Have you ever wondered how BWC calculates your workers’ compensation insurance premium rate?

By Christopher S. Carlson, FCAS, MAAA, BWC Chief Actuarial Officer

It all comes down to an equation:

     Modified premium rate
+   Administrative cost rate
+   Disabled Workers’ Relief Funds assessments
=   Blended insurance rate per $100 of payroll

With the definitions in the sidebar as reference, let’s break down the formula:

All employers have a base rate determined by their manual classifications.

Larger businesses also have an experience modifier, a projection of expected future claims costs (based on past claims experience).

Multiplying the base rate and experience modifier (if you have one) results in the modified premium rate (MPR).

BWC factors in an administrative cost rate, used to run BWC and the Industrial Commission, and then adds assessments for two Disabled Workers’ Relief Funds that provide cost of living increases for disabled workers.

The result is your blended premium rate, the amount you pay per $100 of payroll

So there you have it, a quick lesson in BWC Premium Rate Development 101. This YouTube video provides even more detail on how BWC calculates your Ohio workers’ compensation premiums.

Remember, the best way to keep premiums low is to provide a safe workplace. Safer workplaces reduce accidents, reduce costs, and in the end, reduce your premiums.

Continuing the workers’ comp conversation

By Kendra DePaul, BWC Other States Coverage Manager

Oklahoma: home to Will Rogers, Route 66 and CompSource Mutual Insurance Company – host of the 2017 Annual Conference of the American Association of State Compensation Insurance Funds (AASCIF). AASCIF is an association of workers’ compensation state funds from 26 different states, plus 8 workers’ compensation boards in Canada.

The conference was held in Oklahoma City in late June and hundreds of attendees gathered from around the country to discuss hot topics in the workers’ comp industry.

As was mentioned in a previous post, three BWC employees are members of AASCIF’s committees tasked with planning session topic and finding speakers for the annual conference. Michael Rienerth, Ergonomics Technical Advisor is on the Safety and Health Committee. Bill Teets, Communications Director is on the Communications Committee and I am on the Enterprise Risk Management and Underwriting Committee.

Along with planning sessions, committee members were also asked to share their knowledge and experience at track sessions at this year’s conference. Mike presented on violence in the workplace. Bill presented on crisis communication and the strategy of thought leadership. And I presented on state to state coverage conundrums.

Shadya Yazback, our Chief of Enterprise Services, also presented a session on preparing the business for large scale IT changes.

Additional sessions were held on the use of predictive analytics, the state of the economic, emerging technologies, telemedicine, and other topics affecting the industry as a whole.

Two of the main session speakers, Richard A. Clarke, Former National Security Advisor and Frank Abagnale, American Security Advisor (you may know him from the movie Catch Me If You Can), discussed the importance of safeguarding our personal information and the constant threat of cyber security.

We also heard the inspiring story of an Oklahoma City Bombing survivor and the friendship that developed with her rescuer. The story reinforced the amazing capacity of people to heal from wounds (both physical and metal) and the important role of the people who support them through their recovery.

In addition to the speakers, AASCIF holds an annual Communication Awards competition. I am happy to report that BWC won two awards this year. We received 2nd place in the Excellence in the Writing category for the “Trek through Nepal” article. And we won 1st place in the Print Marketing Piece category for a marketing piece we created for Other States Coverage. Working with the communications department, we targeted our marketing to a specific group of employers based on their size and the type of work they do. The marketing piece generated several inquires and we ended up issuing three policies, meaning we received a return on our investment.

As always, the conference was a whirlwind of activities. In addition to educational sessions, we spent time getting to know members of the other states workers’ comp funds, discussing ways to improve our operations and even having a little fun. Since we were in Oklahoma, we couldn’t close the trip without experiencing a rodeo and visiting the National Cowboy and Western Heritage Museum. Yee Haw!

Workers’ Comp: Adapt or fall behind

By Kendra DePaul, BWC Other States Coverage Manager

I had the opportunity to attend the National Council on Compensation Insurance (NCCI) 2017 Annual Issues Symposium earlier this month. NCCI presents a word that describes the industry as a whole and sets the tone for the conference each year. That word this year was “adapting.”

As Bill Donnell, president and chief executive officer for NCCI, kicked off the conference, he explained how important it is for workers’ compensation to stay relevant in a world that is consistently changing. He provided Blockbuster Video as an example of a company that failed because they did not see the changes coming and adjust to keep up with the times.

As technology was moving towards streaming television and videos, Blockbuster Video did not anticipate how these changes were going to affect them and actually turned down an opportunity to purchase Netflix. This inability to see the writing on the wall contributed to their ultimate demise.

The theme that resonated throughout the conference is that we as an industry cannot afford to get stuck where we are. If we want to continue to be successful in serving our customers, we have to continue to adapt. Bill believes the industry has the capacity and talent to weave the changing technology into our everyday activities and predicted continued growth and development well into the future.

Reflecting on this need to adapt, I began to think about all the things BWC is doing to adapt and ensure our customers are getting the services they desire. The first thing that came to mind is the initiative to update BWC’s website to make it more user friendly. BWC’s website has A LOT of good information. But in a time when attention spans are getting shorter by the day, no one wants to comb through piles of information to find what they need.

Our customers want us to know what they need and put it front and center on the website so that they can find it quickly. I know the Administrator is particularly excited about the new website and the ability to provide information to customers in the way they desire. There is talk about a mobile app, push notification and other needed updates. I know I pay my bills, check into flights and generally manage my life from my mobile phone so I am excited to see how the new web changes will streamline and simplify interactions for our customers.

I am also excited about BWC’s recent announcement to invest $6 million for a new health and wellness program for small Ohio employers. We only get one body to live in, so investing in our health is essential to a happy and healthy life.  In addition, the research continues to show that employees who get injured are much more likely to have positive outcomes and return to work if they are healthy pre-injury.  Investing in Ohio’s workforce wellness is another great example of how BWC is adapting to serve its customers.

Internally, we have recently launched the Nimble and Agile workgroup to continue discussions on what we can do to stay relevant and adapt with the changing world. The workgroup is working on crisis management planning to ensure BWC resources are ready in the event of a policyholder crisis. They are also exploring ways to foster innovation and encourage staff to collaborate on improvements. Finally, they are planning the launch of a new internal wellness program to encourage BWC staff to strive for wellness of mind, body and spirit.

“Adapting” is an appropriate word to describe the workers’ comp industry. I’m pleased my employer recognizes and understands the importance of the word. We’ll continue to work toward a more flexible system ready to adjust to our customers’ changing needs.

I look forward to hearing next year’s word. No matter what it is, I suspect Ohio will be well prepared to meet whatever challenge it presents.

Driverless Vehicles – Rapid Changes Ahead

By Kendra DePaul, BWC Other States Coverage Manager

Originally published in the May 2017 American Association of State Compensation Insurance Funds (AASCIF) Newsletter

Transportation-related incidents continue to be the leading cause of fatal workers’ compensation injuries. So the buzz about autonomous vehicles has caught the attention of the industry. The hope is that by automating certain functions of vehicles, human error can be eliminated and safety improved.

There are different levels of automation, ranging from low levels of driver assistance, such as cruise control, to partial automation, where humans cede control under certain condition, to fully autonomous, self-driving vehicles. Although there are companies currently piloting self-driving vehicles, experts say we are still years away from fully autonomous vehicles. However, partial automation is being developed rapidly and is likely a short-term reality due to increased investment in research from the National Highway Traffic Safety Administration (NHTSA), auto manufacturers, and individual states.

Although the possibility of improving safety is exciting, those in the workers’ compensation world need to be thoughtful about how the changes in innovation will affect how they do business in both the short and long term. Specifically from an underwriting perspective, considerations will have to be made about evaluating the risk of transportation companies in an ever- changing technology landscape.

One of the first questions on everyone’s mind is “how do we know when autonomous vehicles are safe enough to become mainstream?” Companies have been testing and retesting concept vehicles, but the real difficulty is anticipating every situation a vehicle may encounter. Arda Kurt, research scientist for the Center of Automotive Research at The Ohio State University, explained that “the real challenge is figuring out how to program the vehicle for the unexpected situation.” Developing an autonomous vehicle to travel on a highway is something technology can handle, but when you throw in unexpected obstacles such as an animal or road construction, that is where testing still needs to be done. He also explained that research is still being conducted on how consumer usage will affect injuries. “When people don’t have to actually be driving, they may position themselves differently in the car. We are still researching how to mitigate risk if people are slouching to one side,” he said.

As these developments continue, underwriting departments are going to have to determine how they are going to assess the risk associated with employers using autonomous vehicles. It is still unclear how underwriters will determine which automated components actually lead to fewer accidents, or how to evaluate employer safety protocols to ensure the vehicles are being used as intended. As the technology for automation continues, the underwriting strategy will have to follow closely behind to ensure risks are adequately accounted for.

Another topic of discussion has to do with liability. There are many questions about liability if an autonomous vehicle crashes. Currently, a human is still required to pay attention in a car, but there will surely be questions about product liability when crashes occur. A publication titled Self-Driving Cars and Insurance by the Insurance Information Institute (III) explained that insurers will have to determine “whether the accidents that do occur lead to a higher percentage of product liability claims, as claimants blame the manufacturer or supplier for what went wrong rather than their own behavior.” It also mentions the possible need for liability laws to evolve to account for these situations.

Although autonomous vehicles should not affect claim compensability, insurers will have to consider how to address subrogation for workers’ compensation claims occurring in autonomous vehicles. If liability laws change to encourage the use of autonomous vehicles, workers’ compensation carriers will have to stay engaged and advocate for their right to recover claims costs caused by a third party. And if laws are passed that do not allow recovery, underwriting and risk control departments will be tasked to find ways to reduce the risk associated with these types of claims.

Perhaps the biggest question that remains for underwriters is how technological innovation will change the transportation industry and the occupations therein. Today, there are millions of truck drivers on the roads, delivering the products we consume. Currently their jobs are pretty straightforward; they pick up freight in one location, drive to the destination, and unload the freight. Their occupation, and the risk associated with it is somewhat defined. However, we may be on the cusp of technology that could radically change what the truck driver occupation looks like. Companies are beginning to experiment with “platooning,” where two tractor trailers follow each other closely to approve fuel efficiency. This arrangement is possible because technology allows the vehicles to talk to each other, so the second truck knows when to change speed or break. Currently, a truck driver is required to be present in both vehicles, but some are predicting that it is only a matter of time until the second vehicle is driverless.

If platooning becomes an industry standard in transportation, many questions about occupational hazards will have to be addressed. Will manual classification need to evolve to address drivers who are not actually driving? Will truck drivers’ salaries change and if so, how will that affect payroll and premiums for the transportation industry? And what are the unintended risks that may creep in as occupations change?

Just like most changes, there are many questions that we don’t have the answers to. And that’s ok. Right now it is just important that we stay alert and prepare for the rapid changes ahead.

Be sure to join the Underwriting Committee at the AASCIF Annual Conference for A Changing Workforce: Technology & Automation to hear about what changes other industries are experiencing.

Sources:
Kurt, Arda. “Autonomous Vehicles.” Personal interview. 10 Feb. 2016. Center of Automotive Research at The Ohio State University

“Self-Driving Cars and Insurance.” © Insurance Information Institute, Inc, July 2016. Web. 22 Feb. 2017.

McFarland, Matt. “When Truck Drivers Tailgating Is Actually a Good Thing.” CNNMoney. Cable News Network, 16 Feb. 2017. Web. 22 Feb. 2017.

Ottawa County Safety Council members share their OSC17 experience

By Michelle Francisco, BWC Safety Council Program Manager

Two-hundred and forty miles total. Four hours roundtrip. Ottawa County Ohio employers didn’t let that keep them from capitalizing on the nation’s largest regional occupational safety and health conference. Several employers from Ohio’s north shore descended on Columbus a few weeks ago to find valuable information and resources at BWC’s Ohio Safety Conference & Expo 2017 (OSC17).

It’s no surprise that so many of these employers are also members of the Ottawa County Safety Council. That’s because Jessica Kowalski, manager of the safety council, keeps her membership engaged and focused on workplace safety.

Jessica works tirelessly to promote BWC programs and services through social media and more traditional means of communication, and we appreciate her partnering with us.

After OSC17, she surveyed members of the Ottawa County Safety Council to get feedback on their experience at this year’s event. Below are some of their thoughts.

Dave Barth of Bay Point Resort & Marina attended several sessions on the Occupational Health and Safety Administration’s new reporting guidelines and found sessions to enhance his understanding of job assessments and their benefits. In the Expo Marketplace, he met several vendors he intends to contact about future business.

Julia Catlett of Magruder Hospital applauded BWC for providing classes that are educational from a variety of different perspectives, ranging from safety officers to human resources. She appreciates that sessions provide credit toward her certifications and give her useful information to implement in everyday processes.

Michelle Ish, Ottawa County HR Director, attended her 13th safety congress this year. She appreciates seeing other industry professionals and knows many are repeat attendees, adding, “It’s nice to network on such a large scale!”

Evan Viery of Signature Label found OSC17 to be an excellent summarization of where safety has gone in recent years and where it intends to go. He also felt it was a great opportunity to meet people from other companies and to see what fellow Ohio companies are doing to keep an edge.  “Every time I attend I am more pleased with OSC,” he says.

Tim Gerkensmeyer of Martin Industries tries to attend the Ohio Safety Congress & Expo as much as he can. He said he enjoys catching up with people who he doesn’t see often, adding that he met several new people from his own county.

Adam Holmes of The Ashley Group praised the Ohio Workers’ Compensation Medical & Health Symposium. He attended the symposium for the first time, saying it covered topics related to almost every industry, and it promoted open conversation and sharing of ideas among professionals from several different backgrounds. He says, “The chance to hear first-hand from a variety of employer organizations regarding the challenges they face helps me improve as a consultant to my clients. “That in itself is invaluable and reason alone to make the trip again next year!”

No matter the distance to Columbus, employers from all over the state have many reasons to attend the Ohio Safety Congress & Expo. Make your plans to attend in 2018, March 7-9, in Columbus.

Coping with pain

‘Visualize your way out of it,’ psychologist tells work comp audience

By Tony Gottschlich, BWC Public Information Officer

There’s another way to deal with chronic pain that doesn’t involve medications or surgery, a psychologist told an audience Friday at the 2017 Ohio Workers’ Compensation Medical & Health Symposium.

It’s called Cognitive Behavioral Therapy, and it’s not as complicated as it sounds. In fact, the techniques are rather simple, said Michael Coupland, medical director for Integrated Medical Case Solutions in West Palm Beach, Florida.

Cognitive Behavioral Therapy (CBT) is a widely accepted form of psychotherapy that is based on the cognitive model: the way that individuals perceive a situation is more closely connected to their reaction than the situation itself.

Coupland explained that we can condition our brains to control pain or banish it from our consciousness. But it takes practice, a daily repetition of mantras, deep breathing techniques, meditation and other mindfulness methods for it to take root and stick.

Thanks to neuroplasticity, the brain can reorganize or rewire itself, both physically and functionally, throughout your life in response to your environment, behavior, thinking and emotions.

“Exercise your neurons, visualize your way out of this,” he said. “I tell my patients, ‘Whether you believe in this or not, just humor me and do this every day for eight weeks.’ These techniques help stand down the body’s stress-arousal system.”

Coupland admitted it’s tough for most patients to accept this approach. Mindfulness, a state of active, open awareness of the present moment, and meditation are about “letting go,” but the American educational system teaches us to “hold on” to everything we learn.

Coupland shared with the audience a book he authored in the style of Dr. Seuss that illustrates the simplicity and effectiveness of CBT. It’s titled, “Up Pain, Down Pain, Good Brain, Bad Brain,” and can be found for free here.

For more on Coupland and his work, visit www.icms.us or www.cope-with-pain.com.

‘Wired for addiction’

Addiction specialist addresses work comp health symposium

By Tony Gottschlich, BWC Public Information Officer

Many believe drug addicts are weak-willed people of diminished moral character who choose drugs, getting high and even criminal behavior over a proper, law-abiding life.

And they would be wrong, a longtime psychiatrist and addiction specialist said Friday morning at the 2017 Ohio Workers’ Compensation Medical & Health Symposium.

“Addiction is not about the drugs or the behavior, it’s all about the brain,” said Dr. Susan K. Blank, co-founder and chief medical officer for The Atlanta Healing Center, an outpatient treatment recovery program. “This is a genetically inherited brain disease.”

Blank, speaking to a capacity audience at the Greater Columbus Convention Center, spoke for an hour on the topic, “The Perfect Storm: Pathophysiology of Controlled Substance Misuse and Addiction.” Her presentation was the first continuing education session on the final day of the two-day symposium for health care professionals.

Blank explained there are three key forces behind addiction, and choice has little, if anything, to do with it. They include:

  • Genetics. Our brains are hardwired for addiction because of our genes. Some of us inherit malfunctioning “dopamine feedback loops.” When we experience pleasure, whether from food, drugs or sex, it’s because our brains are releasing the feel-good neurotransmitter dopamine. In addicts, that feedback mechanism doesn’t shut down and they just want more and more, regardless of the consequences. “It’s never enough,” Blank said. This is particularly hard to overcome if the addiction started in one’s youth. That’s because drug and alcohol abuse can damage the prefrontal cortex, our brain’s impulse-control center, which is still developing into our mid 20s.

Worried your children might be future addicts? Look for the thrill-seeking child who thrives on adrenaline, the child who’s the first to take a dare. These are behaviors that demonstrate he or she is seeking a dopamine release, Blank said.

  • Exposure. Growing up around addicts increases the likelihood of addiction.
  • Environment. There must be an environmental trigger or stressor – loss of a job or loved one, for instance – that keeps the addiction cycle going.

“You have to have all three legs of that stool for addiction to manifest itself in your life,” said Blank, who is also president of the Georgia Society of Addiction Medicine. Genes alone won’t doom you.

Addictions often start through prescription drugs, she said, and can’t stop without outside help. They lead to brain changes that can’t be undone. “Our rational brain is gone.”

Drug overdose is the leading cause of accidental death in the United States in recent years, fueled by powerful opioids, heroin especially. Ohio is the nation’s overdose death capital, with 3,050 OD deaths in 2015, or more than eight per day, according to state-by-state statistics compiled by the Henry J. Kaiser Family Foundation.

Blank noted that addictions aren’t limited to painkillers and street drugs, of course. People can be addicted to sugar, sex, tobacco and other dopamine triggers, too. It’s all about the dopamine. (Surprising fact to nonsmokers: “Nicotine is better than food, sex and morphine,” Blank said.)

Blank provided a number of sobering facts and statistics, including this one: “This is a chronic disease and there is no cure.”

But there is hope, she said. Addictions can be managed, and many addicts go on to live long, productive and healthy lives. Nationwide, opioid prescriptions are falling and there’s a growing awareness and understanding that addiction is a disease.

She concluded her remarks with a warning: “If you can’t escape addiction, choose yours carefully.”

The health symposium concluded Friday. It was held in conjunction with the 2017 Ohio Safety Congress & Expo, the Ohio Bureau of Workers’ Compensation’s annual safety, health and workers’ compensation conference.