by Sterling Risk Advisors
Sterling Risk Advisors Garry Hill on businesses surviving the ACA: Cutting Employee hours might not be the solution
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Garry Hill is a Principal with Sterling Risk Advisors and has over 12 years of expertise in the financial, consulting and insurance industries, and specializes in Employee Benefits. For more information on Garry Hill please visit his page on the Sterling Risk Advisors Website: http://www.sterlingriskadvisors.com/garry-hill.php
Sterling Risk Advisors’ Paul Baker writes in the Cobb Business Journal that recent ERM changes will affect what businesses are paying for workers compensation insurance.
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Earlier this year, changes occured that will significantly affect what businesses pay for workers compensation insurance. To encourage a more responsible employer culture, the National Council on Compensation Insurance created a financial incentive and punishment mechanism, the Experience Modification Rating (commonly known as the ‘experience mod’ or ERM). That rating is being adjusted during the next three years to catch up with cost changes in the economy.
The intent of the ERM is to reward or punish employers whose loss results either overperform or under perform against the average. The idea is simple: even though all employers pay a similar rate due to grouped “class codes” corresponding to hazard risk, individual employer cultures can have a drastic affect on losses.
The “experience mod” acts much like an insurance credit score, warning potential insurers of a bad loss risk, or indicating the most desirable employers. Similar to the effect of your credit score on your interest rate, the experience mod can have a significant impact on the final cost and viability of your insurance policy and thus on the overall profitability of your business.
Recent Changes Catch Up on Last 12 Years of Cost Changes
The current mod formula takes into account actuarial ratios to determine what the National Council on Compensation Insurance would consider to be “average.” Amazingly, these ratios have remained relatively consistent for the past 12 years, meaning costs for items such as fuel, materials, labor and medical expenses are out of date.
Consider for a minute you run a shipping company and your budget for predicting cash flow is based on the cost of goods and services 12 years ago. You would be budgeting for a gallon of gas to cost $1.00! Any fleet fuel expense estimates would be wildly inaccurate given the current $3.40 or higher cost of gasoline.
1. At its most basic, your business could be paying much higher workers compensation insurance premium rates
2. A high mod rating could affect how you’re perceived in your industry and might cause OHSA to examine your company for safety violations
3. You might find that you can’t even bid for specific jobs if your rating is too high
Just as we spend time watching our payment history, potential credit lines, and available credit to debt ratio to maintain our credit score, we should also devote a similar amount of time to understanding the mod formula. We should watch the number of claims, size of claims, insurance company reserving practices and other factors, to keep our insurance score the best it can be. Your question should be: “How low could my mod score be and what can I do to make it lower?”
Cobb resident Paul Baker is a Principal with Sterling Risk Advisors, a full-service insurance and surety brokerage firm that has offices on Powers Ferry Road. ]]>
For more information, please call Paul Baker at: (678) 424-6521 or email at email@example.com.
Matt Miller has been admitted as a shareholder and principal of Sterling Risk Advisors (www.sterlingriskadvisors.com), a full-service Atlanta-based risk management and insurance brokerage firm, in recognition of his contributions since joining the firm in 2010.
“Matt Miller has made tremendous contributions to the firm over the last three years”, said Doug Rieder, President of Sterling Risk Advisors. “Matt has really energized our personal lines department since joining the firm and his approach to the business is very consistent to the high touch, consultative approach we bring to our commercial clients.”
At Sterling Risk Advisors, Miller specializes in management of the insurance needs of successful business owners and individuals, designing portfolios to uniquely fit each client. His clients’ needs might include high value home insurance, coastal property coverage, high limits of liability coverage and valuable collections.
Prior to joining Sterling, he spent seven years as president and principal of Miller Insurance Agency.
Miller has a Bachelor of Science degree in business management from the Georgia Institute of Technology. While at Georgia Tech he was a three-year football letterman and named to the All ACC Academic Football Honor Roll.
Miller is active in the football program of his high school alma mater, Marist School, and played an integral role in establishing the internet broadcast of high school football games throughout Georgia.
About Sterling Risk Advisors:
Sterling Risk Advisors is a full-service Atlanta-based risk management and insurance brokerage firm serving the commercial, professional and personal needs of clients across a diverse spectrum of industries. These include medical and other professional services, construction, transportation and logistics, manufacturing, real estate and technology. Product offerings include all forms of commercial and personal property & casualty insurance, employee benefits and surety bonds.
For more information on Matt Miller please visit his bio on our website at http://www.sterlingriskadvisors.com/matt-miller.php
Sterling Risk Advisors’ John Miller quoted in August issue of Physician Risk Management advising Physicians to be aware of their obligations to report parent’s neglect and decisions that put a child’s life in danger.
If a parent’s refusal to consent to treatment is life-threatening for the child or places the child at risk of serious harm, physicians have a legal duty to report this to the appropriate child protection agency or law enforcement.
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John W. Miller is a Principal and Broker with Sterling Risk Advisors specializing in Medical/Malpractice Insurance and Risk Management. For more information on Mr. Miller please visit his bio page on our website at: http://www.sterlingriskadvisors.com/john-miller.php.