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Many workplaces have potential exposure to confined spaces. It is important for employers to identify these spaces, train their employees and prevent unauthorized entry into these spaces. Confined spaces can be fatal if all steps and procedures are not followed prior to an entry. In this webinar, we’ll discuss the definition of a confined space, how to identify these spaces, how to determine if a space is a permit-required confined space, what is OSHA’s requirements for entry into a confined space and how to protect employees that must enter the spaces. Click here to download the presentation slides.

As winter persists with hazards of ice, snow, cold, and low light conditions pose ongoing risks of sprains, strains, slips, and falls for employees and drivers. Despite feeling constrained in managing safety for an over-the-road workforce, practical steps can be taken to mitigate these dangers and prevent workers’ compensation claims. In this webinar, we’ll prioritize proactive measures and encouraging employees to stay alert and aware to confront the challenges of winter with resilience and emerge stronger and safer. Click here to download the presentation slides.

Have you tried to access your CSA scores since January 1, 2024, and struggled with being able to access your data?  In response to the presidential mandate for Multi-Factor Authentication, in 2024, the FMCSA has transitioned all users with credentials for any FMCSA system.  Users will now be required to use a Login.gov account in lieu of their current credentials to access FMCSA systems. Learn how to establish a login.gov account and link this to your FMCSA Portal, OSHA reporting, and FMCSA Drug and Alcohol Clearinghouse. Click here to download the presentation slides.

Navigating the intricate web of FMCSA drug and alcohol testing regulations is not merely a legal obligation for employers; it’s a crucial aspect of ensuring the safety of our roads and the well-being of our drivers. We’ll focus on helping you ensure your fleet is compliant with these regulations. We’ll look at the six different types of regulated testing and explore the regulations defining the minimum standards for drug and alcohol testing, as well as some of the top mistakes that employers make with alcohol and controlled substances testing. Click here to download the presentation slides.

Drivers are one of a motor carrier’s first lines of defense when guarding against DOT roadside inspection violations and crash prevention. Over time, complacency overcomes proficiency resulting in multiple vehicle violations. We’ll rewind and go “Back to the Basics” and walk you through how to do an effective pre-trip inspection. We will also highlight specific vehicle components to help your company prepare for the 2024 CVSA International Roadcheck scheduled for May 14-16. Click here to download the presentation slides.

Tailored Risk Management Solutions for the Unique Challenges of Food/Agribusiness In an era of evolving risks and uncertainties, the food and agribusiness industry faces unique challenges that demand innovative risk management solutions. One approach that has gained prominence in recent years is the use of captive insurance, a strategic tool that allows companies to take control of their risk management and insurance programs. Customized Coverage for Complex Risks Captive insurance, at its core, involves the creation of a subsidiary insurance company to cover the risks of its parent company. For the food and agribusiness industry, where supply chain disruptions, regulatory changes, and volatile market conditions are part of the daily landscape, captives offer a tailored and flexible risk management solution. Cottingham & Butler, with its longstanding history and expertise in serving the unique needs of the food and agribusiness sector, recognizes the potential of captives to revolutionize risk management strategies. One of the primary advantages of captive insurance lies in its ability to provide a customized approach to risk. Standard insurance policies often fall short of addressing the specific and complex risks faced by food and agribusiness companies. With captives, these companies can design policies that align precisely with their operations, covering everything from crop failures and contamination issues to regulatory compliance challenges. This tailored approach not only enhances coverage but also ensures that premiums are directly correlated to the company's risk profile, leading to potentially significant cost savings over time. Stability in Uncertain Times Cottingham & Butler understands that the food and agribusiness industry is characterized by seasonal variations, market fluctuations, and external factors that impact production and distribution. Captive insurance provides a strategic advantage by offering stability in uncertain times. By retaining risk within the captive, companies gain greater control over claims management and loss prevention strategies. This control enables them to respond swiftly to industry shifts, reducing the impact of unforeseen events on their bottom line. Moreover, captives empower food and agribusiness companies to harness their risk data for better decision-making. Cottingham & Butler recognizes the importance of data analytics in today's business landscape. With a captive insurance program, companies can leverage their data to identify trends, assess risks, and implement proactive risk mitigation measures. This data-driven approach not only enhances risk management but also contributes to overall business intelligence, fostering a culture of continuous improvement within the organization. Long-Term Cost Containment and Financial Planning Another significant benefit of captives is the potential for long-term cost containment. Traditional insurance markets are subject to fluctuations, and premiums can vary based on external market conditions. Cottingham & Butler understands that for food and agribusiness companies, stability in insurance costs is crucial for financial planning. Captive insurance provides the opportunity to stabilize costs and avoid the volatility associated with traditional insurance markets, allowing companies to allocate resources more efficiently and make informed business decisions. A Strategic Move Towards Resilience, Growth, and Sustained Success In conclusion, Cottingham & Butler believes that captive insurance is a powerful and viable risk tool for the food and agribusiness industry. The ability to tailor insurance programs to specific risks, enhance control over claims management, leverage data for informed decision-making, and achieve long-term cost stability positions captives as a transformative force in the industry. As the food and agribusiness sector navigates an increasingly complex risk landscape, embracing captive insurance can be a strategic move towards resilience, growth, and sustained success.

When you don’t get enough sleep, not only does it affect your physical health, but it also takes a toll on your mental health. In fact, mental health and sleep are so closely related that a lack of sleep can often lead to issues such as anxiety or depression. Most adults need at least seven hours of sleep each night, according to the American Academy of Sleep Medicine. Unfortunately, studies consistently show that Americans struggle to get a good night’s sleep. According to the U.S. Centers for Disease Control and Prevention, about 1 in 3 adults aren’t getting enough rest or sleep every day. A lack of sleep can result in physical symptoms (e.g., an increased risk of developing obesity, diabetes and other chronic health conditions) and psychological effects (e.g., low mood, anxiety, irritability and poor cognitive performance). This article explores the relationship between sleep and mental health and provides tips for a better night’s sleep. The Impact of Sleep on Mental Health Sleep is essential for optimal health—and that includes mental health. When individuals consistently endure sleep deprivation or encounter poor-quality sleep, a cascade of adverse effects on their mental health ensues. One primary facet that is affected is emotional regulation; inadequate sleep can render individuals more susceptible to mood swings, heightened stress levels and irritability, which can exacerbate the symptoms of anxiety and depression, making it challenging to cope with life’s demands. Furthermore, sleep plays a pivotal role in cognitive functioning. During deep sleep, the brain engages in memory consolidation, emotional processing and toxin removal. Disruptions in this process can compromise the ability to concentrate, make decisions, and effectively solve problems. Over time, chronic sleep disturbances can contribute to the development or exacerbation of mental health conditions. Addressing sleep problems and prioritizing healthy sleep practices is a significant step in enhancing mental well-being, bolstering emotional resilience and promoting cognitive clarity. Tips For a Better Night’s Sleep Sleep and mental health are both complex issues impacted by various factors. However, given their close association, research continues to explore how quality sleep can benefit mental health. Signs of poor sleep quality include not feeling rested even after getting enough sleep, waking up repeatedly during the night and experiencing symptoms of sleep disorders (e.g., snoring or gasping for air). Sleep quality is often impacted by an individual’s health, environment, mental health and lifestyle. Consider the following tips for better sleep: Eat nutritiously. Good eating habits can help you sleep better and feel energized all day. Also, avoid big meals right before going to bed. Exercise regularly. A workout can help relieve stress, reset your circadian clock, reduce sleep disorder symptoms and boost your daytime energy level. Just be sure to avoid vigorous exercise close to bedtime. Keep a consistent sleep schedule and routine. Try to have the same wake-up and bedtimes, including during the weekend. Establish a bedtime routine. A routine can help your brain unwind and recognize that it’s time to sleep. Keep track of bedtime habits that help you fall asleep, like listening to relaxing music, reading before bed or taking a warm bath. Repeat those activities each night. Keep your bedroom cool, dark and quiet. Create a good sleep environment, including a comfortable room temperature (between 60-67 degrees Fahrenheit), minimal noise and sufficient darkness. Put the electronics away at bedtime. Blue-light-emitting electronic devices can prohibit you from getting a good night’s sleep. To reduce the effects of these sleep-stealing devices, refrain from using them for at least an hour before bed. Avoid the use of alcohol, caffeine and nicotine close to bedtime. Stimulants like caffeine and nicotine promote alertness, making falling and staying asleep difficult. While alcohol may help you fall asleep at night, it disrupts your sleep and leaves you waking up not as restful. Therefore, it’s important to start limiting these substances about four hours before bed. Reduce your fluid intake before bedtime. While our bodies are programmed to slow urine production during sleep, excessive fluid intake could cause an unwanted trip to the bathroom at night. Try to stop drinking beverages two hours before going to bed. Summary Getting proper sleep is extremely important in improving and maintaining good mental health. Adequate sleep not only aids emotional regulation, reducing the risk of mood disorders, but it also supports cognitive functioning, enhancing your ability to think clearly and make sound decisions. Insufficient sleep may increase negative emotional responses to stressors and decrease positive emotions. As such, chronic sleep deprivation or poor sleep quality can contribute to the development or exacerbation of mental health issues, creating a harmful cycle. Prioritizing healthy sleep habits is critical for fostering mental resilience, emotional stability and cognitive vitality. Contact a doctor for more information on improving your sleep habits or addressing sleep issues. Additionally, if you’re concerned about your mental health, talk to your doctor or a licensed mental health professional, or contact the Substance Abuse and Mental Health Services Administration’s National Helpline by calling 800-662-HELP (4357).

Employee well-being refers to the overall state of employees’ physical, mental, social and financial health, which can often be influenced by various workplace dynamics (e.g., workload, connections with co-workers and available resources). While employee well-being plays a key role in employee retention, it also has a significant impact on business performance. As a result, it’s vital for organizations to take employee well-being seriously and do what they can to foster a culture that promotes well-being. The following article provides more information on employee well-being and outlines several workplace well-being initiatives for employers to consider. The Important Role of Mental Health in Employee Well-being Over the years, many organizations have attempted to promote employee well-being by offering workplace solutions aimed solely at maintaining physical health. These solutions may include serving nutritious meal options on-site, offering smoking cessation programs or providing discounted memberships to local gyms. While such solutions can certainly help employees make healthier lifestyle choices and reduce their risk of chronic illnesses, promoting employee well-being requires organizations to develop initiatives that address all aspects of workers’ overall health and happiness. Specifically, employees’ mental health must be considered. Mental health consists of individuals’ emotional, psychological and social well-being. It affects how individuals communicate, form relationships, contribute to their communities and cope with adversity. In times of distress, individuals may suffer from poor mental health. Emotions associated with poor mental health include grief, stress, sadness or anxiousness. It’s important to note that mental health differs from mental illness. In particular, emotions stemming from poor mental health are not diagnosable conditions but rather temporary feelings. On the other hand, mental illnesses pertain to a wide range of clinical mental health disorders (e.g., anxiety and depression). These disorders are chronic and affect how individuals think, behave and function in their daily lives. Yet, individuals who experience prolonged periods of poor mental health may eventually develop mental illnesses. In any case, mental health is a key factor in determining employees’ well-being—one that organizations can’t afford to ignore. In fact, recent research from the Centers for Disease Control and Prevention (CDC) found that nearly three-quarters (71%) of U.S. adults experience at least one adverse symptom of stress (e.g., feeling overwhelmed or anxious) each year. Furthermore, mental health can make a difference in employees’ physical health. According to the CDC, poor mental health can increase individuals’ likelihood of developing a range of chronic conditions, such as diabetes and heart disease. Considering these findings, it’s clear that employers must account for employees’ mental health when addressing their overall well-being. How Employee Well-being Impacts the Workplace Employees’ mental health and well-being can impact employers in various ways. Here are some key business objectives that may be influenced by overall workplace well-being: Business performance — Employee well-being can make all the difference in business performance. According to the National Center for Biotechnology Information (NCBI), mental health concerns in the workplace can contribute to increased absenteeism rates, lost productivity, decreased customer satisfaction and reduced profits. In addition, the NCBI reported that work-related stress is a leading cause of poor job performance among employees, negatively affecting employers as a whole. Stakeholder perception — Apart from business performance, employee well-being can also impact stakeholder perception. According to a recent report from the Harvard Business Review, the vast majority (91%) of working adults believe that a company’s culture should support mental health. As such, employers who disregard their employees’ mental health and well-being are more likely to be perceived poorly by stakeholders, resulting in reduced workplace morale, reputational damages and lost business. Such negative stakeholder perception could have lasting impacts on an employer’s brand, limiting its ability to attract top talent and remain profitable for the foreseeable future. Workplace safety — If organizations encounter employee mental health and well-being concerns on-site, workplace accidents and related injuries are likely to follow suit. According to the National Safety Council, instances of both moderate and severe mental health distress have been linked to a greater risk of workplace accidents. This is likely because employees facing mental health concerns are often less focused, engaged and aware of potential safety hazards, resulting in poor decision making and unnecessary risk-taking. Taking a closer look at specific mental health concerns, between 60% and 80% of workplace accidents stem from workers experiencing stress-related distractions or fatigue on the job, according to research from Eastern Kentucky University. These accidents not only lead to injured employees but also contribute to higher workers’ compensation costs for employers. Evidently, ignoring employees’ mental health and well-being can result in significant consequences for organizations. That’s why it’s crucial for employers to adopt effective workplace well-being initiatives. Steps Employers Can Take In order to promote employees’ mental health and well-being, organizations should consider implementing the following measures: Foster a supportive workplace culture. First and foremost, it’s critical for employers to promote a company culture that prioritizes employees’ mental health and well-being. In doing so, employers will be able to show their employees that they value them beyond their work contributions and are invested in their overall health and happiness. Having a supportive workplace culture in place will also help employers lead by example within their workforce, highlighting the importance of maintaining work-life balance and establishing a more open dialogue surrounding mental health topics. Establish a long-term strategy. In addition to fostering a supportive workplace culture, employers need to have long-term strategies for promoting employees’ mental health and well-being. Such strategies should be well-documented and clearly outline the steps organizations are taking to keep their workers healthy and happy. They should also list the specific objectives employers are trying to accomplish through their well-being initiatives. By having long-term strategies in place, organizations will be able to better identify the effectiveness of their well-being initiatives, calculate the return on investment for these initiatives and determine when initiatives need to be updated or changed. Key well-being initiatives for employers to consider within their long-term strategies include: Conducting routine well-being awareness training and mental health screenings with all employees. Providing employees with a variety of well-being resources and helplines. Having managers conduct monthly check-ins with employees to discuss any issues that may be negatively impacting their mental health (e.g., excessive workloads or conflicts with co-workers) and find proper solutions. Educating managers on how to recognize symptoms of mental health distress and mental illness among employees as well as how to effectively respond to a mental health crisis. Creating an employee assistance program to allow employees to seek additional help for mental health concerns as needed. Offering greater work flexibility (e.g., remote work and flexible hours) or extra paid time off to help employees maintain work-life balance. Hosting on-site events, classes or similar offerings to allow employees to take a break from work and unwind (e.g., company picnics, mindfulness classes and exercise groups). Reviewing all workplace policies to ensure they align with employee well-being initiatives and promote a supportive culture. Overall, it’s evident that employee well-being is a matter that organizations of all sizes and sectors should take seriously. By understanding how employee well-being impacts key business objectives and making a conscious effort to keep workers happy and healthy, employers can reduce their workplace well-being exposures and maintain successful operations. For more employee well-being resources, contact us today.

Before implementing employee wellness programs or strategies, it may be beneficial for an employer to assess what common health concerns employees may have. Health risk assessments (HRAs) can be used to learn about general employee health. With an HRA, each employee receives a personal, confidential report, and employers can receive an aggregated summary of group statistics. You can then use this information to help you develop wellness program goals for your company. What Are HRAs? HRAs are questionnaires used to detect the presence of a disease or to estimate the risk that an individual will develop a disease based on certain characteristics. HRAs typically include three components: a questionnaire, a risk calculation, and an educational report. Health risk assessments are a good option for several reasons: They are easy to complete and are generally popular with employees. They may increase motivation and participation in other workplace wellness initiatives because they uncover individual health risks. They provide group data that employers can use to identify major health problems and risk factors that can then be addressed through wellness initiatives. HRAs can also be combined with on-site biometric screenings, which include tests that measure things like blood pressure and glucose levels. Explore the HRA and biometric screening resources provided by our in-house wellness team, HealthCheck360! Implementing an HRA Initiative Some health plan providers and health care systems offer HRA programs for the workplace. Contact Cottingham & Butler to find out what options are available. When selecting an HRA vendor, look for an experienced company that is affiliated with reputable organizations. The vendor should be able to assure you that it is compliant with applicable laws and has proper security measures in place to protect your employees’ data. Legal Considerations Several federal laws regulate the use of HRAs, including the Americans with Disabilities Act (ADA), the Health Insurance Portability and Accountability Act (HIPAA) and the Genetic Information Nondiscrimination Act (GINA). These laws involve privacy and discrimination issues and the use of incentives or penalties. For instance, it is important that HRAs remain voluntary and that employees are not required to complete an HRA as a condition of enrolling in their employer’s group health care plan. Employers should be familiar with applicable regulations to ensure their programs comply with federal and local laws. Employers should not hesitate to consult legal counsel to avoid exposing themselves to unnecessary legal risks when devising and implementing HRAs in the workplace. HRAs and Other Wellness Initiatives If legally compliant, HRAs can be a beneficial, relatively low-cost wellness initiative that can be used in several ways: As a standalone program to make employees more aware of their health statuses. Paired with educational materials to help employees mitigate health risks. Before implementing another program to help your company assess what problems a wellness program should target. To motivate employees to participate in a wellness program. Whether used alone to raise individuals’ awareness of health risks and problems or combined with another wellness program, HRAs are a versatile and useful way to ensure that an employer’s wellness efforts start and stay on the right track.

The manufacturing industry is the backbone of many economies. But in today's volatile economic climate, manufacturers face a perfect storm of rising costs, supply chain disruptions, and an increasingly complex risk landscape. Traditional insurance solutions, often burdened by rising premiums and limited coverage, might feel more like an anchor than a life raft. This is where captive insurance emerges as a powerful tool for manufacturers seeking to take control of their risk management destiny. The Squeeze is On: Insurance Costs and the Manufacturing Industry The numbers paint a concerning picture. A recent study by the National Association of Manufacturers (NAM) found that manufacturers' insurance costs have skyrocketed by an alarming 12% in the past year. Our latest P&C Market Report, highlights that we’ve experienced 25 consecutive quarters of marketplace rate increases from 2018 to present and are expected to stay at elevated levels for the foreseeable future. This significant increase, coupled with other economic pressures like rising material costs and inflation, is squeezing profit margins for manufacturers of all sizes, and forcing them to re-evaluate their risk management strategies. Understanding Captive Insurance: A Proactive Approach Many best-in-class manufacturing companies are increasingly considering alternative solutions such as captive insurance to gain greater control over their insurance programs. Captive insurance allows companies to create their own subsidiary insurance company. Instead of being at the mercy of traditional insurers with potentially inflexible policies and rising premiums, manufacturers can design a captive program specifically tailored to their unique risk profile. Here's how captive insurance empowers manufacturers in the current economic landscape: Cost Control: Captive insurance allows manufacturers to break free from the cycle of rising premiums dictated by a volatile insurance market. By retaining surplus funds within the captive, manufacturers gain greater control over their insurance costs and potentially achieve significant savings. This financial relief can be a game-changer in a tight economic environment. Tailored Coverage: Unlike traditional "one-size-fits-all" policies, captives can be designed to address the specific risks inherent to a manufacturer's operations. This ensures they are adequately covered for the risks that matter most, avoiding unnecessary premiums for irrelevant coverages. Enhanced Control: Captives empower manufacturers to manage claims processes and risk mitigation strategies directly. This proactive approach allows for faster response times, potentially leading to lower claim payouts and improved risk prevention strategies. Key Considerations for Manufacturers Before venturing into captive insurance, it's important to carefully consider these crucial factors: Risk Assessment: Conduct a thorough risk assessment to identify and quantify potential exposures. This forms the foundation for designing a captive program that effectively mitigates risks and optimizes costs in the current economic climate. Regulatory Expertise: Captive insurance is subject to specific regulations depending on the domicile. Partnering with an experienced captive provider ensures compliance with evolving regulations, allowing you to focus on core business activities. Financial Stability: Maintaining a healthy financial standing is vital for the captive's long-term success. Partnering with an advisor with expertise in financial analysis and risk assessment helps establish optimal capital structures for your captive in this economic environment. Claims Management Alignment: Within the captive, you have a dedicated claims team directly invested in your company's success. They become an extension of your risk management team, working diligently to ensure fair and efficient claims resolution, minimizing losses as if it were their own money on the line. Investing in Your Future: Partnering for Success Today's economic and risk landscape demands a proactive approach. At Cottingham & Butler, we empower manufacturers with the education and resources needed to navigate these complexities. As a leading provider of captive insurance and risk management solutions, we offer a proven path to success. Our Expertise, Your Advantage Cottingham & Butler isn't just another insurance broker. We have a distinguished captive track record dating back to 1993, managing 12 successful captive programs with over 360 members. Our industry-leading 99% renewal retention rate speaks volumes about the value we deliver. Selective Membership, Exceptional Results We understand that a captive's success hinges on a strong foundation. That's why we meticulously select members with a like-minded focus of safety and results, a positive loss history, and financial stability. This selective approach, combined with our in-depth captive knowledge, has resulted in loss ratios significantly lower than the industry average. In short, by partnering with Cottingham & Butler, you gain access to: Decades of Captive Management Experience: Leverage our proven track record to design and implement a captive program that optimizes your risk management strategy. A Selective and Collaborative Community: Benefit from a network of like-minded manufacturers who share best practices, fostering long-term success. Industry-Leading Loss Ratio Performance: Our deep understanding of captive structures and selective membership approach lead to demonstrably lower risk profiles for your captive. Don't weather the storm alone. Partner with Cottingham & Butler and emerge stronger in any economic climate. Contact us today to explore how a captive insurance solution can empower your manufacturing business.

An essential component of workers' compensation is an effective return-to-work (RTW) program. Eliminating injuries and illnesses is paramount for reducing workers’ compensation costs, but after an incident has occurred, an RTW program can significantly reduce workers’ compensation expenses for employers and improve the lives of employees. Read on for more information on RTW programs and best practices for establishing and maintaining them. RTW Programs An RTW program is characterized by specific, documented organizational policies and procedures that provide guidance to supervisors and employees in managing the RTW process following a work-related absence due to injury, illness or chronic disease. Its main goal is to expedite the individual’s recovery and reintegrate them into productivity, achieved through various means such as referral, counseling, coordination of medical care, or adjustments to the workplace or job responsibilities. RTW programs may also include vocational rehabilitation services alongside transitional work options to facilitate a smooth return to full productivity. RTW Program Best Practicers An RTW program can assist employees in returning to work faster after a work-related illness or injury, increasing their odds of a full recovery. It also allows employers to save on workers’ compensation costs. Below are best practices for employers to consider to help ensure their RTW program is effective: Address the basics by reviewing state-specific laws, outlining the roles and responsibilities of those involved in the RTW program, and setting clear expectations. Put the program in writing and inform employees about RTW policies and procedures as well as processes for filing a workers’ compensation claim. Establish an RTW contact person whom an injured employee can reach out to with any questions. Create a safety committee including both management and employees. The committee can identify hazards causing injuries and illnesses and find solutions. Employee members can provide insight into the physical demands of their roles. Develop functional job descriptions that explain the physical demands and movements necessary for specific job tasks to help employers safely place employees who are returning to work after a work-related illness or injury. Evaluate a returning employee’s condition and modify job tasks while they are healing. If they are unable to return to work in their previous capacity, match the employee’s skills to where they can work within the company. Develop individual plans that outline necessary actions for a worker to resume their pre-illness or pre-injury role. In larger organizations, plans should be made collaboratively by the RTW program coordinator, the injured worker, the worker’s supervisor, the health care provider, the union representative and legal counsel, if applicable. Maintain a job duty bank that lists jobs coordinated with doctor restrictions that employees can be placed into when they have restrictions from a work-related illness or injury. Communicate early and often with impacted workers. Integrate and coordinate with all stakeholders to share information while maintaining a focus on employees’ well-being of employees. Monitor, evaluate and adjust the program by looking at the measurements they should have in place, setting up ways to gather the important data needed to review the RTW program, and continuing to adjust where necessary. RTW programs that follow best practices provide benefits to employers and employees as they work toward full-time, full-duty work.

The National Council on Compensation Insurance (NCCI) is making alterations to its experience modification factor for 2024. These changes are slated to go into effect on each state’s regular filing date on or after Nov. 1, 2023. This Work Comp Insights will provide an overview of the NCCI’s changes. Overview of Experience Modification Factor The NCCI governs the workers’ compensation system in 36 states. The rollout will begin with the District of Columbia and West Virginia and conclude with Rhode Island on Aug. 1, 2024. The formula itself will remain unaltered; however, there are adjustments in how certain foundational components of the formula are derived to more accurately account for cost variations among states. Two specific changes are being made: A transition from a nationwide primary/excess split point to a state-specific split point and implementation of state-specific split points. A revision of the calculation of the state accident limitations. These changes may appear minimal, as the fundamental experience modification factor formula and methodology remain unchanged; however, these changes have the potential to increase or decrease employer premiums. The changes are being made to better reflect each state’s average claim costs and align with other state-specific variables. In addition, the NCCI states the revisions will improve plan performance by providing: Enhanced precision and predictability in experience rating modifications Experience rating modifications that equitably account for primary and excess losses in states with diverse cost structures Improved performance of the experience rating plan, particularly in states with substantial variations in claim costs compared to the national average Experience rating modifications with reduced sensitivity to exceptionally large outlier claims while maintaining predictive accuracy Consistent calculation of each employer’s anticipated claim count, resulting in a fairer allocation of credibility to each employer’s loss history Reconfigured credibility parameters that enhance fairness among employers Streamlined calculations by eliminating unnecessary complexities State-specific Split Points The split point plays a crucial role in the workers’ compensation experience rating formula. It represents the specific dollar threshold at which each claim is divided into two distinct components: Primary— Comprising the expenses of each claim incurred below the split point Excess— Comprising the expenses of each claim incurred above the split point Primary costs are given full weight in the experience algorithm. Excess costs, on the other hand, receive only partial weight in the experience algorithm. For instance, if the split point stands at $15,000, a claim amounting to $50,000 would contribute $15,000 to the primary category and $35,000 to the excess category. In the computation of the experience rating modification, primary losses carry more weight than excess losses. Consequently, primary losses have a more substantial impact on the experience rating modification. The D-ratio represents the expected percentage of losses that fall below the split point. Currently, the split point is uniform across states where NCCI provides rate-setting services. However, the average D-ratio in a state depends on the split point and the average claim costs within that state. Consequently, a uniform split point results in a widely varying average D-ratio among states. The proposed approach seeks to standardize the average D-ratio across states at around 40% by introducing a state-specific split point. This adjustment allows the split point to mirror the average claim costs specific more accurately to each state. Consequently, experience rating modifications will provide a more equitable allocation of primary and excess losses across states with differing cost levels. For instance, instead of a uniform split point value of $18,500 for all states, the proposed plan would assign a higher split point value, like $25,000, to a state with above-average claim severity, while a state with below-average claim severity might have a split point value of $15,000. The utilization of state-specific split point values, reflective of individual state cost variations, aims to align the significance given to actual employer loss experiences in the calculation of experience rating modifications across states. This is expected to result in improved and more comparable plan performance in states where claim costs deviate significantly from the national average. Given the considerable disparities in average claim costs among NCCI states, the experience rating modification must mirror these cost variations, similar to how loss costs and rates differ by state. Tailoring the split point to account for these cost differences is a significant stride toward aligning performance across states, resulting in a more precise and predictive experience rating modification compared to uniformly applying a nationwide split point. To respond to fluctuations in claim costs and uphold consistency with other factors influencing experience rating, the split point value is expected to be modified in tandem with the annual loss cost and rate filings for each state. This adaptation will rely on an assessment of yearly shifts in severity between the average loss date during the initial implementation year and the effective year. These changes will affect each state differently. Some businesses will have higher experience modifications, and others will have lower ones. Methodology for State Accident Limitations The state-per-claim accident limitation (SAL) serves to mitigate the impact of significant claims on the experience rating modification, as exceedingly large outlier claims are typically not indicative of future loss patterns. By adopting a state-level approach that considers the 95th percentile of lost-time claims, the SAL is designed to address the most substantial 5% of such claims. The revised definition of the SAL results in lower caps across all states. This adjustment makes experience rating modifications less responsive to exceptionally large outlier claims while still maintaining their ability to predict future loss trends accurately. Who Is Affected? NCCI-governed states include Alaska, Alabama, Arkansas, Arizona, Colorado, Connecticut, District of Columbia, Florida, Georgia, Hawaii, Iowa, Idaho, Illinois, Kansas, Kentucky, Louisiana, Maryland, Maine, Missouri, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, Nevada, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Vermont and West Virginia. Independent bureau states like North Carolina, Indiana, Michigan, Massachusetts, Minnesota and Wisconsin are presently in the process of evaluating the proposed changes by NCCI and will communicate their adoption decisions once they have made a decision. Other states like New York, Pennsylvania, Delaware, New Jersey and California, which operate with distinct experience rating plans, won’t be affected by these modifications. Organizational Impacts No significant statewide premium impact is expected from the proposed. The overall average adjustment to experience rating modifications in each state is not anticipated as a result of these proposed revisions. The impact on individual employer-level adjustments in experience rating modifications will differ and can be offset by changes in loss occurrences and regular updates to rating criteria. It is projected that experience rating modifications for the majority of employers will undergo changes of less than +/-5%. This means that for some individual employers, their premiums could increase. Conclusion In summary, the proposed alterations to the experience rating modification calculation aim to enhance the performance of the experience rating plan and promote greater consistency across states. These modifications will come into effect for experience rating modifications with rating effective dates on or after each state’s expected loss cost and rate filing effective date, which begins on or after Nov. 1, 2023