longer being a problem. Gov. John Kasich signed House Bill 493 into law, which offers an insurance coverage solution for all Ohio employers whose employees cross state lines.

 

H.B. 493 permits the Ohio Bureau of Workers’ Compensation (BWC) to enter into an agreement with an insurer to provide limited other-states’ workers’ comp coverage for Ohio employees who are temporarily working in another state. With this arrangement in place, Ohio businesses will no longer have to fear the repercussions of aggressive states like Pennsylvania and Kentucky that do not accept Ohio’s workers’ comp because they require local workers’ comp coverage for all work performed in-state, regardless of whether coverage exists in Ohio.

While local workers’ comp coverage can be obtained in these states, it is not necessarily cost-effective. In addition, obtaining blanket cost-effective out-of-state workers’ comp coverage has been a challenge in the current marketplace where such a product is hard to find. With H.B. 493, this will soon be an issue of the past, as BWC works to create the opportunity to provide guaranteed issue workers’ comp coverage to resolve the problems many Ohio businesses have faced due to other states workers’ comp requirements.

How did this issue surface?
Independent insurance agents throughout Ohio found their trucking, contracting, plumbing and other clients were being hit with audits, fines, taxes and other compliance enforcement actions from border states because Ohio’s workers’ comp insurance was not compliant with the insurance requirements of other states. These compliance issues were putting Ohio businesses at a competitive disadvantage.

The Professional Independent Agents Association of Ohio, of which your agent is a member, created a task force of independent insurance agents who serve a variety of businesses. These agents worked with the Ohio BWC and representatives from other industries, like trucking and contracting, to develop a solution to this problem.

What’s Next?
Now that the bill has been signed into law, BWC will begin the competitive bid process to identify an insurance carrier(s) to provide limited other states’ coverage for Ohio employers who need it.

 

While this process will take some time, the outcome will ensure that Ohio businesses will finally have guaranteed access to a workers’ comp insurance product that provides the type of out-of-state coverage that will protect their business and meet their needs. Furthermore, employers and insurance agents will no longer have the burden of trying to determine all the different workers comp requirements of each and every state where work is performed, since there will be access to a workers’ comp product that is accepted in all states.

Disability Insurance Vs. Workers' Compensation

I have often been asked by business owners:  

Instead of getting a disability policy, can't I just add myself onto my workers' compensation policy?

While it is possible to add yourself onto a workers' compensation policy, the benefits are not the same as a disability policy.

Was this paper cut work related?  

Here are some of the similarities:

• Both may pay medical bills if you are hurt
• Both may pay disability and lost wages
• Both may pay a portion of your lost income
• Both will cost you based on your current income

Here are some differences:

• Workers' Compensation only pays for on-the-job injuries
• Workers' Compensation will only pay at most 2/3 of your stated income
• Workers' Compensation may only pay based on your stated payroll (even if you take a draw or have other forms of compensation)
• Workers' Compensation is based on the rate for your specific class code and you pay per $100 of payroll.  Disability is based on many factors.

When does it make sense to add yourself to your workers' compensation?

• If you can't qualify or afford disability insurance
• If you are in a 'low risk' field such as computer programming and the rate per $100 is relatively affordable.  
• As an additional protection in case you get hurt on-the-job
• If you have an abnormally high deductible for your health insurance
• If you are prone to accidents

If you are truly worried about losing your income from getting hurt then nothing will suffice for a good disability policy.  Many people buy life insurance and feel like they have taken care of their family, but if have a bad accident and you don't die then your family can't collect.  

Don't forget that not all disability policies are created equal either.  Make sure to read the small print because in some policies you may not be able to collect if you are able to do any other job.  If you are a doctor, you aren't going to like it if the company stops paying because you can get a job as a barrista.  

Please note:

When employers make workers' compensation claims against themselves, it's a red flag for claims adjusters.  This is because it is easier for an employer to exaggerate a claim than an employee, so be ready to defend any over the top expenses for your medical treatment.  

Disclaimer:

This answer is not a substitute for professional legal advice. This answer does not create an insurance agent-client relationship, nor is it a solicitation to offer legal/insurance advice. If you ignore this warning and convey confidential information in a private message or comment, there is no duty to keep that information confidential or forego representation adverse to your interests. Seek the advice of a licensed insurance agent in the appropriate jurisdiction before taking any action that may affect your rights.  

How to Save Money on Insurance For Start-Ups

The biggest mistake start-ups make is being too optimistic.  Of course, you wrote in your business plan that demonstrates to your investors that you are going to make $1,000,000 in the first year and turn a profit by year three, but that's not what you should be telling your insurance agent.  

As a start-up, cash will make or break your business. CASH IS KING.  You will often have to accept 60-90 terms to get orders, your vendors (and insurance company) will want cash upfront.  Here are a few tips to keep your insurance overhead as low as possible so you can turn your start-up into the business of your dreams:

Since its first store opening in 2005, Pinkberry has nearly 100 locations throughout the United States, Mexico and the Middle East...(11/30/2011: Pinkberry Website)

Be Conservative on Sales and Payroll Estimates

You don't know how much you are going to make the first year.  Your numbers are based on estimated sales based on estimated customers based on research and industry benchmarks.  Insurance policies are generally based on either annual sales or payroll, so the higher you estimate the larger monthly bill you are going to have during that crucial first year.   

How conservative should you be?  

It really depends on your business.  After the first year the insurance company will do a review (nice way of saying audit) with you and will adjust the yearly premium based on your actual sales or payroll.  Go here for a great FAQ on audits.  If you estimated sales of $50,000 per year and you end up doing that in the first quarter, you need to call your agent to adjust the policy so the payments will be spread more evenly.  The last thing you want is to estimate a super low sales or payroll figure, have a great year and have an extremely large bill when the insurance company audits you.  The idea here is to increase cash flow and lower overhead.  

Look at all your options with your independent agent when starting an insurance policy.  Keep in mind that your personal assets could be at risk even if you incorporate, so price shouldn't be the only factor in choosing your policy.  Don't know where to start?  Check out this blog post: Insurance 101 for New Business.

What Insurance Does a Dental Office Need?

I love to work with clients that truly are interested in protecting their business from unforeseen losses.  I can’t say that I have a favorite client, but one that comes to mind is Dr. Solomon Cantwell DMD .  He is a dentist that is truly dedicated to his customers, his staff, and the growth of his practice.  He is committed to keeping up to date with the latest dental technology and making his customers comfortable. 

Solomon and Joe in front of the dental office after talking business insurance.

Business Owners Policy and Workers' Comp

I have worked with him to make sure his equipment, liability, and building are all covered properly on his business owners’ policy.  In addition, we worked together to make sure that his employees had the proper coverage in case they were hurt on the job.

Employee Practices Insurancee (Sexual Harassment Insurance/Wrongful Termination)

We also went over the advantages of two other types of coverage including Employee Practice Liability Insurance (EPLI) and Data Breach Insurance.  EPLI is a coverage that is put in place in case an employee sues for wrongful termination, sexual harassment, or wage disputes.  It’s an important coverage that is often overlooked by many business owners because they don’t know about it or their agent never offered it.  There are actually more EPLI claims per year than General Liability claims per year in California. 

Data Breach

The Data Breach Insurance coverage is a relatively new coverage that was created in order to pay damages caused by loss of client information due to a breach in security (online or offline).  Most data breach policies cover: notifying your customers of the breach, paying an organization to monitor clients’ credit, repairing damaged PR, and even paying government fines for non-compliance.   Take a look at California's penal code relating to a breach.


Malpractice
Malpractice is for mistakes that the dentist makes when working on a patient.  An example would be doing a root canal on the wrong tooth.  Most dentists already have this coverage when we start working because it is often a requirement for working as a dentist, but there are many programs that can offer malpractice at competitive rates.  

Ohio Workers' Compensation for Your Home or Business (repost from Oct 29th, 2009)

If you are in the State of Ohio and employ at least one employee to whom you pay $160 or more in a three month period, you are required to carry Ohio Workers’ Compensation. Your employee could be with your business or simply a babysitter or person you hire to mow your grass.

In Ohio you buy Workers’ Compensation from the State’s Bureau of Workers’ Compensation. Their website address is www.ohiobwc.com or you can call them at 1-800-OHIO-BWC.

Unfortunately your Homeowner Policy Personal Liability cannot help you in situations where you are paying the employee more than $160 in a quarter, so we highly recommend that you purchase an Ohio Workers’ Compensation policy if you are in this situation.

Workers’ Compensation pays for injuries to your workers and includes not only medical expenses but loss of income benefits, too.

The website at www.ohiobwc.com is actually very helpful. If you decided you need to buy a policy, you can do it all on-line including paying for the coverage and printing out a temporary policy to show you have the protection.

Please feel free to contact one of our friendly agents if you wish to learn more about workers’ compensation.

Worker's Compensation issues for Ohio Business Doing Business in States Other Than Ohio

If you own or operate a business in Ohio, you are most likely carrying Ohio Worker's Compensation Insurance through the State of Ohio's Bureau of Worker's Compensation. If you pay an employee more than $160/quarter, you are required by law to do this. If your business takes you or your employees to other states, you need to be aware of the specific state's Worker's Compensation requirements. Depending on the circumstances, your Ohio Worker's Compensation may protect you and your workers in other states under the terms of Ohio's Worker's Compensation laws. There may be a problem, however, in Kentucky, for example where their Worker's Compensation governing bodies and laws do not recognize Ohio's Worker's Compensation Policies. In that case you may need to buy Worker's Compensation in the state where you or your employees are temporarily working. Many of these new issues are evolving as states scramble for revenue because of the current recession, so before going into other states on business, please check with that state's Worker's Compensation authorities to see if you need state-specific Worker's Compensation in addition to your coverage in Ohio or any other state.

Ohio Workers' Compensation for Your Home or Business

If you are in the State of Ohio and employ at least one employee to whom you pay $160 or more in a three month period, you are required to carry Ohio Workers’ Compensation. Your employee could be with your business or simply a babysitter or person you hire to mow your grass.
In Ohio you buy Workers’ Compensation from the State’s Bureau of Workers’ Compensation. Their website address is www.ohiobwc.com or you can call them at 1-800-OHIO-BWC.

Unfortunately your Homeowner Policy Personal Liability cannot help you in situations where you are paying the employee more than $160 in a quarter, so we highly recommend that you purchase an Ohio Workers’ Compensation policy if you are in this situation.
Workers’ Compensation pays for injuries to your workers and includes not only medical expenses but loss of income benefits, too.

The website at www.ohiobwc.com is actually very helpful. If you decided you need to buy a policy, you can do it all on-line including paying for the coverage and printing out a temporary policy to show you have the protection.

Please feel free to contact one of our friendly agents if you wish to learn more about workers’ compensation.