Wednesday, March 28, 2012

12-1 PM CST

REGISTER

RJF, a Marsh & McLennan Agency LLC company, has developed a professional liability insurance program for companies in the drug testing and substance abuse program management industry. This program is now available to SAPAA members to protect them from the risks unique to this specialized industry.

Regardless of your size, RJF’s service platform can reduce your risk, provide coverage consistency and make the insurance process easier, providing you with added time and resources to build your business. The RJF team is prepared, experienced and excited to help.  

To get a quote, please complete the following form. You should hear back from us within just a few days.

If you want more information or have questions, contact Emily Tschimperle at 763-746-8247.

Check out our future seminars.

Click below to download copies of the materials from the seminar.

• PowerPoint presentation

We hope you found it useful and worth your time. You can view a recording of the presentation below. Feel free to bookmark this page and share with colleagues who might find it valuable.

For more information about Wisconsin Educators Risk Management Cooperative (WERMC), contact:

Kathy Johnson
Independent Consultant
kjohnson@rmstrategies.net
608-663-9032

Erin Green
President, WERMC
Director of Business, Greendale School District
erin.green@greendale.k12.wi.us
414-423-2705

For more information on legal issues pertaining to labor and union contracts, contact:

Ron Stadler, Esq.,
Partner, Gonzalez Saggio & Harlan LLP
414-847-1366
Ronald_Stadler@gshllp.com

We hope you found it useful and worth your time. You can view a recording of the presentation below. Feel free to bookmark this page and share with colleagues who might find it valuable.

Learn about other WERMC Webinars.

For more information about Wisconsin Educators Risk Management Cooperative, contact:

Kathy Johnson
Independent Consultant
kjohnson@rmstrategies.net
608-663-9032

Erin Green
President, WERMC
Director of Business, Greendale School District
erin.green@greendale.k12.wi.us
414-423-2705

For more information on legal issues pertaining to guns in the schools, contact:

Andy Phillips, Esq.,
Attorney, Phillips Borowski, S.C.
atp@phillipsborowski.com
262-241-7788

Chrissy Van Berkum, Esq.
Attorney, Phillips Borowski, S.C.
ckv@phillipsborowski.com
262-241-7788

• Presentation

Due to the technical glitches, we are not able to provide you with the recorded version of this meeting. You can, however, access the presenation by following the link below.

If you have any questions, please don't hesitate to contact:

Erin Green, President of WERMC
414-423-2705

Kathy Johnson, Independent Insurance Consultant for WERMC
608-663-9032

Rosie Ward, Health Management Services Manager for RJF
763-548-8861

• Presentation
• Development Options Worksheet
• Vacancy vs. Capability Worksheet

Thanks for your interest in our FREE Webinars, brought you you by the Wisconsin Educators Risk Management Cooperative.

Risk Prevention & Insurance Webinars

This series is designed to help you strengthen your district by explaining steps you can take to avoide and eliminate costly risks common to Wisconsin school districts.

PART 1: CREATING A CULTURE OF WELLBEING, Sept. 22, 12-1 p.m.

PRESENTED BY ROSIE WARD, PH.D., HEALTH MANAGEMENT SERVICES MANAGER AT RJF

How can wellness efforts in the district translate into organizational effectiveness? By broadening the scope to create a culture of well-being, safety and employee engagement. High performing districts recognize the value of their human capital and invest in their employees to build on their strengths. Typical approaches to wellness programs are short-sighted and not enough to have long-term success; health is only a fraction of a bigger, more complex picture of what impacts the district. Increased well-being and engagement result from supporting individual intrinsic values and creating a culture that supports employee growth and development. This session will provide a framework for focusing on district employee well-being as a means to individual well-being.

VIEW THE PRESENTATION HERE.

PART 2: GUNS AT SCHOOL? THE NEW REALITY AND WHAT IT MEANS FOR THE DISTRICT, Oct. 20, 12-1 p.m.

PRESENTED BY ANDREW PHILLIPS, ATTORNEY AND SHAREHOLDER AT LAW FIRM PHILLIPSBOROWSKI, S.C.

Wisconsin is now the 49th state in the U.S. to allow its citizens to carry concealed firearms. 2011 Wisconsin Act 35 changed the landscape of the law surrounding a citizen’s ability to carry concealed weapons. While the new law prohibits the carrying of concealed weapons on school grounds, the new law does allow licensees to possess firearms within 1,000 feet of the grounds of a school and nevertheless has other important ramifications for schools to consider.

• How are schools affected by the new law?
• What are school districts’ rights and responsibilities under the state statute? 
• What is the interplay between the state’s new concealed carry law and the federal Gun Free School Zone law?

PART 3: NEW DISTRICT DYNAMICS: LIFE WITHOUT LABOR CONTRACTS, Nov. 2, 12-1 p.m.

PRESENTED BY RON STADLER, ATTORNEY AT LAW FIRM SMITH AMUNDSEN

PART 4: WORKERS' COMPENSATION 101: UNDERSTANDING HOW TO CONTROL COSTS IN A SCHOOL ENVIRONMENT, Dec. 13, 12-1 p.m.

PRESENTED BY MIKE FETTING, LOSS PREVENTION SPECIALIST WITH SFM . Register now.

Please join us. Participants in this fast paced webinar will learn the following:

• What is worker’s compensation?
• How is your cost of insurance calculated, and who sets the rates? 
• Methods of lowering your cost of insurance. 
• What are the most common work comp injuries at schools based on cost and frequency?
• Tactics for controlling the most common injuries
• The characteristics of a successful district 

REGISTER Now

or view our Sitemap below for a full list of currently available pages.

Home

Regardless of where the future takes us, one thing is for sure: The days of simply providing basic health and welfare insurance plans to employees are over.

Employer-provided benefits programs are no longer limited to just insurance plans. With the increasingly complicated compliance landscape intersecting with changes in how employers and employees are defined and engage with each other, leading employers need to provide programs of benefits not just a benefits program.

EXPENSE VS. INVESTMENT

While typically administered by the Human Resources department, the best benefits programs are seen as a strategic business asset worthy of c-suite attention and resources as opposed to just another cost.

The highest-functioning programs blend insurance components with things like recruiting strategies, leadership training, health care consumerism education, employee engagement strategies, and more. When these programs are led by forward-thinking HR departments with the support of executives and principals, they bring value to the c-suite that is often not considered possible within the middle market.

RJF starts uncovering your risks related to employee performance, engagement and health through our PREVENT Process. We are then able to design solutions that can prevent losses before they occur and transform health insurance expenses into investments targeting employment risk.

SERVICES & PRODUCTS

Basically, we’ve got it all. With so much to offer, things can get left out on lists. If you don't see it below, just ask. 

BUSINESS MANAGEMENT

• Alternative funding methodologies
• Plan change impact analysis
• Actuarial services
• M&A plan comparison and advising
• Cost, contribution and utilization benchmarking and forecasting
• Employee, senior management, board presentations

PLAN AND BENEFITS MANAGEMENT

• All health and welfare insurance programs
• Domestic and international programs
• Plan design, implementation and support

EMPLOYEE WELLBEING, SUPPORT & ENGAGEMENT

• Wellness, health management and employee wellbeing strategies
• Culture audits
• Health care consumerism training
• Employee assistance programs, Health Advocate services

COMPLIANCE & HUMAN RESOURCES SUPPORT

• Regulatory and health reform updates and guidance
• Policy, program and procedure audits
• Management development and training
• Employee communication strategy and delivery
• Employee recruiting, screening, retention and termination assistance

RJF offers several online tools that help make dealing with insurance and all its complexities easier.

DEALERS MONTHLY REPORT: Helps auto dealer clients quickly and easily report inventory and calculate monthly premium payments.

RJF RISK MANAGEMENT CENTER: Manage COIs, accidents and access library of best practices, forms and policies.

MYWAVE®: Your insurance, employee benefits and Human Resource tools are easily accessible 24 hours a day.

HRCONNECTION®: Helping you keep employees well informed for a better employer/employee relationship.

ETFILE ONDEMAND: Access your insurance documents electronically through this secure, HIPAA-compliant online portal.

Access Online Certificates of Insurance

• Townhome and Condo
• All Other

Operate better, smarter and more profitably

Every business wants to lower costs, pay less for claims and reduce premiums. But what’s the best way to make that happen?

We believe that, rather than just finding you a better insurance solution, preventing those things that put your organization at risk in the first place is far smarter and will reap you far greater results.

Going through our PREVENT Process can help you identify risk before anything happens. We’ll then help proactively install counter measures to protect you, your assets and your people from the negative affects of incidents, accidents, and claims.

It’s a different way of doing business. We know that. But it gets results.

Basically, we’ve got it all. With so much to offer, things can get left out on lists. If you don't see it below, just ask. In addition to all health, dental and welfare insurance lines, RJF provides employers with the following:

BUSINESS MANAGEMENT

• Alternative funding methodologies
• Plan change impact analysis
• Actuarial services
• M&A plan comparison and advising
• Cost, contribution and utilization benchmarking and forecasting
• Employee, senior management, board presentations

PLAN AND BENEFITS MANAGEMENT

• All health and welfare insurance programs
• Domestic and international programs
• Plan design, implementation and support

EMPLOYEE WELLBEING, SUPPORT & ENGAGEMENT

• Wellness, health management and employee wellbeing strategies
• Culture audits
• Health care consumerism training
• Employee assistance programs, Health Advocate services

COMPLIANCE & HUMAN RESOURCES SUPPORT

• Regulatory and health reform updates and guidance
• Policy, program and procedure audits
• Management development and training
• Employee communication strategy and delivery
• Employee recruiting, screening, retention and termination assistance

While typically administered by the Human Resources department, the best benefits programs are seen as a strategic business asset worthy of c-suite attention and resources.

The highest-functioning programs blend insurance components with things like recruiting strategies, leadership training, health care consumerism education, employee engagement strategies, and more. When these programs are led by forward-thinking HR departments with the support of executives and principals, they bring value to the c-suite that is often not considered possible within the middle market.

RJF starts uncovering your risks related to employee performance, engagement and health through our PREVENT Process. We are then able to design solutions that can prevent losses before they occur and transform health insurance expenses into investments by targeting employment risk.

Our IMBA Member Program is designed from the ground-up to protect you from the exposures you face. If you’ve ever had difficulties finding coverage that truly aligns with your business, or are looking to just make the insurance process simpler, this program is for you.

Learn more about the IMBA Bike Club Insurance Program.

Need a quote?

New Member

Renewing Member

About RJF Agencies, a Marsh & McLennan Agency LLC company

RJF, a Marsh & McLennan Agency LLC company (RJF), is dedicated to serving the insurance needs of middle market companies in the United States. Our clients demand local service excellence and require outstanding products and solutions that meet their needs. At RJF, we recognize that the middle market utilizes a distinctive paradigm, much different from that of national or global risk management agencies, and we’re here to service those unique needs.

Our Commitment to Transparency and Compliance

Along with our parent company, Marsh USA Inc., we pride ourselves on being the industry leader in transparency and compensation disclosure. We are committed to setting the industry standard for ethical business practices and client service.

To fulfill that commitment, we pledge to our U.S. clients that we will:

• disclose the role(s) we perform in the insurance transaction(s);
• disclose the types of compensation we may receive from insurers or others (see below);
• disclose upon our clients’ request all quotes and premium indications we receive from insurers on our clients’ behalf;
• disclose upon our clients’ request the amount of our compensation from insurers and from other third parties; and
• promptly respond to client requests for additional information about our compensation.

We have reinforced this commitment with a comprehensive compliance program that includes:

• a network of experienced compliance specialists;
• thorough compliance procedures;
• ethics and compliance training;
• regular transaction monitoring and auditing to make sure we live up to our standards; and
• regular reports to our board of directors.

These initiatives translate into many benefits for our clients, including:

• a clear understanding of how much you are paying us;
• a clear understanding of what you are paying us to do; and
• the ability to evaluate our services and any potential conflicts of interest, much as you evaluate services you purchase from other professionals.

Our Compensation

We are compensated in a variety of ways, including commissions and fees paid by insurance companies and fees paid by clients. RJF may receive compensation through one or a combination of some of the following methods:

Retail Commissions

Insurers pay RJF retail commissions that are a percentage of the premium charged to the insured for the policy. The amount of commission may vary depending on the type of insurance product sold, the insurer selected by the client, the location of the risk, the risk classification, or services provided to the insured. Given the wide variety of products available and the size and complexity of the risk, retail commissions generally vary from transaction to transaction.

Client Fees

Some clients may negotiate a fee for RJF’s services in lieu of, or in addition to, retail commissions paid by insurance companies. Fee agreements will be in writing and will set forth the services to be provided, the compensation to be paid by the client to RJF and the terms of the engagement.

Contingent Commissions

Some insurers pay contingent commissions. Contingent commissions are dependent on pre-established metrics, which may include volume, profitability, retention and/or growth thresholds for all or some of the policies RJF places with an insurer during a given period. Because the amount of contingent commission earned may vary depending on factors relating to an entire book of business over the course of an entire year (or other stated time period), the amount of contingent commission attributable to any given policy typically will not be known at the time of placement.

Supplemental Commissions

Some insurers pay supplemental commissions. Supplemental commissions are calculated as a percentage of premium that is fixed at the beginning of the calendar year and is based on the broker’s performance in the prior year. This supplemental commission percentage remains fixed for all policies written during the year (or other stated time period). Unlike contingent commissions, the amount of supplemental commissions is known at the time of the insurance placement. Like contingent commissions, supplemental commissions may be based on volume, profitability, retention and/or growth.

Other Benefits or Compensation

From time to time, RJF may participate in insurance company promotional events or training and development that insurers provide for RJF employees. Sometimes, RJF is reimbursed by insurers for its costs related to promotional marketing (i.e. cooperative advertising and marketing programs). RJF also earns interest and other income on premium accounts in financial institutions that hold insurance premiums pending remittance to the insurance company and may also be compensated for assisting its clients in obtaining premium financing.

Questions? Just Ask.

We encourage you to ask questions regarding any aspect of your relationship with RJF. Please feel free to ask a member of your account team.

 

If you wish to raise issues, express concerns, or file a complaint regarding compensation paid or payable to us by insurers or any other third parties, please contact our Ethics & Compliance line at 800-381-2105, 24 hours a day, seven days a week.

Too often insurance agents provide inadequate protection for businesses like yours. Isn’t it time you worked with someone who understands and cares about your industry?

We love this industry

And we’re dedicated to serving it for the long term. Managing Agent Scott Chapin is an avid silent sport participant and is devoted to improving your industry. In fact, he speaks throughout the country on the economic impact of bike trails and has designed insurance solutions for several bicycle share programs across the country.

Protecting your interests and your assets 

Our established bicycle industry insurance programs are listed below, and we are developing new ones for other bike industry segments. Each program is designed to address the unique risks of that operation. New clients typically find our pricing to be equal to or better than what they were paying. Plus, they get better and more complete coverage, with industry-specific protection generally not available from others.

Retail Bike and Ski Shops

RJF’s Retail Bike & Ski Shop Insurance Program was built from the ground up to protect bicycle shop and ski shop owners like you. Because of this, you get broader protection than what’s typically available through other providers—all for about the same or less than standard business owner policies.

Learn more about the Retail Bike & Ski Shop Insurance Program or get an online quote.

Bike Clubs

This program is the only one endorsed by the International Mountain Bicycling Association (IMBA), available exclusively for its clubs in the United States. Not only does it offer protection for board members, members and volunteers, but it can also protect land managers and owners.

Learn more about the IMBA Bike Club Insurance Program or get an online quote.

Bike Races & Special Events

Want to host a race or other special event? Make sure you and your organization are protected. Often a special policy must be issued, and RJF can help.

Learn more about RJF's Bike Race and Special Event Insurance or get an online quote.

Industry Partners

National Bicycle Dealers Association (NBDA)
International Mountain Bicycling Association (IMBA)
Quality Bike Products (QBP)

Visit with us on Facebook
 

Shop owners and IMBA clubs can get started now with a quick online quote. Or call us at 800-378-4318 to learn more or have us walk you through a quote.

We have created this privacy statement in order to demonstrate our firm commitment to your privacy. The following discloses our information gathering and dissemination practices for this website.

OUR PRIVACY POLICIES AND PRACTICES

Information we collect

We collect nonpublic personal information about you from the following sources:

• Information we receive from you on applications or other forms.
• Information about your transactions with us, our affiliates or others.
• Information we receive from a consumer-reporting agency.

Information we may disclose to third parties:

• We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

Non-affiliated third parties to whom disclosures may be made:

• We disclose nonpublic personal information about you only to non-affiliated third parties as permitted by law (e.g. to insurance carriers for underwriting purposes).

Our practices regarding information in unforeseen circumstances:

We restrict the access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.

Reservation of the right to disclose information in unforeseen circumstances:

In connection with the potential sale or transfer to its interests, RJF reserves the right to sell or transfer your information (including but not limited to your name, address, age, sex, zip code, state and country residency and other information that you provide through other communications) to a third party entity that (1) concentrates its business in a similar practice or service; (2) agrees to be RJF's successor in the interests with regard to the maintenance and protection of the information collected; and (3) agrees to the obligations of this privacy statement.

Amendment to Privacy Notice and Privacy Policy:

We reserve the right to amend, modify or change at any time for any reason, our privacy policies and the Privacy Notice. In any such events, we will provide an amended Privacy Notice to you.

We have a single-minded goal: Prevent your risk. Our multi-faceted approach to meeting this goal could involve anything from strengthening safety procedures to supporting employee well-being to providing the right mix and level of insurance coverage.

In fact, we’re so passionate about preventing risk for our clients that we’d hang off a 100-floor building to install guardrails if they asked us to. While wearing correctly-installed harnesses and helmets, of course.

By Practice

Executive team

Management Liability Team

Business Insurance team

Employee Benefits team

Community Association team

Consultants

By Office Location

Minneapolis, Minnesota

Duluth, Minnesota

Eau Claire, Wisconsin

Hayward and Spooner, Wisconsin

To prevent risk to your organization and to protect you from severe harm in the event that something unfortunate does happen, it is essential that you have proper insurance coverage.

Risk prevention is more than insurance products

Risk prevention services support your insurance coverage by addressing the causes of risk at its roots.
Find out more

Local to multi-national protection

Because we are a division of Marsh & McLennan Agency, you’re covered whether your firm is local, statewide, multi-state or international. We will grow with you as you grow your business, and our resources can keep up with your organization's evolving needs.

We do our homework

Because your business is unique, we research your organization, industry, market and people to uncover your risks and learn about goals. Then we develop a comprehensive solution that protects your firm, your assets and your employees. We work with a wide variety of carriers, so we are always able to find the right match no matter what your needs are.

INDUSTRY FOCUS

• Manufacturing & Distribution
• Construction
• Auto Dealers
• Bicycle Industry
• Hospitality
• Retail
• Small Business
• Nonprofit
• Life Science
• Law Firm

Services & Products

We can fulfill any insurance need you could possibly need. If you don't see what you're looking for below, just ask.

BUSINESS MANAGEMENT

• Alternative risk evaluation and options
• Supply chain mapping
• M&A support: Insurance and risk due diligence
• Board of Directors presentations
• Open claims analysis and monitoring, and ultimate cost forecasting
• Experience mod analysis and promulgation

INSURANCE MANAGEMENT

• All lines of property and casualty insurance
• Executive, management professional risk
• International and domestic programs
• Surety

EMPLOYEE WELLBEING, SUPPORT & ENGAGEMENT

• Safety culture development
• Behavioral observations and analysis
• Leadership and employee coaching, training and screening
• Pre-hire through post-hire support
• 24/7 employee health and wellness

SAFETY & LOSS PREVENTION

• Safety committees and consulting
• On-site and walkthrough inspections
• OSHA, DOT and regulatory compliance

Prevention starts by identifying the root causes of current issues and possible future problems. RJF's team of risk prevention consultants research all angles of your business operations and bring tailored solutions that will reduce claims, lower costs and support a healthier organization. Each of these disciplines can achieve great results alone. But when human resources, health management, safety and claims are able to integrate policies and cultural change initiatives, you will see transformative results.

 

Safety and Loss Prevention

We will work with you to prevent injuries, engage your employees in a strong safety culture, develop safer procedures, and keep up with government standards.

Learn more

 

Human Resources Consulting

We will partner with you to develop human resources policies and procedures that prevent employee issues from arising in the first place.

Learn more

 

Health Management Consulting

In order to assist you in controlling rising health care costs, we’ll transform your workplace culture by integrating accountable and measurable well-being strategies.

Learn more

 

Claims Consulting

After a situation has occurred, we become your advocate to during every step of the claims process from filing to resolution. And we’ll even review past claims to ensure you received the most favorable result.

Learn more

We're your risk prevention partner. While we certainly sell insurance—a lot of it, actually—our intent is to help clients prevent as much risk as possible, and then use insurance only when it’s necessary.

How? With our unique prevention-driven assessment and monitoring process, we can identify potential risk before anything happens and execute strategic solutions that make a measureable impact on our clients’ business.

OUR PHILOSOPHY

We believe a business culture that supports a healthy, safe work environment by delivering the right benefits, programs and policies will keep employees engaged and more productive—resulting in reduced claims, lower costs and a healthier organization.

OUR COMMUNITY

RJF maintains an active commitment to the communities in which it operates. Last year RJF’s signature Charity Challenge event raised over $100,000 for Children’s Hospitals and Clinics of Minnesota and Admission Possible. This year’s goal is to raise $125,000 for these organizations devoted to serving and improving the well-being and development of children.

OUR LEADERSHIP

Chief Executive Officer Bill Jeatran founded the company in 1986, when he purchased a small agency with revenues of about $100,000. His goal was to build a firm that provides risk prevention advice and resources to clients rather than insurance products alone. He serves on the Children’s Hospitals and Clinics of Minnesota board of directors.

President Tim Fleming joined Bill soon after Bill purchased the company. Together, the pair began building together the agency, whose genesis occurred over a pint in Ireland during a study abroad semester for the two roommates.

Chief Operating Officer Jill Lowder has been instrumental in creating a company that focuses on partnering with forward-thinking clients to prevent risk. She has also played a key role in integrating RJF's approach into the company's service strategy and platform.

Vice President of Sales & Marketing Jim Johnson came to RJF after running various aspects of national, regional and local agencies and brokerages. His knowledge of and experience with insurance is balanced with his dedication to helping employers eliminate as much risk as possible.

OUR OWNERSHIP

As a Marsh & McLennan Agency LLC company, there are no resources we don’t have access to. Nationwide or internationally, our family of companies can support all your insurance and risk prevention needs, with expertise and a dedication to providing you with the results you deserve.

RJF is a risk prevention organization dedicated to providing measurable results for our clients. More than insurance brokers, we believe that a business culture that supports a healthy, safe work environment does so by offering the right benefits, programs and policies to keep employees engaged and productive. This approach results in reduced claims, lower costs and a healthier organization.

Because we practice what we preach, we’ve been named a Top Workplace by the Star Tribune, and have won the Hennepin County top Wellness by Design Award for the past six years. Oh, and our compensation and benefits packages are highly competitive as well.

We currently have the following positions open:

• Manager of Information Technology (Minneapolis)
• Client Service Representative - Commercial Lines (Minneapolis)

General Applications

RJF is always looking for qualified people to join our team. Even if we don't have an immediate openings for a position that appeals to you, send us your resumé. We'll contact you when something comes up.

Apply here

MINNEAPOLIS

MANAGER OF INFORMATION TECHNOLOGY
We are currently seeking an individual to fill a leadership role in our Automation and Information Technology department. The Manager of Information Technology ensures availability and reliability for all IT tools, utilizes new technologies, and collaborates with the IT team to exceed internal client expectations. 

Responsibilities Include:

• Provide infrastructure leadership for all systems applications and IT support / oversight (e.g. desktop support); partner with business to determine and implement best solutions for RJF while aligning with broader corporate goals
• Key infrastructure liaison to corporate team and vendors
• Champion and oversee large scale project management such as migrations, acquisitions and the selection and implementation of new tools and systems
• Manage and develop technical staff within the infrastructure team; align goals for direct reports to be consistent with business and service delivery objectives; provide technical and management mentoring direction and feedback to ensure growth and development within the team
• Manage purchasing of hardware and software products and manages software and support licenses
• Manage testing & implementation of new technologies, including methods, policies and procedures for installation, management, monitoring and support.
• Provide progressive input and support for physical and technical security for all locations 
• Design, implement, document and maintain internal standard operating procedures (SOP)
• Provide continuous review of problems with existing processes and suggest improvements; provide regular updates to management on advantages and potential opportunities for new technologies

Position Requirements:

• Bachelor’s degree in Computer Science, Business Administration or related field
• Min of 10 years tehnology leadership, project and vendor management in complex environments
• Min. 5 years supporting IT within a heavily regulated and dynamic industry, insurance industry highly preferred.
• 5+ years experience in application development a plus, understanding of software life cycle and related requirements.
• Previous experience driving security within a compliance focused organization.
• Proven results in driving complex system integration projects and converting / transitioning / consolidating businesses to new application platforms.
• Experience maintaining operational confidentiality of sensitive information; experience with HIPAA,SaS70 and SOX requirements preferred
• Strong interpersonal and communication skills; demonstrated initiative; solutions focused.
• Capable of working across various teams/groups to execute projects; thinks strategically and acts tactically; ability to manage multiple activities simultaneously with minimal direction, while relying on experience and judgment to plan and accomplish goals.
• Strong verbal and written communication skills with ability to define business cases; strong analytical and problem-solving skills
• Strong crisis management skills and ability to remain focused and ensure effective decision making under pressure
• Must be able to work overtime during peak periods and perform maintenance work during non-business hours.

Apply here

MINNEAPOLIS

CLIENT SERVICE REPRESENTATIVE – COMMERCIAL LINES
The Client Service Representative is responsible for providing administrative support to Client executives in the marketing, renewal, and servicing of commercial lines accounts. This includes preparing applications for submission, constructing proposals, issuing certificates of insurance and processing endorsements.

Success in this position requires

• Excellent communication skills
• Solid customer service skills
• Keen attention to detail
• Strong organizational skills
• Demonstrated initiative
• Bachelor’s degree preferred
• Property and casualty insurance license (or willingness to obtain) required
• Proficiency in Microsoft Word and Excel

Apply here

Introduction

The IRS has published a request for comments in Notice 2011-25 regarding the implementation provisions included in the Patient Protection and Affordable Care Act (ACA) related to fees which will be imposed on health plans to help fund comparative clinical effectiveness research relating to patient-centered outcomes.

The ACA creates a nonprofit corporation, the Patient-Centered Outcomes Research Institute (the Institute), to conduct and promote clinical effectiveness research. The Institute will be funded by a Patient-Centered Outcomes Research Trust Fund (the Trust Fund).

The Trust Fund will be funded in part by fees paid by issuers of health insurance policies and sponsors of self-insured health plans. The IRS will publish regulations providing guidance on the requirements applicable to issuers and plan sponsors that pay those fees. The request for comments is an opportunity for employers, and the health insurance industry, to provide comments on how the fees should be determined and paid. While a request for comments does not define the rules, it includes information on the kind of issues that may be addressed in the subsequent regulations.

Background

The ACA imposes fees on “specified health insurance policies” and “applicable self-insured health plans” based on the average number of lives covered under the policy or plan. The fees are effective for plan years ending after Sept. 30, 2012. Thus, for employer-sponsored plans that begin on the first of the month, the first plan year subject to the fees will be plan years beginning Nov. 1, 2011. The fee no longer applies for plan years ending after Sept. 30, 2019.

The fee equals to $1.00 (one dollar) per year, multiplied by the average number of lives covered under the plan for plan years ending before Oct. 1, 2013, and $2.00 (two dollars) per year for plan years ending after that date. Beginning in 2014 the fee will be adjusted based on a formula that takes into account the increase in national health care expenditures. Covered employees, spouses, and dependents will be included in the total number of covered lives.

The fee applies to “specified health insurance policy” including self-funded plans, which is defined as any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. The fee does not apply to plans that are treated as excepted benefits under HIPAA (i.e. limited scope dental and vision plans).

For fully insured plans the fee will be paid by the issuer (the health insurance carrier). The fee for self-funded plans must be paid by the plan sponsor (generally the employer).

IRS Request for Comments

The IRS has asked for comments on a number of administrative issues related to the implementation of the fee including:

• The possible types of health reimbursement arrangements (HRAs) that would be excluded.
• How the administrative burden could be reduced by providing for reasonable methods to determine the average number of lives covered under an applicable self-insured plan. For example, should there be a safe harbor that would permit sponsors of applicable self-insured health plans to compute the average number of lives covered using a formula.
• Regulations could require plan sponsors to report and pay the fees annually as opposed to quarterly.
• Regulations might also require the reporting and payment to occur on the same calendar date regardless of the plan year.
• Should future guidance permit all employers currently treated as a single employer under § 414 to be treated as a single employer?
• In the case of the fee imposed on self-insured health plans, what guidance is needed concerning the ability of a third-party administrator to act on behalf of a plan sponsor?

Submit Comments

Individuals and organizations wishing to submit comments must do so by 9/6/11.

Comments may be submitted through either of the following methods:

• Mail to CC:PA:LPD:PR (Notice 2011-35), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044
• Electronically to Notice.Comments@irscounsel.treas.gov. (include “Notice 2011-35” in the subject line).

Summary

Employers will need to plan to pay the fee for plan year beginning later in 2011. However, with the comment period ending in September, it is unlikely that regulations will be issued before the first plan year begins that will be subject to the new fee. It is also likely there will be some kind of transition period which will give plan sponsors additional time to implement the necessary systems to report and pay the required fees.

The COBRA subsidy provided under the American Recovery and Reinvestment Act of 2009 (ARRA) will soon come to an end.  After several extensions, the subsidy will end by August 31, 2011, for most assistance eligible individuals (AEI) who lost medical coverage due to an involuntary termination of employment on or before May 31, 2010.

It is possible that a termination of employment occurred before May 31, 2010, but a loss in coverage did not occur until a later month, in which case coverage could be subsidized beyond August 31, 2011.

ARRA provided a 65 percent subsidy to an assistance eligible individual’s COBRA premium as long as the involuntary termination from employment occurred on or before May 31, 2010.  For these individuals, the subsidy was available for up to fifteen (15) months.

Larger employers were able to claim the subsidy on IRS Form 941 as part of payroll tax reporting once the reduced COBRA premium was received from the AEI. In the case of smaller employers, insurance carriers were entitled to this reimbursement.

On August 1, 2011, the Department of Health and Human Services (HHS) adopted guidelines that require non-grandfathered health plans to provide women’s preventive services free of charge to participants. The new guidelines will apply to group health plans for plan years beginning on or after August 1, 2012.

Background

The Affordable Care Act (ACA) includes a provision that requires non-grandfathered health plans (including new plans) to provide a range of preventive services with no cost sharing to participants. This general ACA preventive care requirement was effective for plan years beginning after September 23, 2010. The law also required HHS to consider additional preventive services for women that were not included in the original guidelines as defined in the ACA. In response to this requirement, HHS directed the Institute of Medicine (IOM), an independent organization, to conduct a review and provide recommendations on specific preventive measures related to women’s health needs. The IOM issued a report on July 19, 2011, which HHS used in developing the new guidelines.

Preventive Services for Women

Under the new guidelines additional women’s preventive services that will be covered without cost sharing requirements include:

• Well-woman visits, including an annual well-woman preventive care visit for adult women to obtain the recommended preventive services.
• Gestational diabetes screening for women 24 to 28 weeks pregnant, and those at high risk of developing gestational diabetes.
• HPV DNA testing, for women who are 30 or older will have access to high-risk human papillomavirus (HPV) DNA testing every three years.
• STI counseling, and HIV screening and counseling that includes access to annual counseling on HIV and sexually transmitted infections (STIs).
• Contraception and contraceptive counseling that provides access to all FDA approved contraceptive methods, sterilization procedures, patient education and counseling. These recommendations do not include abortifacient drugs.
• Breastfeeding support, supplies, and counseling for pregnant and postpartum women, including comprehensive lactation support and counseling from trained professionals.
• Domestic violence screening

Exemption for Certain Religious Employers

An additional regulation gives “religious employers” the choice of buying or sponsoring group health insurance that does not cover contraception if that is inconsistent with their religious tenets.

A “religious employer” is an organization that meets all of the following criteria:

• The inculcation of religious values is the purpose of the organization
• The organization primarily employs persons who share the religious tenets of the organization
• The organization serves primarily persons who share the religious tenets of the organization
• The organization is a nonprofit organization as described in section 6033 of the Internal Revenue Code

More Information

A more detailed description of the “Guidelines for Women’s Preventive Services” can be found at www.hrsa.gov/womensguidelines.

Interim final rule regarding the exceptions allowed for religious organizations can be found at www.ofr.gov/OFRUpload/OFRData/2011-19684_PI.pdf.

President Tim Fleming joined Bill soon after Bill purchased the company. The pair began building together the agency, whose genesis occurred over a pint in Ireland during a study abroad semester for the two roommates.

Chief Operating Officer Jill Lowder has been instrumental in creating a company that focuses on partnering with forward-thinking clients to prevent risk. She has also played a key role in integrating RJF's approach into the company's service strategy and platform. y.

Vice President, Sales & Marketing, Jim Johnson came to RJF after running various aspects of national, regional and local agencies and brokerages. His knowledge of and experience with insurance is balanced with his dedication to helping employers eliminate as much risk as possible.

RJF is a risk prevention organization dedicated to providing measurable results for our clients. More than insurance brokers, we believe that a business culture that supports a healthy, safe work environment does so by offering the right benefits, programs and policies to keep employees engaged and productive. This approach results in reduced claims, lower costs and a healthier organization.

Because we practice what we preach, we’ve been named a Top Workplace by the Star Tribune, and have won the Hennepin County top Wellness by Design Award for the past six years. Oh, and our compensation and benefits packages are highly competitive as well.

We currently have the following positions open:

• Client Analyst (Minneapolis)
• Client Services Representative - Commercial Lines (Minneapolis)

General Applications

RJF is always looking for qualified people to join our team. Even if we don't have an immediate openings for a position that appeals to you, send us your resumé. We'll contact you when something comes up.

Apply here

MINNEAPOLIS

CLIENT ANALYST

We are currently seeking an individual to join our Employee Benefits department as a Client Analyst. The Client Analyst works closely with the RJF service team members to provide assistance and technical expertise in the sale, placement and service of Employee Benefits. The Client Analyst works closely with the Client Advisor assisting them as the primary service point of contact. This role works closely with assigned clients to form effective business relationships through proactive client service, management of renewals and ongoing problem resolution.    


POSITION REQUIREMENTS

• Bachelor’s degree or equivalent work experience required.
• Basic understanding of the key challenges in employee benefit plans and current health care trends.
• Ability to coordinate multiple projects while ensuring timely and accurate client deliverables, with effective problem solving and resolution skills. 
• Strong organizational, project planning and management, analytical, problem solving and multi-tasking skills. 
• Excellent client relationship building and presentation skills. 
• Superior listening, verbal and written communication skills. 
• Proficiency with Microsoft Office suite required. 
• State Life/Health insurance license required (can obtain after hire). 

PREFERRED SKILLS

• Working knowledge of employee benefit plans with 1+ year(s) of industry experience and demonstrated relationship management skills.
• Experience managing, implementing and renewing small and large group health & welfare plans including medical, dental, ancillary, FSA and COBRA plans.
• Working knowledge of HIPAA, ERISA, COBRA and other state and federal employee benefit regulations. 

Apply here

MINNEAPOLIS

CLIENT SERVICE REPRESENTATIVE – COMMERCIAL LINES

We are currently seeking an individual to fill a full-time Client Service Representative (CSR) position within our commercial lines group. 

The Client Service Representative is responsible for providing administrative support to Client Executives in the new & renewal marketing process and daily servicing of accounts. This includes creating pre-renewal summaries, constructing proposals, preparing policies for delivery, issuing certificates of insurance, and processing final audits & endorsements.

Success in this position requires the ability to thrive in a team-based environment, excellent communication skills, solid customer service skills, keen attention to detail, strong organizational skills, and demonstrated initiative. High school diploma required; bachelor’s degree preferred. Property and casualty insurance license (or willingness to obtain) required, as is proficiency in Microsoft Word and Excel. 

Apply here

We have created this privacy statement in order to demonstrate our firm commitment to your privacy. The following discloses our information gathering and dissemination practices for this website.

OUR PRIVACY POLICIES AND PRACTICES

Information we collect

We collect nonpublic personal information about you from the following sources:

• Information we receive from you on applications or other forms.
• Information about your transactions with us, our affiliates or others.
• Information we receive from a consumer-reporting agency.

Information we may disclose to third parties:

• We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law.

Non-affiliated third parties to whom disclosures may be made:

• We disclose nonpublic personal information about you only to non-affiliated third parties as permitted by law (e.g. to insurance carriers for underwriting purposes).

Our practices regarding information in unforeseen circumstances:

We restrict the access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information.

Reservation of the right to disclose information in unforeseen circumstances:

In connection with the potential sale or transfer to its interests, RJF reserves the right to sell or transfer your information (including but not limited to your name, address, age, sex, zip code, state and country residency and other information that you provide through other communications) to a third party entity that (1) concentrates its business in a similar practice or service; (2) agrees to be RJF's successor in the interests with regard to the maintenance and protection of the information collected; and (3) agrees to the obligations of this privacy statement.

Amendment to Privacy Notice and Privacy Policy:

We reserve the right to amend, modify or change at any time for any reason, our privacy policies and the Privacy Notice. In any such events, we will provide an amended Privacy Notice to you.

About RJF Agencies, a Marsh & McLennan Agency LLC company

RJF, a Marsh & McLennan Agency LLC company (RJF), is dedicated to serving the insurance needs of middle market companies in the United States. Our clients demand local service excellence and require outstanding products and solutions that meet their needs. At RJF, we recognize that the middle market utilizes a distinctive paradigm, much different from that of national or global risk management agencies, and we’re here to service those unique needs.

Our Commitment to Transparency and Compliance

Along with our parent company, Marsh USA Inc., we pride ourselves on being the industry leader in transparency and compensation disclosure. We are committed to setting the industry standard for ethical business practices and client service.

To fulfill that commitment, we pledge to our U.S. clients that we will:

• disclose the role(s) we perform in the insurance transaction(s);
• disclose the types of compensation we may receive from insurers or others (see below);
• disclose upon our clients’ request all quotes and premium indications we receive from insurers on our clients’ behalf;
• disclose upon our clients’ request the amount of our compensation from insurers and from other third parties; and
• promptly respond to client requests for additional information about our compensation.

We have reinforced this commitment with a comprehensive compliance program that includes:

• a network of experienced compliance specialists;
• thorough compliance procedures;
• ethics and compliance training;
• regular transaction monitoring and auditing to make sure we live up to our standards; and
• regular reports to our board of directors.

These initiatives translate into many benefits for our clients, including:

• a clear understanding of how much you are paying us;
• a clear understanding of what you are paying us to do; and
• the ability to evaluate our services and any potential conflicts of interest, much as you evaluate services you purchase from other professionals.

Our Compensation

We are compensated in a variety of ways, including commissions and fees paid by insurance companies and fees paid by clients. RJF may receive compensation through one or a combination of some of the following methods:

Retail Commissions

Insurers pay RJF retail commissions that are a percentage of the premium charged to the insured for the policy. The amount of commission may vary depending on the type of insurance product sold, the insurer selected by the client, the location of the risk, the risk classification, or services provided to the insured. Given the wide variety of products available and the size and complexity of the risk, retail commissions generally vary from transaction to transaction.

Client Fees

Some clients may negotiate a fee for RJF’s services in lieu of, or in addition to, retail commissions paid by insurance companies. Fee agreements will be in writing and will set forth the services to be provided, the compensation to be paid by the client to RJF and the terms of the engagement.

Contingent Commissions

Some insurers pay contingent commissions. Contingent commissions are dependent on pre-established metrics, which may include volume, profitability, retention and/or growth thresholds for all or some of the policies RJF places with an insurer during a given period. Because the amount of contingent commission earned may vary depending on factors relating to an entire book of business over the course of an entire year (or other stated time period), the amount of contingent commission attributable to any given policy typically will not be known at the time of placement.

Supplemental Commissions

Some insurers pay supplemental commissions. Supplemental commissions are calculated as a percentage of premium that is fixed at the beginning of the calendar year and is based on the broker’s performance in the prior year. This supplemental commission percentage remains fixed for all policies written during the year (or other stated time period). Unlike contingent commissions, the amount of supplemental commissions is known at the time of the insurance placement. Like contingent commissions, supplemental commissions may be based on volume, profitability, retention and/or growth.

Other Benefits or Compensation

From time to time, RJF may participate in insurance company promotional events or training and development that insurers provide for RJF employees. Sometimes, RJF is reimbursed by insurers for its costs related to promotional marketing (i.e. cooperative advertising and marketing programs). RJF also earns interest and other income on premium accounts in financial institutions that hold insurance premiums pending remittance to the insurance company and may also be compensated for assisting its clients in obtaining premium financing.

Questions? Just Ask.

We encourage you to ask questions regarding any aspect of your relationship with RJF. Please feel free to ask a member of your account team.

 

If you wish to raise issues, express concerns, or file a complaint regarding compensation paid or payable to us by insurers or any other third parties, please contact our Ethics & Compliance line at 800-381-2105, 24 hours a day, seven days a week.

The EEOC (Equal Employment Opportunity Commission) voted and approved revisions to the use of arrest and conviction records in the hiring process on April 25, 2012. The approval addresses which factors an employer should consider when utilizing criminal conviction history. Additionally, the update includes when and how an employer should ask an applicant about their criminal history. 

Highlights of the new guidance:

• The guidance discusses the differences between arrest and conviction records.
• The fact of an arrest does not establish that criminal conduct has occurred, and an exclusion based on an arrest, in itself, is not job related and consistent with business necessity. However, an employer may make an employment decision based on the conduct underlying an arrest if the conduct makes the individual unfit for the position in question.
• In contrast, a conviction record will usually serve as sufficient evidence that a person engaged in particular conduct. In certain circumstances, however, there may be reasons for an employer not to rely on the conviction record alone when making an employment decision.
• The guidance discusses disparate treatment and disparate impact analysis under Title VII.
• A violation may occur when an employer treats criminal history information differently for different applicants or employees, based on their race or national origin (disparate treatment liability).
• An employer’s neutral policy (e.g., excluding applicants from employment based on certain criminal conduct) may disproportionately impact some individuals protected under Title VII, and may violate the law if not job related and consistent with business necessity (disparate impact liability).

Access the full report.

VIRGINIA EMPLOYEE BENEFITS AGENCY TO JOIN RUTHERFOORD

New York, March 13, 2012 – Marsh & McLennan Agency LLC (MMA), a subsidiary of insurance broker Marsh Inc., today announced that it has acquired KSPH LLC, a $5 million revenue employee benefits agency based in Glen Allen, Virginia. Terms of the transaction were not disclosed.

Launched in 2000, KSPH offers a wide range of employee benefits and retirement plan services to middle market clients in Virginia. KSPH will operate within Rutherfoord, a Marsh & McLennan Agency LLC company, further expanding Rutherfoord’s Richmond, Virginia, market position and adding to its employee benefit capabilities. The transaction is the third complementary acquisition for Rutherfoord, which MMA acquired in March 2010 to serve as its mid-Atlantic hub.

All of KSPH’s leadership and employees will join Rutherfoord/MMA and continue operating out of KSPH’s existing Glen Allen, Virginia, office.

“Adding KSPH to Rutherfoord enables us to offer greater resources and a broader platform to serve the needs of our clients throughout the mid-Atlantic,” said Thomas R. Brown, Vice Chairman of Rutherfoord/MMA. “We are delighted to welcome the KSPH team as we share the same core values of putting clients’ interests first and providing exceptional service and expertise.”

“Joining Rutherfoord/MMA is an excellent opportunity for KSPH to build upon its success over the last decade,” said Jeff Penny, Co-Founder and Principal of KSPH. “With the resources that Rutherfoord and MMA bring to bear, our clients will now have access to a wider range of products and services to address their emerging needs.”

Commenting on the deal, David Eslick, chairman and CEO of Marsh & McLennan Agency, said: “KSPH is another example of MMA’s ongoing strategy of adding high caliber, local talent and expertise to enhance the resources available to our clients.”

Since embarking on its strategy in November 2009 to build a preeminent, nationwide middle market agency, MMA has completed 17 acquisitions and currently generates approximately $340 million in annualized revenue.

About Marsh & McLennan Agency

Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the U.S. MMA operates autonomously from Marsh to offer commercial property, casualty, personal lines, and employee benefits to clients across the U.S.

About Marsh

Marsh, the world’s leading insurance broker and risk advisor, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has around 25,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a member of Marsh & McLennan Companies, a global professional services firm with 52,000 employees worldwide and annual revenue exceeding $10 billion, which is also the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. Follow Marsh on Twitter @Marsh_Inc.

Contacts:

Sally Roberts
Marsh
303-952-9453
sally.roberts@marsh.com

Katie Kestle
Rutherfoord
804-915-5637
katie.kestle@rutherfoord.com

by Bill Jeatran, Chief Executive Officer

Feb. 28, 2012

RJF works with many manufacturers throughout the region, and believes in the importance of manufacturing. It’s why we have been a top sponsor of Enterprise Minnesota’s State of Manufacturing® survey project every year. Employing about 300,000 people throughout the state, Minnesota’s manufacturing sector provides a foundation for other industries to build upon and around. These businesses provide jobs and help support local, statewide and regional economies. They require business services, office supplies and materials, which they purchase from other businesses—often locally. 

On Tuesday, Feb. 21, the results of the State of Manufacturing® survey were announced, and the top four areas of concern for Minnesota manufacturing executives were, starting at the top:

• Cost of health care 
• Government policies and regulations
• Federal, state and local taxes
• The ability to attract and retain qualified workers. 

The cost of health care has led this list each year the survey has been conducted, and government intervention and taxes seem also to be a perpetual business concern. Finding and keeping good talent, however, was a little striking as a major concern, in part because it vaulted toward the top of the list this year. 

You might think that, in an economy with historically-high unemployment, finding and keeping workers would be relatively easy. It can be, if you’re not picky about the workers you want. But if you want talented and dedicated employees, it can be very difficult: Budgets and margins are tight; employees feel overworked and under-appreciated; divisions between management and labor may be growing; and employees may even be looking for new jobs (Mercer reports nearly one in three U.S. workers is seriously considering leaving their employer). Add it up, and yours may be a less-than-inviting environment for a new, great employee. 

How do you change that? The answer, unfortunately, isn’t simple. We all want the quick fix, the miracle drug, so employers often try to implement a program here and a program there to help change the people and company for the better. But what happens with those types of “fixes” is that things change for the length of the program then resume their prior modus operandi without really improving anything or making systemic, lasting change. 

Improving your culture is what will attract and retain the best employees, and that requires an ongoing process rather than a series of programs. The key to doing so is to create a process of cultural improvement. A healthy culture is a prerequisite for becoming a great company (it can also reduce insurance costs, believe it or not). Your people are what create your culture. Leading organizations know this, and focus intently on their people. 

Yes, you need to compensate employees fairly and you need to provide competitive benefits (and we know it’s getting tougher than ever as prices continue inflating), but the deal-sealer for most employees is larger than either or both of those. People want to work in a place they feel valued and cared about—not just because of the work they do, but because of who they are. 

And just because you, as a leader in your organization, know you care about your employees, the real question is: Do they?

Improving your company culture can positively affect everything from employee satisfaction and wellbeing to profits and insurance rates, and move your company past good to great.

By Rosie Ward, Ph.D., & Alan Wissbroecker, CSP, OHST

In “Healthy Culture, Healthy Company,” a paper published for The State of Manufacturing® in 2009, we outlined why a healthy organizational culture is one of the most important factors in moving a company from good to great. In that paper, we concluded success—both cultural and financial—comes when executives lead the charge to empower employees, engage them in processes that drive their own health and safety practices, and allow them to share in the tangible reward®s that come as a result of their efforts.

Two years later, in an economy where, according to a recent study by Mercer, nearly one in three U.S. workers is seriously considering leaving his or her organization, there is still no better competitive advantage than healthy, engaged employees who feel their companies genuinely care for their wellbeing.

Disengaged employees not only affect the bottom line—with disengagement costing American businesses more than $328 billion per year in lost productivity, according to a recent Gallup study—they have also been proven to sustain 62 percent more accidents than their engaged counterparts, according to another study by Gallup Consulting. Further, more accidents often mean increased insurance costs across the board.

A healthy culture made up of an engaged and motivated workforce, conversely, improves efficiency through productivity gains and reduces costs associated with insurance through fewer claims due to both the reduction of accidents and the improvement of overall health and wellbeing. In fact, a Gallup-Healthways Well-Being Index Community Survey and Wellmark Corporate Survey (2008) found employees who reported they were thriving in overall wellbeing had 20 percent lower medical costs than their peers. Those in the suffering category reported an average of 50 percent higher medical costs.

Developing a process to change your company culture, then, is not only an effective way to engage your workforce, it is the only way to make lasting changes to overall productivity, employee satisfaction and, consequently, the bottom line.

Uncovering the Root Cause of Risk

In order to succeed—and manage the overall cost of risk—a company needs healthy, safe and engaged employees. To get there, it is necessary to address the underlying causes of risk. Uncovering and understanding those risks requires a full commitment from all management and leadership teams. A single champion—even the CEO—cannot drive this type of cultural shift because culture is driven by teams working together, not through individuals mandating change. Once leadership teams are on board, the next step is to learn where you need to improve.

Most insurance brokers will perform an in-depth study of your business in order to understand the root cause of your risk. This could include scouring health claims and loss runs, checking OSHA records, and performing health assessments and facility inspections. But, standard data is not enough. The best brokers will aim to get to the core of risks that are costing you money and corroding your company’s culture.

In addition to surveying hard data, it is valuable to learn about your employees, specifically their ability to make good on-the-job decisions. Good judgment plays a major factor in the success or failure of a company’s culture. In fact, more than 75 percent of all workplace injuries can be attributed to poor judgment. Measuring employees’ capacity for good judgment through a thor-ough assessment can offer valuable insight and be used to address core causes of risk.

Possibly the best way to learn about the inner workings of your company, though, is by directly surveying employees about their everyday work experiences. By partnering with a third party to conduct a comprehensive cultural survey, employees will have the freedom to honestly assess what is working and, more importantly, what is not. This type of cultural survey can lay the groundwork for building a healthy culture by finding out what your employees really think, feel and care about.

Another benefit to surveying employees directly is the message it sends. According to Stephen M. R. Covey in The Speed of Trust, a mere 29 percent of employees believe management cares about them developing their skills. Only 42 percent believe management cares about them at all. When you take time to ask employees what they think, and encourage them to answer honestly, you can begin to build a trust relationship between employees and leaders.

When the results from a cultural survey are returned, management should be prepared to respond to criticism without placing blame back on employees. If management resists change or ignores survey results, employees will lose trust in their leaders and disengagement will increase. Creating credibility and trust requires management acting in the best interest of their employees, and following through on the results of a survey where employees express a need for change.

CASE STUDY

In 2008, a manufacturer with about 230 employees completed a comprehensive employee cultural survey that uncovered positive and negative aspects of the operation. While employees had a strong sense of community, they were unclear on how they fit within the company’s overall vision for the future. About 34 percent said they were experiencing great stress, and 31 percent reported not having a good work/life balance. This played into additional comments about stress levels on the job, namely fatigue due to 12-hour workdays. This was reflected in health surveys, which showed employees visiting the emergency room an average of 82 times in 2009.

Unfortunately, this company opted not to act immediately on the survey’s findings. Between the policy year 2008 and 2009, the manufacturer experienced several workers’ compensation accidents. The next year incidents increased by 10 percent and losses increased by almost 19 percent. Then, in 2010, the company replaced a disengaged safety director and once again amped up its focus on cultural improvement. Management committed to spending more time listening to employees and opened lines of communication. Leadership also opened up more development opportunities for employees. As a result, the number of incidents dropped by 50 percent, and losses decreased by nearly 87 percent for the 2011 policy year. In addition, emergency room visits were cut in half once the company implemented healthcare consumerism skill-building workshops and ongoing reinforcement. This dramatic claim reduction will lead to a reduction of the company’s workers’ compensation experience modification factor (EMR), thus lowering its ultimate insurance premium cost.

This example demonstrates that engaged employees are not only more satisfied on the job and in their personal lives, but they also have fewer accidents, are safer overall and make fewer health claims than their disengaged counterparts.

Once data is collected, it is time to formulate a vision for the future. Without a vision of what your company will look like in three to five years, it is easy to get sidetracked or downright derailed. A lack of clear vision also causes employees and management teams to become disengaged when they see programs being implemented with no real results or clear picture of the end game.

Teaming up with an accountability partner from the beginning can help establish a path to success and ensure you stay focused. A partner with proven tools to survey your employees and measure their capacity for good judgment can give you a leg up on data collection and get you moving in the right direction toward realigning your company’s culture. The result will be meaningful data and a specific plan of action that will serve as a baseline for successful cultural change.

From Programs to Process

In an attempt to correct fundamental risk, your company may have focused on programs that force compliance on employees. These one-off ventures into undoing unhealthy behavior or promoting health and safety do not work for a variety of reasons. Employees naturally resist forced behavioral modification and, even when they start off excited, grow weary of multiple programs that begin and end with no real, lasting change. Instead, changing a company culture requires a shift in thinking, which will lead to more engaged employees, who then become the innovators and instigators of deep-seated, positive change rather than reluctant participants in small behavioral shifts.

To accomplish this, leadership has to set the example for employees. If employees feel they are being handed down one more program, they will resist. It is up to a company’s owners and managers to lead by example and lay a strong foundation for fundamental change.

The entire leadership team should start by evaluating how you view your employees. Are your managers interacting with employees as if they are simply things, working to get tasks done in the company? Or, do employees feel like valued team members whose ideas and interests are appreciated and encouraged? If the former sounds more familiar, your company may require a serious shift in how its leaders regard the people within their employ.

People who feel undervalued—as if their only contribution to a company is to perform tasks for someone else—are disengaged. Among the myriad negative consequences of disengagement, employees who feel undervalued are more likely to experience workplace stress, which directly affects a company’s productivity and overall wellbeing. According to the Journal of Occupational and Environmental Medicine, 90 percent of all visits to primary care doctors are related to stress. Additionally, healthcare costs for employees with high stress levels are nearly 50 percent higher than for those with low stress.

Because the vast majority of an insurance premium is based on past and expected future claims, you can see how premiums can be lowered or at least reined in by keeping employees at a low stress level. Lower stress equates to fewer claims, which ultimately means lower insurance costs.

When a focus on culture and engagement becomes a way of life within the leadership of a company, rather than just a means to a financial end or just one more wellness or safety program, employees respond positively and begin to take ownership of their own attitudes and actions.

CASE STUDY

A manufacturer with fewer than 100 employees had been struggling with safety without much impact. In 2009, the company recruited a partner to reposition its “Wellness” programs as wellbeing benefits of employment. A cultural survey uncovered the need for improved communication and employees’ concerns with favoritism and other issues within a portion of the leadership team. The claims proved to be serious enough to warrant an investigation, which led to a termination. This sent a strong message to employees—who had become apathetic—that inappropriate behavior at the leadership level would no longer be tolerated. Two months later, a Health Assessment and Screening revealed significant improvement in job satisfaction and career wellbeing metrics. The fact that leadership took action and began to listen to employees’ concerns made a near instant impact.

The above example demonstrates the importance of a healthy and supportive community culture. A culture in which employees feel disengaged is less likely to retain workers, and more likely to experience workplace injuries. A survey by Randstad U.S. found that 35 percent of employees report that company culture has the greatest impact on morale with 22 percent believing it has a major effect on productivity.

Programs that force compliance on employees and try to correct behavior may appear to be working for a while, but they are a temporary fix and cannot be sustained over time. While workshops on self care, safety, cost of risk and effective communication between employees and managers may play a role in your path toward cultural change, they should be part of a broader process that requires constant nurturing by the entire company—from C-suite executives to the newest hires on the manufacturing floor. A partner can facilitate this type of process aimed at keeping employees engaged and therefore more productive. The end result will be reduced claims, lower costs and an overall healthier organization.

Partnering for Success

Drastic improvement to company culture is an investment in the human capital of your organization. While some components of changing the culture are cost-free, like improving communication or working on relationships between managers and employees, it is important to look at achieving a healthy culture and engaged employees as an essential business expense, and therefore, to invest adequate resources into the process. Designating a budget for health and safety management resources and initiatives allows a company to walk through the process of improving company culture uninterrupted. The results of data collection and cultural surveys will help direct where resources are most needed.

When done well, these costs can be recouped through insurance savings and productivity gains. In fact, a Towers Perrin survey found that organizations that successfully implemented a culture of caring benefitted from a 100 percent return on investment. Every dollar invested in injury prevention returned two dollars through increased productivity. In addition, for every dollar spent on the direct costs of a workplace accident, The National Safety Council estimates there are 1.1-4.5 times that in additional soft costs, such as the cost of production downtime, decreased quality, training new or replacement employees, employee morale and higher insurance premiums.

A thoughtful process for implementing a healthy company culture should be designed to head off risk and prevent it before it causes loss to a company’s bottom line. Recruiting an accountability partner who is knowledgeable and has resources in place to help you along the way can ease the process of creating a healthy company culture. In addition to tools, resources and expertise, a third party offers a fresh perspective and can keep the process on track by getting to know your business and implementing practical solutions that help prevent risk and foster a culture of health and safety. Additionally, employees may view hiring an accountability partner as a gesture of serious intention on the part of managers. When they see the company investing resources into improving company culture, they are more likely to trust in the process and be open to significant change.

Conclusion

Changing a company’s culture is a complex process, but it is worth the effort. In moving a culture from good to great, you improve overall employee engagement levels, which affect safety, health and productivity. You can also dramatically lower medical costs and reduce claims, which can be directly linked to lower insurance premiums. Creating a healthy company culture can also influence unexpected metrics within the business, like job performance, turnover, profit and time-to-delivery. Additionally, a healthy culture equals a significant competitive advantage by attracting top recruits and ensuring current employees remain engaged and invested in the company’s future. In short, healthy, safe and engaged employees are more productive, have fewer accidents, report fewer injuries and contribute positively to a company’s financial and overall success.

To create this significant, lasting change within your company, it is imperative to move away from one-off programs that aim to change a single behavior among employees. These programs, while sometimes met with enthusiasm in the beginning, almost always fizzle out without any lasting impact on wellbeing, safety or the bottom line. Instead, significant cultural change is a living, breathing entity that continues beyond programs and exists within the day-to-day operations of employees, managers and owners alike.

Rosie Ward is a health management consultant and Alan Wissbroecker is the director of risk services with RJF. Both individuals work with a variety of clients throughout Minnesota and Wisconsin.

With a doctorate in organization and management and additional degrees in the health field, Dr. Ward helps employers develop and implement cultural improvements and changes that improve employees’ wellbeing while positively affecting the company’s bottom line. She is involved in numerous national, state and local health initiatives, and is a regular speaker at many health, wellness and organizational development events. Contact Rosie Ward at wardr@rjfagencies.com.

Mr. Wissbroecker helps employers reduce risk exposures and their associated costs. His well-rounded approach takes a realistic view of human nature and work environments. He works with clients at the executive level to ensure complete understanding of an employer’s long-term strategic needs and to help shape the corporate culture, which is imperative to reducing long-term costs. Contact Alan at wissbroeckera@rjfagencies.com.

By Rosie Ward, Ph.D., MPH, CHES

Most health management programs tend to focus on changing behaviors – frequently relying on health assessments (which are limited to physical wellbeing and health behaviors) and using incentives to try to get people to change. However, what ultimately drives behaviors is more complex.

Research from the Gallup Organization consistently shows the importance of focusing on all areas of wellbeing (career, social, financial, physical and community), not just physical. Experts in motivation state that it is more important to get underneath the surface of behaviors to identify and address values and attitudes. Despite these findings, most health management tools and programs continue to focus on assessing and trying to change health behaviors, and often fail after a few years.

Only focusing on behaviors is like putting a Band-Aid on a cancerous tumor; it will temporarily be covered, but underneath the disease grows and more tumors emerge in other areas. Therefore, if companies want to impact the causes of poor wellbeing, it is imperative that they focus on how people think about their choices and strengthening judgment.

MEASURING AND STRENGTHENING JUDGMENT

Robert S. Hartman, Ph.D., believed our value system is the lens through which we view the world, formulate choices and make decisions. He taught that values are not in our mind or heart, but are manifested in the judgments we make. 

Hartman developed the Judgment Index™ (JI™), a measurable, quantifiable assessment of a person’s value system and capacity for good judgment in more than 70 indicators, including decision-making ability and style, stress coping skills, engagement, morale, work ethic and trainability.

During more than 40 years of research and work using the JI™, C. Stephen Byrum, Ph.D., has found that 75 percent of all workplace injuries and wellness issues can be attributed to weak judgment. Luckily, he also found that it is possible to influence and change the way people think about their values and thus, improve judgment skills.

RESULTS YOU CAN ACHIEVE

Combining a tool like the JI™ with thoughtful initiatives in human resources, safety and health management channels allows leaders to foster engagement; align employees’ thinking with wellbeing best practices; manage safety risks; improve overall wellbeing; determine and improve individual job fit; improve succession planning; develop current employees, leadership and teams; reduce turnover and retain key employees. These efforts will provide lasting results.

By Heather Roiger, M.S.

Many employers offer internships to students and other persons new to a field or industry. Applying the term “intern” to these positions, however, does not automatically exempt the employer from federal and state minimum wage and overtime requirements. Unless the positions meet certain criteria, interns will be subject to the same wage and hour requirements as employees. 

Unpaid Interns

The Department of Labor (DOL) has established six criteria to help employers determine whether interns are considered employees or trainees under the Fair Labor Standards Act. The criteria:

• The individual receives training similar to what would be given in a vocational school or academic educational instruction.
• The training is for the benefit of the intern or trainee.
• The interns or trainees do not displace regular employees, but work under close observation.
• The employer that provides the training derives no immediate advantage from the activities of the individuals and on occasion the employer’s operations may actually be impeded.
• The interns or trainees are not necessarily entitled to a job at the conclusion of the training period.
• The employer and the individual understand that no wages are paid for the time spent in the internship. 

Internship programs that do meet these requirements may be unpaid or be offered a stipend. Internships that do not meet these standards must be offered as paid positions. Interns in paid roles are entitled to the same wage and hour laws as other employees. 

Avoiding Misclassifications

When designing an internship program, employers should ensure that the intern, not the business, obtains the primary benefit of the experience. The more a program is structured around a classroom or academic experience, rather than the company’s actual operations, the more likely the intern will not be considered an “employee.”  

Additionally, employers should maintain documentation on the structure and features of the internship program, including an agreement detailing the parties’ mutual intent that: (1) their relationship will not be one of employment but rather an internship for the individual’s benefit, (2) the intern does not expect employment or compensation, and (3) the relationship is to provide the intern with skills that can be used in multiple settings. Employers should periodically review their internship program to determine how well it is working in practice. 

Additional Information

Department of Labor Fact Sheet: Internship Programs under the FLSA 

eLaws® – Fair Labor Standards Act Advisor 

Think back to when you found yourself at the crossroads of how you impart knowledge. The scene is usually this: An employee describes a problem and then asks: ‘What should I do?’ In this instance they want you to tell them what to do perhaps to avoid accountability. Or they might ask: ‘What would YOU do if you were me?’ Tempting isn’t it? The trap has been set. Obviously you could just tell them what to do and save time. You might reason; it’s my job to provide direction and telling them exactly what to do will ensure the project is done correctly. 

Experience has taught me that I don’t want to be the answer man. Why? First, I am not that smart! I’ve only done this living thing once and fortunately, I’m still at it. Second, what may be right for me may not be right for someone else. In addition, the way I would go about executing a decision is probably different from the way someone else would. This difference in execution would have the potential of creating a different outcome. Third, what if I’m wrong and they follow my advice and disaster ensues?  I am partly responsible for the outcome.

A better way of handling employee questions is this. Instead of telling them what to do, you could choose the more challenging and yes, time-consuming route by asking questions. Here you would be applying a best practice coaching technique. You are helping them to think things through and thus teaching them how to reach their own conclusions. New thoughts create new pathways in the brain and if used often enough the way a person thinks begins to change.

Part of our job as leaders is to help our team make good decisions and not to make decisions for them.  (Good Coach) If your management team has a track record of making good decisions you no doubt have been applauded for producing exceptional results. 

Since your role as a leader involves the coaching and mentoring of others, you should consider this next question as food for thought. Why is it better to help a person by asking questions rather than just giving them the solution? The answer is simple. Since thinking precedes behavior an employee who is making bad decisions must change the way he/she thinks. Reasoning Point: If someone else is always solving your problems (Bad Coach) you are being denied the opportunity to grow your thinking ability. 

Thinking ability requires carefully weighing options before making important decisions. At the same time the decision-maker needs to recognize that no one option may have all the benefits. The person who develops and utilizes thinking ability also draws upon their past experiences in business and in life. They should also have the humility to seek the experience of others. 

It is also important to understand that what follows a decision may be more important than the decision itself. The commitment to have the decision succeed also counts. Persistence, follow-through and personal accountability are all crucial to a successful outcome. The book Overcoming Indecisiveness, by Dr. Theodore Isaac Rubin, points out: “It almost always is the decision-maker and not the particular choice that makes the decision work. . . . The failure of the decision has little or nothing to do with the choice. The failure is directly traceable and proportional to lack of dedicated commitment.”

It takes self-discipline and patience to be the Good Coach but it’s beneficial to everyone in the long run.

About Jason Kleid: Jason is focused on optimizing performance and getting results. Underscoring this philosophy is a belief that it is always the individuals in any organization, where the greatest potential for improvement and possibility of change resides. It is the mind (one’s thinking) where new ideas broaden understanding and cause things to happen. However, it is the heart (inner person/motivation) where transformation occurs.

By Tim Fleming

I believe that strong organic growth depends on the successful execution of four disciplines. These four disciplines function as pillars that form the structural integrity of your talent development plan. If even one pillar is weak, the entire structure will collapse. Let’s explore how these four pillars support your own organic growth plan.

Pillar 1: Recruitment and hiring

Successfully recruiting a world-class sales force demands a clear understanding of your business goals and the ideal candidate that will help you achieve those goals. As part of your recruitment and hiring strategic planning, you should:

• Create a disciplined three- or four-step hiring process. Challenge yourself to include all key stakeholders in the interviewing process, including your CEO and COO.
• Consider hiring a professional sales recruiter to identify and screen candidates.
• Target the first year salary at a practical level that new sales talent can reasonably validate in three years.
• Develop an assessment tool to benchmark successful behaviors, motivators and attributes. Use this to evaluate candidates.

Target candidates who demonstrate:

• Ability to sell at the C-suite level
• Ability to thrive and persevere in a long sales cycle
• Success with sales activities
• A “hunter” mentality
• Passion for business and the confidence to deliver business solutions

Pillar 2: Onboarding and Training

The second critical pillar is your new sales talent development plan, also called a learning path. Most firms’ learning paths focus on a graduation date that ranges from one week to 90 days, concluding by handing the new graduate the telephone to make cold calls. In contrast, a world-class learning path builds on agreed-upon success metrics and a thorough understanding of your most successful producers’ strategies. To ensure meaningful progress, define proficiency expectations at six, 12, 26, 52, and 104 weeks, and design a detailed training guide to achieve individual results. The most valuable secret to a successful learning path is to make sure your trainees experience the learning objective with a customer or prospect the same week that they learn the concept.

Pillar 3: Sales Methodology

Strive to develop one sales methodology for your entire business development team and hold them accountable to it. Your goal is to teach them how to gain a deeper understanding of their client’s business, discover a business fit, and deliver business solutions. Similar to a professional sports playbook, everyone must run the offensive plan with great precision. Your playbook can offer multiple options to allow for individual creativity, but failure to execute the fundamentals every day should result in bench time and ultimately termination.

Pillar 4: Sales Management

Finding leaders who are fearless, disciplined, confident and selfless is a challenge. Your goal is to uncover an individual who enjoys developing others, building a team, helping others succeed, encourages disciplined sales activities, and is motivated by working with talented people.

Excellent sales talent and leaders are rare, but following the four pillars above will help you attract and retain these valuable employees. In fact, I believe that executing a disciplined approach to achieving the four pillars can result in 10-percent or more increase in organic revenue growth for your organization.

by Laura Muhlstein, HR Director

January 31, 2012

Working with employers in the employee benefits business, we’re often asked how we approach wellness with our own employees. Much like any other employer, our approach has evolved over time. We began years ago, not knowing what we didn’t know. Over time, however, we learned several lessons and have gradually embraced a more well-rounded approach to our employees' overall wellbeing.

In 2005, we started with a team-based weight loss competition with huge cash purses for the winning team. While the short-term weight loss was significant, the only long-lasting impact is the memory of our president, Tim Fleming, wearing sweats and blowing his whistle as he led his team in a lap around the building. Tim’s team later conceded, with CEO Bill Jeatran’s team emerging victorious…and 213 pounds lighter.

As we continued to learn, we focused less on short-term incentives and more on long-term impact. We continued to see year-over-year changes in our health assessment results, but it still didn’t feel like a cohesive approach to employee wellbeing.

By 2010, we started to act on our own belief that there’s more to it than just fitness challenges or healthy eating competitions. Anyone who has listened to or spoken with our health management consultant, Rosie Ward, knows that she bases much of her work on Gallup’s five components of wellbeing. Promoting the wellbeing of employees is more complex than encouraging healthy eating and exercise habits, and Gallup and others have research that supports this.

So in 2011, RJF rolled out its “A Balanced You” platform, which encompasses all the ways that RJF supports an employee’s physical and mental, career, social, financial and community wellbeing. Components vary and include things like healthy food guidelines that promote physical health and RJF’s Charity Challenge, which encourages volunteering with peers and business partners. The platform is reinforced in management and email communications, our monthly employee newsletter and through events hosted by employee-based committees.

We still offer annual no-cost health assessments to all employees and participation in our Wellbeing Rewards program is tied to reduced health insurance premiums. However, we now put less focus on things like spending time at the gym. Instead more emphasis is now placed on helping each employee, a unique person who happens to be a part of the RJF team, identify what wellbeing means for him or herself and take steps toward improvement.

January 4, 2012

The Federal Motor Carrier Safety Administration (FMCSA) issued a new rule, effective, Jan. 3, 2012, prohibiting interstate commercial motor vehicle (CMV) drivers from using hand-held cell phones while driving.

These drivers are banned from holding, dialing or reaching for a hand-held cell phone. While using a phone with push-to-talk capabilities is not allowed, hands-free set-ups can be. Using CBs and two-way radios is also allowed.

Companies allowing employee drivers to operate hand-held cell phones while driving will face a maximum penalty of $11,000. Individual employees can face up to $2750 in federal civil penalties for each offense. The U.S. Department of Transportation estimates that about 4 million drivers will be affected.

The U.S. Department of Transportation has published a list of frequently asked questions at http://www.fmcsa.dot.gov/about/other/faq/cellphone-ban-faqs.aspx.



Minnesota Statute 221.0314 subd. 6 adopts part 392 of the federal regulations. This means the new rule, using a hand held mobile telephone, will also apply to intrastate CMV drivers. 

Jan. 4, 2012

On December 27, 2011, the National Labor Relations Board announced that it was delaying the implementation of its rule requiring covered employers to post notice of employee rights under the National Labor Relations Act. The new date for posting requirements will be April 30, 2012.

According to a press release from the NLRB, it has agreed to postpone the effective date of its employee rights notice posting rule at the request of the federal court in Washington, DC pending a legal challenge which would change the rule.

Additional information

by Bill Jeatran, Chief Executive Officer of RJF

Last week, Marsh & McLennan Agency (MMA) announced its latest acquisition, Seitlin Insurance. Based in Florida, this firm is about the same size as RJF, and was the largest independent agency in Florida.

Only the best firms are invited to join Marsh & McLennan Agency because MMA is uncompromising in its quality standards for new acquisitions. Adding Seitlin to the MMA family represents another step forward on our path of growing this world class organization and strengthening MMA’s cornerstone of values and quality. This dedication to only acquiring firms that represent the elite in terms of service, client support, culture, and values is what makes RJF proud to be part of Marsh & McLennan Agency, and what will drive the firm forward.

Seitlin will be the Florida hub for MMA, and they are already finding ways to bring the resources of Marsh, Mercer and the rest of Marsh & McLennan Agency to their clients. They are also excited to help other MMA teams serve their clients as well.

I’ve gotten to know many of the people and leadership who make up Seitlin over the years through RJF’s  former affiliation with Assurex Global. I can say, wholeheartedly, that this firm is quality. Their CEO Tom Cornish is a personal friend of mine, and I welcome him and the rest of his team to the Marsh & McLennan Agency.

For more information, read the press release.

Marsh & McLennan Agency Acquires Seitlin Insurance

New York, November 17, 2011 – Continuing its strategy to build a national platform, Marsh & McLennan Agency LLC (MMA), a subsidiary of insurance broker Marsh Inc., announced today the acquisition of Seitlin Insurance, one of the largest insurance brokerage firms in South Florida. Terms of the transaction were not disclosed.

Founded in 1945, Seitlin has annual revenue of approximately $24 million and 119 employees in three Florida offices: Miami, Fort Lauderdale, and West Palm Beach. Seitlin provides property and casualty insurance and employee benefits to middle market companies in a wide range of industries. All of Seitlin’s employees and leadership team, including CEO Tom Cornish, will join MMA.

Seitlin will serve as MMA’s Florida hub and is the latest in a number of acquisitions MMA has made since embarking on its strategy of building a national platform to serve the property and casualty insurance and employee benefit needs of the middle market.

“Seitlin’s excellent reputation, strong management team, and blend of property/casualty and employee benefit business make it an ideal partner for MMA,” said Dave Eslick, chairman and CEO of MMA. “I welcome the entire Seitlin team to MMA and look forward to further building out MMA’s presence in Florida.”

“Joining MMA represents a great growth opportunity for Seitlin,” Mr. Cornish said. “As part of MMA, we will be able to continue our strong legacy of innovation and superior client service while also having access to the support and resources of the world’s leading insurance broker and risk advisor.

"As South Florida is the gateway to Latin America, we are especially excited about being able to offer our clients the capability of Marsh throughout the Americas," Mr. Cornish said.

About Marsh & McLennan Agency

Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the U.S. MMA operates independently from Marsh to offer commercial property, casualty, personal lines, and employee benefits to clients across the U.S.

About Marsh

Marsh, the world’s leading insurance broker and risk advisor, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has over 24,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a member of Marsh & McLennan Companies, a global professional services firm with 52,000 employees worldwide and annual revenue exceeding $10 billion, which is also the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. Follow Marsh on Twitter @Marsh_Inc.

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CONTACTS

Sally Roberts
303 952 9453
sally.roberts@marsh.com

Anand Poola
212 345 4292
anand.poola@marsh.com

Marsh & McLennan Agency Acquires Gallagher & Associates, Inc.

New York, November 3, 2011 – Marsh & McLennan Agency LLC (MMA), a subsidiary of insurance broker Marsh Inc., today announced the acquisition of Gallagher & Associates Inc., a $1 million property and casualty insurance agency specializing in public school districts. Terms of the transaction were not disclosed.

Gallagher & Associates, based in Blaine, Minnesota, will operate within RJF, a Marsh & McLennan Agency LLC company, adding to the depth of RJF’s property and casualty business. The transaction is the first complementary acquisition for RJF, which MMA acquired in January 2011 to serve as its upper Midwest hub.

Tom Gallagher, John Siffert and the rest of the Gallagher & Associates team will join RJF’s Minnesota office and continue in their current roles.

“Gallagher & Associates is a high-quality firm with a well-deserved reputation earned through years of exceptional client service and innovation to the public schools sector,” said Bill Jeatran, CEO of RJF/MMA. “We’re thrilled to welcome Tom, John, and the rest of Gallagher & Associates as they share the same core values of putting clients’ interests first and providing innovative business solutions, exceptional service, and expertise.”

“Joining RJF and Marsh & McLennan Agency is the next step in our firm’s evolution,” said Tom Gallagher, principal and founder of Gallagher & Associates. “As part of MMA, our clients will enjoy the same high-quality service they’ve come to expect from us. Additionally they’ll gain new and enhanced capabilities and resources from RJF/MMA to meet their needs.”

David Eslick, chairman and CEO of Marsh & McLennan Agency, said: “Adding high-quality talent and expertise from firms such as Gallagher & Associates is an integral part of Marsh & McLennan Agency’s strategy to build a preeminent national agency primarily serving the needs of the middle market.”

About Marsh & McLennan Agency

Marsh & McLennan Agency LLC, a subsidiary of Marsh, was established in 2008 to meet the needs of midsize businesses in the U.S. MMA operates independently from Marsh to offer commercial property, casualty, personal lines, and employee benefits to clients across the U.S.

About RJF, a Marsh & McLennan Agency LLC company

RJF, a Marsh & McLennan Agency LLC company, is a risk prevention organization dedicated to helping businesses proactively reduce risk by anticipating the needs of their people and their assets. Its unique prevention-driven assessment and monitoring process helps forward-thinking clients strengthen their employees, assets and bottom line. As the Upper Midwest hub for Marsh & McLennan Agency, RJF has offices throughout the Upper Midwest and United States, and is supported by Marsh & McLennan, the premier global provider of advice and solutions in risk, strategy and human capital. More information is at www.rjfagencies.com.

About Marsh

Marsh, the world’s leading insurance broker and risk advisor, teams with its clients to define, design, and deliver innovative industry-specific solutions that help them protect their future and thrive. It has around 25,000 colleagues who collaborate to provide advice and transactional capabilities to clients in over 100 countries. Marsh is a member of Marsh & McLennan Companies, a global professional services firm with 52,000 employees worldwide and annual revenue exceeding $10 billion, which is also the parent company of Guy Carpenter, the risk and reinsurance specialist; Mercer, the provider of HR and related financial advice and services; and Oliver Wyman, the management consultancy. Its stock (ticker symbol: MMC) is listed on the New York, Chicago and London stock exchanges. Follow Marsh on Twitter @Marsh_Inc.

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Contacts:

Sally Roberts   
Marsh   
303-952-9453
sally.roberts@marsh.com   

Jeff Mulfinger
RJF, a Marsh & McLennan Agency LLC company
763-746-8257
mulfingerj@rjfagencies.com

by Heather Roiger

Recently, President Obama presented the American Jobs Act, which includes the Fair Employment Opportunity Act of 2011. Based on this proposal, the Act will prohibit employers and employment agencies from discriminating against unemployed job-seekers. Essentially, if passed, it would create a new protected class under Title VII – the unemployed.

An unemployed individual is defined as one who does not have a job but who is available and searching for work. The regulations of this act would make it unlawful for employers with 15 or more employees to publish job advertisements or announcements where provisions are given indicating that anyone who is unemployed will be disqualified from an employment opportunity or that they will not be considered or hired for a position based on his or her status as unemployed. Moreover, employers would be prohibited from failing to consider or refusing candidates because they were unemployed. The Act further prohibits an employer to request that an employment agency take an individual’s status as unemployed into account to disqualify him or her from consideration, screening, or referral for employment. This Act also extends to protect the unemployed individual from retaliation.

An employment agency under the Act would also be subject to this regulation by not limiting, segregating, or classifying any individual in any manner that would limit a candidate’s access to information about jobs. Moreover, an employment agency must also not limit an unemployed individual’s access for job consideration, screening or referral based on his or her unemployment status.

However, under this Act an employer or employment agency are still able to consider an individual’s employment history and examine the reasons underlying an individual’s status as unemployed when assessing his or her ability to carry out the job functions. The Act specifically states that an employer may continue to evaluate whether a candidate’s recent employment in a similar position is job-related.

Employers should continue to monitor the progress of this Act and begin to review their hiring practices and criteria – especially how they view resume gaps.

FOR MORE INFORMATION:

• www.whitehouse.gov/the-press-office/2011/09/12/presidential-memorandum-american-jobs-act-2011
• www.esrcheck.com/wordpress/2011/08/03/fair-employment-opportunity-act-bill-in-senate-would-prohibit-discrimination-against-unemployed-jobseekers

CREDIT: Deveta, P. & Kircher, A. “Congress Considers Legislation That Would Create a New Protected Class Under Titile VII.” September 16, 2011.

RJF rebrands: bye, bye, boring blue

by Bill Jeatran

Yes, RJF has some new and exciting changes taking place. Specifically, we have launched our new brand. We have intentionally done so quietly because our new brand isn’t changing us – it’s really just clarifying who we are and have been.

Our brand initiative was born over two years ago when we held an all-employee strategic planning session. Our employees felt that it was very difficult to describe who we are and what we do to help serve our clients, and they told us so. As you hopefully know, we are not a typical insurance agency. We offer so many resources, tools and capabilities to prevent risk—versus just selling an insurance policy—that it can be difficult to effectively describe us or what makes us unique to the marketplace. 

Over the past two years we worked closely with a local branding company to help us convey our true corporate identity. In mid-July we made our official internal brand launch and we have been “taking it to the streets” ever since.

The reality is that not much has changed, except for our ability to better communicate how and why we are different. RJF’s brand has always been about helping clients reduce risk. It still is, just now with a new look and additional resources.

What you will see are bold new colors, reinvigorated people and a slight name change (we dropped “Agencies”). But what you should feel or sense is that we now have more clarity on how we help you prevent risk and more clarity on how we show the progress we have made with your team. It’s actually quite simple: By helping you prevent risk, we will reduce your long term costs.

This rebrand came at such a great time because now, as part of Marsh & McLennan Agency, RJF has even more capabilities and resources to help clients strengthen their employees, assets and bottom line. It’s a large part of why we joined Marsh & McLennan Agency earlier this year. We now have unmatched resources with which to help clients avoid risk, anywhere in the world and a more fitting brand to help us explain ourselves.

Frankly, there’s basically no risk prevention resource we can’t provide. If there’s something facing your organization you don’t know quite how to handle, talk to your RJF representative. I’m confident we’ll be able to find a solution that helps you sleep better at night. Our ability to help is now so much greater than ever before. In fact, that’s what helps me sleep well at night.

Bill Jeatran is the chief executive officer of RJF. He can be reached at 763-746-8201 or jeatranb@rjfagencies.com.

Addressing the Root Causes of Poor Wellbeing

by Rosie Ward, Ph.D., MPH, CHES

Most health management programs tend to focus on changing behaviors – frequently relying on health assessments (which are limited to physical wellbeing and health behaviors) and using incentives to try to get people to change. However, what ultimately drives behaviors is more complex. Research from the Gallup Organization consistently shows the importance of focusing on all areas of wellbeing (career, social, financial, physical and community), not just physical. Additionally, experts in motivation state that it is more important to get underneath the surface of behaviors to identify and address values and attitudes. Despite these findings, most health management tools and programs continue to focus on assessing and trying to change health behaviors, and often fail after a few years.

Only focusing on behaviors is like putting a Band-Aid on a cancerous tumor; it will temporarily be covered while the disease grows and more tumors emerge in other areas. Therefore, if companies want to impact the causes of poor wellbeing, it is imperative that they focus on how people think about their choices and strengthening judgment.

Measuring and Strengthening Judgment

Robert S. Hartman, Ph.D., believed our value system is the lens through which we view the world, formulate choices, and make decisions. Values are not in our mind or heart, but are manifested in the judgments we make.

Hartman developed the Judgment Index™ (JI™), a measurable, quantifiable assessment of a person’s value system and capacity for good judgment in more than 70 indicators, including decision-making ability and style, stress coping skills, engagement, morale, work ethic, and trainability. During more than 40 years of research and work using the JI™, C. Stephen Byrum, Ph.D., has found that 75 percent of all workplace injuries and wellness issues can be attributed to weak judgment. Luckily, he also found it is possible to influence and change how people think about their values and thus, to improve judgment skills.

Using a tool like the JI™ allows leaders to efficiently address all areas of wellbeing and move beyond behaviors to address the root causes of many issues. Combined with thoughtful initiatives in human resources, safety and health management to improve overall culture and wellbeing, the JI™ becomes a way of fostering engagement, aligning employees, managing safety risks, improving wellbeing, determining and improving individual job fit, succession planning, developing current employees, leadership and team development, reducing turnover and retaining key employees to provide lasting results.

Rosie Ward is the health management services manager at RJF. She can be reached at 763-548-8861 or wardr@rjfagencies.com.

even in insurance, You still catch more flies with honey

by Angela Wheeler

Insurance claims are not limited to catastrophic events. They happen every day in the business world. For example, businesses employ drivers who get in auto accidents; retailers may have a guest slip and fall in their store; or a business owner may have an employee who injures their back. These are all examples of insurance claims that happen daily, and could have serious financial implications.

Today, insurance adjusters generally have very good customer service, but the industry has a bad reputation to overcome. Unfortunately, even people who have never had an insurance claim often have a misperception that insurance adjusters
are difficult.

The outcome of claims, regardless of size, depends on an attentive adjuster with good communication skills. Here are some
tips business professionals working with claims can follow to maintain a positive relationship with the adjuster:

• Partner with the insurance adjuster to best resolve the file.
• Return the adjuster’s calls and requests for documents in a timely manner. Investigating a claim is critical to determining liability, coverage and defenses.  Making the adjuster’s requests a priority will protect your interests as a business. The sooner you respond, the sooner the claim can be advanced forward.
• Ask questions. Claims are often very complicated and emotional. Write down all your questions before calling the adjuster and make sure you are clear about the direction of the claim.
• Be nice during communication with the adjuster. Don’t automatically assume the adjuster is coming into the situation with a “no-pay” position. The friendlier you are with the adjuster, the more motivated they will be to work on your claim.
• Don’t be afraid to call and check in. As the saying goes, “the squeaky wheel gets the grease.” 

The majority of adjusters want to help at claim time. However, that doesn’t mean there are not industry exceptions.

If you have followed all of the above tips and continue to experience problems, please do not hesitate to reach out to your agent or a claims supervisor.

Angela Wheeler is a claims consultant at RJF. She can be reached at 763-746-8266 or wheelera@rjfagencies.com.

Wisconsin has passed legislation that permits licensed and trained individuals to carry a concealed weapon. The bill, which will take effect Nov. 1, 2011, also allows people to carry loaded, uncased guns in their vehicles.

The Personal Protection Act, Senate Bill 93, provides employers with immunity from weapons-related incidents occurring in the workplace only if the employer allows employees to carry concealed weapons into the workplace.

For more information, visit http://www.doj.state.wi.us/dles/cib/ConcealedCarry/ConcealedCarry.asp

successful organizational change rests oN employees’ engagement

by Jason Kleid

As a forward-thinking company, your leaders know that quickly adapting to change is vital to staying competitive and profitable. When your company unveils its new initiatives, imagine that your company announces: “We are changing our corporate direction to stay competitive in the marketplace. We know all of you will stand behind this new strategic effort. Effective Monday, we will begin…”

Over the next few weeks, you begin to realize that some employees have not bought into the new direction and may not be fully cooperating with the new requirements and procedures. The leadership team becomes concerned and perhaps a little frustrated. Some on the leadership team may take the lack of engagement with the new direction personally and conclude that these employees do not respect them and are simply not team players. But this conclusion may be premature.

Time to reassess

When people are simply not responding correctly, it’s time to stop and assess before you respond. You might first ask: How are we as leaders contributing to the problem? Have we failed to understand the unique needs and personality types of our people? Have we assumed that everyone responds to change the same way? Perhaps the lack of engagement stems from the way you are communicating change. Let’s briefly examine a couple differing needs.

Behavioral Styles

Some employees are analytical thinkers. They need time to digest information before they are able to change the way they accomplish their tasks. Because they approach their work methodically, carefully, and conservatively, you must provide plenty of facts and examples that answer their questions of why and how? These employees are a treasure and you need them on your team. Often these same employees prevent poor decisions by helping their leaders think things through.

You also have risk takers in your organization.

Doing something new is challenging and fun for them. These employees are ambitious, independent, decisive and forceful. They are results-driven and looking for efficiency. What this behavioral style doesn’t want are too many details. Just point them in the right direction and get out of their way. We need these people on our team as well.

Tailoring your communication style to your employees’ differing needs will help you communicate more effectively. When announcing organizational or departmental change, plan your internal communication to provide the right level of detail for the different personality types. You may even wish to hold separate meetings for the different behavioral styles so that the right message is delivered to the right audience.

Jason Kleid is a coach at Jason Kleid, LLC. He can be reached at 763-773-9000 or jkleid@jasonkleid.com.

CAPSTONE PHILANTHROPY CAMPAIGN CONTINUES GROWTH TREND

Sept. 14, 2011

Through its third annual Charity Challenge, RJF, a Marsh & McLennan Agency LLC company, raised nearly $150,000 for local nonprofits thanks to the support of its business partners. This includes a 20-percent match of all donations by RJF and a 10-percent by Marsh & McLennan Agency.

This year’s total of $146,441 is a 35-percent increase over last year’s sum of $108,000. While the number of donors stayed about the same, RJF’s donors were more generous this year, giving nearly 24 percent more on average to Admission Possible and Children’s Hospitals & Clinics of Minnesota.

RJF Chief Executive Officer Bill Jeatran said he’s proud and appreciative of the successful drive, its participants, and donors, and considers it a core priority of RJF to continue serving the communities in which it operates. He said the Charity Challenge’s success is due largely to the passion exhibited by RJF leadership and employees toward helping community involvement, which can be seen through the tremendous participation in volunteer events and fund raising activities throughout the year. He also acknowledged that this level of success without the financial support and leadership of Platinum-level donors who each gave $10,000 or more. They include Bright Spirit Children’s Foundation, Chubb, CNA, The Hanover Insurance Group, and The Travelers Companies, Inc.

Jeatran believes RJF’s focus on helping to improve the well-being of children in the communities it serves by focusing on their health and development is not only a worthy goal, but one that resonates with people. This is part of the reason why RJF expanded its capstone philanthropic event to include non-insurance carrier partners this year, and intends to continue this expansion next year to achieve an even larger goal.

“The continued success and growth of our Charity Challenge drive says a lot about the insurance carriers and other business partners with whom we work—they are caring individuals, not just outstanding business people,” Jeatran said. “They’ve seen our philanthropic efforts increase every year, and know the return on this investment is very real and very important. They’ve stepped forward yet again to support our community’s most important asset—its children.”

Two of the largest contributors this year were insurance companies Chubb and The Travelers Companies, Inc. Both organizations have strong commitments to corporate citizenry, and have regularly helped RJF in its philanthropic endeavors.

"We are honored to take up the RJF challenge of supporting these great children's charities again in 2011,” said Tim Shannahan, Senior Vice President for Chubb. “Events like the RJF Charity Challenge help us all exercise our core values through the giving of both our time and financial support to critical caregivers in our community."

“Travelers’ commitment to helping others is woven throughout our work, and we take pride in empowering our communities through organizations like RJF and their Charity Challenge,” said Rick Smith, Regional President for Travelers.

A reception was held at RJF’s headquarters on Wednesday, Sept. 14, to thank all donors and celebrate the campaign’s success.

AWARD PRESENTED BY THE DONALD MCNEELY CENTER FOR ENTREPRENEURSHIP

Sept. 8, 2011

Tim Fleming, president of RJF, a Marsh & McLennan Agency LLC company, and Bill Jeatran, RJF’s CEO, were jointly selected as St. John’s University’s inaugural Entrepreneurs of the Year. The award was presented by the Donald McNeely Center for Entrepreneurship at the College of Saint Benedict and Saint John’s University.

The Donald McNeely Center is dedicated to engage, connect and serve CSB and SJU students, faculty, alumnae/i and friends with entrepreneurial spirit, transforming them into leaders of successful value creating enterprises in both not-for-profit and for-profit arenas. By presenting these awards, the Donald McNeely Center recognizes and celebrates successful alumnae/i entrepreneurs who embody the entrepreneurial spirit and demonstrate the Benedictine values in their professional and personal lives.

Fleming and Jeatran are both 1982 graduates of SJU. They founded RJF Agencies (now RJF, a Marsh & McLennan Agency LLC company), and over the past 25 years have transformed the business from a $100,000-revenue insurance agency into a $25 million-revenue risk prevention organization.

“To break through within an industry like insurance requires changing how people perceive you,” said Jeatran. “We knew this from early on, and set about doing that not only for RJF but also—to the extent possible—for the broader industry. We’ve stated that the company’s success will follow as a direct result of our people doing the right thing, by working according to a set of values. This was the foundation for all we do and have done, and has enabled us to sustain a company that is seen as an industry leader.”

Fleming added: “Our biggest challenge to gaining a new customer is often their impression of how an insurance agent or firm ‘should’ work. We ask our employees, clients and broader business public to think about insurance differently. Rather than considering how much insurance is needed to ensure adequate protection, we ask, ‘What can we do to eliminate or reduce the need for insurance?’ and ‘How can we help that company’s employees become healthier, safer, engaged, and more productive?’”

The award will be presented Sept. 8 at a luncheon event at the IDS Tower in Minneapolis.

More information about St. John’s University is at www.csbsju.edu.

COLLEGEVILLE UNIVERSITY SELECTS RJF FOUNDER TO BOARD

SEPT. 1, 2011

St. John’s University in Collegeville, Minn., recently named Bill Jeatran, chief executive officer of RJF, a Marsh & McLennan Agency LLC company, to its Board of Regents. The three-year board term began July 1.

Jeatran, a 1982 graduate of St. John’s, founded RJF Agencies (now RJF, a Marsh & McLennan Agency LLC company) just four years after graduating. He has since devoted significant time and resources to helping St. John’s and its students through alumni association involvement, speaking engagements, and hiring students from the university as interns and employees of RJF. He regularly associates with alumni both professionally and personally.

The SJU Board of Regents consists of 44 members—30 lay members, 12 monastic members, one faculty representative and one student representative. Terms are renewable every three years, and board members are able to serve three consecutive terms.

More information about St. John’s University is at www.csbsju.edu.

August 31, 2011

Effective immediately, use of immigration-status tool E-Verify, first mandated by Governor Pawlenty and later allowed to lapse, has been re-enacted through the recent Minnesota budget legislation.

Companies that provide more than $50,000 worth of services to the state of Minnesota must enroll in E-Verify, a Department of Homeland Security database, to determine the work status of new hires. Individuals may check their work status online at no cost, in English or Spanish, and contact U.S. Citizenship and Immigration Services to correct any mistakes they may find.

E-Verify Website

August 31, 2011

In a much anticipated move only two days before the expiration of the term of Chairman Wilma Liebman, the National Labor Relations Board has issued a regulation requiring employers to post a notice of employee rights under the National Labor Relations Act (NLRA) at "conspicuous places" in the workplace. The regulation applies to virtually all private employers in the United States with the exception of those in the railway and airline industry, and certain agriculture-related employers.

In addition to posting in the workplace, the notice must also be posted on the internet or company intranet, if the employer routinely communicates employer policies to employees through such electronic means. According to the Board, the rule takes effect 75 days after its publication in the Federal Register, or on November 14, 2011. In the absence of clarification by the Board, employers should probably treat the regulation as effective on the earlier of those two dates.

Failure to post the notice as required by the rule will be punishable as an unfair labor practice under §8(a)(1) of the NLRA, which prohibits employers from interfering with, restraining or coercing employees in the exercise of their rights under the Act. Further, the Board says it may find it appropriate to excuse the six-month statute of limitations on the issuance of a complaint if the employer has not posted the notice, and may also find failure to post as evidence of unlawful motive in any unfair labor practice charge against the employer.

There are serious questions about the authority under §6 of the NLRA of the Board to have issued the regulations in the first place, as well as about several elements of the regulations which appear to contradict the NLRA. For example, the Act flatly states that "no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge... unless the person aggrieved... was prevented from filing... by reason of service in the armed forces." Yet the Board claims that it may excuse compliance with the statute of limitations based on an employer's failure to post the notice.

There will undoubtedly be additional questions that arise as the rules are applied and employers and their counsel have more experience with them. For now, it is anticipated that some parties may challenge the Board's action in Congress and in the federal courts.

NLRB Fact Sheet

August 30, 2011

RJF, a Marsh & McLennan Agency LLC company, recently hired Heather Roiger as its newest human resource consultant. Roiger comes to RJF from Freudenberg Group, where she spent several years in multiple HR management roles, most recently as the global HR manager for its Dichtomatik business in Shakopee, Minn.

Her recent experience includes talent management, crisis management, and aligning multiple international sites’ HR programs. She earned a master’s degree in industrial, organizational psychology in 2008, which positions her uniquely to help employers execute HR projects and initiatives while developing long-term strategies to move the business forward while reducing its risk.

“My excitement about beginning to consult for RJF clients is matched only by my excitement about working with RJF employees,” Roiger said. “It was apparent to me early on that RJF’s culture is one that will support my efforts and desire to help clients improve their organizations. The people here demonstrate a client-first mentality focused on delivering value.”

Roiger can be reached at roigerh@rjfagencies.com or 763-746-8219.

When a storm hits and damage happens, filing an insurance claim can seem like a monumental task. There are many things to be concerned with after a storm if your property has sustained damage. It is hard to know where to start. 

The RJF CAIS team has compiled a Claims Storm Kit to help you prepare in the event a claim needs to be filed. It also details what you need to consider before filing a claim and some preventative measure you can take to protect your property from damage. 

RJF Claims Storm Kit

Wood-burning Fireplaces  

• Have the chimney inspected annually to ensure it is clear of obstructions and creosote.  
• Install a cap and/or spark arrestor at the top of the chimney to prevent debris or animals from blocking the chimney. 
• Make sure the indoor area around the fireplace is clear of furniture, books, papers or other flammable material.  (2 feet is a good rule).
• Use a fire screen to prevent embers from jumping out. 
• Burn dry hardwoods to prevent excess creosote build-up.
• Don’t close the damper until the fire is completely out.  
• Never empty the ashes into a container immediately after a fire is extinguished.  

Gas Fireplaces

• Have a specialist perform routine maintenance and service as necessary.
• Adjust the millivolt output.
• Clean and adjust the glowing embers and logs. 
• Clean the fan and related air circulation passages. 
• Ensure the vents are unobstructed and able to do their job. 
• Install a carbon monoxide detector if you don’t have one. 

Power Strips

• Do not plug in additional power strips to the first one (known as “daisy chaining”).
• Use UL-or ELT-listed surge protectors and power strips. 
• Only plug one strip into a duplex (two outlet) wall outlet. 
• Unplug the strip with the appliance it powers when not in use. 
• Do not use a power strip to plug in equipment with heating elements, such as a hotplate, hot glue gun, coffee pot, or toaster. 

Clothes Dryer

• Keep lint trap and ducts clean! An indicator of lint and dust blockage can include clothes that are still damp or hotter than usual after a cycle is done. Another sign that something is wrong is if clothes are taking longer than usual to dry. 
• Depending on use, recommended cleaning is every 6 to 12 months. Many heating and air conditioning contractors will provide this service. 
• Improper dryer ventilation set up or installation can lead to carbon monoxide poisonings. Install a carbon monoxide detector if you don’t already have one.

Associations need workers' compensation coverage as they can be held responsible for medical costs and lost wages for an injured contractor if there is no insurance in place.

The due diligence of an association is to require and obtain certificates of insurance before hiring any contractors who will be working on association property. The certificate of insurance should show general liability coverage with a minimum limit of $1,000,000. The certificate should also show workers compensation coverage at the statutory limits.  

Where the association could become responsible for medical costs to an injured contractor is if that contractor either does not have work comp coverage or has let his work comp policy lapse. Under these circumstances, the association could be asked to pay for the injured contractors medical bills and lost wages.  The best way to protect the association from having to pay out of the association general funds is to purchase a minimum premium worker’s compensation policy.

Currently a minimum premium worker’s compensation policy has an annual cost of $336, due at the time of binding coverage. At the end of the policy term, the association will be asked to complete an audit worksheet. Assuming the association has no employees and no payroll and all contractors hired by the association provided the proper certificates of insurance, the association will receive a refund. The insurance company keeps an annual expense fee of $195 and returns $141 to the association.

Purchasing a minimum premium workers’ compensation policy is a very inexpensive way to ensure peace of mind and avoid any surprise outlay of association funds.

Many community associations have volunteer committees and volunteer homeowners offering their time to serve their communities. From landscaping to libraries, volunteers increase community connectivity, and their involvement contributes to making the association a place everyone is proud to call home. A question that often arises is whether there is coverage for a homeowner volunteer in the event the homeowner is injured while volunteering. There are many types of coverage that can be considered for homeowner volunteers. 

WORKER’S COMPENSATION

While most associations have a workers' compensation policy, workers’ compensation will not cover association volunteers. In Minnesota, an injury is not covered by workers’ compensation unless an employer/employee relationship exists.

GENERAL LIABILITY

If the association is negligent, the homeowner can sue under the association’s general liability. An example would be if the association provides a ladder that is defective and the volunteer is injured. Many injuries do not involve negligence though. 

There is also a section within the general liability policy called Medical Payments. This section often provides some bodily injury coverage for association volunteer workers, regardless of fault. Typically, medical payment limits for associations average between five and ten thousand dollars.

PERSONAL GENERAL LIABILITY

A homeowner’s personal liability would not provide coverage for the homeowner volunteer because the volunteer, as named insured, is excluded under their personal liability.

ASSOCIATION VOLUNTEER STAND-ALONE POLICIES

Some associations choose to purchase stand-alone volunteer policies that are designed to bridge the gap.  Volunteer policies vary in cost and coverages. Premiums start around $500 and increase based on the number of volunteers, the volunteer activities performed, and the coverages and limits desired. Available coverages include medical and dental, accidental death and dismemberment, sickness, catastrophic injury, and temporary disability.

Before volunteering, association homeowners should know what coverage, if any, is provided by the association under Medical Payments or on a stand-alone volunteer policy. In many instances, there is little or no association policy coverage for injuries sustained while volunteering. Homeowners should consider this and their own personal medical and disability insurance coverage(s) prior to volunteering.  

An alternative for the association to consider is controlling the volunteer exposure by transferring the risk to independent contractors and vendors. This strategy is especially important to consider with volunteer activities that have high risk of bodily injury.

Jan. 27, 2012

IMPORTANT WEBSITES

www.fema.gov

www.floodsmart.gov

IMPORTANT DEFINITIONS

• NFIP – National Flood Insurance Program
• RCBAP – Residential Condominium Building Association Policy
• E & S Market – Excess and Surplus Lines  Insurance Market
• FEMA – Federal Emergency Management Agency
• SFHA – Special Flood Hazard Area
• Flood – The NFIP defines flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties from the overflow of inland or tidal waters or from the unusual and rapid accumulation or runoff of surface waters from any source. (Private carriers may define flood differently.)

WHAT ARE COMMUNITY ASSOCIATIONS’ OPTIONS FOR OBTAINING FLOOD COVERAGE?

There are four different ways communities can obtain flood coverage:

• RCBAP – Residential Condominium Building Association Policy through NFIP (National Flood Insurance Program), purchased in the name of the association.
• Dwelling Form Flood Policy through NFIP, purchased by the individual unit owner.
• Removal of the exclusion for the peril of flood on the association’s package policy. Carriers, however, usually only allow a small sublimit for this coverage.
• Excess and Surplus Flood Coverage (excess over the NFIP policy) can be purchased at the association level, but only by the entity/owner who purchased the primary coverage.  

WHAT IS THE MAXIMUM LIMIT ALLOWABLE FOR PURCHASE THROUGH THE NFIP PROGRAM?

The maximum allowable limit of coverage per unit in an association is $250,000, regardless of the replacement value of the individual unit. On the dwelling form, the maximum contents limit available is $100,000.

IS THERE A WAY TO PURCHASE ADDITIONAL BUILDING OR CONTENTS COVERAGE?

The additional (excess) coverage may be purchased through the Excess and Surplus Lines market. However, when the association has the RCBAP in place, only they may purchase the excess for the building property. The homeowner may purchase excess limits for contents. 

CAN AN INDIVIDUAL HOMEOWNER OBTAIN A DWELLING FORM POLICY FROM NFIP IF A RCBAP IS IN PLACE?

Yes. However, the total amount of coverage available per unit from either the RCBAP or the Dwelling Form, or a combination of the two, is $250,000. Therefore, if an RCBAP is in place with the maximum $250,000 limit per unit, the individual homeowner should use the Dwelling Form to purchase contents and loss assessment coverage, but there is no advantage to purchasing additional structural coverage.

WHICH NFIP POLICY IS PRIMARY IF THERE IS BOTH AN RCBAP AND A DWELLING FORM POLICY IN PLACE?

The RCBAP is primary and the Dwelling Form is excess, but only up to the $250K limit allowable on the property section.

DO THE GOVERNING DOCUMENTS FOR THE ASSOCIATION COME INTO PLAY AS TO THE LEVEL OF COVERAGE OFFERED BY THE NFIP POLICY?

The NFIP does not recognize the governing documents and will settle all losses on an “All In” basis. This means that everything physically attached to the building is covered on the FEMA policy unless it is specifically mentioned as excluded or is absent in the list of covered items on their policy form.

IF A HOMEOWNER PURCHASES A DWELLING FORM POLICY AND THE ASSOCIATION SUBSEQUENTLY PURCHASES THE FULL ALLOWED LIMIT OF $250K PER UNIT ON THE RCBAP, CAN THE HOMEOWNER DECREASE STRUCTURAL LIMITS ON THEIR POLICY?

Yes, but there is some paperwork involved. The individual would need to supply a replacement cost estimate for the unit, the declaration page of the RCBAP, and documentation of the limits. Other items may be requested as well.

WHEN WOULD COVERAGE BEGIN ON A DWELLING FORM OR AN RCBAP POLICY?

Thirty days after NFIP receives the signed application and payment of the full premium for the annual policy. NFIP will send a declarations page after processing. This will reflect the effective date. There is an exception to the waiting period if the coverage is a lender requirement for closing.  

CAN LOSS ASSESSMENT COVERAGE BE PURCHASED ON THE RCBAP?

No. This is only available on an individual flood policy.

IS THE NFIP COVERAGE LISTED AS “EXTENDED REPLACEMENT COST” OR “GUARANTEED REPLACEMENT COST” LIKE WE HAVE ON OUR PRESENT MASTER POLICY?

No. Payment after a loss will not exceed the policy limit and it could have co-insurance penalties if the limits are not sufficient. (The RCBAP must be purchased at a limit of $250K per unit or 80% of the replacement cost value, whichever is less, to avoid a co-insurance penalty.)

ARE PERSONAL VEHICLES LEFT IN THE GARAGE COVERED ON THE RCBAP POLICY?

No. This coverage would need to be addressed with your personal insurance agent who handles the auto coverage.

Flood insurance is required by Federal legislation in Special Flood Hazard Areas (SFHAs) A, A1-A30, AE, AO, AH, AR, A99 and V zones.

In non SFHAs, flood insurance is optional (B, C, and X). However, it is important to note that one-fourth of all claims are paid in these zones.

Jan. 27, 2012

Workers' Compensation policies are auditable policies.  The estimated payroll makes it auditable because the carrier bases the annual premium charge off the estimated payroll that is submitted to them.

When requesting the policy issued, the agent typically uses “if any” or $100 in estimated payroll, even when it is known there are no employees. This is done because there needs to be a minimum premium charge for the carrier.

After the policy period is over, the carrier will send out an audit looking for actual payroll. The audit letter is usually sent out about 2 weeks after the policy period has ended.

Most associations don’t have any employees, meaning most see a return premium check if they complete the audit. Associations not completing the audit are leaving money on the table and risking the carrier cancelling your coverage. 

An association simply needs to complete an audit and then the carrier will issue a check for the unearned premium. This usually amounts to $130-$150, depending on the carrier.  

Workers compensation carriers have audit departments that are available to assist with the process and other carriers offer online audits.  As always RJF is always available to help as well.

ICE DAMMING

Severe winters bring extra challenges to association maintenance, including the risk of ice dams. Ice dams form when snow accumulates on a roof, melts and freezes, usually at the base of a roof. As more snow melts, it is prevented by the dam from running off the roof. This water instead seeps into the house, wetting insulation and damaging ceilings, walls and more.

Ice dams are more common on pitched asphalt roofs. These roofs were not designed to prevent infiltration from standing water. 

CAUSES

A heated attic area can cause snow and ice to build up on the unheated roof eaves outside, forming an ice dam. Heat can accumulate in attic areas and adjacent roof eaves when there is improper insulation or insufficient ventilation that allows warm and often humid air to escape from or around vent pipes penetrating the attic space.   

PREVENTION

The best way to prevent ice dams and curtail water infiltration is to decrease the heat in the attic space. The cooler the attic, the less melt off occurs. Once ice dams have formed, the root cause should be thoroughly investigated, documented and corrected to prevent future ice dams from occurring. Shoveling the roof eaves can minimize the risk of ice dams until the root cause can be addressed. On one-story rambler-style townhomes, roof rakes can sometimes be used to clean the roof eaves, but isn’t possible with the majority of taller townhomes. Roof rakes can also often cause damage to the shingles. The task of removing snow and ice from the roof eaves is best left to the snow removal contractor, as there is too much liability exposure for the association to handle this task internally with the use of association volunteers. 

HOW ICE DAMS FORM

Image courtesy of University of Minnesota Extension, Ice Dams publication. All rights reserved.

INSURANCE CONCERNS

An association’s master policy is of no help when it comes to addressing the root cause or removing the ice dams, as both are considered maintenance items for the association. In fact, an association’s master policy property section only becomes involved after the water has penetrated the roof and damaged the interior of the building in excess of the master policy deductible. At this point, the lives of the association’s residents have been disrupted, so it is in everyone’s best interest to address the ice dams before the water enters the building’s interior.

Some association boards elect insurance coverage with very large property deductibles. In these cases, their property policy is going to be of little or no value in repairing the water damage. 

If your association has water seeping into a building because of an ice dam, the association should take the following steps:

• Clear ice and snow off the roof areas where water is seeping in. This is important to do promptly, as minimizing damage is a key insuring agreement provision.
• Immediately have the interior thoroughly dried by a competent water mitigation specialist. Postponing this step could also jeopardize coverage as prompt action minimizes damage.
• Promptly notify both the association and the individual unit owner’s insurance carriers.
• Ice dams and the subsequent water damage often affect multiple units and it is advantageous to group these claims together. Assign a point person to coordinate the claim and communicate with the unit owners. It is not in the associations best interest to file multiple losses over a prolonged period of time as that will cause multiple property deductibles to be assessed. 

These steps only offer a general instruction on how to deal with ice dams on asphalt shingled roofs. Specific claim handling procedures need to be directed by the association’s master policy insurance claims adjuster. Associations should take steps to prevent ice dams from occurring by providing adequate insulation and ventilation in the attic space, removing snow accumulation from roofs and continually monitoring the attic area for leaks.

HANDLe ICE DAM Insurance CLAIMS QUICKLY

Claims should be managed quickly to minimize costs. RJF’s claims professionals recommend the following steps:

• Contact a remediation specialist to start the dry-out process and assess scope of damage.
• Report the claim promptly, and include known affected addresses.
• Create a spreadsheet to track addresses of affected units. 
• Communicate with all unit owners via announcements posted in common areas, e-mail blasts, and/or letters to advise them to look for damage in their units and report any damage to the property manager as soon as possible. 
• Schedule inspection of units with remediation specialist together with the independent adjuster. 
• Post the notice of inspection schedule for unit owners. 
• Set a reminder for yourself to send the insurance adjuster new affected unit addresses no later than 10 days after the original claim submission.

Additional Resources

University of Minnesota, Ice Dams publication.  www.extension.umn.edu/distribution/housingandclothing/DK1068.html.

Contact RJF’S COMMUNITY ASSOCIATION INSURANCE SERVICES TEAM with questions:

Herman Fasbender, CIRMS, CIC, ARM
651-480-1739
fasbenderh@rjfagencies.com

Jackie Fink, CIRMS, CIC, RN
763-746-8547
finkj@rjfagencies.com

Sarah Fjellanger, CIRMS, CIC
763-746-8278
fjellangers@rjfagencies.com

Joe Mirocha, CIRMS, CIC
763-746-8272
mirochaj@rjfagencies.com
 
Angela Wheeler, Claims
763-746-8266
wheelera@rjfagencies.com
 

Hurricanes, tsunamis, earthquakes and wildfires—there’s no denying that 2011 was a year for the weather record books. The U.S. experienced 99 FEMA Major Disaster Declarations and 14 weather and climate disasters each causing $1 billion or more in damages, according to the National Oceanic and Atmospheric Administration (NOAA). Worldwide, there were more than 300 natural disasters, with the United Nations’ International Strategy for Disaster Reduction (ISDR) putting the total value of damage at a record $366 billion.

The new year has continued the devastating trend, with damage estimates for just one U.S.-based event in the first quarter of 2012 reaching as high as $475-plus million, according to Aon Benfield’s April 2012 Global Catastrophe Recap report.

When disaster strikes, insurance carriers are tasked with assisting their clients to help mitigate the impact of the natural disaster and assist with rebuilding communities. In this interview, Angela Wheeler, RJF claims consultant and specialist on property damage, explains what businesses can and should expect from their carrier in the event of a weather-related catastrophe.

Are all natural disaster alike in terms of insurance carrier response?

Wheeler: The type of disaster expected makes a tremendous difference. Businesses have little warning of a tornado or earthquake. However, most often there is advance warning of hurricanes, floods, and wildfires. There are critical things that businesses can do with advance warning of a natural disaster. Insurance companies can help with that stage. For example, employing specialists to help move valuables to another location or equipment to a higher level can minimize the impact of the event.

Are expenses associated with pre-disaster preparation included in the insurance policy?

Wheeler: Every good policy should have what’s called an extra expense provision, which can cover the costs of preparing for a business for a disaster to minimize the impact as well as expenses necessary to continue business operations. Ultimately, it may cost the insurance company less to pay for an expensive and valuable piece to be moved out of harm’s way than to repair or replace the damage, and any downtime that the business experiences.

However, the extra expense provision can have dollar limit, and generally only comes into play if the disaster occurs. It’s essential that policyholders check with their agents to understand the terms and limitations of the provision.

After the disaster, what can business reasonably expect from their agent or carrier?

Wheeler: Insurance companies have become very sophisticated in terms of how they are responding to natural disasters, both before and after the event. If there is enough warning, carriers may be able to reach policyholders by phone or via text messages, providing them with instructions should they experience damage.

After the event, they continue to reach out, providing information about the location of their mobilized team of adjusters who can help them through the claims process. Many times carriers are working through agents who have the cell phone number of the owner as well as other designated key people such as the risk manager or operations manager.  Businesses should expect their insurance carrier to be a partner in helping to rebuild after suffering damage.  An adjuster will be onsite to evaluate the damages and make the necessary payments to continue operations.

Insurance carriers know that not only is their initial response to these events and to their policyholders critical to a community, but that they also play a major role in the rebuilding process. A major weather-related event affects residents physically and financially, with many people also experiencing a loss of income due to post-disaster business shutdown. Insurance carriers and business leaders share in the task in getting companies up and running so that the community can return to work.

What are some of the new ways insurance companies are responding to weather related incidents?

Wheeler: Most carriers have mobilized teams of adjusters in trailers that go from disaster to disaster. The onsite team can help get equipment such as generators or specialized products that a business will need, even if necessary making phone calls on behalf of policyholder. Carriers may help the business set up temporary offices or locations so they can continue operating until the permanent location is rebuilt. Insurance companies can anticipate a business’s needs and will bring to a community the critical items needed after a weather-related event. Often adjusters will be armed with an arsenal of tools including water, cleaning materials, internet services, generators, and even chain saws in the event that a road or drive is blocked by a fallen tree.

What are the steps of the process?

Wheeler: After the policyholder or carrier initiates communication, the business owner must make any necessary repairs: secure the building with boards or fencing, relocate equipment and inventory, even hire security people if needed. Business owners shouldn’t wait for the insurance adjuster to come out to start that process. In fact, it’s written into an insurance policy that a business owner is responsible for preventing any further damages. Business continuity plans are a critical piece for businesses after a major weather related event. Businesses continuity plans range from basic instructions to detailed books that are updated regularly and practiced, and often detail relationships with vendors that can help with the initial needs of a business after suffering damage from a weather related loss.  

Business owners should arrange to meet with an adjuster and their agent to inspect the damage. Business owners should have a clear understanding of what their insurance policy will allow in order to resume their operation. At the time of the initial meeting, a strategy should be developed with clear action plans on rebuilding the business operation.

The claims and rebuilding process is often long. Business owners will need to locate contractors to make the necessary repairs, and will need to submit estimates of the repairs to the insurance carrier so payments can be made to initiate the work. Often, insurance carriers will make an advance payment to help businesses get started until numbers for the damages are developed.

Businesses that experience an interruption in their operations should be prepared to provide inventory numbers, average daily values, profit statements and any other details that will help the insurance carrier calculate the business interruption. Depending on the significance of a loss, it could take six months to a year, or longer for a business to be fully operational again. 

What else policyholders should expect from their insurance company?

Wheeler: They should expect their insurance carriers to be courteous, polite and understanding of their situation, with highly trained professionals to provide the needed assistance. Insurance carriers should be making their life easier, not harder. At RJF, our goal after a client experiences a major event is to get that business into best possible situation as quickly as possible and get them as much money as we possibly can to keep their businesses operating.

Employers with 11 or more employees are required to maintain records of occupational injuries and illnesses as they occur. The purposes of keeping these records are to permit survey material to be compiled, to help define high hazard industries, and to inform employees of the status of their employer's record. These records must be maintained for five years at the establishment and must be available during an OSHA inspection. Failure to keep these records accurate and up to date can lead to OSHA fines.

Employers required to maintain records of occupational injuries and illnesses are reminded to do the following by February 1 to comply with OSHA's recordkeeping requirement:

• Review your Log(s) of Work-Related Injuries & Illnesses (OSHA's Form 300) for accuracy.
• Complete the Summary of Work-Related Injuries and Illnesses (OSHA's Form 300A) for each log (companies with no recordable injuries or illnesses must still post the summary with zeros on total lines). 
• Certify the Summary by having it signed by a company executive. 
• Post the Summary (OSHA's Form 300A) - not the Log - from February 1 until April 30 in a common area (i.e. where notices to employees are usually displayed).

For more information on completing OSHA's 300 or 300A form go to http://www.osha.gov/recordkeeping/index.html or http://www.dli.mn.gov/osha/Recordkeeping.asp.

November 14, 2011

introduction

A.M. Best recently reported that 90% of chief financial officers of insurance companies with more than $1 billion in written premium say the property insurance market is hardening or beginning to harden, according to a Towers Watson survey. Richard Kerr, CEO of MarketScout, which publishes an insurance industry market barometer, said recently that the “soft market is drawing to a close” for property/casualty insurance in the United States.

At RJF, we have seen some of the results of this hardening market over the past months. These include less available coverage, less favorable terms for policy holders such as higher deductibles and lower limits, tighter underwriting scrutiny, and increased insurance premium rates.

HARD MARKET HISTORY

The insurance market has historically operated cyclically, with periods of market hardening followed by periods of softening.

OVERVIEW OF RECENT HARD MARKETS

1983-1988

• Insurer capacity was non existent leaving many employers without insurance.
• Many “State Funds” were created as a result of this hard market. 

1991-1992

• More of a pricing correction to bring more capacity back into the insurance marketplace.
• The market saw an adjustment of 10% to 12% increases.

2000-2002

• Heavily affected by the international economy, poor loss results, and the physical/psychological impact of 9/11.
• The market adjusted itself through increases of 15% to 20%.

2011-?

• Thus far, only those businesses with poor loss experience have been affected. 
• Tighter underwriting standards (insurers are accepting less risk).
• Adding medical cost inflation back into the pricing equation.
• Passing through the 15% or more increase in reinsurance costs anticipated for Jan. 1, 2012.

INFLUENCERS: FACTS & FACTORS

MEDICAL COST INFLATION

Since 2003, medical cost inflation has averaged 6% annually, or a compounded 59%, through 2010. During the same time, employers benefited from a very competitive insurance marketplace, leading insurers to absorb the 59% inflation cost. The medical cost inflation would have affected not only workers’ compensation insurance, but also automobile insurance and general liability insurance. 

WORKERS’ COMPENSATION LOSS RATIOS

As of October 2011, the estimated year-end industry-wide combined loss ratio for workers’ compensation insurance is 121.8%. This means that for every dollar employers paid in workers’ compensation premium, $1.22 is paid out in claims and expenses. 

• Claims: The pure cost of the insurable loss (medical, lost time, disability).
• Expenses: Insurer overhead costs, legal, taxes, surcharges, reinsurance, independent medical exams, Preferred Provider Network services, etc.

CATASTROPHES

There have been substantial catastrophic events this year affecting the insurance market including:

• Significant flooding in New Zealand and Midwestern United States.
• Hurricane/flooding along much of the East Coast of the United States.
• Earthquakes in Japan and Turkey.
• Tornadoes, wind and hail losses in the Southeast and Midwestern United States

ECONOMIC INFLUENCE

Macro-level events and situations are also having an impact on the cost of insurance. These include:

• Under employment across the United States and worldwide, leading to excessive uninsured individuals who must be funded by both the private and public sectors.
• Financial upheaval in Europe.
• Inflation averaging 2.1%, but negatively affecting the cost of food and medical expenses.
• Investment returns averaging 0 to 3%.
• Excessive cash in claims reserves and surplus are dwindling for all insurers.
• Legislative actions and inactions affecting ratings and confidence levels.

HOW TO PREPARE for the hard insurance market

Employers not proactively addressing their business risks through sound risk prevention practices will feel more deeply the market change and financial impact. There are things you can do to help avoid or limit increased risk and insurance costs.

• Communicate early and often with your agent or broker.
• Understand the issues and build a strategic and tactical plan to manage the cost of risk process
• Create a plan that manages both risk prevention and losses after they occur.
• Bring your insurance carrier(s) closer to you to create trust and predictability.
• Understand the services available to you through broker and surround yourself and your business with them. Make sure your insurance carrier(s) know you are proactively managing your business risks.
• Fully understand how insurance is priced and how your individual experience affects pricing for you and others.
• Continually seek innovative ideas to manage your risks by employing those who know about them.

Remember that insurance is not just a commodity, but is, instead, one of many key tools you can use to manage your cost of risk. Its cost is directly related to your understanding and prevention of risk and loss.  

Questions?

The RJF Commercial Insurance team is available to help your company evaluate options for preparing for market changes. Contact RJF at 763-746-8000 or call your Insurance and Risk Prevention representative.

Learn the difference between important policies to ensure appropriate fiduciary protection.

by Emily Tschimperle, CISR

Perfect business practices, while a worthy goal, are impossible to achieve. To protect your business, it is important to hold insurance policies that prevent lasting harm from both mistakes and wrongdoing. Any company that sponsors a 401(k) retirement plan, profit-sharing plan, or welfare plan such as a medical, accident or a group life plan needs Fiduciary Liability coverage to protect against errors in plan administration and breaches of fiduciary duty under ERISA.

Definition of fiduciary

A “fiduciary” can be any employee who has discretionary authority or control with respect to the management or administration of the plan or its assets. Fiduciary lawsuits can involve a broad range of allegations such as: Denial or change or benefits, administrative error, wrongful termination of plan, and imprudent investment of assets.

There are three main policy types that solve different aspects of this risk. Each provides different kinds of protection.

ERISA Bond

ERISA stands for the Employee Retirement Income Security Act of 1974. This Act governs fiduciary conduct to ensure the interests of the plan participants and beneficiaries are protected. There is a statutory requirement to bond 10 percent of plan assets up to $500,000, or whichever is less (or $1 million for plans that hold a substantial amount of employer securities). An ERISA Bond covers only “actual employee theft” of plan assets.

Employee Benefits Liability

Employee Benefits Liability covers only administrative errors and omissions of the employee benefit plans. This coverage is part of the General Liability policy and does not protect against breach of fiduciary duties under ERISA.

Fiduciary Liability

Fiduciary Liability, on the other hand, covers breaches of ERISA and administrative errors and omissions of the employee benefit plans (i.e. Employee Benefits Liability). It protects the organization, subsidiaries, directors, officers, employees, and the benefit plans themselves against losses resulting from claims under two types of alleged wrongdoings. The first type, breach of fiduciary duties, is any sort of violation of the duties imposed upon fiduciaries by ERISA. The second type, wrongful administration, is any negligent error or omission while administering the plan.

Emily Tschimperle is a client executive in RJF’s Management Liability Group. She can be reached at 763-746-8247 or tschimperlee@rjfagencies.com.

December 28, 2011

Most Minnesota manufacturers are predicting 2012 to be as good or better than 2011, according to a Minnesota Department of Employment and Economic Development (DEED) report. The report provides an overview of a survey done by the department with the Federal Reserve Bank in November.

"Manufacturing is an integral part of the state's economy," said DEED Commissioner Mark Phillips in a news release. "It's impossible to overstate its importance in terms of wages, employment and exports, so it's reassuring that the industry continues to grow."

Read the release and full report.

Nov. 4, 2011

RJF is again sponsoring the State of Manufacturing™ research project, led by Enterprise Minnesota. This is the fourth year in a row RJF has been a part of this powerful endeavor that taps the knowledge of manufacturers across Minnesota to find out what their concerns are and what their needs are.

RJF has sponsored this project every year since its genesis in 2008, and is proud to do so again. With a strong history of helping manufacturers create stronger workforces and companies, RJF believes in supporting projects like this that benefit the industry and help others throughout the state better understand how this industry provides a foundation for the state’s economy.

"Helping manufacturers grow and strengthen their businesses supports vibrant communities throughout Minnesota, not only by providing jobs and increasing the tax base, but also by providing pride,” RJF Risk Management Consultant Laura Moore said. “This project gives us all a chance to really listen to what manufacturers have to say, and then to find ways to serve them and help create stronger companies.”

She continued: "This project has had a compounding affect since its inception. As an inaugural supporter of this project, we’ve seen participation grow each year, with more people in positions of authority taking note of what manufacturers say they need to succeed. Manufacturing is a vital segment of Minnesota’s economy. Keeping it strong is in all our interests."

The project consists of a statewide survey and several focus groups held regionally throughout Minnesota. The survey is designed and the results are analyzed by a national polling firm. Results of the project will be unveiled Feb. 14 at an event at the Minneapolis Convention Center. Register at http://www.enterpriseminnesota.org/resources/state-of-manufacturing.html.

May 2, 2012

Recent written audit requests to health and welfare plans from the U.S. Department of Labor (DOL) have included inquiries related to various mandates under the Affordable Care Act (the Act). This is a significant development in the ongoing implementation of the Act's various coverage and related mandates, in that it marks the first appearance of Act-related topics in DOL auditing practices. While the recent U.S. Supreme Court oral arguments caused speculation as to the future of the Act, unless and until the Act is ruled unconstitutional by the Supreme Court, it is enforceable and will be enforced by the DOL. Thus, employer-provided group health plans must continue to comply and otherwise implement the Act's various coverage and related mandates. Likewise, plan sponsors must comply with any Act-related DOL audit requests, and be prepared to produce documents to prove that their plan complies with the Act's various mandates.

Areas Addressed in Audits

The DOL audit requests relating to the Act can be divided into three types:

• Requests as to plans claiming grandfathered status
• Requests as to plans not claiming grandfathered status
• Requests as to all health plans regardless of grandfathered status. For each type of request, the DOL has asked to examine the types of documents listed below.

For grandfathered plans (i.e., that are claiming or have claimed grandfathered status under Section 1251 of the Act)

• Disclosure statements regarding grandfathered status included in material distributed to participants and beneficiaries describing the benefits provided under the plan
• Records documenting the terms of the plan on March 23, 2010, along with any ancillary documents required to verify the status of the grandfathered plan.

The DOL audit questions listed above appear to be aimed at substantiating that the plan in question complies with two requirements under the final interim regulations on grandfathered health plans under the Act issued by the Departments of Labor, Health and Human Services, and Treasury on June 14, 2010; namely that plans must:

• Provide a specific notice that the plan believes it is a grandfathered health plan in any materials that describe the plan's benefits to participants or beneficiaries
• Maintain, and make available upon a government agency's request, records documenting the terms of the plan or health insurance coverage in effect on March 23, 2010, as necessary to verify, explain, or clarify the plan's grandfathered status. 

Requests applicable to non grandfathered plans

• The plan's choice provider disclosure notice, along with a list of participants who received that notice
• Documents relating to the plan's emergencies services benefits
• Documents relating to the preventative services for each plan year on or after September 23, 2010
• The plan's internal claims and appeals procedures
• Notices relating to adverse benefit determinations, the plan's final internal adverse determination notice, and the plan's final external review determination notice
• Contracts or agreements with independent review organizations or third-party administrators providing external review.

The DOL audit requests listed above appear to be aimed at substantiating that the plan in question complies with certain coverage mandates that apply only to nongrandfathered health plans, including covering certain preventive care services without cost sharing, as well as that any emergency hospital services must be provided without requiring prior authorization or higher cost sharing amounts, even for out-of-network services. In addition to these mandates, nongrandfathered health plans must adopt new internal and external claims procedures pursuant to guidance issued under the Act. This guidance provides a safe harbor for compliance with the Act's requirement to offer a binding external review process under the plan. For this purpose, the nongrandfathered health plan must contract with three independent review organizations to handle external claims appeals. 

Requests applicable to all plans

• For plans with dependent care coverage, a sample of the notice describing enrollment opportunities relating to coverage of children up to age 26
• A list of any participants who had coverage rescinded and the reason for such rescission
• If the plan imposes or has imposed a lifetime limit since September 23, 2010, documents relating to that limit for each plan year
• If the plan has imposed an annual limit since September 23, 2010, documents relating to that limit.

These requests appear to be aimed at eliciting information necessary for the DOL to determine a group health plan's compliance with four primary mandates applicable to all group health plans, regardless of the plan's grandfathered status. First, the Act requires group health plans and insurance issuers that provide dependent child coverage to make that coverage available for children until they attain age 26. In addition, the Act does not permit the rescission of coverage absent fraud or material misrepresentation on behalf of the individual claiming coverage under the group health plan. For this purpose, a rescission is simply the retroactive termination of coverage for any reason other than non-payment of premiums. Finally, the Act does not permit group health plans to impose lifetime or annual limits on benefits deemed to be "essential," a term that needs further definition by the oversight agencies.

Best Compliance Practices

Generally, plan sponsors and administrators must be able to demonstrate that their plans comply with the Act, which requires documentary evidence – from plans, record keepers, and/or service providers. Written records of the steps taken to comply with the Act since September 23, 2010, including detailed records of participation information and communications with participants about enrollment periods and coverage, should be retained in a readily accessible fashion. For example, plans should keep and be able to produce notices of coverage for children up to 26 years of age, and evidence of distribution. Likewise, any plan amendments or written policies that were adopted to implement the Act mandates discussed above should be ready for production.

Upon receiving such an audit request, you should contact counsel immediately, as the issues are complex, and swift action is often necessary to protect the various rights and interests of the numerous entities involved in administering health and welfare plans. 

Content provided by Proskauer Rose.

May 2, 2012

The IRS may be stepping up their efforts to ensure that employers are complying with COBRA when it recently updated its COBRA audit procedures on its Website last month in a posting titled “Audit Techniques and Tax Law to Examine COBRA Cases" (Continuation of Employee Health Care Coverage). This revision, with very few updates or surprises, may be signaling the need for employers to evaluate their current COBRA practices and make changes in light of stepped up enforcement.

BACKGROUND

COBRA is a federal law that allows for the continuation of most group health plan coverage (medical, dental, vision, Health FSA, HRA, etc.) to covered persons (qualified beneficiaries) upon the occurrence of certain events (qualifying events) such as termination of employment, divorce, loss of dependent eligibility and other events.  In addition, COBRA also requires that certain notices are provided, addresses premium payment by qualified beneficiaries, duration of continuation coverage and more.

Noncompliance may result in significant risks to the employer, including penalties for not providing notices in a timely manner or for any potential recovery of benefits should an employee demonstrate that an employer failed to provide an individual the opportunity to elect continuation. In addition, employers who do not comply may be subject to excise taxes as described below.

UPDATED AUDIT PROCEDURES FOR NONCOMPLIANCE

The updated procedures provide a glimpse into the process that an auditor should follow when reviewing an employer’s COBRA compliance and the extensive nature that an audit can bring. For example, if a covered employee is denied COBRA continuation due to gross misconduct, the procedures instruct an auditor to check to see if the covered employee was denied unemployment benefits for the same reason.

When beginning an audit, the procedures state that an auditor will first request the following:

• A copy of the employer’s health care continuation coverage procedures manual 
• Copies of standard health care continuation coverage form letters sent to the qualified beneficiaries 
• A copy of the employer’s internal audit procedures for health care continuation coverage 
• Copies of group health care plan information
• Details pertaining to any past or pending lawsuits filed against the employer for failing to provide appropriate continuation coverage.

In addition, “the examiner should probe specific areas for noncompliance” and “interview responsible parties” for the following:

• The number of qualifying events (for example, terminations, reduced hours, etc.) occurring in the year under examination through the current date
• The method by which qualified beneficiaries are notified of their rights to continuing health care coverage under COBRA
• The method by which the plan administrator is notified that a qualifying event has occurred
• The election made by qualified beneficiaries to continue health care coverage 
• The premium paid by qualified beneficiaries for continuing coverage under the Plan
• Copies of Federal and state employment tax returns filed during the current period under examination and the preceding year (returns will show changes in the number of employees on the payroll between the two years) 
• List of all individuals affected by a qualifying event (for example, termination, death, etc.) during the current year 
• List of all individuals covered on 1-1-YY and 12-31-YY of the current and preceding years for each plan; this list should include all qualified beneficiaries (in other words, covered employee, spouse and dependent children)
• Personnel records, including:

ο  Name and address of each beneficiary (for purposes of third party confirmation if necessary) 

ο Date the qualifying event took place 

ο Copies of the notification letters sent to qualified beneficiaries (to determine the period they were eligible to elect coverage, and in fact were offered coverage, and also to confirm they received their notice of rights under COBRA)

ο Type of coverage received under COBRA (to determine if the qualified beneficiary received the proper coverage) 

ο Premium payments required under COBRA (review of health plan documents previously requested may indicate whether the premium charged was excessive) 

ο Copy of employer’s letter to the insurance company/plan administrator notifying them of a qualifying event 

ο Reasons for termination of COBRA coverage properly elected by the beneficiary 

ο Reasons for employment termination 

THE COBRA EXCISE TAX

COBRA includes excise taxes that can be assessed to employers for noncompliance.  In 2010, the IRS published guidance related to Form 8928 that an employer uses to self-report COBRA violations and pay applicable excise taxes.  

More recently, the updated guidance includes a detailed computation of the tax if an employer fails to comply with COBRA’s requirements. In general, the tax is determined by the number of days in the “noncompliance period”, multiplied by the number of qualified beneficiaries for which a failed occurred, multiplied by $100.

The noncompliance period begins on the date that the failure to comply occurred and ends on the date the failure is corrected, and will be no longer than six months after the last day of the applicable maximum COBRA period.  For example, for a qualifying event whose maximum COBRA period is 36 months, the period of noncompliance could be up to 3 ½ years.

The updated guidelines also include a minimum and maximum tax penalty amount that varies by whether or not the failure to comply was inadvertent, if the failure was de minimis or not, if the employer has been notified that an audit will occur, if the failure was corrected within 30 days of its discovery, and other factors.

For example, the maximum tax that can be imposed on a single employer plan for inadvertent failures is the lesser of 10% of the employer’s total expenditures on the group health plan or $500,000.  At minimum, the tax may be $2500 for each qualified beneficiary for whom the failure to comply is de minimis or up to $15,000 for each qualified beneficiary if more than de minimis.

WHAT EMPLOYERS SHOULD DO

The recent changes to COBRA audit procedures may signal an increase in COBRA compliance enforcement.  Employers who are subject to COBRA should review their documentation and procedures to ensure compliance.  This may include a review to determine that COBRA notices are correct and provided to individuals as required by the law, a review of the plan’s COBRA premium and how it is determined, tracking qualified beneficiaries coverage elections and premium payments, and record retention policies.

Employers who are also subject to state continuation law should ensure that these requirements are also being met while clearly demonstrating COBRA compliance.  As well, if an employer uses a third party administrator (TPA), the employer is still responsible for some of the requirements under COBRA such as notifying new hires of their COBRA rights and providing the TPA with timely, accurate information regarding COBRA events.

Additional information from the IRS.

May 1, 2012

INTRODUCTION

The IRS has issued proposed rules addressing the comparative effectiveness research fees imposed by the Patient Protections and Affordable Care Act (PPACA) on health insurance carriers and plan sponsors of self-insured health plans. The IRS is taking comments on the proposed rules for 90 days and is expected to issue final regulations shortly thereafter.

BACKGROUND

PPACA creates a nonprofit corporation, the Patient-Centered Outcomes Research Institute, to conduct and promote clinical effectiveness research. The institute will be funded by a patient-centered outcomes research trust fund. The trust fund will be funded in part by fees to be paid by issuers of health insurance policies and sponsors of self-insured health plans.  

The Act imposes fees on “specified health insurance policies” and “applicable self-insured health plans” based on the average number of lives covered under the policy or plan. The fees are effective for plan years ending after September 30, 2012. Thus, for employer-sponsored plans that begin on the first day of the month, the first plan year subject to the fees will be plan years beginning November 1, 2011 (which will end October 31, 2012). The fee no longer applies for plan years ending after September 30, 2019. 

The fee is $1 per year, multiplied by the average number of lives, which includes employees, spouses and dependents, covered under the plan for plan years ending before October 1, 2013, and $2 per year for plan years ending after that date. Beginning in 2014, the fee will be adjusted based on a formula that takes into account the increase in national health care expenditures. 

IRS GUIDANCE

The IRS previously issued a request for comments regarding the fees in IRS Notice 2011-35 released in June 2011. The proposed rules address a number of outstanding issues included in the request for comments.

WHO PAYS THE FEE?

For fully-insured plans, the fee will be paid by the health insurance carrier (referred to as the issuer in the regulations). For self-insured plans, the fee must be paid by the plan sponsor (generally the employer in the case of a single-employer plan). 

The IRS had requested comments regarding the possibility of allowing third parties, such as the employer claims administrator, to pay the fee on behalf of a self-funded employer. Unfortunately, the IRS has decided that the fee for self-funded plans must be paid directly by the plan sponsor/employer.

PLANS SUBJECT TO THE FEE

The fee applies to a “specified health insurance policy” which is defined as any accident or health insurance policy (including a policy under a group health plan and self-funded plans) issued with respect to individuals residing in the United States. The fee does not apply to plans that are treated as excepted benefits under HIPAA (i.e. limited scope dental and vision plans). 

• The effect of the fee on a Health Reimbursement Arrangement (HRA) will depend on if the HRA is integrated with a self-funded or fully-insured health plan.

> Under the proposed rule, multiple self-insured arrangements maintained by the same employer with the same plan year are subject to a single fee. Thus, a health reimbursement arrangement (HRA) is not subject to a separate fee as long as the HRA is integrated with a self-insured health plan.

> However, an HRA offered in conjunction with a fully-insured health plan will be considered a self-funded plan and will be subject to the fee.

• No fee will apply to a Health Flexible Spending Account (HFSA) that satisfies the HIPAA definition of an "excepted benefit".
• An employee assistance program, disease management program or wellness program will generally not be considered a plan subject to the fee as long as the plan does not provide significant medical care or benefits. 

CALCULATING AND PAYING THE FEE

The fee will be based on the average number of lives covered under the policy or plan. To determine the average number of lives covered under a self-funded health plan during a plan year, a plan sponsor must use one of the following methods: 

• The actual count method: the average number of lives covered under a plan for a plan year is determined by adding the total lives covered for each day of the plan year and dividing that total by the number of days in the plan year.
• The snapshot dates method: a plan sponsor may determine the average number of lives covered under a plan by adding the total lives covered on one date in each quarter (or more dates if an equal number of dates are used for each quarter) and dividing that total by the number of dates on which a count was made. For this purpose, the date for each quarter must be the same (for example, the first day of the quarter, the last day of the quarter, the first day of each month, etc.).
• The Form 5500 method: a plan sponsor may determine the average number of lives covered under a plan for a plan year based on the number of reportable participants on the plan’s Form 5500. If the plan covers individuals other than the employee (e.g. spouses and dependents) as most employer plans do, the average number of lives covered under the plan equals the sum of total participants reported in the Form 5500 covered at the beginning plus the number at the end of the plan year. 

This methodology was created to address the fact that the fee includes spouses and dependents covered by the plan but those spouses and dependents are not included in the count of participants reported on the Form 5500. Adding the number of Form 5500 “employee” participants at the beginning of the year to the number at the end of the year to determine the participant count essentially estimates that there are approximately 2 “covered individuals” to every participant reported on the Form 5500.

Plan sponsors of self-funded plans will report and pay the fees once a year on IRS Form 720, which will be due by July 31 of each year. The Form 720 will cover plan years that end during the preceding calendar year. For example, an employer with a plan year ending December 31, 2012 will need to report and pay the fee by July 31, 2013, while an employer with a plan year ending January 31, 2013 will not need to report and pay the fee until July 31, 2014.

SUMMARY

Employers who sponsor only fully-insured plans have little to do since the insurance carrier is responsible for paying the fee. Assumedly, the fee will be reflected in the premiums paid by the employer to the carrier. Note:  Employers who sponsor a fully-insured health plan, but also offer an HRA, will need to report and pay the fee for the HRA plan.

Employers who sponsor self-funded health plans have some work to do. They must first determine which method they will use to calculate the fee. It is also possible that different allowable methods will result in different fee amounts due, so employers may want to calculate the fee each way to determine the lowest amount due.

IRS guidance is available and includes examples of the different types of participant calculation methods. 

May 1, 2012

Lost productivity due to disabled employees is one of the most expensive costs for employers. Economic, demographic and societal trends have led to an increasingly aging, mobile and diverse workforce. In addition, increased stress in the workplace and the home are taking a toll on overall employee health, productivity and safety. The result is higher health care and disability costs that have a measurable impact on employers and the employee benefits packages that they offer. These trends and costs are expected to continue to interact with and influence the marketplace, so making appropriate benefit choices remains important for employers.

Studies show that working-age adults are more likely to suffer from a lengthy disability in a given year than they are to die. Unless it is offered through their employer, most adults have little, if any, disability insurance coverage. 

Group disability insurance provides income protection for employees as well as cost-saving management strategies for employers. For employers, lost time on the job due to a disability can significantly impact workplace productivity and profitability. However, disability insurance provides partial replacement of lost income for employees while also covering overtime and costs of hiring replacements. Most employers offer salary continuation plans. Many states also mandate temporary disability insurance that requires employers to provide benefits equivalent those working in non-statutory states.

Lost time and medical costs are on the rise, and the risk of disability is greater than most employers and employees realize. Consider these statistics:

• Disabilities affect 19 percent of Americans (approximately 54 million people).
• On average, about 3,000 disabling injuries occur every hour during the year.
• A disabling injury occurs every eight seconds at work.
• Thirty percent of employees age 35 to 65 will become disabled for 90 days at least one time while working.
• By age 35, there is a 50 percent chance of becoming disabled for three or more months.
• The Social Security Administration claims that there will be a 37 percent increase in disability insurance incidences because the workforce is getting older. 

The likelihood of becoming disabled is on the rise for working Americans and so are the financial consequences and costs associated with employee absence. The population is aging, which also translates into rising benefit utilization and cost. Beyond that, unscheduled absences disrupt workflow and increase cost, while human resource pressures are impacting the ability to dedicate adequate time and attention to lost-time experience. 

Any organization or individual that does not currently have disability insurance coverage should weigh their options and consider purchasing disability coverage.

Thank you for your interest in the Live Well, Work Well newsletter. Each month, tips for healthy living are featured. Below is a link to this month's newsletter as well as links to archived editions.

Live Well, Work Well May 2012

Archived Live Well, Work Well Newsletters

• April 2012
• March 2012 
• February 2012
• January 2012

Thank you for your interest in the Benefits Buzz newsletter. Each month, new benefits and HR tips are featured. Below is a link to this month's newsletter as well as links to past editions.

Benefits Buzz May 2012

Archived Benefits Buzz Newsletters

Sunday’s Star Tribune business section featured a health care reform Q&A with RJF’s Mary Setter. The paper did a really good job distilling many of the complexities of the legislation in a way that makes sense to employers who don’t have the resources of a full-time compliance specialist or in-house counsel. It’s a difficult job—we know, and we’re in it every day—keeping up with the details.

Based on how the article was edited, we believe there may be a little confusion around the details of how health care reform penalties work and are applied to employers, so we wanted to provide some additional clarity around that topic.

There are different penalties for employers who offer coverage than for those who do not offer coverage.

Penalties for employers not offering a health plan

If an employer with 50 or more employees or full-time equivalents (FTEs) does not offer a health plan to their employees, and at least one employee purchases subsidized coverage through an exchange, they will pay a penalty of $2,000 per year times the total number of full-time employees (excluding the first 30 employees).

Penalties for employers offering a health plan

If the employer offers a health plan to all full-time employees and the plan is considered unaffordable, the employer will pay a penalty of $3,000 per year times the total number of full-time employees that purchase subsidized coverage through the exchange.

March 27, 2012

The Departments of Labor (DOL), Health and Human Services (HHS) and the Treasury (the Departments) released a series of Frequently Asked Questions (FAQ’s) regarding the implementation of the Summary of Benefits and Coverage (SBC) provisions contained in the Affordable Care Act. The FAQ contains answers to 24 questions received by the Departments regarding implementation of the SBC rules.

BACKGROUND

On February 9, 2012, the Departments released the final rules regarding the SBC. Included in these rules is the requirement that health plans provide participants with a uniform summary of benefits and coverage (SBC) beginning later in 2012. The final regulations and the requirements to provide the new, standardized SBC are effective for group health plans on the following dates:

• With respect to participants and beneficiaries who enroll or re-enroll during an open enrollment period, the SBC must be provided beginning on the first day of the first open enrollment period that begins on or after September 23, 2012.
• With respect to participants and beneficiaries who enroll in a plan at a time other than during an open enrollment period (e.g. new enrollees and HIPAA special enrollees), the SBC must be provided beginning on the first day of the first plan year that begins on or after September 23, 2012.

For example, an employer whose plan year begins October 1, 2012 but whose open enrollment period begins on September 1, 2012 would not be required to provide the SBC during open enrollment, but would be required to use the SBC for new enrollees beginning on the first day of the new plan year. 

The final regulations confirmed that, in the case of fully-insured plans, the insurance carrier is responsible for producing and providing a valid SBC to employers who sponsor group health plans. Employers who sponsor self-funded plans are technically responsible to produce their own SBCs; however, it is anticipated that third party administrators (TPAs) will assist with the development of required SBCs. Employers will be responsible for the distribution of the SBC to participants, both during open enrollment periods and to new participants.  

HIGHLIGHTS OF THE FAQ

• The Departments stressed that during the first year of implementation their approach to compliance will be “marked by an emphasis on assisting (rather than imposing penalties on) plans, issuers and others that are working diligently and in good faith to understand and come into compliance with the new law.”…and that during the first year “the Departments will not impose penalties on plans and issuers that are working…in good faith to provide the required SBC content…consistent with the final regulations.” 
• Separate SBCs are not required for different tiers of coverage (i.e. single vs. family).
• Plans can combine coverage provided under separate plans, such as a high deductible health plan combined with a health reimbursement arrangement (HRA) into a single SBC.
• SBCs may be provided electronically to participants and beneficiaries in the following manner: SBCs provided electronically to participants must meet the requirements of the existing DOL safe harbor rules related to electronic communications of plan information. SBCs may also be provided electronically to an individual eligible who is not yet participating in a plan, as long as the individuals is notified as to where and how to access the information. The Departments also provided sample language for this notification.
• Unless the plan or insurer knows of a separate address for a beneficiary, the SBC may be provided to the employee on behalf of other family members.

SUMMARY OF WHEN THE SBC MUST BE PROVIDED TO PARTICIPANTS

The FAQ also provides a summary of when the SBC must be provided to participants. These distribution rules are covered in greater detail in the final regulations. The SBC must be provided at the following times:

Upon Application

If a plan (including a self-insured group health plan) or an issuer distributes written application materials for enrollment, the SBC must be provided as part of those materials. For this purpose, written application materials include any forms or requests for information, in paper form, through a website or email, which must be completed for enrollment. If the plan or issuer does not distribute written application materials for enrollment (in either paper or electronic form), the SBC must be provided no later than the first date on which the participant is eligible to enroll in coverage.

By first day of coverage (if there are any changes)

If there is a change to the information required by the SBC that was provided upon application and before the first day of coverage, the plan or issuer must update and provide a current SBC no later than the first day of coverage.

Special enrollees

The SBC must be provided to special enrollees no later than the date on which a summary plan description is required to be provided (90 days from enrollment).

Upon renewal

If a plan or issuer requires participants and beneficiaries to actively elect to maintain coverage during an open enrollment period, or provides them with the opportunity to change coverage options during this time, the plan or issuer must provide the SBC at the same time it distributes other open enrollment materials. If there is no requirement to re-elect or renew coverage(sometimes referred to as an "evergreen" election), and there is no opportunity to change coverage options, renewal is considered to be automatic and the SBC must be provided no later than 30 days prior to the first day of the new plan or policy year.

Upon request

The SBC must be provided upon request for an SBC or summary information about the health coverage as soon as practicable but in no event later than seven business days following receipt of the request.

PROVIDING THE SBC IN A CULTURALLY AND LINGUISTICALLY APPROPRIATE MANNER

If the SBC is sent to an address in a county in which ten percent or more of the population is literate only in a non-English language, the plan must meet the language requirements contained in the claims and appeals regulations released last year. Current county-by-county data is available.

These rules outline three requirements that must be satisfied for notices sent in these counties. The plan is generally required to:

• Provide oral language services in the non-English language.
• Provide notices upon request by an individual in the non-English language.
• Include in all English versions of the notices, a statement in the non-English language clearly indicating how to access the language services provided by the plan. Sample language for this statement is available on the model notice of adverse benefit determination. 

Versions of SBC language are available on the HHS Website for a number of languages. Written translations in Spanish, Chinese, Tagalog and Navajo will be available. 

SUMMARY

Employers must determine how to incorporate the SBC into current employee communication processes and materials. Additional guidance is expected this year as the Departments continue to receive questions about this process. Employers with fully-insured plans can expect to see SBCs from their carriers soon. Self-funded employers should work with their third party administrators to determine who will be responsible for SBC creation.

The full text of the Departments FAQ is available on the DOL Website.

March 27, 2012

HIPAA requires that plan participants of employer-sponsored health plans receive a Notice of Privacy Practices (NPP). The requirement applies to health plans such as medical, dental, vision, prescription drug, Section 125 health flexible spending account (HFSA) and health reimbursement arrangements (HRA). 

CONTENT REQUIREMENTS

The Notice of Privacy Practices must be written in plain language and should:

• Explain how the health plan may use and disclose an individual’s protected health information (PHI).
• Describe the individual’s rights with respect to his or her PHI.
• Summarize the health plan’s legal duties with respect to the PHI.

DELIVERY DEADLINES

HIPAA required that a NPP be provided to health plan participants at the time the plan was first subject to the HIPAA Privacy rules. Most plans were originally subject to this in April 2003 or 2004, depending on the size of the plan. Thereafter, it is required that a reminder of the availability of the NPP be sent to plan participants at least once every three years. The reminder must tell participants how to obtain a copy of the NPP for the plan.

• Health plans that previously sent a notice or reminder by April 14, 2009, have until April 14, 2012 to send the next notice or reminder. 
• Small health plans (those with annual receipts of $5 million or less) that previously sent a notice or reminder by April 14, 2010, have until April 14, 2013 to send the next notice or reminder.

In addition, health plans must provide the Privacy Notice in the following circumstances:

• To new enrollees at the time of enrollment.
• Within 60 days of a material change to the notice.
• Any time upon a participant’s request.

If the actual NPP is distributed more often than every three years, the notice requirement has been satisfied and a reminder does not need to be sent.

If the employer’s insurance carrier sends a NPP to plan participants, the employer is not required to send a separate notice. Most carriers provide a NPP annually to participants of fully-insured health plans.

DELIVERY METHODS

• The reminder, or an actual NPP, does not need to be sent to the plan participant’s home. Plans can include the notice in other benefit materials sent to participants or distributed at work. 
• Many insurance companies and employers include the NPP with the plan’s annual open enrollment materials. 

ACTION STEPS AND ADDITIONAL INFORMATION

Employers should answer the following questions to determine if they are meeting their HIPAA notice obligations:

• Does your NPP contain all the required content?
• Is the employer’s insurance company or TPA distributing a NPP to all plan participants? If so the employer is not required to send a duplicate NPP for that plan. 
• Is an NPP being distributed to plan participants for all of their health plans that are subject to HIPAA? 

Employers must remember that HIPAA applies to a variety of plans. While it is common for fully-insured medical and/or dental insurance carriers to provide the NPP to plan participants, this will not satisfy the requirement for other plans subject to HIPAA such as the Section 125 HFSA or a health reimbursement arrangement (HRA). An employer can distribute one NPP that covers all of their plans subject to HIPAA. However, to do this, the employer must draft an employer-specific notice that correctly refers to all employer-sponsored plans subject to HIPAA.

Additional information from HHS.

March 27, 2012

The Department of Health and Human Services (HHS) published a final rule on Affordable Health Insurance Exchanges. Affordable Health Insurance Exchanges (Exchanges) will be operational starting in 2014, providing consumers and small businesses a one-stop marketplace for purchasing private health insurance plans. In addition, the final rule provides states with a framework for establishing their exchanges while preserving flexibility. The final rule includes standards for:

• Establishment and operation of an exchange
• Health insurance plans that participate in an exchange
• Determinations of an individual’s eligibility to enroll in exchange health plans and in insurance affordability programs
• Enrollment in health plans through exchanges
• Employer eligibility for and participation in the Small Business Health Options Program (SHOP)

HIGHLIGHTS OF THE FINAL RULE

The rule is effective 60 days after publication in the Federal Register (scheduled for March 27, 2012). HHS is issuing certain provisions as interim final rules and those are open to public comment for 45 days from the publication date in the Federal Register.

ESTABLISHMENT OF EXCHANGES

The final rules provide that a state may establish its exchange as a non-profit entity, an independent public agency or as part of an existing state agency. A state may also operate its exchange through a regional exchange with other states or may operate multiple exchanges in different areas of the state.

The Patient Protection and Affordable Care Act provides that a state’s exchange must be approved by HHS no later than January 1, 2013, with a provision for conditional approval if a state is in advanced stages of preparation but not able to demonstrate readiness by that date. The final rule allows states that are not ready for 2014 to apply to operate an exchange in 2015 or later.

QUALIFIED HEALTH PLANS

Exchange health plans must provide high-quality coverage and meet minimum standards as defined in the law to be considered “qualified health plans.” Exchanges will have the flexibility to establish additional standards, and may choose to allow any plan meeting the minimum standards to participate.

ELIGIBILITY AND ENROLLMENT

The exchanges will also administer the premium tax credits available to certain qualifying individuals. Beginning in 2014, individuals with incomes less than 400% of the federal poverty level who do not have affordable employer-sponsored insurance available may qualify for federal tax credits to be used toward the purchase of individual health insurance on the exchange.

The final rule establishes a streamlined, coordinated, web-based system for applying and receiving an eligibility determination and insurance affordability programs. The enrollment process will include toll-free call centers and state-selected “Navigator” organizations that will provide consumers education and assistance in selecting plans.

SMALL BUSINESS HEALTH OPTIONS PROGRAM

Exchanges will also establish and operate Small Business Health Options Programs (SHOPs) that will provide small employers the opportunity to offer exchange health plans of their choosing to employees. The final rule provides states flexibility with regard to the size of businesses that can participate and the structure of choices for businesses. Initially, states may set the size of the small group market at either 1 to 50 or 1 to 100 employees until 2016. Beginning in 2016, employers with between 1 and 100 employees can participate in a SHOP. In 2017, states have the option to let businesses with more than 100 employees buy large group coverage through the SHOP.

HHS Press Release

Fact Sheet on final rule

March 5, 2012

The Department of Labor (DOL) recently issued a technical release providing  responses to questions from employers and other stakeholders regarding the Affordable Care Act (ACA) provisions governing automatic enrollment, employer shared responsibility (sometimes referred to as “play or pay”) and waiting periods. It also outlines and requests comments on various approaches the Departments of Labor, Health and Human Services and Treasury are considering proposing in future regulations or other guidance. 

AUTOMATIC ENROLLMENT

The automatic enrollment provision directs any employer with more than 200 full-time employees to automatically enroll new full-time employees in one of the employer’s health plans. Information released by the Departments in December 2010 indicated that employer compliance with the provision would not be required until final regulations are issued, which was anticipated by 2014. According to this technical release, the DOL has since concluded its guidance on the matter will not be ready to take effect by 2014. Thus, employers won’t be required to comply until the final regulations are issued and become applicable. 

90-DAY LIMITATION ON WAITING PERIODS

The 90-day waiting period limitation provision provides that, in plan years beginning on or after January 1, 2014, a plan may not apply an eligibility waiting period greater than 90 days. The technical release indicates the provision will not require an employer to offer coverage to part-time employees or to any other particular category of employees. It merely prohibits requiring an otherwise eligible employee to wait more than 90 days before coverage is effective. 

The release uses various scenarios to explain which waiting period provisions and employee situations require compliance with the regulations. Additionally, the release indicates that the proposed guidance is expected to address situations in which employees (or certain classes of employees) are eligible for coverage once they complete a specified cumulative number of hours of service within a particular period (such as 12 months). It is expected that eligibility conditions won't be treated as “designed to avoid compliance with the 90-day waiting period limitation” as long as the required cumulative hours of service do not exceed a number of hours to be outlined in that guidance.

EMPLOYER SHARED RESPONSIBILITY

The employer shared responsibility provisions state that beginning in 2014, any employer with 50 or more full-time equivalent employees could be subject to a penalty if any full-time equivalent employee is certified to receive a premium tax credit or cost-sharing reduction payment for coverage offered through insurance exchanges if the employer does not offer minimum essential coverage or offers coverage that is unaffordable. The technical release indicates the Treasury and Internal Revenue Service (IRS) intend to propose guidance that will:

• Permit employers to use an employee's W-2 wages as employee income safe harbor in determining the affordability of employee-only contributions required to purchase employer-sponsored coverage. 
• Address the intersection of this provision with the rules applicable to the 90-day waiting period limitation so that for at least the first three months after an employee's date of hire, the employer will not be subject to penalty by reason of failing to offer coverage during that three-month period.
• Allow employers to use a look-back/stability period safe harbor approach (likely not exceeding 12 months) to determine whether an employee is a full-time employee. If implemented, this would be welcomed by employers who employ seasonal or variable hour employees.

March 5, 2012

The Middle Class Tax Relief and Job Creation Act of 2012 will extend the two percentage point payroll tax cut that has been in effect since the beginning of 2011, continuing the reduction of Social Security tax withholding rate from 6.2 percent to 4.2 percent. The reduced rate was previously extended through the end of February 2012, and now with this latest extension, employees will continue to take home more earnings through the end of this year. The lower rate does not have an effect on an employee’s future Social Security benefits.

The Act also repealed a “recapture” provision that was included in the extension through February. 

Feb. 15, 2012

The IRS, Department of Labor and Health and Human Services (the agencies) released final regulations regarding the Summary of Benefits and Coverage (SBC) requirement contained in the Affordable Care Act (the Act). The agencies had previously released proposed regulations in August 2011, which were scheduled to go into effect in March 2012. However, the agencies subsequently delayed the effective date until after final regulations were released.  

EFFECTIVE DATE FOR GROUP HEALTH PLANS

The final regulations and the requirement to provide the new, standardized SBC are effective for group health plans on the following dates:

• Beginning on the first day of the first open enrollment period that begins on or after Sept. 23, 2012, plans must provide the SBC to participants and beneficiaries who enroll or re-enroll for coverage during the open enrollment period.
• Beginning on the first day of the first plan year that begins on or after Sept. 23, 2012, plans must provide the SBC to participants and beneficiaries who enroll for coverage other than through an open enrollment period, such as newly eligible individuals and special enrollees.  

For example, an employer with a plan year that begins October 1, 2012, but starts their open enrollment period on September 1, 2012, would not be required to provide the SBC during open enrollment, but would be required to use the SBC for new enrollees beginning on the first day of the new plan year.

In addition, calendar year plans with an annual open enrollment period that takes place before the start of the plan year will generally need to start providing the SBC on the first day of the open enrollment period for the 2013 plan year.

NEW SAMPLES AND TEMPLATES ALSO RELEASED

The agencies have also published new samples and templates that can be used as a basis for developing an SBC. The new templates and instructions can be found on the DOL Website.

WHO IS RESPONSIBLE TO CREATE AND SEND THE SBC?

The final regulations confirm that, in the case of fully-insured plans, the insurance carrier is responsible to produce and provide a valid SBC to employers who sponsor group health plans. While self-funded employers are technically responsible to produce their own SBC’s, it is anticipated that firms which assist employers in the administration of self-funded plans are likely to assist with the development of required SBC’s. Employers will have to play a role in the distribution of the SBC to participants during open enrollment periods and to new participants.  

SUMMARY

Since employer group health plan years generally begin on the first of the month, the first employers who will be subject to these new rules will be those with plan years beginning October 1, 2012. Most employers will be able to depend on their carrier or claims administrator to actually produce the SBC’s, but employers will need to adjust their enrollment procedures to comply with the new disclosure rules.

BACKGROUND

Many employers provide health plan coverage to their employees’ domestic partners (and sometimes the domestic partner’s child).  This coverage may be taxable on a federal level to the employee depending on:

• Whether the domestic partner or child satisfies the conditions to be a Code §105(b) tax dependent for the entire taxable year in question.
• How coverage is paid for (pre-tax or after tax).

In some cases an employer may need to impute the fair market value of coverage provided to domestic partners (and their children).  If income is imputed due to employer-paid health coverage, the domestic partner's coverage will be treated as having been purchased with after-tax dollars for purposes of Code §104(a)(3), with the result that any health benefits paid on behalf of the domestic partner (or child) under the plan will be tax-free to both the employee and the domestic partner.

As well, as more and more states grant various rights to same gender or opposite gender domestic partners, taxation issues on a state level should also be addressed.

DEFINING FEDERAL TAX DEPENDENT

SAME GENDER PARTNERS AS THE EMPLOYEE’S DEPENDENT

To be a federal tax dependent of an employee, a domestic partner must meet the requirements of a “qualifying relative” under Code §105(b).  The partner must:

• Have the same principal place of abode as the employee and be a member of the employee's household.
• Receive over half of his or her support from the employee.
• Not be anyone's qualifying child.
• Be a (1) citizen of the U.S., or (2) a resident of the U.S. or a country contiguous to the U.S.

In many cases, employees are not able to show that they provide more than half of the support for the partner and thus the partner would not qualify as a §105(b) dependent.  The IRS allows employers to rely on the certification of the employee regarding the dependent status of their partner, relieving the employer from collecting income and support information.

CHILDREN OF SAME GENDER PARTNERS AS THE EMPLOYEE’S DEPENDENT

The children of domestic partners (who are not otherwise children of the employee) will be entitled to receive tax-free health coverage only if they qualify as Code §105(b) tax dependents by being an employee's “qualifying child” or “qualifying relative”.  In most cases, such a child will most likely not have the necessary family relationship with the employee to qualify as the employee's “qualifying child”.  The child will typically either be the qualifying child of the domestic partner or of the child's other parent.  And since one of the conditions of the qualifying relative test is that a qualifying relative cannot be the qualifying child of any other taxpayer, the child of a domestic partner will usually fail to satisfy the qualifying relative test for the same reason.

On the other hand, in cases where the same gender couple adopts a child, or where a child is treated as a stepchild under state law, the child will typically qualify as the employee’s dependent.

DETERMINING THE FAIR MARKET VALUE OF HEALTH COVERAGE PROVIDED 

As a general matter, when income must be imputed because health coverage is provided to domestic partners (or children) who are not Code §105(b) tax dependents, the amount includible in the employee’s gross income is the fair market value of the coverage (less any after-tax payments by the employee).  However, no official guidance addresses how to determine the value of health coverage for this purpose.  Employers may want to consider the following approaches:

• The more cautious approach is to use the plan’s COBRA applicable premium for self-only (individual) coverage when coverage is added for an individual who is not a Code §105(b) tax dependent.  This means that when coverage is added for more than one such individual, the COBRA premium for that number of individuals (e.g., the rate for self-plus-one or family coverage) would be used.
• Another possibility would be to determine the value based on the incremental cost of adding coverage for the individual.  For example, if the monthly premiums for self-only and self-plus-one coverage are $160 and $310, respectively, and the employee and one domestic partner are covered, the fair market value of the domestic partner's coverage would be $310 minus $160 or $150.  But in some cases, the incremental cost of adding coverage for an individual may be very small, or even zero (i.e., if the employee already has family coverage).  In this event, because the individual’s coverage is not valueless, the employer may want to use the COBRA applicable premium.
• Some employers may also rely on actuaries to determine the fair market value of coverage.

Regardless of which approach is used, any amount paid for the coverage on an after-tax basis by the employee would be subtracted from the fair market value to arrive at the amount includible in the employee’s gross income.

FEDERAL TAX CONSEQUENCES WHEN A DOMESTIC PARTNER (OR CHILD) IS A TAX DEPENDENT FOR HEALTH COVERAGE

In general, when a domestic partner (or child) is an employee's Code §105(b) tax dependent, the value of the domestic partner's health coverage and any benefits provided under the health plan will be tax-free to the employee and domestic partner.

More specifically, the following are the tax consequences when a domestic partner (or child) is the employee’s Code §105(b) Code §105(b) tax dependent: 

• Employer Pays for the Entire Cost of Coverage. When the employer pays the entire cost of the domestic partner's (or child's) health coverage, the value of the coverage is not taxable to the employee.
• Salary Reductions and Employer Flex Credits Are Used to Purchase Coverage. When the domestic partner (or child) qualifies as a Code §105(b) tax dependent, the employee can make any required employee contributions for the health coverage with pre-tax salary reductions under a cafeteria plan. The employee can also use employer flex credits under the cafeteria plan to pay any required employee contributions for the domestic partner's health coverage on a pre-tax basis.
• Employee Pays for Coverage With After-Tax Dollars. When an employee pays for the domestic partner's (or child's ) health coverage with after-tax dollars, the employee will have no imputed income, and any health benefits paid on behalf of the domestic partner will be tax-free to both the employee and the domestic partner.

DOMESTIC PARTNERS (OR CHILDREN) WHO WERE NEVER FEDERAL TAX DEPENDENTS FOR HEALTH COVERAGE

When health coverage is provided to a domestic partner (or child) who is not the employee's Code §105(b) tax dependent, the tax consequences vary, depending on how the coverage is paid, as follows:

• Employee Pays for Coverage With After-Tax Dollars. When an employee pays with after-tax dollars for coverage of a domestic partner (or child), the coverage will not be taxable to the employee, provided that the employee pays at least the fair market value of the coverage.  An employee who pays less than the fair market value for the coverage is taxed on the difference.  Where health coverage is provided on an after-tax basis for the domestic partner (or child) but on a pre-tax basis for the employee, separate payroll slots must be maintained for pre-tax and after-tax coverage, and an allocation must be made as to the amount of premium attributable to the domestic partner (or child) coverage.
• Employer Pays for Entire Cost of Coverage. If an employer pays for the domestic partner's (or child's) health coverage, then the value of the health coverage is includible in the employee’s income.  The employee will have imputed income reported on Form W-2 equal to the value of the domestic partner's (or child's) coverage.  This amount will also be subject to income tax withholding and employment taxes (e.g., FICA and FUTA).
• Salary Reductions and Employer Flex Credits Can Be Used to Purchase Coverage If Benefits Are Treated as Cash. Cafeteria plan rules permit non-Code §105(b) tax dependent health coverage to be offered under a cafeteria plan as a taxable benefit.  When such coverage is offered under a cafeteria plan, the employee must be treated, for all purposes under the Code (including, for example, reporting and withholding purposes), as receiving, at the time that such benefit is received, cash compensation equal to the full value of such benefits (i.e., the fair market value of the coverage) at such time and then purchasing the benefit with after-tax employee contributions.  In other words, the employee has to elect the coverage as a taxable benefit before the beginning of the plan year (or other coverage period).  Thus, with proper plan design, a participant may use salary reductions or employer flex credits to purchase health coverage for a domestic partner who is not a Code §105(b) Code §105(b) tax dependent as a taxable benefit under the cafeteria plan—the coverage will be treated as a cash election and will be taxed at the time it is received.
• Employee Cannot Pay for Coverage on a Pre-Tax Basis. An employee cannot pay for domestic partner (or child) coverage on a pre-tax basis under a cafeteria plan.

DOMESTIC PARTNERS (OR CHILDREN) WHO CEASE TO BE FEDERAL TAX DEPENDENTS FOR HEALTH COVERAGE DURING THE PLAN YEAR

A domestic partner (or domestic partner's child) who fails to satisfy the conditions for being a Code §105(b) tax dependent during any portion of a taxable year will fail to qualify as a Code §105(b) tax dependent for the entire taxable year. In that event, the employee will be required to include the value of employer-provided domestic partner (or child) coverage in the employee's gross income. In the event a domestic partner (or child) loses Code §105(b) tax dependent status mid-year (e.g., because of income changes or a dissolution of the partnership), the employer should impute in income the value of the domestic partner (or child) coverage provided between the beginning of the year and the date that Code §105(b) tax dependent status was lost. The employer should also immediately cease allowing for pre-tax payment of health coverage for the domestic partner (or child). Failure to do so, and failure to impute income in this fashion, could jeopardize the cafeteria plan's qualified status.  In addition, expenses may not be reimbursed by the Health FSA.

STATE TAX TREATMENT OF COVERAGE PROVIDED TO SAME GENDER COUPLES

A number of states recognize same gender marriages, same gender domestic partnerships, opposite gender domestic partnerships (California only) and civil unions. Individuals in these relationships are often granted the same state and local tax treatment of employer-provided benefits as individuals in opposite gender marriages. These state rules apply only to the state tax and not the federal tax treatment of benefits as described above.

As of the end of 2011, states that provide state tax benefits for same gender couples similar to those afforded to opposite gender couples are: 

• California 
• Connecticut 
• Delaware 
• District of Columbia 
• Hawaii 
• Illinois 
• Iowa 
• Massachusetts 
• New Jersey 
• New York 
• Oregon
• Rhode Island 
• Vermont 

Employers who provide benefits to the partners of employees in same gender relationships in these states should consult with their tax and payroll advisors as to how to handle the state taxes for that particular state. State tax treatment of these benefits in other states may also vary from state to state but often mirrors the federal tax treatment of benefits.

Feb. 7, 2012

Certain states mandate short term disability (STD) coverage for employees who work in those states. States have varying eligibility requirements that determine if an individual is eligible for disability insurance. Download a summary of these states and their requirements below.

Statutory Disability Requirements for 2012

January 10, 2012

The IRS recently released IRS Notice 2012-9 that provides employers additional guidance on the Form W-2 reporting requirement created under the Affordable Care Act1. The Notice clarifies a number of issues addressed in earlier guidance and extends the small employer exemption (for employers filing fewer than 250 W-2s) from the reporting requirement.

BACKGROUND

The Act established a requirement that employers must report the “aggregate cost” of employer-provided health coverage on an employee’s Form W-2. This requirement is informational and does not affect an employee’s taxable income.

The aggregate cost of coverage is the entire cost, including both the employer and employee contributions, to an applicable plan. Self-funded plans are generally allowed to utilize the method used to determine applicable COBRA rates to calculate the aggregate cost of a plan. Applicable cost must be calculated on a monthly basis, based on the specific coverage maintained by the employee.

The Form W-2 reporting requirement was originally effective for the 2011 tax year. However, in March 2011, the IRS provided interim guidance that delayed the requirement so that employers who file 250 or more Form W-2’s in the preceding calendar year were not required to report health costs on Form W-2 until the 2012 tax year (i.e. W-2’s that are provided to employees generally in January 2013).  The guidance also delayed the requirement for smaller employers.

The requirement raised many questions from employers and plan administrators such as what types of coverage must be included on Form W-2 and how to calculate the cost of this coverage. The IRS solicited comments on various aspects of the reporting requirement, and as a result, has now amended its guidance to address some of these questions. The updated guidance is effective for reporting in 2012 and may be relied upon for employers who voluntarily report in 2011.

NEW GUIDANCE AND CLARIFICATIONS

Below is a summary of the guidance and clarifications:

• Employers who file fewer than 250 Form W-2’s in the preceding calendar year are exempt from the reporting requirement and “… until further guidance is issued, an employer is not subject to the reporting requirement for any calendar year if the employer was required to file fewer than 250 Forms W-2 for the preceding calendar year.”
• The reporting requirement does not apply to payments or reimbursements of health insurance premiums for a 2% shareholder-employee of an S corporation who is required to include the premium payments in gross income.
• Tribally chartered corporations that are wholly owned by a federally recognized Indian tribal government are exempt from the reporting requirement.
• The same standards that determine if a group dental or vision plan is subject to HIPAA will also be the same standards that apply to determine if the plan’s cost is includible in this reporting requirement (e.g. stand-alone plans are generally exempt from the reporting requirement). 
• The reporting requirement does not apply to Health FSA coverage that is solely funded through employee salary reductions; however, employer contributions to a Health FSA are reportable.
• Employers who provide employees with access to Employee Assistance Programs (EAP), wellness programs or on-site health clinics are not required to include the cost of this coverage on Form W-2 if the employer does not charge a premium for that coverage for COBRA purposes; otherwise, this coverage would be included in the reported cost of coverage to the extent that it is a group health plan.
• Employers may include the cost of coverage under programs not required to be included under applicable interim relief, such as the cost of coverage under a Health Reimbursement Arrangement (HRA). Some employers may choose to include HRA costs, even though not required, since it may make it administratively easier to calculate an employee’s aggregate cost.
• An employer may use either a composite rate or other method used to calculate COBRA premiums. Regardless of which method is used, the employer must use that method consistently when reporting the cost of coverage.
• The cost of reported coverage may be based on the cost information available to the employer as of December 31 and does not need to be adjusted for future changes in enrollments.
• The guidance also addresses items such as the applicability of supplemental health benefits such as cancer policies, the reporting requirement for related employers that do not use a common paymaster and how to complete reporting for coverage provided during a payroll period that straddles two calendar years.

IRS Notice 2012-9




1 “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

Dec. 21, 2011

The Department of Health and Human Services (HHS) issued a bulletin outlining proposed policies that will give states flexibility to define the “essential health benefits” required by the Affordable Care Act1 (the Act). 

Instead of issuing proposed regulations, HHS chose to release the information in the form of a “pre-rule bulletin”. The announcement provides states with a framework for defining, on their own, the essential health benefits that will apply in each particular state. Implementing regulations based on this approach are expected in 2012.

BACKGROUND

The Act requires that beginning in 2014, health plans offered in the individual and small group markets, provide a comprehensive package of items and services known as “essential health benefits”. Large group health plans and self-insured health plans are not required by the Act to cover essential health benefits.

Essential health benefits must include items and services within at least the following ten categories:

• Ambulatory patient services
• Emergency services
• Hospitalization
• Maternity and newborn care
• Mental health and substance use disorder services, including behavioral health treatment
• Prescription drugs
• Rehabilitative and habilitative services and devices
• Laboratory services
• Preventive and wellness services and chronic disease management, and
• Pediatric services, including oral and vision care

STATE-SPECIFIC DEFINITIONS BASED ON “BENCHMARK APPROACH”

HHS intends to propose that essential health benefits will be defined using a benchmark approach. Under the Department’s intended approach, states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a “typical employer plan”.

States would choose one of the following benchmark health insurance plans:

• One of the three largest small group plans in the state based on enrollment
• One of the three largest state employee health plans based on enrollment
• One of the three largest federal employee health plan options based on enrollment
• The largest HMO plan offered in the state’s commercial market based on enrollment

If a state chooses not to select a benchmark, HHS plans to propose that the default benchmark will be the small group plan with the largest enrollment in the state. 

The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category as long as they do not reduce the value of coverage.

SUMMARY

This announcement dramatically changes what many expected to be a more uniform, national approach to the definition of essential health benefits. By allowing states to define essential health benefits based on existing small group plans already offered in the state, there will be few cases where there is change to the structure of individual and small group plans offered through an Exchange beginning in 2014.









1 “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

Dec. 21, 2011

The Internal Revenue Service (IRS) recently issued the optional standard mileage rates that are used to calculate the deductible costs of using an automobile for business, charitable, medical and moving purposes.  Effective January 1, 2012, the rates are:

• 55.5 cents per mile for business miles driven
• 23 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organizations

As well, Section 132 of the Internal Revenue Code allows employers to offer a transportation fringe benefit plan to employees where certain commuting expenses can be paid with pre-tax dollars. The limits for qualified parking expenses, vanpooling and transit passes will change effective January 1, 2012.

Qualified Parking Expenses

The monthly limit that may be excluded from an employee's income will increase to $240 (which is up $10 from 2011).

Vanpool and Transit Pass Expenses

The temporary increase in the monthly limit that was in effect for 2011 expires and reverts to $125 in 2012.

Dec. 12, 2011

The Department of Health and Human Services (HHS) announced final regulations on the medical loss ratio (MLR) requirements under the Affordable Care Act1. The MLR requirements became effective on Jan. 1, 2011. They require health insurance issuers to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement, rather than administrative costs.

In December 2010, HHS issued interim final regulations on the MLR requirements, which became effective on Jan. 1, 2011. The final MLR regulations issued by HHS on Dec. 2, 2011, leave the 2010 regulations largely intact, but make some technical changes to how the MLR is calculated and how rebates are distributed. The final regulations become effective on Jan. 1, 2012.

MLR CALCULATION

An issuer must calculate its MLR as a fraction. The numerator of the fraction is the amount of incurred claims paid plus expenses for health care quality improvement activities. The denominator is the premium revenue (minus federal or state taxes), licensing and regulatory fees.

The final regulations provide the following guidance on calculating the MLR:

• ICD-10 conversion costs up to 0.3 percent of an issuer’s earned premium in the relevant state market may be considered health care quality improvement activities for each of the 2012 and 2013 reporting years. (The ICD-10 conversion involves updating medical code sets to comply with HIPAA’s transaction standards for electronic health claims.)
• Issuers may deduct from earned premiums the higher of either the amount paid in state premium tax or actual community benefit expenditures up to the highest premium tax rate in the state.
• Adjustment factors may be used to calculate the MLR for expatriate plans and mini-med plans to take into account the higher administrative costs associated with these plans and to ensure that consumers do not lose coverage.

REBATES

Issuers that do not satisfy the MLR requirement must distribute rebates to consumers starting in August 2012.  The final regulations streamline the rebate requirements by generally requiring issuers to provide rebates to the group policyholder. Policyholders must use the rebates for the benefit of enrollees.

Rather than paying the rebates directly to enrollees, the final regulations permit policyholders to use the rebates to reduce the employee portion of the health plan premium. This method allows enrollees to have the benefit of the rebates without having to pay tax on the rebate amount. The final regulations also note that policyholders of ERISA plans will need to consider their fiduciary duties to plan participants when deciding how to use the rebates.

When issuers provide rebates, they must also provide a notice of the rebate to enrollees. The notice must provide information about the MLR and its purpose, the MLR standard, the issuer’s MLR and the rebate provided. The final regulations request comments on whether issuers should provide information to enrollees on their MLR, even if they are not required to provide a rebate, and whether the notice should include information about the issuer’s MLR for the prior year for comparison purposes.

MORE INFORMATION

More information on the MLR requirements, including the interim final regulations and final regulations, is available on HHS’s Website.

1 “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

Nov. 24, 2011

In a short statement released on its Website on November 17, 2011, the Department of Labor (DOL) has provided a welcomed delay in the implementation of the new Summary of Benefits and Coverage (SBC) Rules contained in the Affordable Care Act¹.

The Act requires that health insurance carriers and employer-sponsored health plans provide an SBC to participants and enrollees beginning in March 2012. Proposed regulations were released in August 2011 which contained very specific content and delivery requirements. The regulatory agencies collected public comments on the proposed regulations through October. During the comment period, there was significant concern expressed by health insurers and employers about the short timeframe before the requirement was scheduled to go into effect. 

In response to these concerns, the DOL has stated that carriers and plans will not be required to provide the SBC until after final regulations are issued. The announcement also states that the actual effective date of the SBC rules will be announced in the final regulations and the “the final regulations…will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply”.

Final regulations are expected soon, however, based on the DOL statement that it is anticipated that there will be a significant period of time provided after the rules are released to allow health plans and employers to implement the necessary changes.

The complete DOL statement is included below:

The Departments received many comments on the proposed regulations and templates and intend to issue, as soon as possible, final regulations that take into account these comments and other stakeholder feedback.

PHS Act section 2715 provides that group health plans and health insurance issuers shall provide the Summary of Benefits and Coverage and Uniform Glossary pursuant to standards developed by the Departments. Accordingly, until final regulations are issued and applicable, plans and issuers are not required to comply with PHS Act section 2715.

It is anticipated that the Departments’ final regulations, once issued, will include an applicability date that gives group health plans and health insurance issuers sufficient time to comply.

¹ “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

Nov. 23, 2011

At the request of the Obama administration and the 26 states challenging its legality, the United States (U.S.) Supreme Court agreed to rule whether the 2010 Patient Protection and Affordable Care Act¹ (PPACA) is constitutional. The oral arguments will occur in March 2012 and the Court’s decision is due by July of 2012, which should have dramatic implications on both employers offering employee health benefits plans and national politics in a Presidential election year.

Below is an outline the issues the Supreme Court is considering, the differing opinions of the lower courts on these issues and the possible outcomes and implications of the Court’s decision.

LEGAL ISSUES

The Supreme Court has decided to address four critical issues that have been challenged in more than 20 suits related to the PPACA:

• Individual Coverage Mandate: The legal question is whether the law’s requirement that legal U.S. residents must purchase health insurance or pay a penalty is within Congress’s powers under the Commerce Clause in Article 1 of the Constitution.
• Severability: If the Individual Mandate is found to be unconstitutional, the Court will decide if the rest of the PPACA can be implemented, or if the Individual Mandate is so deeply linked to the purpose and results of the overall law, that the PPACA is unconstitutional in its entirety.
• Penalty: The Court will interpret whether the Individual Mandate penalty really acts as a tax; if so, then Congress has much broader authority to implement the Mandate.
• Medicaid Expansion: The legal challenge is whether the need for states to comply with the federal funding conditions defined in the PPACA are so compelling that states are being “coerced” by Congress, which goes beyond its authority.

Most of the recent court activity and legal focus has been on the first two issues.  The Commerce Clause of the Constitution gives Congress power to regulate three categories of business transactions, one of them being activities that substantially affect interstate commerce; in this case, the activity is the payment of health care expenses.  The Individual Mandate issue focuses on whether the way an individual decides to pay for health care expenses, (i.e., third-party payments through insurance coverage, individual out-of-pocket payment, or uncompensated care funded through cost-shifting to third-party payers) substantially affects the overall performance of the health care marketplace.

If the Court determines that the Individual Coverage Mandate is unconstitutional, the issue of severability will come into play.  Because Congress did not write a severability clause in the PPACA legislation, the Court must decide if the “failure” of one provision of the law substantially affects the performance and validity of other provisions.  Supreme Court precedent from a 2010 majority opinion written by Chief Justice John Roberts Jr. states, “…when confronting a constitutional flaw in a statute, we try to limit the solution to the problem, severing any ‘problematic portions while leaving the remainder intact.’”  However, even the Obama administration has suggested that the Individual Mandate provision is intertwined with the other key provisions of the PPACA, so the likely Court decision is unclear.

The third and fourth issues are more subtle legal arguments.  As an argument to have suits disqualified, the Obama administration has stated the Individual Mandate penalty is actually a tax which Congress has broad powers to enact; therefore Congress has authority to implement the Individual Mandate.  It is worth noting that the Anti-Injunction Act bars any suits against a tax until it becomes effective, so if the Supreme Court rules the Individual Mandate is a tax, legal challenges would have to wait until 2014.  The Medicaid Expansion issue is a more speculative argument: It’s based on whether or not states are forced to accept the funding conditions for broader Medicaid access.  The question is whether, by rejecting them, states risk their federal funding altogether---giving them no other option but to accept, which exceeds Congress’ authority to set state funding practices.

APPELLATE COURT DECISIONS

Four circuits of the U.S. Court of Appeals, which is the judicial level right below the Supreme Court, have ruled differently on the 20 suits against the PPACA involving the first three issues, prompting the Supreme Court to hear this case.  The lower courts have been consistent on the fourth issue, deciding the PPACA expansion of Medicaid is constitutional; yet, the Supreme Court still agreed to provide an opinion on that issue as well.

The Second, Fourth and Sixth Circuit Courts of Appeals all have upheld the constitutionality of the Individual Mandate, although based on somewhat different interpretations.  The most important of these rulings was the Sixth Circuit decision to uphold the lower court’s interpretation: That Congress has authority, within the Commerce Clause, to establish an Individual Mandate based on the fact that individuals who don’t buy health insurance impact the entire health care market.  To the contrary, the Eleventh Circuit upheld a Florida district court decision that the Individual Mandate was unconstitutional because Congress can’t regulate how someone buys health insurance.  It also decided the Individual Mandate was severable from the other PPACA provisions and overturned the lower court decision on this issue.

IMPLICATIONS OF SUPREME COURT DECISION

There are four possible outcomes on the constitutionality of the Individual Mandate:

• The entire law can remain if the Individual Mandate is considered legal, causing a number of major PPACA provisions  to gain immediate momentum (most significantly the design and implementation of health exchanges by the states);
• The entire law can be invalidated if the Individual Mandate is found both unconstitutional and not severable from the other provisions of the law, in which case continued compliance of current PPACA provisions is in question (especially the significant 2010-2011 market reforms, by employers and insurance companies);
• The Individual Mandate can be invalidated but considered separate from most or all other PPACA provisions, which will require employers to comply with all applicable provisions—but make cost savings from PPACA much more difficult to achieve; or
• The decision on constitutionality could be delayed until at least 2014, if the Individual Mandate penalty is considered a tax and the Anti-Injunction Act disqualifies all related suits until the Mandate becomes effective January 1, 2014.

We will keep you updated on further developments and their implications as they relate to the Supreme Court decisions expected in June or July 2012; and we will provide a detailed assessment of the ruling(s) when published.

¹ “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

November 14, 2011

OVERVIEW

The HITECH Act, a portion of The American Recovery and Reinvestment Act of 2009 (ARRA), requires the Department of Health and Human Services (HHS) to provide for periodic audits to ensure covered entities and business associates are complying with the HIPAA Privacy and Security Rules and Breach Notification standards. To implement this requirement, the HHS Office for Civil Rights (OCR) is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance. OCR is the agency charged with HIPAA privacy and security compliance. Audits during the pilot phase will begin November 2011 and conclude by December 2012. It is anticipated that additional audits will continue after the initial pilot program.

Audits present a new opportunity to examine mechanisms for compliance, identify best practices and discover risks and vulnerabilities that may not have come to light through OCR’s ongoing compliance investigations and compliance reviews. OCR plans to share information gleaned through the audit process and issue guidance targeted to observed compliance challenges.

WHO WILL BE AUDITED?

OCR may audit a wide range of covered entities such as covered individual and organizational providers of health services, health plans of all sizes and functions and health care clearinghouses. Business associates will not be included in the initial audit pilot program but will be included in future audits.

HOW WILL THE AUDIT PROGRAM WORK?

Entities selected for an audit will be informed by OCR of their selection and asked to provide documentation of their privacy and security compliance efforts. In this pilot phase, every audit will include an onsite visit and result in an audit report. During onsite visits, auditors will interview key personnel and observe processes and operations to help determine compliance. Following the onsite visit, auditors will develop and share with the entity a draft report, audit reports that generally describe how the audit was conducted, what the findings were and what actions the covered entity is taking in response to those findings.

Prior to finalizing the report, the covered entity will have the opportunity to discuss concerns and describe corrective actions implemented to address concerns identified. The final report submitted to OCR will incorporate the steps the entity has taken to resolve any compliance issues identified by the audit, as well as describe any best practices of the entity.

WHAT IS THE GENERAL TIMELINE FOR AN AUDIT?

OCR expects to notify selected covered entities between 30 and 90 days prior to the anticipated onsite visit. Onsite visits may take between three and 10 business days depending upon the complexity of the organization and the auditor’s need to access materials and staff. After fieldwork is completed, the auditor will provide the covered entity with a draft final report; a covered entity will have 10 business days to review and provide written comments back to the auditor. Should an audit report indicate a serious compliance issue, OCR may initiate a compliance review to address the problem. OCR will not post a listing of audited entities or the findings of an individual audit which clearly identifies the audited entity.

SUMMARY

It is expected that the majority of covered entities selected for the pilot audit program will be medical providers and insurance companies. However, based on the description of the audit process provided by HHS, it is likely that a number of employers’ group health plans will be included in the program. Now would be a good time for employers who sponsor group health plans subject to the HIPAA privacy and security rules to review their existing HIPAA policies and procedures.

November 11, 2011

Wisconsin has amended state tax code to simplify Wisconsin's income tax treatment of employer-provided health insurance benefits for adult children. Previously, employers were required to add the fair market value of the health insurance benefit to the parent's income for state tax purposes if certain non-dependent adult children were covered by an employer’s plan.

Effective March 30, 2010, federal tax law was changed as part of health care reform legislation and employers were no longer required to add the fair market value for health insurance benefits to the employee's income for federal tax purposes; however, until now, Wisconsin tax law previously did not conform to the federal definition. 

The change to Wisconsin tax law is effective retroactive to January 1, 2011. Employers no longer need to add the fair market value for health insurance benefits to an employee's income as long as a child has not turned 27 by the end of the tax year. Also, when 2011 W-2s are prepared, employers should not include any income for the children’s health insurance benefit provided during 2011. Employees will get a credit on their state income tax return for taxes already withheld in 2011.

DETERMINE IF YOUR PLAN IS DISCRIMINATORY

The impact of Health Care Reform Requirements

The Affordable Care Act¹ applies the Section 105(h) nondiscrimination rules to non-grandfathered, fully-insured health plans and will be effective pending the release of additional guidance from the IRS. The IRS has initiated a comment period that will remain open until March 11, 2011, after which guidance will be released and the effective date determined. The rules prohibit employers from offering health benefits in a manner that discriminates in favor of highly compensated employees.

Section 105(h) nondiscrimination rules are complex; however, a quick review of the employer’s benefit, contribution and eligibility strategies will help most employers determine whether or not they need to perform the detailed nondiscrimination tests.

It is also important to remember that employers are able to provide highly compensated employees with additional taxable income which could be used to pay for benefits. The Section 105(h) testing exists to ensure that benefits provided to employees on a tax-free basis are limited to plans that are nondiscriminatory.

PENALTY FOR NON-COMPLIANCE

If a fully-insured plan is found to be discriminatory, a penalty will be imposed on the employer/plan sponsor. Regulations are needed to define exactly how the employer penalty will be applied. Currently, it appears that the employer will pay a penalty of at least $100 per day per highly compensated participant.

HIGHLY COMPENSATED EMPLOYEES

Employers must determine which employees are considered highly compensated employees (HCE). Section 105(h) defines an HCE as:

• One of the five highest-paid officers.
• A shareholder who owns more than 10 percent of the employer’s stock
• An individual who is among the highest-paid 25 percent of all employees

Certain individuals can be excluded from the group of the highest 25 percent of paid employees and disregarded from the testing as long as they do not participate in the plan. Excluded individuals include:

• Employees who have not completed three years of service
• Employees who have not attained age 25
• Part-time (defined as less than 35 hours per week) or seasonal employees
• Collectively bargained employees
• Non-resident aliens who receive no U.S. source earned income

PERFORM A QUICK CHECK

Before analyzing the Section 105(h) requirements in detail, an employer can consider these criteria to more quickly determine if the employer passes or fails.

QUICK CHECK #1 – EMPLOYER PASSES

Barring special circumstances, such as a plan being part of a common group according to the IRS 414 rules, an employer who offers benefits in the following ways would not violate the Section 105(h) nondiscrimination rules.

• An employer offers the identical health benefits to all full-time employees, with the same contribution requirements regardless of age, years of service, or compensation.
• Employees covered by a collective bargain agreement, and not covered by the plan, can be ignored for testing purposes. These employees can be offered a separate plan with different benefits and different contribution requirements.

It is possible for an employer to offer health benefits in a manner that varies in terms of eligibility, coverage or contribution for different employees, but then it must consider and pass the Section 105(h) tests.

QUICK CHECK #2 – EMPLOYER FAILS

If an employer offers health benefits that clearly favor individuals in the highly compensated group (defined above) in terms of benefits, eligibility or contribution, the plan will likely fail the Section 105(h) rules based on the “benefits test” described below. Failure to comply with Section 105(h) will mean that the benefit plan must alter its terms or be subject to penalties.

PERFORM THE SECTION 105(H) TESTS

This summary will provide enough detail for most employers to perform an analysis of how the rules apply to their plan. However, there are additional strategies (i.e. combining multiple plans into one plan or creating complex classifications of employees) that have been used by some employers wishing to offer dissimilar benefits to separate groups of employees. Any employer considering one of these more complex approaches should seek the advice of a qualified advisor or legal counsel.

To pass the Section 105(h) nondiscrimination rules an employer must meet two separate tests:

1. The Benefits Test
2. The Eligibility Test

The names of the tests have long been the source of confusion, and subject to some criticism, since the “benefits test” considers a number of factors including eligibility, and the “eligibility test” principally measures who actually benefits under the plan.

THE BENEFITS TEST

The benefits test has two components, which we will discuss below:

• Is the plan offered in a manner that is discriminatory on its face?
• Is the plan operated in a discriminatory manner?

The statute requires that “all benefits provided for [HCEs] are provided for all other participants” and that “all the benefits available for the dependents of HCEs must also be available on the same basis for dependents of all non-HCE participants.”

DISCRIMINATORY ON ITS FACE

A plan must meet the following four requirements to be considered nondiscriminatory on its face.

1. Required employee contributions must be the same for HCEs and non-HCEs for each benefit level.
2. The same type of benefits that are available to HCEs must be available to non-HCEs.
3. The maximum benefit level cannot vary based on age, years of service, or compensation.
4. HCEs and non-HCEs must have the same waiting periods.

Differences can exists in these areas between different classes of employees as long as the requirements of the eligibility test are met (discussed below). For example, an employer could have different contribution requirements for salaried employees vs. hourly employees, but not for “executives” vs. other employees. If the plan is determined to be discriminatory on its face, it does not comply with Section 105(h) rules and may be subject to penalties.

DISCRIMINATORY IN OPERATION

A less common reason for a plan to be deemed discriminatory is in its actual operation. For example, if a plan added a benefit for a particular treatment for one plan year during which an HCE received coverage for that treatment, then terminated the benefits as soon as the HCE no longer needed the treatment, the plan would be considered discriminatory, and fail to comply with Section 105(h) rules.

THE ELIGIBILITY TEST

An employer passes the eligibility test if it passes any one of three different tests.

• The 70% Test – At least 70 percent of employees must benefit from the plan.
• The 70%/80% Test – If at least 70 percent of all non-excludable employees are eligible, the plan benefits at least 80 percent of the eligible employees.
• The Nondiscriminatory Classification Test – The plan benefits a nondiscriminatory classification of employees. This test requires (1) eligibility based on a bona fide business classification, and (2) a sufficient ratio of benefiting non-HCEs to benefiting HCEs.

The first two tests provide a method to pass the eligibility test using a clear measure of participation rates. If the employer does not meet either of these tests, it may still pass based on the more subjective classification test. There is some debate whether employees need to actually enroll in, or simply be eligible for, the plan to be counted in the eligibility test. The more conservative approach, and the approach we recommend, is to count only the employees who actually enroll in a benefit.

EXAMPLE: THE 70% TEST

XYZ Company has 100 employees.``All employees are eligible for the health benefits.

• 30 employees are considered highly compensated individuals.
• 10 employees have less than three years of service and excluded from testing.
• 65 non-excludable employees (counting both HCEs and non-HCEs) actually participate in the plan.

The employer passes the 70 percent test. Participation equals 72 percent (65 ÷ 90).

EXAMPLE: THE 70%/80% TEST

XYZ Company has 100 employees.

• 70 employees are eligible for the health benefits.
• 30 employees are considered highly compensated individuals.
• 56 non-excludable employees (counting both HCES and non-HCEs) actually participate in the plan.

The employer passes the 70%/80% test: 70 percent are eligible (70 of 100) and 80 percent of those eligible participate (56 ÷ 70).

THE NONDISCRIMINATORY CLASSIFICATION TEST

Employers need to consider this test if it offers different benefits to different groups of employees and cannot meet either of the first two eligibility tests. There are a number of strategies employers can consider when attempting to pass the classification test. This summary describes a common approach most employers can use to determine if they offer benefits in a nondiscriminatory manner. If an employer fails to meet the requirements described below, it may still be possible to pass the test using a more complex strategy such as combining multiple plans into a single plan. If an employer wants to consider other alternatives, they should retain a qualified advisor or legal counsel.

To meet the classification test, the employer must show two things:

1. Benefits are offered based on reasonable classifications.
2. The classifications are not discriminatory in favor of highly compensated employees.

BENEFITS MUST BE OFFERED TO EMPLOYEES BASED ON REASONABLE CLASSIFICATIONS

The rules allow an employer to offer different benefits to different “reasonable” classifications of employees. Reasonable classifications generally include specified job categories, nature of compensation (i.e., salaried or hourly), geographic location, and similar bona fide business criteria.

CLASSIFICATIONS ARE NOT DISCRIMINATORY

The IRS will consider the “facts and circumstances” of the classifications to determine if classifications are discriminatory. If the employer is not confident that their classifications will be deemed non-discriminatory, the employer may be able to meet the safe harbor test described below.

The subjective criteria include:

• The underlying business reason for the classification. The greater the business reason for the classification, the more likely the classification is to be non-discriminatory.
• The percentage of employees benefiting under the plan. The higher the percentage, the more likely the classification is to be non-discriminatory.
• Representative number of employees. Measures whether the number of employees benefiting under the plan in each salary range is representative of the number of employees in each salary range of the employer’s workforce.

As stated above, the classifications are also not discriminatory if the employer can meet an objective “safe-harbor” test. The test compares the ratio of the percentage of non-HCEs to HCEs who participate in the plan.

The safe-harbor test involves comparison of participation rate to a table included in the regulations. The results of a simple formula may answer the question for most employers.

• Compare the percentage of non-HCEs who participate in the plan to the percentage of HCEs who participate.
• If the non-HCEs participant rate is at least 50 percent of the rate HCEs participate, the plan passes.

This is a fairly low bar to meet. An employer would have to have very low non-HCE participation to fail this test.

EXAMPLE: SAFE HARBOR

Employer XYZ has 150 non-excludable employees: 100 non-HCEs, 50 HCEs

• All 50 of the 50 HCEs participate (100 percent)
• Only 50 of the 100 non-HCEs participate (50 percent)
• The ratio equals 50 percent (50 percent ÷ 100 percent) and the employer meets the safe harbor.

It is possible to pass the safe harbor with even lower participation of non-HCEs. For the sake of simplicity, this more complex calculation is described in the appendix at the end of this paper.

SUMMARY

Many employers will satisfy the Section 105(h) nondiscrimination rules simply because they offer the same benefits, contributions and eligibility to all employees. Employers who vary their benefit plan provisions for different groups of employees need to carefully consider the Section 105(h) nondiscrimination rules to avoid paying what could be a significant penalty.

If an employer has a more complicated situation or wishes to maintain a benefits strategy that may be discriminatory, a more detailed analysis must be conducted, and expert or legal advice should be sought.

APPENDIX 1 - SAFE HARBOR TEST

STEP 1: Determine the plan’s Ratio Percentage. A plan’s Ratio Percentage is the percentage determined by dividing the percentage of the non-HCEs who benefit under the plan by the percentage of - Employer XYZ has 150 non-excludable employees - 100 non-HCEs, 50 HCEs.

• All 50 of the 50 HCEs participate (100 percent).
• Only 50 of the 100 non-HCEs participate (50 percent).
• The ratio equals 50 [percent (50 percent ÷ 100 percent).

STEP 2: Determine the plan’s Non-HCE Concentration Percentage. A plan’s Non-HCE Concentration Percentage is the percentage of all employees who are non-HCEs. Employees who can be excluded are not taken into account.

STEP 3: Determine the Safe Harbor Percentage from the Nondiscriminatory Classification Table. Next, the employer must determine the applicable Safe Harbor Percentage for the plan by consulting the Code §410(b) Nondiscriminatory Classification Table published by the IRS. The Non-HCE Concentration Percentage determined in step 1 dictates the applicable Safe Harbor Percentage. The test is easier to pass as the percentage of non-highly compensated employees increases.

In the Nondiscriminatory Classification Table, find the applicable Non-HCE Concentration Percentage in left column, and match that with the corresponding Safe Harbor Percentage. For example, if the Non-HCE Concentration Percentage is 75 percent, the applicable Safe Harbor Percentage is 38.75 percent.

STEP 4: Compare the plan’s Ratio Percentage With the Safe Harbor Percentage. Compare the Ratio Percentage from step 1 with the Safe Harbor Percentage from step 3. If the plan’s Ratio Percentage is equal to or greater than the Safe Harbor Percentage, then the plan’s employee classification meets the safe harbor and is deemed nondiscriminatory.

Nondiscrimination Classification Table

DISCLAIMER

While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting or other professional advice or services. Readers should always seek professional advice before entering into any commitments.

¹ “Affordable Care Act” refers to The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

October 31, 2011

The state of Wisconsin has passed legislation that would largely change the state’s definition of dependent for insurance coverage purposes to more closely follow the new federal definition created by the Affordable Care Act. The state’s budget repair bill, which was signed on June 26, 2011, included a provision that would mandate dependent coverage to age 26 regardless of student, marital or tax status, reversing earlier state legislation that had extended dependent eligibility to the age of 27. The change is effective for plan years beginning on or after January 1, 2012 (unless otherwise dictated by a collective bargaining agreement). 

One exception to the new law will still require coverage to be extended beyond age 26 if the dependent meets all of the following three requirements:

• The child is a full-time student, regardless of age.
• The child was called to federal active duty in the National Guard or in a reserve component of the U.S. armed forces while the child was attending (on a full-time basis) an institution of higher education.
• The child was under the age of 27 years when called to federal active duty.

October 31, 2011

The Affordable Care Act¹ had included a provision, referred to as the CLASS Act, which was intended to provide long term care benefits to many Americans. However, on October 14, the Secretary of Health and Human Services, Kathleen Sebelius, released a report regarding the analysis and viability of the CLASS Act and announced that the Administration had decided to not move forward with its implementation.

In the report, Sebelius states, “In 2009, the actuary at [CMS] released a report to Congress…that raised concerns about the [CLASS] program's viability. Because of such concerns, the law passed by Congress required me to design a plan that would be actuarially sound and financially solvent for at least 75 years.” HHS has concluded that it cannot certify the plan’s long-term financial viability as currently structured. As a result of this decision, for all practical purposes, the CLASS Act is dead.

Employers who were holding off on their decision to offer long term care benefits because of the Act may now want to re-consider its implementation as more workers look to their employers to provide access to this benefit.

¹ “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

October 20, 2011

BACKGROUND

The Institute of Medicine (IOM) has released a report which includes recommendations on developing a process for establishing “Essential Health Benefits” (EHB) as required by the Affordable Care Act1. The Act requires certain individual and small group health plans to include a set of benefits defined as “essential”, and calls for the Department of Health and Human Services (HHS) to identify what benefits are to be included in the EHB package. HHS in turn asked the IOM, an independent non-profit organization and the health arm of the National Academy of Sciences, to develop recommendations on the creation of the EHB package. This report is a result of that request. HHS will now move forward with finalizing the process of defining the EHB package taking into account these recommendations.

WHAT HEALTH PLANS WITH BE SUBJECT TO THE EHB REQUIREMENTS?

Beginning in 2014, all individual health plans and small employer fully-insured health plans must include coverage for essential health benefits. The Act defines a small employer as an employer with up to 100 employees; however, states are free to limit the definition of small employer to those with up to 50 employees until 2016. 

The EHB package does not apply to small employer plans which retain grandfathered status; however, it is anticipated that very few small group plans will maintain grandfathered status by 2014. Furthermore, most heath insurance carriers are likely to include the EHB package in all small group plan designs instead of offering a “non-EHB” plan for the few small employer plans where it may apply.

Self-funded, and fully-insured large group health plans are not required to include coverage for the EHB package.  However, any essential health benefits that are provided by these plans are subject to the limits on annual and lifetime maximums contained in the Act.

RECOMMENDATIONS

The IOM report does not identify or make specific benefit suggestions; rather it provides HHS with recommendations on the process for defining and maintaining the EHB package.  Some of the IOM recommendations relevant to employer-sponsored plans include:

• “The starting point in establishing the initial EHB package should be the scope of benefits and design provided under a typical small employer plan in today’s market.”
• The EHB rules should allow some state flexibility.  “For states administering their own Exchanges that wish to adopt a variant of the federal EHB package, the Secretary should …grant such requests, provided that the state-specific EHB definition is consistent with the requirements of …the ACA”
• “To ensure over time that EHB-defined packages are affordable and offer reasonable coverage, the… HHS… should develop a strategy for controlling rates of growth in health care spending across all sectors in line with the rate of growth in the economy.”

A copy of the full report can be found on the Kaiser Family Foundation health reform site at http://healthreform.kff.org/document-finder/iom-essential-health-benefits-recommendations.aspx.

The IRS has increased the per-mile reimbursement rate by $0.045 for July 1 to December 31, 2011.

Sept. 30, 2011--Employees with a Health Flexible Savings Account (FSA), Health Reimbursement Account (HRA) or Health Savings Account (HSA) are able to claim medical care-related mileage for reimbursement at a slightly higher rate for the second part of 2011.

This change is because the IRS recently increased the standard mileage reimbursement rate incurred for the purpose of obtaining medical care. For travel that occurs on or after July 1, 2011, the new rate is $0.235 per mile.

Use of the updated standard mileage rate is not mandatory. Employers may choose to update the eligible medical travel reimbursement aspect of their plan or keep the rate unchanged.

How it works:

• Mileage occurring Jan. 1, 2011, to June 30, 2011, must be paid at $0.19 per mile
• Mileage occurring July 1, 2011, to Dec. 31, 2011, may be paid at $0.235 per mile or at $0.19 per mile

Eligible travel expenses are transportation expenses that are deductible medical expenses under Code §213(d). Eligible travel expenses may include:

• Personal vehicle mileage
• Rental car costs
• Public transportation fees
• Toll fees
• Parking fees

Most plans do not specifically list the actual reimbursement rate and thus may not need to be updated to implement the change. However, employers should review their plan documents to determine if an amendment is required.

September 16, 2011

Employers that currently provide prescription drug coverage must disclose to plan participants who are eligible for Medicare Part D whether the prescription drug coverage provided under the group health plan is creditable or non-creditable.

The Patient Protection and Affordable Care Act (PPACA) changed the Medicare Part D annual enrollment period to October 15 through December 7 of each year, thus changing the date by which notices must be distributed.  Beginning in 2011, employers should send required Medicare Part D notices by October 15.  Previously, this deadline was November 15.

Since it is often difficult for employers to identify all individuals (including dependents) who may be eligible for Medicare, many employers satisfy this requirement by including the notice in enrollment materials or in separate mailings provided to all employees who participate in the employer-sponsored plan.

In addition to the annual notification, there are also other times that employers are required to provide this notice. Below is a list of times at which notice of creditable or non-creditable coverage is required:

• Prior to an individual's initial enrollment period for Part D,
• Prior to the effective date of coverage for any Medicare-eligible individual that joins your plan, 
• Whenever prescription drug coverage ends or changes so that it is no longer creditable or becomes creditable, or 
• Upon the request of the individual.

Many insurance carriers already send the notice annually to all participants, so employers should first check with their insurer to determine if a notice is already being provided to their employees. Employers are not required to provide their own notice if participants receive a compliant notice from the insurance company or the employer’s claims administrator.

CMS has also posted updated model disclosure notices that reflect the new enrollment period. The model notices can be found at http://www.cms.gov/CreditableCoverage.

Who, what, why, and how?

September 14, 2011

September is Life Insurance Awareness Month, so we'd provide a quick overview of the product and some things you might want to consider.

Many of your employees rely on your company for all or most of their insurance coverage. Because of this, you may want to consider offering life insurance. Whether group-sponsored or voluntary, this coverage offers protection and security for your employees’ families.

The Statistics

• According to LIMRA, one-third of adults in the United States carry no life insurance.
• Many more have less coverage than experts recommend, and in the event of their death, the coverage may not adequately provide a secure financial future for their families.
• 95 million adult Americans have no life insurance, and most of those who do have far less coverage than most financial experts recommend.[1]
• Both men and women are less likely to own life insurance today than they were in 2004—only 61 percent of men and 57 percent of women have some sort of life insurance coverage.[1] 
• Today, more insured adults depend solely on group life insurance for their only life insurance coverage than in the past.[1]

Who needs life insurance?

Life insurance is for anyone who has dependents who rely on them for financial security. Dependents can include children, spouses, parents or other relatives for whom the insured individual is a caretaker.

Why offer life insurance?

Life insurance protects surviving family members and dependents from unexpected financial strain.

Because terminal illnesses and death are unplanned—and therefore unbudgeted—events, life insurance is designed to help cover immediate and future costs that would have been funded through future earned income. This can include funeral expenses, housing, income that maintains the family’s standard of living, and children’s tuition bills.

Without life insurance, families are often forced to dip into their savings, work additional hours, obtain additional loans, and downgrade their lifestyle.

Lastly, the perceived value of this benefit to employees often greatly outweighs the costs, which are usually nominal or nonexistent for you, the employer. A more secure employee is a more productive one.

Find out more

Employers can easily offer the benefits of life insurance to their employees. RJF’s Benefits representatives would be happy to discuss the many options and types of plans available.

[1] LIMRA's LIAM Fact Sheet, 2011

Contact the RJF Benefits team at 763-746-8000.

Comments on the proposed rules will be accepted for sixty days after August 22, 2012.

August 24, 2011

The Internal Revenue Service, Department of Labor, and Health and Human Services (the Regulatory Agencies) have released proposed regulations for the Summary of Benefits and Coverage requirement (SBC) contained in the Affordable Care Act [1].

BACKGROUND

Beginning March 2012, the Act requires that health insurance carriers and employer-sponsored health plans provide an SBC to participants and enrollees. The Regulatory Agencies had originally intended to release regulations regarding the SBC requirement by March 23, 2010; however, the rules are now scheduled to be published in the Federal Register on August 22. The Regulatory Agencies will be taking comments on the proposed rules for sixty days and presumably will issue final rules prior to the scheduled March 2012 effective date of the requirement.

EFFECTIVE DATE STILL IN QUESTION

The Act originally required that plans begin using the SBC on March 23, 2012. The proposed regulations recognize that a mid-year communication requirement may be problematic for employers and is seeking comments on a phased approach to the rule.

In an additional development, America’s Health Insurance Plans (AHIP), the trade group representing health insurance companies, has called for a delay in the effective date due to the fact that the agencies were four months late in issuing the regulations.

SAMPLES AND TEMPLATES ALSO RELEASED

The Regulatory Agencies have also published samples and templates that can be used as a basis for developing an SBC. The templates were created by a working group put together by the National Association of Insurance Commissioners (NAIC). The templates and instructions can be found on the DOL website at www.dol.gov/ebsa/healthreform.

WHO IS RESPONSIBLE TO SEND THE SBC?

For fully-insured plans, the proposed regulations confirm the insurance carrier is responsible to produce and provide a valid SBC. However, the rules also require that the summary be provided to individuals “as part of any written application materials that are distributed by the plan or issuer for enrollment. If the plan does not distribute written application materials for enrollment, the SBC must be distributed no later than the first date the participant is eligible to enroll in coverage.” As a result, employers will need to provide the summary as part of new hire employee enrollment information and as part of open enrollment process, not only after an employee actually enrolls in a plan.

Employers who sponsor self-funded plans will be responsible for the production and distribution of the SBC. However, it is anticipated that most administrators will provide some assistance to their employers in meeting these requirements.

DISTRIBUTION RULES

SBCs must be provided for each “benefit package” for which an employee is eligible. Upon renewal, an SBC need only be provided for the specific benefit package in which a participant is enrolled. The SBC must also be provided to participants upon request no later than seven days following a request.

Individuals who enter the plan due to a HIPAA special enrollment must be provided with an SBC within seven days of when they request special enrollment.

60-DAY ADVANCE NOTICE REQUIREMENT

The Act also requires that plans notify participants of certain changes to the plan at least 60 days in advance. This is a significant new communication obligation for employers and plans to meet. The proposed regulations provide important guidance on this rule.

• Employers will be relieved to learn that the 60-day advance notice requirement does not apply to changes made as part of the annual renewal of the plan.
• Plans will be required to distribute a new SBC whenever a mid-plan year “material” change is made to the plan.

SPECIFIC CONTENT REQUIREMENTS

The proposed regulations contain a number of specific content requirements that largely mirror the language contained in the Act.

These requirements are:

• Uniform definitions of standard insurance and medical terms
• A description of the coverage, including cost sharing, for each category of benefits
• The exceptions, reductions, and limitations of the coverage
• The cost-sharing provisions of the coverage, including deductible, coinsurance, and copayment obligations
• The renewability and continuation of coverage provisions
• With respect to coverage beginning on or after Jan. 1, 2014, a statement about whether the plan or coverage provides minimum essential coverage as defined in the Act
• A statement that the SBC is only a summary and that the plan document, policy, or certificate of insurance should be consulted to determine the governing contractual provisions of the coverage
• Contact information to ask questions and obtain a copy of the plan
• For plans that maintain one or more networks of providers, an Internet address or similar contact information to obtain a list of network providers
• For plans and issuers that use a formulary in providing prescription drug coverage, an Internet address or similar contact information to obtain information on prescription drug coverage
• An Internet address to obtain the uniform glossary of terms required by the rule
• Premiums (Self-insured group health plans should provide the cost of coverage)
• Coverage examples that illustrate benefits provided under the plan or coverage for common benefit scenarios including pregnancy and serious or chronic medical conditions.

Plans must also provide access to a uniform glossary of terms. The Regulatory Agencies have provided a glossary of terms for this purpose and an employer can meet this requirement by providing a link to an Internet location that contains the glossary.

[1] “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

August 23, 2011

The Affordable Care Act[1] has extended coverage for eligible dependents up to the age of 26. In addition, the value of this coverage for adult children can be excluded from the employee’s federal taxable income as long as the dependent will not reach age 27 during the calendar year.

In order for this coverage to be excludable from an employee’s state taxable income and income withholding requirements, a state must amend its income tax law to match the federal definition (if not done so automatically). Early in 2011, the Minnesota state legislature did change tax law so that the extension of coverage up to age 26 would not create a taxable event for employees; however, this applied only to the 2010 taxable year. Employers were uncertain how to address this issue for 2011 and beyond.

On July 20, 2011, the Minnesota legislature amended state tax law so that providing coverage to an adult child is no longer subject to Minnesota income tax withholding requirements nor creates taxable income to the employee. Employers no longer are required to impute taxable income to employees for tax years 2010, 2011 and beyond. In addition, employers who have been imputing taxable income to employees in 2011 should undo these imputations.

[1] “Affordable Care Act” means The Patient Protection and Affordable Care Act (PPACA) and the Health Care and Education Reconciliation Act of 2010 (HCERA).

A Trend Toward State Recognition of Same-Sex Civil Unions

On July 2, 2011, Rhode Island Governor Lincoln Chafee signed legislation that allows same-sex couples to form civil unions effective as of July 1, 2011. The law comes just days after New York passed legislation legalizing same-sex marriage.

The law makes Rhode Island the fifth state to permit same-sex partners to enter into civil unions. Delaware, Hawaii and Illinois each enacted civil union laws earlier this year, and New Jersey has permitted civil union formation since 2007.[1] Currently, six other states (and the District of Columbia) permit same-sex marriage, and several other states have laws that create various types of domestic partnership.[2]

Application of the Civil Union Laws

Each of the four new state civil union laws generally grant to civil union parties all the legal rights, benefits, protections and responsibilities afforded to married persons under the state's laws (including statutory, administrative, decisional and common law), while refraining from defining such unions as “marriages.” In addition, each law expressly provides that civil union partners are included in their state law definitions or uses of terms that denote a spousal or family relationship. Thus, not only will these laws have an impact on employee benefits and other employment-related rights that arise out of, or are governed by state law, but they will also affect various statutory and other legal rights provided to spouses in these states, such as those relating to inheritance and death benefits, property division, hospital visitation and parental rights.

With respect to same-sex unions formed under the laws of other states or jurisdictions, the state laws differ. Rhode Island recognizes civil unions or registered domestic partnerships formed outside the state as civil unions, provided that the parties satisfy Rhode Island’s eligibility requirements.[3] In Delaware and Hawaii, same-sex marriages, civil unions, and domestic partnerships formed out-of-state are all recognized as civil unions if the relationships otherwise meet Delaware's and Hawaii's eligibility requirements. In Illinois, a same-sex marriage, civil union or “substantially similar legal relationship” (other than a common law marriage) that is legally formed outside of Illinois is recognized as a civil union in Illinois, without regard to whether the relationship would meet Illinois’ eligibility requirements.

Impact on Employee Benefits and Other Employment-Related Rights

The federal Defense of Marriage Act (“DOMA”) defines the term “marriage” to refer exclusively to a marriage between a man and a woman, and the term “spouse” to refer exclusively to an opposite-sex spouse, for purposes of federal acts of Congress. Thus, any employer-sponsored benefits that are governed by federal law will not be affected by the civil union laws. These include certain retirement plans and health and welfare benefits governed by the Employee Retirement Income Security Act of 1974 and/or the Internal Revenue Code of 1986. However, insofar as state law governs a particular benefit (for example, insured health benefits), employers operating in a civil union state must generally treat an employee’s civil union partner as a spouse for purposes of those state-regulated benefits. Attention should also be paid to whether any of the states have discrimination or other laws that would require equal treatment for civil union partners with regard to various employment-related rights.

Tax Implications

As a result of DOMA, state civil union laws do not have any federal tax implications. At the state level, however, the impact of the four new civil union laws is not entirely clear.[4] The language of each of these state laws appears to require civil union parties to be treated as spouses for all state law purposes; however, each of the states’ tax laws refer to the federal tax law in at least some circumstances, and DOMA applies to federal tax law. As a result, it is possible that a state’s taxing authority may take the view that the civil union law does not affect the definitions of “marriage” and “spouse” for state tax purposes. For example, the Illinois Department of Revenue has stated that Illinois’ civil union law did not change Illinois tax laws and that, because state tax law follows federal tax law with regard to filing of state tax returns, civil union partners are therefore required to file separate state tax returns. Same-sex partners residing in Illinois may, however, be able to qualify for dependent status under the Illinois Revenue Code.

What Employers Should Do

Civil union laws generally have significant implications for employers in many respects, including benefits, human resources policies, and tax withholding. An employer operating in any of these states should review its benefit plans and policies to ensure they are in compliance with applicable law. In addition, even an employer that does not operate in any of these states should undertake a review to determine whether applicable state reciprocity (or other) principles would require recognition of civil unions (or domestic partnerships or same-sex marriages) formed in another state for purposes of the employer's benefit plans and policies.

IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this document is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter that is contained in this document.

FOOTNOTES

1 The Illinois civil union law took effect on June 1, 2011, while the Delaware and Hawaii laws will both become effective on January 1, 2012.
2 Same-sex marriage is permitted in Connecticut, Iowa, Massachusetts, New Hampshire, New York and Vermont. The following states have domestic partnership laws: California, Maine, Maryland, Nevada, New Jersey, New York, Oregon, Rhode Island, Washington and Wisconsin.
3 It is unclear whether Rhode Island recognizes same-sex marriages performed in other states.
4 However, New Jersey law is clear that civil union partners are to be treated as spouses for purposes of state tax issues.

Disclaimer

This publication is a service to the clients and prospects of RJF with content courtesy of Proskauer Rose. It is designed only to give general information on the developments actually covered. It is not intended to be a comprehensive summary of recent developments in the law, treat exhaustively the subjects covered, provide legal advice or render a legal opinion.

Introduction

The IRS has published a request for comments in Notice 2011-25 regarding the implementation provisions included in the Patient Protection and Affordable Care Act (ACA) related to fees which will be imposed on health plans to help fund comparative clinical effectiveness research relating to patient-centered outcomes.

The ACA creates a nonprofit corporation, the Patient-Centered Outcomes Research Institute (the Institute), to conduct and promote clinical effectiveness research. The Institute will be funded by a Patient-Centered Outcomes Research Trust Fund (the Trust Fund).

The Trust Fund will be funded in part by fees paid by issuers of health insurance policies and sponsors of self-insured health plans. The IRS will publish regulations providing guidance on the requirements applicable to issuers and plan sponsors that pay those fees. The request for comments is an opportunity for employers, and the health insurance industry, to provide comments on how the fees should be determined and paid. While a request for comments does not define the rules, it includes information on the kind of issues that may be addressed in the subsequent regulations.

Background

The ACA imposes fees on “specified health insurance policies” and “applicable self-insured health plans” based on the average number of lives covered under the policy or plan. The fees are effective for plan years ending after Sept. 30, 2012. Thus, for employer-sponsored plans that begin on the first of the month, the first plan year subject to the fees will be plan years beginning Nov. 1, 2011. The fee no longer applies for plan years ending after Sept. 30, 2019.

The fee equals to $1.00 (one dollar) per year, multiplied by the average number of lives covered under the plan for plan years ending before Oct. 1, 2013, and $2.00 (two dollars) per year for plan years ending after that date. Beginning in 2014 the fee will be adjusted based on a formula that takes into account the increase in national health care expenditures. Covered employees, spouses, and dependents will be included in the total number of covered lives.

The fee applies to “specified health insurance policy” including self-funded plans, which is defined as any accident or health insurance policy (including a policy under a group health plan) issued with respect to individuals residing in the United States. The fee does not apply to plans that are treated as excepted benefits under HIPAA (i.e. limited scope dental and vision plans).

For fully insured plans the fee will be paid by the issuer (the health insurance carrier). The fee for self-funded plans must be paid by the plan sponsor (generally the employer).

IRS Request for Comments

The IRS has asked for comments on a number of administrative issues related to the implementation of the fee including:

• The possible types of health reimbursement arrangements (HRAs) that would be excluded.
• How the administrative burden could be reduced by providing for reasonable methods to determine the average number of lives covered under an applicable self-insured plan. For example, should there be a safe harbor that would permit sponsors of applicable self-insured health plans to compute the average number of lives covered using a formula.
• Regulations could require plan sponsors to report and pay the fees annually as opposed to quarterly.
• Regulations might also require the reporting and payment to occur on the same calendar date regardless of the plan year.
• Should future guidance permit all employers currently treated as a single employer under § 414 to be treated as a single employer?
• In the case of the fee imposed on self-insured health plans, what guidance is needed concerning the ability of a third-party administrator to act on behalf of a plan sponsor?

Submit Comments

Individuals and organizations wishing to submit comments must do so by 9/6/11. Comments may be submitted through either of the following methods:

• Mail to CC:PA:LPD:PR (Notice 2011-35), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044
• Electronically to Notice.Comments@irscounsel.treas.gov. (include “Notice 2011-35” in the subject line).

Summary

Employers will need to plan to pay the fee for plan year beginning later in 2011. However, with the comment period ending in September, it is unlikely that regulations will be issued before the first plan year begins that will be subject to the new fee. It is also likely there will be some kind of transition period which will give plan sponsors additional time to implement the necessary systems to report and pay the required fees.

The COBRA subsidy provided under the American Recovery and Reinvestment Act of 2009 (ARRA) will soon come to an end.  After several extensions, the subsidy will end by August 31, 2011, for most assistance eligible individuals (AEI) who lost medical coverage due to an involuntary termination of employment on or before May 31, 2010.

It is possible that a termination of employment occurred before May 31, 2010, but a loss in coverage did not occur until a later month, in which case coverage could be subsidized beyond August 31, 2011.

ARRA provided a 65 percent subsidy to an assistance eligible individual’s COBRA premium as long as the involuntary termination from employment occurred on or before May 31, 2010.  For these individuals, the subsidy was available for up to fifteen (15) months.

Larger employers were able to claim the subsidy on IRS Form 941 as part of payroll tax reporting once the reduced COBRA premium was received from the AEI. In the case of smaller employers, insurance carriers were entitled to this reimbursement.

Aug. 8, 2011

On August 1, 2011, the Department of Health and Human Services (HHS) adopted guidelines that require non-grandfathered health plans to provide women’s preventive services free of charge to participants. The new guidelines will apply to group health plans for plan years beginning on or after August 1, 2012.

Background

The Affordable Care Act (ACA) includes a provision that requires non-grandfathered health plans (including new plans) to provide a range of preventive services with no cost sharing to participants. This general ACA preventive care requirement was effective for plan years beginning after September 23, 2010. The law also required HHS to consider additional preventive services for women that were not included in the original guidelines as defined in the ACA. In response to this requirement, HHS directed the Institute of Medicine (IOM), an independent organization, to conduct a review and provide recommendations on specific preventive measures related to women’s health needs. The IOM issued a report on July 19, 2011, which HHS used in developing the new guidelines.

Preventive Services for Women

Under the new guidelines additional women’s preventive services that will be covered without cost sharing requirements include:

• Well-woman visits, including an annual well-woman preventive care visit for adult women to obtain the recommended preventive services.
• Gestational diabetes screening for women 24 to 28 weeks pregnant, and those at high risk of developing gestational diabetes.
• HPV DNA testing, for women who are 30 or older will have access to high-risk human papillomavirus (HPV) DNA testing every three years.
• STI counseling, and HIV screening and counseling that includes access to annual counseling on HIV and sexually transmitted infections (STIs).
• Contraception and contraceptive counseling that provides access to all FDA approved contraceptive methods, sterilization procedures, patient education and counseling. These recommendations do not include abortifacient drugs.
• Breastfeeding support, supplies, and counseling for pregnant and postpartum women, including comprehensive lactation support and counseling from trained professionals.
• Domestic violence screening

Exemption for Certain Religious Employers

An additional regulation gives “religious employers” the choice of buying or sponsoring group health insurance that does not cover contraception if that is inconsistent with their religious tenets.

A “religious employer” is an organization that meets all of the following criteria:

• The inculcation of religious values is the purpose of the organization
• The organization primarily employs persons who share the religious tenets of the organization
• The organization serves primarily persons who share the religious tenets of the organization
• The organization is a nonprofit organization as described in section 6033 of the Internal Revenue Code

More Information

A more detailed description of the “Guidelines for Women’s Preventive Services” can be found at www.hrsa.gov/womensguidelines.

Interim final rule regarding the exceptions allowed for religious organizations can be found at www.ofr.gov/OFRUpload/OFRData/2011-19684_PI.pdf.

Employer-Paid

Internal Revenue Code Section 79 permits an employee to receive up to $50,000 of group term basic life insurance on a tax-free basis. The value amount over $50,000 must be added to the individual’s taxable income (certain exceptions apply in the case of a discriminatory life plan or if life insurance is provided through a cafeteria plan).

In addition, the cost of employer-paid group term life insurance on an employee’s spouse and/or dependents is not taxable to the employee if the face amount of the coverage does not exceed $2,000. If the $2,000 limit is exceeded, all dependent life insurance, including the first $2,000 of coverage, is taxable. The Uniform Premium Table (Table 1) rates below—using the dependent’s age to select the applicable rate—must be used in calculating the amount to impute to the employee’s gross income. 

Employee-Paid

Imputed income rules also may apply to voluntary or optional life insurance if the employee-paid rates “straddle” the Table 1 rates. If all rate tiers are neither completely over nor completely under Table 1, then you must impute income for the value of the coverage for rate tiers that fall below Table 1. Your organization will need to review your voluntary life age bands to determine whether you need to calculate imputed income for certain employees.

All Plans

Plan sponsors should determine the amount of imputed income for group term life plan participants and report this information to the payroll administrator to ensure that the imputed income amount is reported on employees’ W-2 forms which are due by January 31. Plan sponsors may wish to include the imputed income in the employees’ last paycheck(s) of the year as the imputed income is also subject to Social Security taxes. 

The government’s Table 1 (see table below) is used to determine the tax reportable cost of the extra protection. Reg.Sec.1.79-3(d)(2). 

The initial enrollment period for Medicare eligible beneficiaries to enroll in Medicare Part D has passed, all employers must continue to fulfill annual requirements with both their employees and Centers for Medicare and Medicaid Services (CMS).

Group health plans must provide notice to Medicare-eligible participants advising whether prescription drug coverage provided under the plan is “creditable” or “non-creditable” at the following times:

• Prior to the Medicare Part D Annual Coordinated Election Period (ACEP) beginning October 15- December 7 of each year (this deadline previously was November 15).
• Prior to an individual’s Initial Enrollment Period (IEP) for Part D, as described under 423.38(a).
• Prior to the effective date of coverage for any Medicare-eligible individual that joins the plan.
• Whenever the entity no longer offers prescription drug coverage or changes the coverage offered so that it is no longer creditable or becomes creditable.
• Upon a beneficiary’s request.

A prescription plan is deemed creditable if it is expected to pay out as much as the standard Medicare prescription drug coverage will pay in 2011. If your company’s creditable coverage is on average at least as good as standard Medicare prescription drug coverage, Medicare eligible employees can keep this coverage and not pay extra if they later decide to enroll in Medicare coverage.

Employers must also provide a disclosure of creditable coverage status to CMS. An entity is required to provide the Disclosure Notice through completion of the disclosure form on the CMS Creditable Coverage Disclosure Web Page. 

At a minimum, disclosure to CMS must be made at the following times:

• Within 60 days after the beginning date of the plan year for which the entity is providing the disclosure to CMS.
• Within 30 days after the termination of the prescription drug plan.
• Within 30 days after any change in the creditable coverage status of the prescription drug plan

If you have made changes to the taxable proportion of premiums (e.g. pre-tax contributions to post-tax contributions), be sure to discuss this change with your insurer. 

In addition, employers should be mindful of W-2 reporting and FICA requirements and responsibilities for claimants who have received disability income from an insurer.

In addition, the Summary Annual Report (SAR) is a narrative (Form 5500) which must be distributed to all participants two months after Form 5500 is due.

The total benefit received must be reported on an individual’s W-2 form. Most plan sponsors use the W-2 form to satisfy as a notification. The maximum tax-free dependent care benefit an individual may receive is $5,000 if filing jointly or $2,500 if married and filing separately. Dependent care assistance plans must also satisfy certain nondiscrimination requirements and should be tested for nondiscrimination annually.

Wisconsin tax law was changed to treat Health Savings Account (HSA) contributions and earnings as tax-free for state income tax purposes. Effective for tax years beginning January 1, 2011, Wisconsin state tax law conforms to federal law regarding the tax treatment of HSA accounts. As a result:

• Employer contributions to an employee’s HSA will no longer be treated as taxable income to employees for Wisconsin state tax purposes.
• Employee contributions to HSA accounts made through a Section 125 cafeteria plan should be treated as pre-tax contributions for Wisconsin state tax purposes.
• Earnings on HSA balances are no longer treated as taxable income for Wisconsin state tax purposes.
• HSA distributions taken prior to January 1, 2011 for non-qualified medical expenses were not treated as taxable income for Wisconsin state tax purposes. However, due to this change, distributions after January 1, 2011 must be for qualified medical expenses in order to be tax-free.

For employer-sponsored adoption assistance programs, the maximum amount excludible from an employee’s income in 2012 for the adoption of a child (both for regular and special needs adoptions) will be $12,650 (decreased from $13,360 in 2011). The excludible amount starts to phase out for a taxpayer with a modified adjusted gross income that exceeds $189,710 and is completely phased out when such income reaches $229,710.

Taxpayers adopting children are eligible for both the adoption credit and the adoption assistance exclusion of adoption expenses paid for through an employer’s adoption assistance plan. However, the same adoption expense cannot qualify for both the adoption credit and the adoption assistance exclusion.

The Federal Motor Carrier Safety Administration (FMCSA) issued a new rule, effective, Jan. 3, 2012, prohibiting interstate commercial motor vehicle (CMV) drivers from using hand-held cell phones while driving.

The IRS issued final regulations on “qualified transportation fringe benefits” under Code Section 132. These benefits include employer-provided mass transit passes, reimbursement for parking and employer-provided transportation in a “commuter highway vehicle” (vanpools). The statutory income exclusion limit for qualified parking – parking provided to an employee at or near the employer’s business premises– is $240 per month for 2012 (increased from $230 in 2011). The combined income exclusion limit for transit passes and vanpooling is decreasing to $125 per month (from $230 in 2011).

The Affordable Care Act established a uniform standard effective January 1, 2011 that applies to all tax-favored arrangements, such as flexible spending arrangements (FSAs), health reimbursement accounts (HRAs) and health savings accounts (HSAs). The IRS has issued guidance for these changes as they apply to tax-favored arrangements used to pay for over-the-counter medicines and drugs. Under this standard, the cost of an over-the-counter (OTC) medicine or drug cannot be reimbursed from the account unless a prescription is obtained; whereas previously, OTC drugs were permissible for reimbursement under FSAs without a prescription.

This standard does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles. The standard applies only to purchases made on or after January 1, 2011. 

In 2011, the tax penalty on withdrawals from HSAs for reasons other than the reimbursement of qualified medical expenses increased to 20%.

The Internal Revenue Service (IRS) released the 2012 cost-of-living-adjusted HSA limits.

Maximum annual HSA contribution limit

• Self only coverage: $3,100 (previously $3,050)
• Family coverage: $6,250 (previously $6,150)
• Catch-up contribution for those age 55 or older: $1,000

Minimum annual deductible to qualify as a high deductible health plan

• Self only coverage: $1,200 (no change from prior year)
• Family coverage: $2,400 (no change from prior year)

Maximum annual out-of-pocket maximum to qualify as a high deductible health plan

• Self only coverage: $6,050 (previously $5,950)
• Family coverage: $12,100 (previously $11,900)

Employers continue to analyze the impact that the “Play or Pay” mandate will have on their organization. The law requires that employers with 50 or more full-time equivalent employees (defined as 30 or more hours per week) must provide a minimum level of medical insurance for their employees. If organizations do not meet the government requirements, they must pay a penalty.

• If no employer-sponsored plan is offered: $2,000 multiplied by the number of individuals employed, not counting the first 30 employees.
• If employer-sponsored plan is offered: $3,000 multiplied by the number of full-time employees who receive an Exchange-based premium tax credit; this is capped at the amount of penalty that would have been assessed had the employer not provided any coverage, not counting the first 30 employees

As employers make changes to their plan’s benefits and contributions, the number of “grandfathered” plans has significantly decreased over the last year. Plans that lose grandfathered status must comply with additional provisions of the law; however, many employers within our market are not significantly impacted by the loss of this status. This should be analyzed each year.

Current Mandates for Grandfathered Plans

• Extend coverage to dependents up to age 26; plan may choose to limit eligibility so that dependents eligible for other employer-sponsored coverage are not eligible.
• Plans may not impose a pre-existing condition exclusion for any individual under age 19.
• Plans may not apply any lifetime limit on the dollar amount of essential health benefits for any individual; plans may apply an annual limit as allowed by the law.
• Plan may not terminate coverage retroactively except in the case of fraud or an intentional misrepresentation of material fact.

Current Mandates for Non-Grandfathered Plans

• Extend coverage to dependents up to age 26 regardless of eligibility for other employer-sponsored coverage.
• Plans may not impose a pre-existing condition exclusion for any individual under age 19.
• Plans may not apply any lifetime limit on the dollar amount of essential health benefits for any individual; plans may apply an annual limit as allowed by the law.
• Plan may not terminate coverage retroactively except in the case of fraud or an intentional misrepresentation of material fact.
• Provide coverage for certain preventive care services without cost-sharing, including preventive services rated A or B by the U.S. Preventive Task Force.
• Plans must allow enrollees to select their primary care provider (PCP), or pediatrician in the case of a child, from any available participating primary care provider.
• Plans are prohibited from requiring authorization or referral by the plan for a female patient who seeks coverage for obstetrical or gynecological care by a specialist in these areas.
• Plans are prohibited from requiring prior authorization or imposing increased cost-sharing for emergency services.
• Plans must comply with the law’s internal claims appeals process and external review procedures

As the debate over the Affordable Care Act1 (the “Act) continues, several components of the law have been enacted over the last year and will continue to be implemented in coming years.

Components enacted in 2010 and 2011:

• Dependents are eligible for coverage provided by a parent’s plan up to age 26; however, plans that maintain grandfathered status may choose to limit eligibility if the dependent is eligible for other employer-sponsored coverage.
• Pre-existing condition exclusions removed for children under age 19.
• Plans may not impose a lifetime limit on essential health benefits; annual limits that meet certain thresholds are allowed.
• Plans may not terminate coverage retroactively (i.e., rescind coverage) except in the case of fraud or an intentional misrepresentation of material fact.
• Over-the-counter medications are not eligible for reimbursement under a Health FSA, HSA or HRA unless prescribed by a doctor or is insulin.
• Penalty for non-qualified HSA or Archer MSA distributions increased to 20%.
• Employers must provide Medicare Part D Creditable Coverage Disclosure Notice to certain individuals by October 14 of each year (previously November 14).
• Non-grandfathered plans must provide coverage for certain preventive care services, immunizations and screenings without any employee cost-sharing.
• Non-grandfathered plans must include certain patient protections.
• Non-grandfathered plans must implement certain processes for internal claims appeals and external reviews

Components eliminated in 2011:

• Free Choice Voucher program
• CLASS (Community Living Assistance Support and Services) Act long-term care benefit

Components expected in 2012:

• Employers must distribute a uniform summary of benefits and coverage to participants.
• Form W-2 reporting of health coverage for employers issuing 250 or more Form W-2’s (optional for employers filing less than 250 Form W-2’s).
• Health plan fee to fund clinical effectiveness begins ($1/covered life/year for first year; $2 for second year and indexed thereafter).
• Expanded definition of women’s preventive services (effective for plan years occurring on or after August 1, 2012)

Components expected in 2013:

• Health FSA salary reductions capped at $2,500 per year beginning January 1, 2013; will be indexed to inflation beginning in 2014.
• Form W-2 reporting for health coverage for employers issuing less than 250 Form W-2’s may apply (initially effective in 2013, this provision has been delayed until further guidance is provided).
• Change in Medicare retiree drug subsidy tax treatment takes effect.
• Employers must provide notice to employees that includes information on health insurance Exchanges, premium subsidies and employer contributions.

Components expected in 2014:

• Health insurance Exchanges open
• Insurance market reforms take effect; Pre-existing condition exclusions cannot be applied to any individual; Health insurance guaranteed availability and renewability.
• Waiting periods for health plans cannot exceed 90 days.
• Automatic enrollment of employees into group health plan for employers with more than 200 employees (effective date unknown).
• Individual mandate takes effect
• Employer “Play or Pay” penalties may apply to employers that do not provide coverage to full-time employees, that offer minimum essential coverage that is unaffordable or that offer coverage under which the plan’s shares of the total allowed cost of benefits is not at least 60%.
• Additional employer reporting and disclosure.
• HIPAA wellness limit increases to 30%.

Components expected in 2018:

• Excise tax on high-cost “Cadillac Plans”

When you don't stay focused on your values, it puts the whole community at risk. Values don't simply belong in a company manual. They must be practiced within the company and within the community at large. The RJF Charity Committee is just one way our people put their values to work.
 
Read about our Charity Challenge! Our goal is to raise $125,000 to help positively affect children's well-being in the communities we serve by focusing on their health (Children's Hospitals and Clinics of Minnesota) and development (Admission Possible).

Our employees also share their time and talents with many civic clubs, chambers of commerce, scouting organizations, religious institutions and other non-profits. It's our employees values in action.

Putting our values to work in the business community
RJF is setting a new "standard of expectations" in the business community by staying focused on our company values of service and integrity. Serving the community, serving our clients and practicing higher standards in the insurance industry. That's the RJF code of conduct.

We love our challenge supporters. Click here to see who has accepted our challenge!

Platinum ($10,000+)  

> Dominant logo placement (GIF or JPEG) in all RJF promotional material related to RJF’s 2011 Charity Challenge, including:

• The RJF Standard newsletter
• RJF Charity Challenge webpage
• Press releases
• Internal signage
• RJF Charity Challenge reception program
• Promotional letters and email blasts

> Link to corporate website from RJF website

> Opportunity to be quoted in official RJF newsletter article and external press releases (limited to top two donors)

> Special recognition at RJF's September 14 Charity Challenge Reception (up to 10 attendees)

> Opportunity to bring up to 15 volunteers to RJF's Charity Challenge special volunteer events

Gold ($5,000 to $9,999)

> Logo placement (GIF or JPEG) in all RJF promotional material related to RJF's 2011 Charity Challenge, including:

• The RJF Standard newsletter
• RJF Charity Challenge webpage
• Internal signage
• RJF Charity Challenge reception program

> Link to corporate website from RJF website

> Special recognition at RJF's September 14 Charity Challenge Reception (up to 10 attendees) 

> Opportunity to bring up to 15 volunteers to RJF’s Charity Challenge special volunteer events

Silver ($2,500 to $4,999)

> Dominant name recognition in some of RJF’s promotional material related to RJF’s 2011 Charity Challenge, including: 

• The RJF Standard newsletter
• RJF Charity Challenge webpage
• Internal signage
• RJF Charity Challenge reception program

> Link to corporate website from the RJF website

> Special recognition at RJF’s September 14 Charity Challenge Reception (up to 8 attendees)

> Opportunity to bring up to 5 volunteers to RJF’s Charity Challenge special volunteer events

Bronze ($1,000 to $2,499)

> Name recognition in 2011 RJF Charity Challenge internal signage, webpage, and reception program. 

> Link to corporate website from the RJF website

> Special recognition at RJF’s September 14 Charity Challenge Reception (up to 4 attendees)

> Opportunity to bring up to 3 volunteers to RJF’s Charity Challenge special volunteer events

Challenge Friends (All other donations)

> Name recognition in 2011 RJF Charity Challenge internal signage, webpage, and reception program. 

> Recognition at RJF’s September 14 Charity Challenge Reception (you plus one guest)

Donate today! Click here for submission form and instructions.

Thank you for your donation!

Click here to download the submission form and instructions.

With the help of our insurance carriers, business partners, and employees, RJF launched its 2011 Charity Challenge campaign on June 6. Our goal is to raise $125,000 by August 31 on behalf of two non-profit organizations that focus on health (Children's Hospitals and Clinics of Minnesota) and development (Admission Possible) of our young people. (With the generous support of Marsh & McLennan Agency, RJF will match 30% of every dollar raised.)

JOIN US and make a difference
We can't do this alone. We need your help to make a lasting difference in the lives of children in our communities. Our challenge demonstrates the significant, positive impact our industry has on our communities and the mutual desire we have to serve children in need.
           
Donate today! Click here to complete a donation form. Forms can be completed and mailed to to charitychallenge@rjfagencies.com. For more information regarding our sponsorship levels click here.
 
We love our supporters! Click here to see who has taken up the challenge!

GET INVOLVED

Not only is our challenge about financial giving, but we also want to give a little sweat equity. Each quarter we have planned at least one event or volunteer opportunity for you to partake in. We hope by volunteering your time you also will develop a personal connection with these charities. Check out our 2011 RJF Charity Challenge Event Schedule here.
 

LEARN MORE about the charities

Children's Hospitals and Clinics of Minnesota

We selected Children's Hospitals and Clinics of Minnesota because they champion the special needs of children and their families by providing affordable, accessible, and adequate health care regardless of economic or cultural barriers they might have elsewhere. It also recognizes that when a child is sick, it affects the entire family. Children’s Hospitals and Clinics of Minnesota is committed to the well-being of each child and family that comes into its care. Donate now here.

Admission Possible

We selected Admission Possible because it is making a direct impact on the development of youth in our communities by providing college preparation and admission support to low-income students in the Twin Cities and Milwaukee areas. Our contribution may support as many as 40 students as they complete the program. Donate now here.

Many, many thanks to you for taking up our challenge. We couldn't do it without you!

Platinum ($10,000 +)

Gold ($5,000 - $9,999)

Silver ($2,500 - $4,999)

CIGNA Group Insurance

Medica

RJF Employees

S.H. Smith & Company, Inc.

Vertafore, Inc.

Western National Insurance

Westfield Insurance Co.

Bronze ($1,000 - $2,499)

Assurant Employee Benefits
Delta Dental
Fireman's Fund Insurance Company
McKinley Group
OneBeacon Charitable Trust
PreferredOne
Principal Financial Group
QBE
Standard Insurance Company
Swett & Crawford
Tata Consultancy Services (TCS)
TJ Associates
Unum
West Bend Mutual Insurance Co. 

Challenge Friends (All Other Donations)

Events and Volunteer Opportunities

Aug. 18
Childrens Hospital Charity Challenge Event:

We will be stickering 15,000 hand sanitizers to help Children's prepare for its MN State Fair event.

VOLUNTEER

Aug. 31
RJF Charity Challenge - Ends

EVENT

Sept. 14
2011 RJF Charity Challenge Reception:

Save the date! (More details coming soon!)

EVENT

Director, Management Liability Group

763-548-8599
hansond@rjfagencies.com

Biography

Management Liability is a highly technical, complex and ever-changing field of insurance. Dan Hanson, Director of Management Liability, relies on his extensive experience to design programs that will protect his clients, and manage and reduce their executive risk exposures. Dan specializes in directors and officer liability (D&O), employment practices liability (EPL), fiduciary liability, Errors and Omissions, and Network Security/Cyberliability insurance.
 
Dan has spent over 15 years working with executive risk processes and claims handling. Prior to joining RJF, he held several underwriting, management and technical positions with St. Paul Companies and Travelers, and frequently taught errors and omissions workshops.

From 2006-2007, Dan served as the chapter president of the Minnesota Chartered Property Casualty Underwriters (CPCU) Society, a community of credentialed property and casualty insurance professionals who promote excellence through ethical behavior and continuing education. He achieved his Chartered Property and Casualty Underwriter designation in 1998.

Dan earned his undergraduate degree in History from Carleton College, Northfield, Minn., and his Master of Business Administration in Finance and Accounting from the Carlson School of Management, University of Minnesota.

Education

B.A. in History, Carleton College
MBA in Finance and Accounting, Carlson School of Management, University of Minnesota

Senior Vice President, Management Liability Group

763-746-8507
hondab@rjfagencies.com

Biography

Bjorn Honda is the Executive Vice President of RJF Agencies’ Management Liability Group and a partner in the company. He identifies executive risk exposures; advises boards of directors; and structures and procures directors and officers, employment practices and fiduciary liability insurance programs for companies. Bjorn’s clients represent the business spectrum from nonprofit organizations to multi-billion dollar public corporations.

Bjorn has spent 18 years focused on complex international and domestic risks in financial and professional lines. Prior to joining RJF, he served in underwriting, management and technical positions with the Chubb Group of Insurance Companies, including Practice Leader of Executive Risk in Minneapolis. His technical expertise is matched only by his ability to quickly and accurately identify exposures and explain the intricacies of this coverage in lay terms.

He is an active member of the Professional Liability Underwriters Society and serves on the steering committee of the North Central Chapter. Bjorn frequently speaks on Directors & Officers liability topics throughout the United States.

Education

B.A. in International Economics, Allegheny College

HUMAN RESOURCE CONSULTANT

763-746-8219
roigerh@rjfagencies.com

BIOGRAPHY

Helping clients with HR policies and procedures like employee handbooks, employee screening or termination procedures is just the beginning for Heather. Her true talents come through when helping a business eliminate its risks before they occur—specifically as they relate to people, an employer’s most valuable asset. This could include addressing compliance issues to avoid future litigation risk or implementing talent management process to provide bench strength for an employer with an aging workforce.

Her experience includes talent management, crisis management, and aligning multiple international sites’ HR programs. She earned a master’s degree in industrial, organizational psychology in 2008, which positions her uniquely to help employers execute HR projects and initiatives while developing long-term strategies to move the business forward while reducing its risk.

Heather came to RJF from Freudenberg Group, where she spent several years in multiple HR management roles, most recently as the global HR manager for its Dichtomatik business in Shakopee, Minn.

EDUCATION

M.S. Industrial, Organizational Psychology, Capella University
B.S. Retail Merchandising, North Dakota State University

Director of Employer Services

763-746-8502 
800-444-3033 ext.8502
wissbroeckera@rjfagencies.com

Biography

Alan’s experience and expertise revolve around helping companies in all industries identify, eliminate and mitigate organization-wide risks. He focuses on helping organizations develop long-term strategies to reduce losses by incorporating a dedication to safety into their corporate culture.

To establish an effective safety culture, Alan begins by gaining the commitment of executive management. Working with a company’s safety committee and management, he helps find cost-effective ways to reduce their total cost of risk. His process integrates safety, loss control, human resources and insurance claim analysis and management to create a comprehensive program.

Alan spent several years in the U.S. Army, followed by an accelerated path through college. Immediately following college, Alan worked for Federated Insurance where he began his risk management career. He is active in several trade associations, helping to educate members on the value of organizational risk management. A Certified Safety Professional and Certified Risk Manager, Alan also is a professional member of the American Society of Safety Engineers.

Education

Computer Science, University of New Mexico

Claims Consultant

763-746-8266
wheelera@rjfagencies.com

Safety Consultant

763-746-8213
sutherlandj@rjfagencies.com

Health Management Services Manager

763-548-8861
wardr@rjfagencies.com

Biography

Dr. Rosie Ward is passionate about helping employees create more fulfilled lives through improved well-being, and engagement with their jobs. Through her research and experience working with many organizations, Rosie has discovered developing supportive employee cultures is the key to achieving individual and organizational well-being.

Rosie works with companies to establish a long-term vision and plan to create a safe, well, and engaged culture. By focusing on individual and organizational behavior, intrinsic motivation, culture change, employee engagement, and health education, the plan is customized to address each company’s unique needs.

Rosie is a Certified Intrinsic Coach®, and a frequent speaker on well-being, engagement, and motivation, and is very active in the wellness, coaching and professional communities, and serves as a mentor to others in her industry. She is a contributing author to the book, Organization Development in Healthcare: High Impact Practices for a Complex and Changing Environment, to be published in March 2011.

Education

B.S. in Kinesiology (emphasis in worksite health promotion), University of Minnesota
Master of Public Health in Community Health Education, University of Minnesota
Ph.D. in Organization and Management, Capella University

Safety Consultant

763-746-8284 
800-444-3033 ext.8284
rumseyd@rjfagencies.com

Biography

Going back to his days as a volunteer firefighter in Michigan, David has always been keenly aware of safety issues and what it takes to ensure a safe working environment. For the last 15 years, David has taken his passion for safety and used it to help his clients implement comprehensive risk management and jobsite safety programs.

David especially enjoys helping clients understand the importance of employee safety as a means of lowering their cost of risk. He works closely with management to analyze company processes and ensure that all necessary safety considerations have been taken into account.

David is actively involved in several local professional organizations that keep him current on changes and new trends in the industry. He is also in the process of obtaining his CRM certification.

Education

B.B.A. in Marketing, Western Michigan University

Safety Consultant, Hospitality/Retail

763-746-8295 
800-444-3033 ext.8295
martind@rjfagencies.com

Biography

Dan has over 14 years experience in the safety industry. He is dedicated to helping clients achieve business objectives that help manage their cost of risk while simultaneouly fostering a safe and healthy workplace. He easily adapts to any client in any industry to understand their issues and objectives to establish measurable practices that are supported by their existing work environment.

Dan’s previous experience with two insurance carriers uniquely positions him to help clients develop policies and procedures that insurers consider valuable. This insight into the carrier world helps align short- and long-term strategies that can provide premium discounts. He has also developed and implemented countless tactics for employers such as safety committees, OSHA compliance policies, train-the-trainer and employee training courses, and general safety procedures.

Dan is a Certified Safety Professional (CSP) and Associate in Risk Management (ARM). He is also a professional member of the American Society of Safety Engineers - Northwest Chapter.

Education

B.S. in Community Health Education, University of Minnesota - Duluth
Master’s of Industrial Safety, University of Minnesota - Duluth

Claims Consultant

763-746-8263
800-444-3033 ext. 8263
coopetc@rjfagencies.com

Biography

Cassandra specializes in workers’ compensation claims and understands the employer perspective as well as the broker management side. She works as an advocate for her clients to achieve claim resolution through aggressive claims management.

Cassandra is committed to providing exemplary customer service to her clients, working closely with insurance carriers and others to obtain the most favorable outcome possible. But claims management isn’t the whole picture. To help reduce claims in both severity and quantity, Cassandra works closely with safety and human resources professionals to develop programs that encourage a positive safety, HR, and claims culture.

Cassandra is actively involved with multiple volunteer organizations within her community.

Education

B.S. in Business Administration, Northwestern College

Claims Manager

763-746-8293
800-444-3033 ext. 8293
arayad@rjfagencies.com

Biography

Dawn has spent her entire career involved with insurance, with much of that time involving effectively managing claims from inception to resolution. Her extensive experience as a senior claims representative and claims manager earlier in her career has prepared her well for her role as claims manager at RJF.
   
Dawn specializes in workers’ compensation claims. She has handled claims from both the insurance company and employer sides of the table, which gives her a powerful perspective that few people possess. Dawn is committed to getting the most favorable outcome possible for her clients and works diligently with insurance carriers and others toward that goal. She works closely with loss prevention, health management, and carrier claims specialists.

Dawn is actively involved with professional organizations and boards that help her to continually develop her skill set to provide exemplary service to her clients. She is also fully fluent in Spanish.

Education

B.A. in Spanish, University of Minnesota
B.A. in Speech Communication, University of Minnesota

 
Vice President, Sales and Marketing

763-746-8271
800-444-3033 ext. 8217
johnsonj@rjfagencies.com

Biography

Jim has been a member of the insurance industry for over 30 years. He began his career as an underwriter and underwriting manager of a large national carrier and has since held positions at brokerages or agencies utilizing his knowledge of and connections with insurance carriers.

In 1988, Jim joined Marquette Insurance Group as a marketing specialist. The company eventually became Wells Fargo Insurance via several mergers and acquisitions. While at Wells Fargo, Jim held a variety of positions, including marketing manager, agency manager of its largest agency and national marketing director.

In May 2001, Wells Fargo purchased Acordia, a large national broker. For nine months Jim led the domestic marketing group of Wells Fargo/Acordia and served as a member of the merger transition team.

Jim has held a variety of positions on regional and national insurance company advisory boards and has built a number of programs since joining RJF in 2002.

Education

B.A. in Business Finance and Political Science - Constitutional Law, University of Wisconsin - River Falls

Chief Operating Officer and EVP

763-746-8205
800-444-3033 ext. 8205
lowderj@rjfagencies.com

Biography

Jill joined RJF in 1984. With the growth of the company, she was instrumental in creating management systems for the firm, which led to providing leadership in a variety of roles.  

During her RJF tenure, Jill has filled a variety of leadership positions including group leader, department manager and vice president of corporate operations. Now as chief operating officer--and an active member of the executive management team--she oversees eight departments and more than 100 employees.

In addition to directing RJF's overall operational resources, policies and initiatives, Jill has been instrumental in creating a company that focuses on partnering with forward-thinking clients to prevent risk. She has also played a key role in integrating RJF's approach into the company's service strategy and platform..

Education

B.A. in Sociology, University of Minnesota

President

763-746-8204
800-444-3033 ext. 8204
flemingt@rjfagencies.com

Biography

In 1988 Tim joined his former college roommate, Bill Jeatran, at RJF Agencies. Tim and Bill shared a vision to build a company based on quality and integrity that provided unique, focused risk management and insurance resources to middle-market clients. Over the years, Tim has served RJF’s clients in several leadership capacities. As president, Tim primarily focuses on developing the sales team and sales platforms. Additionally, his passion for carrier relationships has inspired him to become an active member of several local and national advisory boards. Tim currently serves on the board of directors for The Council of Insurance Agents & Brokers.
Tim began his career with Aetna, servicing large commercial clients throughout North and South Carolina. He earned his CPCU designation in 1987, and his CIC designation in 1995. He continues to service clients, including nearly 40 middle-market companies that have been with him for over 10 years.

Above and beyond continued client service, Tim’s current activities revolve around recruiting top sales talent and leading RJF’s client retention committee. His retention efforts focus on increasing and affirming RJF’s ability to provide valuable and trusted advice.

Tim is active in his community and has coached football, baseball and hockey for a number of years, as well as serving in various roles within his church. Tim also continues to be active with his alma mater, and currently serves on board of directors for St. John’s Vianney Seminary.

Education

B.S. in Business Administration, St. John’s University

Chief Executive Officer

763-746-8201
800-444-3033 ext. 8201
jeatranb@rjfagencies.com

Biography

Bill launched RJF in 1986 with the goal of creating an agency with a strong value proposition based on integrity and respect. He wanted to create a firm that would positively impact both its customers and employees. By positioning the company as a business advisor with expertise in organizational risk management, RJF has grown to represent more than 5,000 corporate clients. RJF now employs more than 160 professionals in five offices.

Bill devotes a large portion of his time to coaching the leadership within RJF and helping them achieve new levels of personal and professional success. He dedicates himself to promoting the RJF culture of values within all levels of the company. This leadership has produced exemplary results — RJF has been named the best medium-sized employer in Minnesota, has been one of the fastest growing private companies in Minnesota six times in nine years and is one of the “100 largest brokers of U.S. business,” and was awarded the 2009 Minnesota Business Ethics Award.

Bill’s passion for innovative ideas has earned him the position of chairman from 2007-2009 of the board of Assurex Global, the third largest risk management brokerage group in the world, with more than 20,000 professionals spanning the globe. Bill now serves as a board member of Children’s Hospitals and Clinics of Minnesota.

In 2006, he was named Entrepreneur of the Year by TwinWest Chamber of Commerce, the most active chamber in Minnesota. Ernst & Young selected him as a finalist for their Entrepreneur of the Year award in 2007 and 2008.

Bill and his wife have three children and enjoy spending time at their cabin in Northern Wisconsin.

Education

B.A. in Economics, St. John’s University

Senior Vice President, Employee Benefits & Carrier Relations

763-746-8216

800-444-3033 ext. 8216

setterm@rjfagencies.com

Employee Benefits Consultant

763-548-8569

800-444-3033 ext. 8569

moeolsony@rjfagencies.com

Benefits Consultant

763-746-8523

800-444-3033 ext. 8523

haffelyg@rjfagencies.com

Senior Vice President, Employee Benefits

763-746-8264 
800-444-3033 ext.8264
scrogginsd@rjfagencies.com

Biography

Donn has a genuine passion for building comprehensive benefit solutions for his clients. His goal is always to design a solution that provides maximum coverage for employees in the most cost effective manner for the client. He works closely with clients to help them understand market trends and other factors that affect their benefits program.

Donn is also a strong proponent of health management initiatives as part of a comprehensive cost containment strategy. He counsels his clients on the value of structured wellness programs as a way to help curtail future costs.  His programs have helped to make employees better healthcare consumers while still positively impacting his client’s bottom line.

Donn has worked in the insurance industry since 1996. You can always count on him to go the extra mile to design a customized benefits solution and be there with you to implement new strategies as your company grows and changes.

Education

B.A. in Management, St. John’s University

Employee Benefits Consultant

763-746-8249 
800-444-3033 ext.8249
mcdonoughj@rjfagencies.com

Biography

As a Benefits Consultant at RJF Agencies, John is responsible for designing and implementing cost-effective comprehensive benefits programs for his clients, and has a specialty niche in HSA and HRA programs. John works very closely with his clients to ensure that they understand all the information the insurance carriers provide and that the client has all the necessary information to make the best decision for the company and its employees.

John has built his career helping growing and emerging companies find the right coverages for their employees. His principal focus has been on simplifying the entire benefits process for his clients and helping them through all the intricacies of employer-sponsored healthcare. In a climate where quantity tends to overrule quality, John remains committed to his clients’ best interests and works tenaciously to see that those interests are fully accommodated.

Education

B.A. in Spanish, University of Minnesota

Senior Vice President, Benefits Consultant

763-746-8536
800-444-3033 ext.8536
krihap@rjfagencies.com

Biography

PK brings incredible creativity, energy and drive to her job as an employee benefits consultant at RJF. She joined RJF after a 10+ year career as a strategic account manager at Pro Staff, one of the nation’s largest staffing agencies. During her time there, PK became extremely adept at earning the client’s business and ascertaining their needs; an absolutely critical skill in her role at RJF.

PK’s clients look to her to make sound recommendations about benefit options that serve the best interests of their businesses and their employees. PK has a special knack for developing and launching customized benefits programs that provide all the necessary coverages employees need while simultaneously reducing the client’s expenses in a world of ever-increasing health care costs.

Due to PK’s continued success at RJF, she became a principal in July 2009. PK is one of ten principals at RJF and is actively involved in company-wide decisions and future strategic initiatives.

PK devotes much of her free time to a variety of professional and charitable organizations and also stays busy volunteering at her kids’ schools.

Education

B.A. in Liberal Studies & Psychology, College of St. Benedict

Community Association Specialist

651-480-1739
fasbenderh@rjfagencies.com

Biography

Herman has been in the insurance business for over 25 years and brings a creative, enthusiastic and entrepreneurial spirit to his work every day. His experience as a former insurance agency owner has given him a keen eye for the big picture and, in particular, the ability to see potential risk exposure that needs to be addressed.

Herman specializes in community association and construction risk management. In his role as a Community Association Specialist at RJF, he has his finger on the pulse of the industry at all times to keep informed about any new developments that may impact his clients and their coverage. He believes that the risk management approach to insurance is in the best interest of his clients and the only way to ensure a decrease in their total cost of risk.

Herman is involved in numerous local professional organizations and charitable efforts. He is married and has two sons.

Education

B.S. in Natural Science, St. John’s University

Community Association Specialist

763-746-8272 
800-444-3033 ext.8272
mirochaj@rjfagencies.com

Biography

Joe is celebrating his thirtieth year of service in the insurance industry.  His career has been a journey of advancement, achievement and recognition that we don’t see very often.  From his beginnings as a claims adjuster and agency manager to his current status as an industry expert in the areas of community association governing documents and insurance; Joe is truly a leader in his area of expertise.

As a Community Association Specialist at RJF, Joe is passionate about helping his clients stay ahead of the curve by anticipating future needs before they become liabilities.  He is diligent in his review of community association governing documents and ensuring that the coverages meet their requirements.  Joe is a strong advocate of education as a means of decreasing claims and, to that end, is a frequent contributor to association newsletters and other publications.

Joe is a prominent member of in the Community Associations Institute and is one of less than 100 Community Insurance and Risk Management Specialists (CIRMS) in the entire nation.  He is also involved in a number of other local and national professional organizations.

Education

B.S. in Health and Physical Education, University of Minnesota

Community Association Specialist

763-746-8278 
800-444-3033 ext.8278
fjellangers@rjfagencies.com

Biography

As an agent, agency owner and community association specialist with over 35 years of experience, Sarah brings a dynamic vision, expertise and capability to her job. Sarah is an authority on Minnesota law regarding community associations and is a frequent speaker and published author on the topic.

Sarah is committed to staying ahead of the game when it comes to changes in laws, regulations and other potential issues that could impact her clients. She is constantly seeking out information about changes in the community housing, construction and related industries so she can proactively recommend enhancements to prevent an unforeseen lack of coverage.

Sarah is a frequent consultant to local legislators on the Minnesota Common Interest Ownership Act. She also has taught a number of courses at Prosource and area community colleges that help to train property managers.

Education

Metropolitan State University

Community Association Specialist

763-746-8547
800-444-3033 ext. 8547
finkj@rjfagencies.com

Biography

Jackie has strong critical analysis skills and is highly creative, two traits that make her uniquely qualified to identify risk and find solutions.

Jackie joined RJF in 2004, and works closely with boards of directors, attorneys, and property managers to address community association needs. Jackie drills down into policy details to find high quality matches for her clients. As part of her role with the community associations practice group at RJF, she maintains close ties with community, neighborhood and home associations in order to be the most reliable and informed resource possible. That diligence and commitment makes it possible for Jackie to see potential risks before they actually become issues for her clients.

Jackie is a former board member of the Minnesota Chapter of the Community Associations Institute (CAI-MN) and previously served on the CAI-MN’s Legislative Action Committee. She holds a Community Insurance and Risk Management Specialist (CIRMS) certification with CAI.

Education

B.A. in English, Metropolitan State University
Associate of Science in Nursing, Normandale Community College

Producer

715-5523630

ericksonj@rjfagencies.com

Producer

218-348-5122

simensonj@rjfagencies.com

Producer

218-590-0153

starnoldb@rjfagencies.com

Executive Vice President, Producer

763-746-8287

800-444-3033 ext 8287

ziemannt@rjfagencies.com

Producer

763-746-8506

800-444-3033 ext. 8506

taggartl@rjfagencies.com

Producer

763-746-8529

800-444-3033 ext. 8529

marksc@rjfagencies.com

Executive Vice President

763-746-8207

800-444-3033 ext. 8207

neppert@rjfagencies.com

 
Producer

763-746-8544 
800-444-3033 ext.8544
nepperc@rjfagencies.com

Director, Commercial Lines

763-746-8296 
800-444-3033 ext.8296
gallaghert@rjfagencies.com

Biography

Tim has been in the insurance industry for over 20 years. Before joining RJF in 2006, he spent the first 18 years of his career with the Chubb Insurance Company where he advanced through the ranks and held progressively more challenging positions. At RJF, Tim seized the opportunity to lead its dynamic and vibrant Commercial Lines group.

Tim is committed to ensuring that RJF continues to grow and expand its capabilities to provide its customers with the products and services they require. He works diligently with insurance carriers to obtain the most comprehensive and cost-effective insurance and risk management products available. He also works with people at all levels of the RJF organization to ensure that it is providing world-class customer service to all clients. 

Tim is very involved in community athletics as a coach for a number of youth sports as well as serving on the board of Family Fest Ministries since 2003.

Education

B.S. in Psychology, St. John’s University

Insurance & Risk Management Consultant

763-548-8879
watkinsr@rjfagencies.com

Biography

Ryan learned early on that there are few things that excite him more than being able to help a client improve their business. That, and the appeal of developing long-standing relationships, is why he chose a career in the insurance and risk management industry.

Now with seven years of industry experience under his belt, Ryan knows the ins and outs of insurance and risk management. He understands that providing solid insurance isn’t enough to be considered a valuable asset by his clients. He sets himself apart by understanding the nuances within an organization and how they may hold back future plans. He then develops plans and assembles resources to help eliminate risks that may act as barriers to achieving business goals.

His consultative style and genuine concern for his clients’ best interests along with the results he delivers have earned him the trust and confidence of clients in a wide range of industries.

Ryan is an avid outdoorsman, and he and his wife are the devoted parents of two young children.

Education

B.A. Business Management, Gustavus Adolphus College

Producer

763-746-8229
800-444-3033 ext. 8229
sandvigg@rjfagencies.com

Biography

Greg brings to RJF customers his wide-ranging experience in the insurance and risk management industries. He began his career as a property claims adjuster in 1980, and later made the transition into a multi-line adjuster position, where he gained invaluable insight into how insurance carriers operate.

Since that time, Greg began helping companies find cost-effective and innovative solutions to their organizational risk management issues. His previous experience provides Greg’s clients with an dedicated advocate who understands what insurance underwriters are seeking and how to maximize the effectiveness of all risk management investments.

While he works with many construction and manufacturing companies, Greg’s background and technical expertise allow him to assist numerous clients in a variety of industries. Over the past couple years, Greg has been honored as one of the top-producing consultants within RJF. A member of the Minnesota Chapter of the National Fire Sprinkler Association, Greg supports the risk management efforts of many of these contractors.

Greg is married and has four sons. He keeps active in sports, and coaches basketball — his passion of more than 20 years.

Education

B.S. in Organizational Administration, Northwestern College

Risk Management Consultant
Business Development Manager, Property & Casualty

763-746-8252
800-444-3033 ext.8252
moorel@rjfagencies.com

Biography

Laura’s extensive background in safety and loss control coupled with her time as a basketball coach and referee puts her in a distinctive position to both find risk management solutions and encourage her clients to achieve the best risk reduction techniques possible.

In her role as Risk Management Consultant, Laura works as an advisor and coach to help her clients understand risk management and the advantages of implementing practical risk management initiatives at their companies. After assessing a client’s needs, Laura helps to create and launch their proactive risk management programs designed to reduce their total cost of risk and improve their safety culture.

Laura was a four-year starter for the women’s basketball team at the University of Minnesota and became a member of their 1,000 point club. Later, Laura served as a collegiate basketball coach for her alma mater University of Minnesota, Duluth.

Education

B.S. in Community Health with a Minor in Psychology, University of MN - Duluth
Master’s in Environmental Health & Safety, University of MN - Duluth

Risk Management Consultant, Manufacturing

763-548-8867
800-444-3033 ext.8867
maresj@rjfagencies.com

Biography

John has been in the insurance business for over 20 years. During his career he has taken on a number of different responsibilities and excelled at all of them. John’s many roles in the insurance industry include producer, sales manager, underwriting and loss control. His broad base of experience gives him the ability to examine any situation from a number of different perspectives.

John dedicates himself to finding the perfect solution for his clients. He especially prides himself on his ability to solve a problem for a new prospect when no one else can. John has worked with clients across a wide variety of industries, which has helped him develop a real knack for spotting possible risk exposure that could have easily gone overlooked by a less experienced consultant.  His work ethic, drive, tenacity and commitment are second to none. 

John is involved with a number of charitable and support organizations including Big Brothers Big Sisters, Alliance for Heart Failure Patients and Sudden Cardiac Arrest-Survivor Network.

Education

B.S. in Agricultural Engineering, University of Wisconsin – River Falls

Account Manager, Manufacturing Practice Group

763-746-8234
800-444-3033 ext.8234
lindquistd@rjfagencies.com

Biography

If you asked Debbie what one thing she was committed to above all others, it would be the success of her clients’ businesses. Every day she brings a drive, enthusiasm and commitment to find her clients better, more efficient and more effective tools to help them reach their unique business goals. Always seeking to go beyond insurance coverage, Debbie is constantly looking for ways to make her clients’ lives easier.

Utilizing a team approach to maximize value for her clients, Debbie’s high level of energy and creativity on the job allows her to recommend solutions that may otherwise be overlooked. She especially enjoys learning everything there is to know about her clients’ business and their unique nuances and risks. Armed with this information, she can recommend specific solutions tailored to the client’s business needs.

Debbie is very involved in her local school district and frequently volunteers her time for school functions.

Education

B.S. in Business, University of Minnesota

Risk Management Sales Executive

763-746-8535
800-444-3033 ext.8535
johnsons@rjfagencies.com

Biography

Shalin has nearly 20 years of experience in the insurance industry. He draws on every facet of that experience on a daily basis to provide his clients with sound timely advice on their risk management programs. He prides himself on his ability to help his clients clearly understand risk exposures and helping them find the best way to protect against it.

While there are certainly some people who simply “wound up selling insurance” for a living, you’ll find Shalin to be the exact opposite. He targeted this industry and pursued it with a passion. He earned his Bachelor’s degree in Risk Management and Insurance to have the full knowledge he needed to help his clients properly protect their businesses, employees and property.

Shalin is involved in a number of professional organizations that help to keep him abreast of all the new developments in the area of risk management. He is also a passionate fundraiser for local youth charities.

Education

B.S. IN Risk Management and Insurance, St. Cloud State University

Risk Consultant, Retail/Hospitality/Franchising

763-746-8221
imholted@rjfagencies.com

Biography

Doug Imholte is passionate about finding solutions that support his clients’ success. “I spend my days thinking about my clients and how we, as partners, can help them manage and improve their business,” he says.

Doug’s career has been marked by growth—at every position Doug has developed new sales strategies, repeatedly exceeded his sales quotas, and expanded the business. Doug began his career as an insurance underwriter and quickly moved to leadership positions. Over the next 20 years, he built strong teams at several companies, working to deliver the best solutions for his customers’ needs. While at e-learning company LearningByte International, Doug developed and grew two regional sales teams and served on the Strategic Leadership Team, where he helped steer the direction of the organization.

In 2004, Doug purchased the Minnesota master franchise rights for Wireless Toyz, a national wireless franchise. He managed operations from strategy, sales, finances, and marketing to the P&L insurance. “I understand the daily duties and pressures that franchisees face in growing and operating their businesses,” Doug says. “I have faced the same challenges and dealt with the same risks.” After developing the territory from zero stores to seven, Doug sold the business.

Doug’s experiences in insurance, sales, and business strategy, and as a business owner have developed his deep understanding of business risk. Today, Doug is a member of the International Franchise Association, and has served on the boards of the Saint John’s University National Alumni Association, the Lakes Street Council. He volunteers with the Leukemia-Lymphoma Society and coaches his daughter’s basketball team. He enjoys spending time with his kids, golf, travel, and has completed three marathons.

Education

B.A. in Government, Saint John’s University

Risk Management Sales Executive

763-746-8230 
800-444-3033 ext.8230
heppb@rjfagencies.com

Biography

Throughout his year career, Brad has strived to be a strategic partner with his clients. By always going the extra mile to find the perfect risk management solution, Brad works diligently to help his clients become more profitable without neglecting their need to safeguard against risk.

One of Brad’s areas of expertise is transactional risk management, assisting clients with their everyday dealings with vendors, suppliers and subcontractors, and how they can protect themselves. Brad’s extensive insurance expertise spans both private and public companies across a wide variety of industries.

Brad has earned a well-deserved reputation as a dependable, honest and trusted business partner who puts the client’s needs first at all times. His longevity in the industry and his broad base of experience make him a valuable asset to his clients.

Education

B.S. in Business, Mankato State University

Life Sciences & Technology Risk Advisor

763-746-8515
612-804-9846 cell
800-444-3033 ext.8515
ellingsont@rjfagencies.com

Biography

As a Risk Management Consultant at RJF Agencies, Todd relies on his extensive experience in the medical device, high tech, and pharmaceutical industries every day. Todd forms his partnerships on the basis of integrity and trust, and his passion lies in his desire to exceed the expectations of his clients and ensure that they are covered against potential risks.

Todd brings a consultative, needs-based approach to his work. He strives to learn as much as he can about his clients, their business and their challenges. He conducts a thorough needs analysis and develops solutions that will best fit those needs. These solutions offer comprehensive, cost-effective coverage for the client’s current situation and are flexible enough to accommodate future company growth. Todd also speaks frequently on risk management issues and is currently pursuing his CIC designation.

Todd and his wife have three daughters. He is involved in his church and children’s activities as well as a number of professional organizations. He is an avid traveler, golfer and sports fan.

Education

B.A. in Business & Communications, Concordia College, Moorehead
M.B.A. in Marketing, University of Texas

Account Manager, Auto Dealers

763-746-8258
800-444-3033 ext. 8258
curtisc@rjfagencies.com

Biography

Corie has over ten years of experience in the insurance industry and currently works as an Account Manager in the RJF Auto Dealer Group. A more perfect match has never been seen before at RJF. All her life, Corie has been passionate about everything automotive and she brings that passion to work every day as an advocate for her clients in the auto industry.

The consummate problem solver, Corie relentlessly pursues the perfect solution for her clients. To make sure she can deliver, Corie is on a never-ending quest for knowledge of new products, solution and options. Because the auto dealer market is very specialized, Corie frequently has to develop unique, creative solutions to fulfill her clients’ needs and she delivers every time.

Corie was a three-time All-American in Women’s Soccer at Macalaster College. She continues to be deeply involved in Minnesota soccer through coaching and local associations.

Education

B.A. in Environmental Studies, Macalester College
B.A. in Geography, Macalester College
A.A. in Auto Mechanics, Dunwoody Institute

Commercial Insurance/Employee Benefits Consultant

715-634-6513
800-378-4318
chapins@rjfagencies.com

Biography

Scott has nearly 15 years experience in the insurance industry and has become known among his clients as a trusted and committed business partner. His consultative manner, thoughtful evaluation and ‘client-first’ attitude allow him to make honest, objective recommendations designed to ensure the long-term health of the client’s business and employees.

Scott especially enjoys working with his clients on risk management programs. After a thorough assessment process of his client’s business, Scott designs and recommends a comprehensive proactive risk management program including human resource consulting, loss control and insurance.

Scott is very involved in the Hayward community. He is a member of several local business and civic organizations and has held board positions on many of them. Scott also enjoys many outdoor sports including competitive cycling and skiing.

Education

B.A. in Economics and Mathematics, University of Wisconsin - Eau Claire

Risk Management Consultant

763-746-8285
800-444-3033 ext.8285
bakerr@rjfagencies.com

Biography

Risk management has been a key focus at every stop of Reesa’s career. She holds her master’s degree in Risk Management & Insurance and is a published author on the subject.

Along with the credentials, Reesa has practical, hands-on experience. She has served as a Risk Manager for two major corporations, where she acquired intimate knowledge of employers’ needs and how to assess a corporation’s risk/reward appetite. Her experience and insight consistently saves her clients time and money.

Reesa is involved in a number of local and national business organizations which helps keep her on top of industry trends and changes.

Education

B.S. in Finance, University of Nebraska – Lincoln
Master’s of Risk Management & Insurance, University of Georgia – Athens

Risk Management Consultant

763-746-8202
800-444-3033 ext.8202
aanensonm@rjfagencies.com

Biography

Mary Pat relies on her extensive experience in the areas of underwriting, marketing and technical insurance knowledge to help bring risk prevention solutions to her clients. She works to thoroughly understand each client’s business before determining the most appropriate coverage and most cost-effective insurance programs for the client’s transfer of risk. Mary Pat’s talent is the ability to do the right thing at the right time for the client while providing strong technical support and advice.

Mary Pat brings a tactical-based plan of action for client’s strategic initiatives based on their needs, financial strength, culture and values as well as appetite for risk. Throughout her 30 years of experience within the risk management industry she has handled clients from start-up or R&D to larger publicly-held companies.

Mary Pat currently specializes in medical and computer technology, a field she finds very rewarding. In addition to servicing many of RJF’s top accounts, Mary Pat keeps her industry knowledge and contacts fresh as a board member of the St. Paul Companies’ and Chubb Insurance Group’s Advisory Councils.

Mary Pat volunteers at nursing homes and local civic events. She spends her free time fishing, hunting, camping and working with her three champion-bred dogs.

Education

Business Administration, University of Mankato

RJF stands by you no matter what the weather

You know that your needs as a community association require unique services and expertise. That’s why RJF has a dedicated community association team specializing in association risk prevention. This team of professionals holds all four of the Community Insurance and Risk Management Specialist (CIRMS) designations in Minnesota.

RJF researches your association’s needs to identify your unique risks and then creates a comprehensive risk prevention solution that protects your association, board and unit owners. If you prefer, we’ll even attend board meetings, meet with developers and help design and implement communication strategies to keep your unit owners informed.

We offer:

• Property valuations
• Vendor selection and contract guidance
• Contract review
• Loss control strategies
• Manager training
• Board member liability protection
• Prompt claims service

Prevent risk for your association today. Contact RJF at 763-746-8000 or email prevent@rjfagencies.com.

RJF's skilled claims consultants start by analysing your claims history. By identifying both the most frequent types of claims and the most severe, the information we uncover will demonstrate how your claims history affects your experience modification factor, and thus, your premium costs, as well as guide our preventative efforts to reduce future claims.

After a situation has occurred, we become your advocate to during every step of the claims process from filing to resolution. We'll create return-to-work programs that help you and your employee thrive after an incident, and reinforce your claims processes through your safety and human resources procedures. We’ll even review your past claims to see if they were resolved to your best advantage.

Meet our Consultants

How does HR fit in with risk prevention? It’s at the start of everything—from pre-hire recruiting to employee screening to policy development.

How HR Consulting Works

After discussing your goals with you, an RJF HR consultant will conduct an evaluation of your needs using the appropriate tools, which may include employee surveys, policy audits and other assessments. This process will help identify any necessary improvements or missing components. We’ll then develop a plan that will fill your needs and meet your goals, and with your approval, set this plan in motion, making any adjustments along the way as necessary. We’ll track progress throughout and keep you informed on the discoveries and improvements made.

Additional Services

• HR Legal Advice Hotline
• On-site training for executives and managers on key HR functions
• On-site training for employees on company expectations
• Free seminars on HR topics
• A la carte services

Contact RJF to learn more

Meet our consultants

Health care coverage is one of the biggest expenses for most organizations, and these costs have steadily shot up over recent years with no sign of stopping. RJF’s health management team can help you take back control of these costs.

Our long-term strategy starts by evaluating the needs of your employees. Then, depending on their needs, we’ll create training, educational events and initiatives that target specific well-being areas to start improving your employees’ lives and your bottom line today.

Additional Services

• On-site training
• Free seminars on well-being topics

Meet our Consultants

You know that preventing claims is the best way to lower costs. We’ll analyze your claims history, current policies and procedures including safety measures. From there, we’ll develop a strategy to fix and improve your safety measures and provide employee education and training. After implementing the plan, we’ll track its progress and keep you informed of any needed adjustments, findings and improvements.

RJF can also help you create successful disaster and pandemic planning or disaster recovery plans. Often, a basic plan will be enough provided you have solid insurance and risk management programs in place.

Additional Services

• Worksite and facility inspections
• Compliance audits
• Ergonomic and job safety analyses
• On-site training
• OSHA training
• Free seminars on safety topics
• Building valuations
• Safety Committee meetings

Meet our Consultants

RJF’s Health Management Services Manager Rosie Ward, Ph.D., will lead a presentation, “Moving Beyond Motivation for Lasting Results” at the 22nd Annual Art and Science of Health Promotion Conference.

Core Conference: April 11-13, 2012
Intensive Training Seminars: April 14-15, 2012
The Manchester Grand Hyatt, San Diego, CA

This conference will bring together leaders in health promotion who represent some of the largest and most successful workplace, clinical, educational and community programs in the nation. Continuing Education Credits will be available for a number of professions. Complete program details, schedule and registration information are available at www.HealthPromotionConference.org.

Just fill out the form below to start receiving email invitations to our risk prevention seminars.

“We cannot solve our problems with the same thinking we used when we created them” (Albert Einstein). The key to sustainable change is moving away from changing and controlling behaviors to focus on shifting how we THINK about choices. Until leaders fundamentally shift how they think about people, culture improvement and employee engagement efforts will fail. Likewise, sustainable change on an individual level requires people to take ownership for their own engagement and well-being – which can be done by developing better thinking skills.

This Webinar is designed to provide more in-depth follow-up information presented at the seminar, Building Risk Prevention Through Employee Wellbeing. Rosie Ward will review details and case studies that illustrate the power and the benefit of shifting thinking from an organizational and individual level.

WHO SHOULD ATTEND?

• Company leaders
• HR Managers and Directors
• HR Generalists
• Safety Professionals
• Managers and supervisors in any department
• Anyone involved in employee development
• Anyone involved in employee engagement

REGISTRATION INFORMATION

Tuesday, May 22, 2012

12-1 PM

REGISTER

This is a free Webinar, brought to you by RJF, a Marsh & McLennan Agency LLC company.

For questions, email Emily Reller or call her at 763-548-8896. 

Developing current and future leaders is critical to growth and sustainability of any organization; no culture change or employee engagement effort can succeed without quality leaders. Leaders today need to bring different thinking and skills than in the past, but where should you invest your resources to get the best result? Effective leadership development needs to be approached from a long-term strategic framework like any other organizational initiative.

This Webinar, lead by Rosie Ward and Heather Roiger, is designed to provide more in-depth follow-up information presented at the seminar “Building Risk Prevention Through Employee Wellbeing”.

KEY DISCUSSION POINTS:

• Tools and considerations for addressing the strategic and practical needs for developing effective leaders. 
• Long-term development to shift thinking.
• Creating career ladders, talent management plans and competency models.
• Effectively leveraging performance evaluation systems.

WHO SHOULD ATTEND?

• Company leaders
• HR Managers and Directors
• HR Generalists
• Safety Professionals
• Managers and supervisors in any department
• Anyone involved in employee development
• Anyone involved in employee engagement

REGISTRATION INFORMATION

Wednesday, May 9, 2012

12-1 PM

REGISTER

This is a free Webinar, brought to you by RJF, a Marsh & McLennan Agency LLC company.

For questions, email Emily Reller or call her at 763-548-8896. 

Risk prevention services support your insurance coverage by addressing the causes of risk at its roots. Some of the services we use to help prevent damaging insurance claims from occurring in the first place include the following:

CLAIMS ASSESSMENT & ANALYSIS

• Past claims analysis—by business unit, shift, department, etc.
• Loss picks

EMPLOYEE WELLBEING, SUPPORT & ENGAGEMENT

• Safety culture development
• Behavioral observations and analysis
• Leadership and employee coaching, training and screening
• Pre-hire through post-hire support
• 24/7 employee health and wellness

Safety and loss prevention

• Safety committees and safety consulting
• On-site and walk through inspections
• OSHA, DOT and regulatory compliance

RJF has experienced insurance and risk prevention teams focused on the following industries and specialty insurance coverage lines.

• Manufacturing & Distribution
• Construction
• Auto Dealers
• Bicycle Industry
• Franchising
• Hospitality
• Retail
• Small Business
• Nonprofit
• Life Science & Medical Technology
• Law Firms
• Surety Bonding
• Executive, Management & Professional Liability

We go beyond just brokering insurance for you. We can fulfill virtually any insurance and risk prevention need. If you don't see what you're looking for below, just ask.

BUSINESS MANAGEMENT

• Alternative risk evaluation and options
• Supply chain mapping
• M&A support: Insurance and risk due diligence
• Board of Directors presentations
• Open claims analysis and monitoring, and ultimate cost forecasting
• Experience mod analysis and promulgation

INSURANCE BROKERING, PLACEMENT & MANAGEMENT

• All lines of property and casualty insurance
• Executive, management and professional liability insurance
• International and domestic insurance programs
• Surety bonding

Services to improve the performance of your Commercial Insurance program

• Online Certificates of Insurance
• Contract reviews
• Industry and marketplace updates
• Claim support and problem resolution
• Policy interpretations
• Renewal analysis
• Ongoing insurance carrier evaluation

With access to most regional, super-regional, national and international insurance carriers, RJF can place all types of business/commercial insurance, from the easily accessible to hard-to-place. Because we are a division of Marsh & McLennan Agency, you’re covered whether your firm is local, statewide, multi-state or international. As you grow your business, our resources can keep up with your evolving insurance needs.

There is basically no insurance product or service you don’t have available to you through RJF.

Make your franchise stand out from the competition

Risk management and commercial insurance programs that benefit the entire franchise system—both ZORs and ZEEs.

We get it.

RJF’s Franchise Insurance & Risk Management Group is led by a former Master Franchisor. From FDD compliance to monthly cash flow issues, we know what it means to be a part of a franchise system, and we’re devoted to making your business stronger.

Experienced.

From salon insurance programs to home improvement insurance programs and more, RJF is the endorsed franchisee insurance provider for many systems because we understand the franchisor's insurance needs as well as the franchisee's insurance needs.

Insurance is the easy part.

Of course price is important, but maintaining proper insurance coverage and brand protection is at least as critical. Our relationships with all leading insurance carriers and experience building insurance programs for franchise systems enable us to match your franchise system with the best carrier for your needs. And we’ll do it at a competitive price.

RJF’s Franchise Insurance & Risk Management Group provides more than just insurance. We can also help you with:

• HR Compliance, Strategies & Support: We can help develop policies and procedures, provide valuable training and education to franchisees, managers and employees, and obtain employee feedback. We also offer an Employment Law Hotline.
• Multi-Unit Loss Control Strategies: Our loss control specialists understand how losses at one or two locations can affect the whole system performance. We can help you rein them in.
• Claims Management & Advocacy: Our team can help you identify problems and trends throughout multiple locations and establish procedures to save money and time for you and your franchisees. And of course, we’ll also ensure your interests are protected when a claim occurs.
• Health Insurance: Finding competitive and reliable individual and small group health insurance can be tough. We can directly assist franchisees in Minnesota and Wisconsin seeking individual and small group health insurance. We’ve secured a relationship with another provider to help franchisees in other states get simple health insurance online quotes and plan comparisons.
• Certificate of Insurance Management: RJF’s online portal provides easy management and tracking of franchisee and vendor insurance certificates. It will also notify you of unmet requirements laid out in the FDD.
• FDD Compliance: Poor FDD insurance compliance can put your business at risk. RJF can help you institute measures to better ensure compliance system wide and fill the gaps with insurance protection.

RJF has a network of reliable surety companies for many different types of clients. This includes successful relationships with numerous markets of all sizes and specialties, regularly screened to ensure they are able to live up to our and your demands.

The best partnerships are when you, the surety and RJF are all working and communicating together to protect your business and financial interests. We partner with you and your team, surety companies and underwriters to ensure you receive the best possible service and consideration.

There are many non-construction surety bonds that you might need at a moment’s notice to secure a contract or sale. This makes it extremely important to have a bonding professional with the knowledge and capabilities to place these obligations.

RJF has the experience, carriers and know-how to efficiently handle these requests. 

Some of the non-contract bonds we can help you with include:

• License and Permit Bonds
• Financial Guarantees 
• Court Bonds
• Fiduciary Bonds
• Miscellaneous Bonds

As an agency heavily involved in the construction industry, RJF understands that a contractor's bond program is a vital component in achieving your business goals. Having a consistent underwriting approach that contractors can count on is a must in today's construction marketplace. 

RJF has experienced bonding professionals with a thorough understanding of the contract surety industry who can help you find the right surety carrier. Our goal is to build a strong, long-term relationship based upon our performance and the results we deliver to you.

A sample of the types of contract surety business RJF currently handles includes:

• General Contractors
• Heavy Highway Contractors 
• Subcontractors
• Specialty Contractors  
• Suppliers
• Manufacturers

We have a large number of products drawn from our world-wide experience and partnerships with trusted insurers. We use our extensive studies of your firm and your industry to design a package of products around your firm’s needs. 

A sample of the kind of specific coverage products we offer you: 

• Director’s and Officer’s Liability Insurance (D&O)
• Employment Practices Liability Insurance (EPL) 
• Professional Liability Insurance (E&O) 
• Cyber Liability Insurance
• Crime Insurance
• Lawyers Professional Liability Insurance
• Outside Directorship Liability Insurance
• Not-for-Profit Organization Liability Insurance
• Fiduciary Liability Insurance 
• Kidnap and Ransom Insurance
• Intellectual Property Insurance

INSURANCE CARRIERS

We only work with quality carriers, and evaluate each using stringent criteria, including: 

• Carrier’s financial strength 
• Carrier’s reputation 
• Breadth of coverage offered 
• Demonstrated long-term commitment to the market
• Claims-paying philosophy

An executive or management liability insurance program with gaps in it is not worth the paper it’s written on. Through our PREVENT Process we can identify your exposures, conclude if they are insurable, and help you determine whether insurance is the most viable and cost-effective means of protection. Our team then draws on decades of brokering and underwriting experience in the domestic and international insurance markets to provide: 

• Risk identification
• Coverage analysis 
• Program construction
• Market selection
• Negotiation 
• Program implementation and monitoring
• Claim support and advocacy

Based in Minneapolis, RJF is anchored to the epicenter of the world’s most dynamic life science region. Our experience, scale, and reach to global markets are enhanced through a proprietary partnership with Marsh & McLennan, the premier global provider of advice and solutions in risk, strategy and human capital—enabling us to service any benefit or property/casualty need, nationally or internationally.

You need a risk management partner who understands your risks and provides more than impeccable insurance program design and placement. A partner who can keep pace with your business, anticipating current and long term needs. A partner who acts strategically, with a deep level of understanding that only comes from experience inside the industry. Our PREVENT Process helps ensure we’re able to deliver on this and provide you with the results you demand.

To help you prevent risk, we can provide the following and more to your life science, med tech or medical device company:

• M&A support – insurance and risk due diligence
• Contract review
• Business risk analysis
• Claims analysis, support and advocacy
• Wellness, health management and employee wellbeing strategies
• HR and benefits regulatory compliance support and guidance
• Alternative risk evaluation and options
• Supply chain mapping
• Safety culture development
• Pre-hire through post-hire HR support
• 24/7 employee health and wellness
• Leadership and employee coaching, training and screening

Few industries are as rewarding—and risky—as the life sciences and medical technology. From product liability issues and supply chain, to clinical trials, the stakes are high in this ever changing sector. RJF provides a total portfolio of insurance offerings designed to keep pace with your growing business.

RJF Life Sciences insurance offerings include:

• Clinical trials insurance and product liability insurance
• Supply chain and inventory management insurance including transit
• International insurance
• Business income insurance
• Management and professional liability
• Directors & Officers liability insurance (D&O)
• Errors & Omissions (E&O)
• Cyber liability insurance
• Employment practices liability insurance
• Property insurance
• Workers' compensation insurance
• Auto and crime insurance
• All lines of employee benefits plans

Our comprehensive offerings are delivered by a dedicated life sciences team led by a seasoned veteran of the industry who understands med tech.

As life science organizations increasingly turn to global markets to conduct clinical trials, they become exposed to new risks. Partner with a risk prevention firm with the specialized knowledge and experience to manage your global clinical trials and keep pace with your growth.

RJF offers clinical trial protection through two primary sources: Chubb and Marsh. Whether you’re seeking to bind coverage quickly or secure coverage for a trial that others just won’t touch, RJF has the dedicated and experienced life sciences team to develop custom solutions to ensure you’re covered—no matter where your business takes you.

• General Liability Insurance
• Product Liability Insurance
• Workers’ Compensation Insurance
• Product Recall Insurance
• Credit Insurance
• Mechanical Breakdown
• Property Insurance
• Auto Insurance
• Executive Liability Insurance (D&O, EPL, etc.)
• Excess and Umbrella Liability Insurance
• Employee Benefits

• Pre-employment testing and screening
• Safety programs that are trade-specific and company-specific
• 10-hour OSHA training course
• Trench safety
• Fall protection and prevention
• Fleet and auto safety
• Return-to-work programs
• Accident investigation training/assistance

• Lockout/Tagout procedures
• Forklift safety training
• Auto/Fleet/motor vehicle safety programs
• Safety committees – from offering training programs to actively assisting with or even running monthly employee safety meetings
• Industrial hygiene programs such as hearing protection, air monitoring, hexavalent chromium monitoring, etc.
• Light-duty return to work programs
• Job Hazard Analyses
• OSHA compliance
• Creation of site specific safety manuals
• Ergonomics
• Employee wellness & health management

• Product Liability
• Workers’ Compensation
• Product Recall
• Credit Insurance
• Mechanical Breakdown
• Employee Benefits
• Property Insurance
• Auto Insurance
• Executive Protection
• Professional Liability
• Excess and Umbrella Liability

Seven Steps Toward Risk Prevention

Following our PREVENT Process, RJF goes degrees further than most insurance agents and brokers are willing to go to learn about your organization, and it delivers results. Our clients are able to reduce risk, insurance and employee benefits costs while also improving their operations and profitability.

Each step is detailed below.

PROFILE

We perform an in-depth study of your business, so we truly understand your risks. Depending on your needs, we:

• Learn about your position, strategies and issues, by department and organizationally
• Review industry best practices and trends
• Condust key personnel interviews

REVIEW GOALS

We take the time to understand your company’s goals, objectives and expectations so we know exactly where and what you want to be. Depending on your needs, we:

• Ensure our understanding of your business objectives
• Clarify what you demand and desire from business partners
• Establish your goals for, and expectations of, the PREVENT Process

EXPOSE RISK

Using what we’ve learned about your company, we uncover potential risks and vulnerabilities, opportunities and ways RJF may be able to help. Depending on your needs, we provide:

• In-depth analysis of profile research as it relates to your goals
• Overview of potential gaps in insurance protection
• Current insurance policy review and analysis
• Claim analysis and projections
• New insights into your known and unknown risks

VISUALIZE SOLUTION

We propose the best risk prevention solutions for your company. Depending on your needs, we:

• Introduce your RJF service team
• Recommend specific solutions, services, pricing and timing
• Prioritize what’s important to you and establish a final plan
• Go beyond insurance and recommend employee wellness and health management plans, employee assistance programs, culture audits, and operational details like safety policies and supply chain mapping

EXECUTE PLAN

Your RJF team puts our risk prevention solutions into action. Depending on your needs, we:

• Broker and place the right insurance and present plans to employees
• Conduct audits to ensure compliance (e.g. OSHA, DOT, ERISA, HIPAA, FMLA, etc.)
• Train employees, document and develop new procedures and implement processes

NAVIGATE CHANGE

We stay with you as your risk prevention needs change, so you are always informed and up to date. Depending on your needs, we:

• Provide ongoing updates of industry changes concerning safety, insurance, HR and more
• Monitor program execution
• Help with shifts in company direction and strategy
• Uncover any new potential risks that should be addressed
• Continue learning about and helping your business as it changes and grows
• Reduce the impact of claims on your organization and people

TRACK PROGRESS

We track your progress according to your goals using real, tangible measurements. Depending on your needs, we provide:

• A stewardship report summarizing the status of the program and plan implementation
• Progress reporting against goals
• ROI results as appropriate