Collaboration among states improves program

By Kendra DePaul, BWC Other States Coverage Manager

In late August, underwriting consultant Julie Phillips and I traveled to the User’s Conference for Other States Coverage. The conference was hosted by United States Insurance Services (USIS) who is the vendor we work with, along with Zurich American Insurance to offer workers’ comp coverage outside the state of Ohio.

As I have mentioned in previous blog posts, workers’ compensation can be complicated for employers working in multiple states as each state has different rules and laws that must be followed. The Other States Coverage program allows BWC and several other state’s funds to assist their policyholders with securing proper coverage nationwide.

The purpose of the annual conference is to get together with the other states to discuss program results, best practices and troubleshoot common questions.

There are six other state funds in the program and in 2016 about 3,000 policies were issued collectively. The majority of the policies are small, with 68% being under $5,000 in premium. Although there are some large accounts, the collective group has primarily embraced this program to offer coverage options for smaller employers.

Around the meeting table it was clear that the reason each of the state funds offered this option is because they cared deeply about their policyholders and wanted to assist them with being successful. The issue with coverage and claims in a multitude of different states is not unique to Ohio. Each of these state’s funds have dealt with similar issues of employees hired in one state and injured in another, or with employers being fined for not having coverage in a specific state. It is also clear that some states are harder to work with than others and require multiple forms to be filed when policies are issued there.

A big push at this User’s Conference is for each state to share lessons learned or tools created to make the program more efficient for each user. One example of this has to do with schedule rating forms. Schedule rating is an available premium adjustment on private workers’ comp policies. An insurer can offer debits or credits for unique conditions of an employer.

For every policy we issue we are required to complete a form stating whether a schedule rating was used and the specific reasons why. Most states have a separate form for this purpose and if you issue a policy in multiple states, multiple forms are often required.

In an effort to reduce the time spent completing these forms, Julie Phillips took the initiative to create an Excel tool where policy information only has to be entered once and then is populated to multiple forms and saved as a PDF document. This new format has allowed our underwriters to spend much less time completing individual forms. Julie presented the Excel tool at the User’s Conference so they could begin taking advantage of it as well.

I am thankful for Julie’s hard work in completing this and I am continuously impressed by the collaborative spirit of all the state funds involved in the program. Each of them has offered assistance as we continue to improve our Other States Coverage program in Ohio. We all have the same goal of providing excellent customer service to our policyholders. Working together, I am confident we will do just that.

Coverage in other states: do you have it?

By Kendra DePaul, BWC Other States Coverage Managerkendra

With the New Year approaching, now is the time to begin planning for 2017. We encourage businesses to evaluate their current workers’ compensation coverage to ensure there are no potential coverage gaps.

Each state has different laws and requirements for workers’ compensation coverage. Consider each state where you send employees, and make sure proper coverage is in place.

We have many resources on our website to help employers work through requirements for work outside of Ohio. In addition, we work with a private insurer to offer optional coverage to employers with out-of-state exposures.

Through our Other States Coverage offering, employers can secure coverage nationwide in 46 states. From implementation in March 2016 through November 2016, more than 200 employers have secured coverage. These businesses have eliminated potential coverage gaps and compliance issues, which may arise when working out of state.

If your business is looking to expand outside Ohio, please contact BWC’s Other States Coverage unit to discuss your coverage options. We want you to have the proper coverage upfront, so that you can avoid any coverage issues and focus on having a successful 2017.

Contact the Other States Coverage unit at 614-728-0535 or via email bwcotherstatescoverage@bwc.state.oh.us.

There is no “all-states” endorsement

A discussion with Kendra DePaul, BWC Other States Coverage Manager, and Jim Klingensmith, Independent Insurance Agent

Since implementing BWC’s Other States Coverage program in March 2016, we have received applications from over 200 Ohio employers looking for coverage outside the state of Ohio. We have been happy to assist these employers in meeting their workers’ comp liability and have answered many questions along the way.

The questions are understandable, as workers’ comp is a complex system. Apart from a few federal programs for certain occupations such as coal and marine exposures, there is no federal system for workers’ comp. Instead, each state has established its own rules, laws and benefit levels. Considerations need to be made of each state an employer sends employees into to ensure that proper coverage is in place.

Often, when we receive applications, the employer wants an “all-states” endorsement or may be traveling in all states and wants a policy that will protect them wherever their business may take them. This is understandable, as it is often hard to predict where a job will be won or where a new client will be located. Although there are options for the employer to secure coverage, there is not the ability to simply purchase a policy covering all states. Because of the peculiarities of each state, we do need to know what states an employer wants on its policy so that we can properly price and quote the coverage and ensure that claims will be covered if filed.

Given the complexity of this issue, I asked Jim Klingensmith, a seasoned independent insurance agent and a Certified Workers’ Compensation Advisor (CWCA), to weigh in on the topic. Jim works out of an agency in Canfield, Ohio and is a member of Ohio Insurance Agent’s Association’s Workers’ Compensation Committee.

Kendra: Jim, you have clearly been advising clients on workers’ compensation for many years. It is my understanding that the “Broad Form All – States” endorsement for workers’ compensation was eliminated in the 1990s. And now it is important that employers list the states with known exposures on their policy. What information do you typically provide your clients who have operations or may have operations in several states?

Jim: We always make it clear to them that it is imperative that at policy inception, any states in which they already have ongoing operations, a contract to work in during the policy year or know that they will absolutely be working in during the policy year, must be listed in Item 3.A. (Workers’ Comp states) portion of the Workers’ Comp application. Failure to do so, could be cause for declination of coverage.

And of course, they will also have to list any other states in which they have a physical presence (office, satellite office, temporary office, etc.). It is also suggested that if their corporation was filed for in another state, that the state of incorporation be listed, if it is different than where their regular operations and office are located.  Item 3.C. of the application (other states insurance) is to be used to list the states that they reasonably anticipate working in, but have no current known exposure in those states, thereby allowing for temporary coverage until reported (must be within 30 days).

Kendra: As Jim mentioned, there is a section of standard workers’ compensation policies (3C) that provides temporary coverage for new exposures an employer may have over the course of the policy year. If an employer begins work in a new state, they should call us to have the new state added to the policy. It is a simple endorsement that can be done quickly. Jim, why is it so important that states with known exposure are listed in 3A of the policy?

Jim: Because Item 3.A. (also titled Workers’ Comp States), is where the employer is actually applying for Workers’ Compensation coverage for the states that have a known exposure. If the employer doesn’t list the states with known exposures, then coverage is not applicable after “30 days” have passed without the exposure being reported…NO EXCEPTIONS!

Kendra: What about a client who is just “passing through” a state? Do they need to get coverage if they are only there for a short time?

Jim: This is a Hot Topic in the Workers’ comp world. The safest way to avoid a gap in coverage, is to list under Item 3.C. (other states), the states that you reasonably anticipate that you might enter into during the policy year. WITH THE UNDERSTANDING THAT 3.C. (other states coverage) PROVIDES TEMPORARY COVERAGE FOR 30 DAYS. And technically, even though there is a 30 day reporting clause, there is an important clause in the policy that states “Tell us (the insurer) at once if you begin work in any state listed in Item 3.C. of the information page (application). The insurer is utilizing these measurers within the contract (WC policy) to exercise a degree of control over the loss potential. In other words, the bigger the claim the more the insurer will look to the contract (WC policy), and hold steadfast to the language (warnings and/or clauses).

Kendra: There are a few states that are monopolistic and cannot be include on a private insurance policy. Ohio is one of the monopolistic states, but so are Washington, Wyoming and North Dakota. What would you tell clients who have operations in these states?

Jim: They must be sure to purchase Workers’ Compensation coverage directly from each of the states you mentioned, because there is no other way from them to have coverage. Which aside from Ohio, are Washington, Wyoming and North Dakota.

Kendra: I think the best direction we can give employers doing business outside Ohio, is to provide us with as much information as possible about where and how often you are traveling so that we can make sure proper coverage is in place. Jim, do you agree?

Jim: Yes, I do agree. Providing the right information upfront, as well as adhering to the stipulations of Workers’ Comp policy, especially the reporting requirements. The safest way for the employer to list their potential exposures under Item 3.C. (other states), is to utilizing the following wording on the application for Item 3.C. “All states except North Dakota, Washington, Wyoming and those listed in Item 3.A., with the understanding that, in order to be safe, the employer should notify the insurance company as soon as work has begun in any state not listed in Item 3.A., and not wait for the 30 day reporting period to go by.

Kendra: Jim, living on the Ohio – Pennsylvania border, I know you often deal with this issue. Any other information you would like to share?

Jim: The most important point that any employer should pay attention to, is the fact that when it comes to insurance, especially Workers’ comp, an open channel of communication is critical to being properly insured. Otherwise, the employer will be paying for an employee’s injury out of their own business checking account, and in some states, their personal checking account as well!

 

*The intent of this blog post is for general information purposes only. We do not intend it to be a full and complete description of the law, nor as legal advice. This information is subject to change. Therefore, we cannot guarantee it is the most current and correct information. Employers should consult an insurance professional, private counsel, or the workers’ compensation agency in the other state to verify requirements of that state.

Ohio border no longer a barrier

kendraKendra DePaul, Other States Coverage Manager

I often wonder how many employers realize the jurisdictional issues associated with having employees working in other states. As you may know, each state has different laws and requirements for workers’ compensation coverage and it is not always easy for employers to know what is required of them in another state.

Unfortunately, the way employers usually find out about the differences in state laws, is when something bad happens. A claim is filed outside the state of Ohio or a letter comes from a state official with an accompanying penalty for not having proper coverage. We often get calls from employers when these things happen. They want to know what they should do to remedy the situation. Oftentimes though, the call comes too late and the only advice we can give is to work with the official to pay the penalty and get coverage for the future. This is not a great option for employers and usually not a cheap option either.

BWC has come to the realization that our employers need a better option. An option where they can get coverage up front so that the frantic phone calls can be eliminated and employers can focus on the success of their businesses. And that is why we are undertaking implementation of Other States Coverage for Ohio employers.

We are partnering with a private insurer to offer optional coverage to employers who may face financial exposure while working outside the state of Ohio. The coverage secured through BWC will be very similar to private workers’ compensation insurance that some employers have chosen to purchase on their own. And if an employer is happy with their private coverage, there is no mandate to switch. But for those who have struggled to find coverage or don’t know where to go to meet their out-of-state requirements, BWC is here and we can help.

It has been a long journey to make this possible for Ohio employers. The legislation was passed in 2014, and since then there have been countless workgroups, meetings, and training to get ready for this endeavor. I’m happy to say there is some light at the end of the tunnel. I would not say that we have it all figured out, and there will be a lot of learning along the way, but I have confidence that we will bring this coverage offering up in the next few months and have a viable option for Ohio employers who send their employees outside the state of Ohio.

We at BWC will keep on working hard to get this option up and running, and we hope that if you are in need of this coverage, you will give us a call. We are excited to assist you.

More about Other States Coverage is available at bwc.ohio.gov.