Third Quarter 2015
Back in June, I had talked about how most insurance professionals were preparing to run the gauntlet known as “7/1,” one of our industry’s busiest times of the year. Apparently United Heartland agents and our underwriters had been eating their Wheaties, chugging energy drinks and pumping iron for weeks in anticipation because our results were nothing short of impressive. For the month of July, United Heartland:
- Wrote $11.5 million in new business, a record! In fact, June, July AND August were all record-setting new business months.
- Wrote $63.5 million in total written premium, another record!
- Retained an impressive 94.5% of our accounts, another record!
- Bound $1 million-plus guaranteed cost accounts in each of our four regions, including one for $2.0 million in the Charlotte region!
To top it off, one of UH’s priorities this year has been to focus on retaining our $400,000 and larger accounts and we succeeded with a fantastic 96% retention of our large accounts in June and July. United Heartland couldn’t have achieved this type of record-setting success without the support and backing from our agent partners who continue to believe and promote the value of our high-touch service model to their customers. We encourage all of our agents to continue submitting their business to us so we can keep this momentum going throughout the rest of the year.
It’s this type of support that helped us enter Florida in 2013 and where year-to-date we’ve already surpassed our new business premium goals. And it’s this type of support that I count on as United Heartland pursues our next strategic path – entry into Texas. Texas became United Heartland’s 16th core state effective October 1. We are assembling our team, under the guidance of Adam Gildemeister in the Kansas City region (read more here), and we are currently exploring Texas agency partners that share a common core class focus and commitment to service.
I believe there are great opportunities in the Lone Star State for customers withinour core segments who are seeking a high-touch, customer service-focused approach to workers’ compensation. We understand that we have to earn your business by exceeding your expectations every day. United Heartland is eager to demonstrate our value proposition and our tireless commitment to controlling your customers total cost of risk. One great example of this is our new “Results Matter” flier. It illustrates how UH customers across our key segments showed an overall overage of a 12.4-point reduction in their experience modification factor after their first four years with us. Simply put, UH delivers results for you, our agents, and their customers.
I am excited by the potential the Texas entry holds for the United Heartland brand and look forward to keeping you informed about the successes we achieve there. As always, I appreciate the support you, our agents, provide as we grow and expand our regional footprint.
Vice President, Field Operations
To appreciate the success of Risk Management Services (RMS) – Accident Fund Holdings’ (AFHI) Enterprise approach to providing a comprehensive workers’ compensation product created specifically for retrospective and large deductible buyers, it helps to understand the opportunity that was recognized more than a year ago.
Looking at the AFHI and United Heartland books of business, it was clear the focus was on guaranteed cost. It was also clear there was an opportunity to expand our service offering to our agency base. Using UH’s high-touch service model as a guide, it was determined AFHI could provide a loss-sensitive product that would supplement the outstanding guaranteed cost product our customers had grown to expect.
We knew that the workers’ compensation marketplace was basically split three ways:
- 55% of all premium was written on guaranteed cost plans.
- 10% was either self-insured or in a captive arrangement.
- 35% was either on a deductible or retrospectively rated program. It is this 35% of the marketplace that RMS is focused on.
When the vision for RMS was explained to our Agency Councils, the message was clear: If you can do this without losing focus on your core product and core service values, we’re on board.
So what has RMS delivered?
- Given customers who are willing to take on more risk a complete package that bundles all services, eliminates back-end charges and reduces overall insurance costs.
- Delivered proactive claim and medical management services that reduce overall cost of risk.
- Provided loss control experts who focus on loss drivers and how to prevent losses from happening in the first place.
- Offered Client Relation Consultants as a single point of contact for customers to coordinate all aspects of their work comp programs.
As a result, RMS activity has remained strong throughout 2015. Here are some examples of the accounts written by the RMS team:
- A group of long-term care facilities
- Industrial laundry service provider for hospitals and long-term care facilities
- Grocery store chain
- Frozen food manufacturer
- A large group of dental offices located throughout the United States
- A manufacturer of paving stones, retaining walls and hardscape products
The reach of our Enterprise – supplemented through the Accident Fund, CompWest Insurance, Third Coast Underwriters and UH brands – has played a key part in helping the RMS team build connections and develop relationships with the agents that control loss-sensitive account opportunities that otherwise may have been overlooked.
Moving into 2016, RMS Director Tim Greifenkamp has clear goals. “We want to continue to refine the business that RMS pursues to become more strategic with agents and brokers who are willing to partner with us. It really is a chance for accounts, who are willing to have some skin in the game, to reduce their overall insurance costs,” he said.
If you have loss-sensitive accounts that would be well-served by RMS, emailRMS@UnitedHeartland.com today.
Keeping Existing Business, While Attracting More: 2015 has been a strong year for United Heartland’s Kansas City region thus far. Of note:
- An outstanding 89.5% premium retention through Aug. 31.
- 9% increase in submissions through the same period.
- Nearly $8.28 million written in new business during the previous 12-month period with health care ($2.68 million, 32% of total new business), social services ($1.96 million, 24%) and manufacturing ($910,000, 11%) leading the way.
Here’s a small sample of the larger accounts the Kansas City team has written recently:
- $1.18 million hospital group
- $960,000 hospitality/hotel chain
- $550,000 grocery store
- $500,000 physician group
- $490,000 printing company
- $421,000 metal goods manufacturer
- $325,000 and $296,000 public school districts
Taking on Texas: As mentioned in Justin’s letter, the Kansas City region is leading the charge as United Heartland expands into Texas as a core state. “Our team is extremely excited to be taking the lead on this important initiative, which takes effect Oct. 1,” said Regional Director Adam Gildemeister. As part of these expansion efforts, United Heartland is hiring underwrtiers and loss control representatives that will be based within the triangular region bounded by Dallas, Houston and San Antonio. We’re happy to announce we already have our first Texas associate there – Senior Claim Representative Velma Salazar, who is based in the Dallas area.
Growing Team: Speaking of new faces, several other individuals have joined the Kansas City region within the last year. They are:
- Senior Underwriter Amy Conway (handling Iowa)
- Senior Underwriter Dusty Gutierrez (handling Nebraska)
- Underwriting Manager Warren Rhodes
- Claims Manager Ben Richeson
The misclassification of employees as independent contractors presents one of the most serious problems facing workers, employers and the economy as a whole. Misclassified employees are often denied access to critical benefits and protections to which they are entitled, including workers’ compensation coverage.
The U.S. Department of Labor’s Wage and Hour Division is working with the IRS and many states to combat employee misclassification and to ensure that workers get the wages, benefits, and protections to which they are entitled. To this end, the U.S. Department of Labor recently issued a blog post (summarized in this Insurance Journal article) that explains new guidance on classifying workers as employees or independent contractors under the federal Fair Labor Standards Act (FSLA). The Department supports the use of legitimate independent contractors, who play an important role in our economy, but when employers deliberately misclassify employees in an attempt to cut costs, everyone loses.
In a recent memo, the Department of Labor outlined six factors to consider when determining whether a worker is an employee or independent contractor. While factors can vary, and while no one set is exclusive, the following can be used as a general guideline:
- The extent to which the work performed is an integral part of the employer’s business.
- Whether the worker’s managerial skills affect his or her opportunity for profit and loss.
- The relative investments in facilities and equipment by the worker and the employer.
- The worker’s skill and initiative.
- The permanency of the worker’s relationship with the employer.
- The nature and degree of control by the employer.
For detailed information about each of the factors listed above, click here.
As you may be aware, entities covered under the Health Insurance Portability and Accountability Act (HIPAA) will be required effective Oct. 1, 2015, to use to a new coding system called ICD-10 to report injuries and illnesses to the Centers for Medicare and Medicaid Services (CMS). To help you understand this change and communicate it easily with your customers, we’ve provided the answers to some frequently asked questions below.
What does ICD-10 stand for?
International Classification of Diseases. The 10 indicates this is the 10th revision of this system, which is utilized by the World Health Organization and had its origins in the 1700s.
What is the difference between ICD-10 and ICD-9?
ICD-10 is a more flexible, larger and detailed code set that allows for greater specificity and precision in describing a patient’s diagnosis and in classifying inpatient procedures. ICD-10 uses five to seven characters and offers about 68,000 coding options whereas ICD-9 uses three to five characters and only offers about 14,000 coding combinations. The most notable change is the ability to specify what part of the patient is injured, such as right arm or left leg.
What motivated the change?
As part of HIPAA’s passage in 1996, a new universal standard for diagnosis coding was mandated. Physicians, clinics and hospitals are all required to move to this system for all services provided on Oct. 1, 2015, and after. The deadline for implementation of ICD-10 was delayed twice, but no further delays are anticipated.
What are the benefits of moving to ICD-10?
From a workers’ compensation perspective, ICD-10 will improve the ability to analyze health care utilization, cost, outcomes, and resource use and allocation. It also offers the potential for developing enhanced analytics that could prevent and detect health care fraud and abuse. For our customers and their claims handlers and nurse case managers, ICD-10 should result in better reporting and injury tracking capabilities as well as greater accuracy for reimbursement.
How has United Heartland prepared for ICD-10 implementation?
United Heartland and Accident Fund Holdings have been anticipating this transition for the last few years and have updated our systems to ensure that the move to ICD-10 will be seamless to our agents and policyholders. Our claims handling experts have been thoroughly trained on this new coding system and will be able to respond effectively to any questions our customers may have.
Why is ICD-10 and our preparations for this transition important for you and your customers?
When your customers’ employees experience injuries, they expect claims to be handled effectively and efficiently. By providing a seamless transition to the ICD-10 system, United Heartland and Accident Fund Holdings illustrate our commitment to deliver the superior workers’ compensation product your customers have come to expect. Additionally, ICD-10 will give us the capability to better manage and track claims and ensure continued positive outcomes for injured claimants.
For more details about ICD-10 compliance, visit the Centers for Medicare & Medicaid Services’ page here.
Fall marks back-to-school season for students as well as teachers, administrators and other school employees. While the focus is often on preparing classrooms for the return of students, steps should be taken to ensure school employees are returning to safe and healthy workplaces.
To help school administrators and staff accomplish this task, United Heartland has created “Tools for Schools,” a safety and health resource for K-12 public and private school district employees. The document provides information for administration officials including:
- 10 steps to reduce workers’ compensation costs
- 10 key elements for a successful safety process
- Accident investigation and reporting information
- Information on return to work programs
This resource also provides related information for school personnel including:
- Food safety
- How to prevent muscle and back strains
- Transportation safety
- Maintenance, groundskeeping and custodial safety
- Safety and housekeeping inspections
- Dealing with bloodborne pathogens
- Handing an active shooter situation
You can download a copy of “Tools for Schools” here. Or to receive a printed copy, please contact your United Heartland Loss Control representative. If you know of others who may be interested in our education safety information, encourage them to subscribe to our free Risk Connection e-blasts here.
Legislative Update is a brief synopsis of relevant legislative activity currently taking place in United Heartland core and accommodation states. For more details or further documentation on any of these legislative activities, contact your business development consultant.
The standoff between Gov. Bruce Rauner (R) and Democrat legislators over resolution of the state’s budget and related business reforms continues. Industry trade organizations remain in discussions with employer groups about what could possibly be included in any comprehensive deal that involves workers’ compensation insurance. It is unclear when or if the legislature will take action on workers’ compensation-related reform in the near future.
The Tennessee Bureau of Workers’ Compensation will host a forum to discuss the “Future of Workers’ Compensation in Tennessee” from 2 to 4 p.m. CST Thursday, Oct. 8 in Nashville. The administrator of the bureau has made clear reference to the support of large Tennessee employers for the opt-out legislation in Tennessee and the resulting support from some legislators. It appears that in addition to hearing views on that issue, the administrator is interested in discussing whether it is possible to address the concerns of opt-out opponents. The Insurors of Tennessee oppose the opt-out legislative effort.
The Office of Commissioner of Insurance (OCI) will be changing vendors and moving its back-office systems to the NAIC’s State Based Systems (SBS) in December. SBS provides regulatory system services including consumer services, producer licensing, continuing education, company licensing, enforcement and revenue management. Carriers in particular will want to make sure the appropriate company people are aware that OCI licensing services and National Insurance Producer Registry (NIPR) services will be unavailable from Nov. 23 to Dec. 14. OCI will be reminding carriers and agents of the change through notifications, as well as providing details and assistance to those that need it.
Disclaimer of Liability
This document is provided for informational purposes only and does not constitute legal advice. This information is subject to change. Every effort is made to provide accurate and complete information in Accident Fund Holding’s Legislative Update. However, Accident Fund Holdings makes no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the Update and expressly disclaims liability for errors and omissions in the contents of this newsletter.
All content within the Legislative Update is the property of Accident Fund Holdings, Inc., unless otherwise stated. All rights are reserved. No part of the Update may be reproduced, transmitted or copied in any form or by any means without the prior written consent of Accident Fund Holdings.