Re: Comp benefit from PPFA - Re: PPFA Updates
Bennett Hall said:
Workers Comp and PPFA benefits:
Proposal that this become part of the national agency priorities as the organization moves forward.
...............................................
Anyone in on this?
Bennett,
Although I comeserate with you as a business owner with employees for the past 37 years, I honestly don't think that PPFA under new Administrative Management could or would be willing to tackle this huge task. I think this would be as impossible as getting them to convince the credit card industry to simplifying merchant fees in the U.S. :shocked:
I will comment specifically on a couple of your key points...
Bennett Hall said:
...One of the most touted benefits of PPFA is the workers comp program. In our experience that program had many undisclosed details, which I only learned about after the fact. This cost this us unnecessary premium expense and could have been mitigated, as we paid perhaps a few thousand more than we otherwise would have if they had proactively told us about this...
Did you not have a Workers Compensation program in place prior to working with Meadowbrook / PPFA? Would you not have had your employee designated codes already established?
Although you are frustrated by wasted expense, the burden of this falls on us as owners of our business to buy wisely and understand what we are buying, regardless if it is phone service or insurance.
You are correct about many PPFA members and PPFA touting this benefit...and our shop has enjoyed a dividend back every year for a number of years, so we were happy. However, as I understand it now, the "rules have changed" since PPFA first partnered with Meadowbrook, and many providers offer dividends to their insured customers. (Truth: They have all been over-charging for a product with huge profitability despite the fact that each state sets the exposure rate) So give PPFA kudos for pioneering this effort, but I think you might be able to ask an insurance agent to give you a quote from another company that also offers dividends.
Bennett Hall said:
• Did you know that it is possible if you have dual class code employees if you properly document staff work hour by hour, ( not %), thus you can get avoid the framer rate when they are only doing sales activities etc.? Fair right?
You better have some pretty tight documentation to support this! We have two framers that spend 50% of their time on the sales floor selling custom framing and selling general gifts, doing display and merchandising... when does this happen? 15 minutes here and an hour there... So they are classified as picture framers. We then have one employee who is purely sales. Sarah as the owner is purely Administrative. Obviously you want each person to be in their respective category to be able to take advantage of the lower rates in that category.
Bennett Hall said:
• Did you know that when they do research, administrative or computer work, which is even lower risk, that this is not even allowed even though it is the lowest risk of all activities? That is wrong - but in CA it is apparently the law. The PPFA should lobby to correct this unfairness.
Each state sets it's own rate... so a Picture Framer in Wisconsin is in category with Trophy Shop people (My guess is that they figure it is small scale cutting and assembling). That Wisconsin rate might be 20% lower than a similar category in Michigan or 45% lower than a similar category in California. Apparently it takes decades for the incidence rate of claims to affect the rate, and yet Insurance companies can still issue large dividends... Anyone else see the fallacy of this system? :mmph:
Bennett Hall said:
• In CA at least, if your business involves, as our does, lots of digital printing and restoration work, that you are not allowed to carve that out, and have to pay the full frame rate premium? Your only option is to not allow that employee to frame, and to reassigned them to only do digital services/printing.
Same in Wisconsin, and I would imagine for most every other state, as well.
Bennett Hall said:
• Did you know that your experience modifier (your run rate as it were) provides great discounts to your loading from comp premium as it evolves? This also means that once you have been with someone for a while, that you virtually cannot shop your policy as unlike unemployment insurance, this does not carry over to a new insurance company.
I'm a little confused by your statement, but YES..the rates are set by each State, so that if you changed companies, and your staffing hours and job responsibilities did not change, then your base insurance rate would be identical. However, another firm might have a different Dividend rate (this is the insurance companies way of competing on price on an otherwise same priced product.)
Bennett Hall said:
• Does PPFA and Meadowbrook have a plan to help the industry reduce the risk of injury that would be working together unable us to reduce this high loading on labor cost? they should. Working together the industry experience modifier could be impacted - this could in theory reduce the cost of comp by 50% - but, if framers are reckless and there are lots of injuries, then the pendulum will swing the other way.
Framers for the most part are NOT reckless and accident claims are probably extremely minimal. I think in 37 years, we have had one cut that required an ER visit by an employee. The truth is that the high rates that you may be incurring have everything to do with the State that you are physically located and perhaps MOST IMPORTANT, is what other business types share your category. If you are are lumped with another industry that has a higher accident incident rate, than I would be on the horn with a legislative representative to get your own category.
Bennett Hall said:
• BTW: we have now been in the program for over two years and are yet to receive one dollar of the promised rebate (12%) - they have a complicated excuses for this which is basically double dutch buy ultimately it is simply unfair and wrong. nothing we can do about it but bring awareness to that detail.
Hmmmm - wonder why?
Bennett Hall said:
• Did you know you have to pay comp when a staff member is on vacation taking paid PTO - even though there is zero risk of a job injury? How is that fair?
Well...because it is based on wages not hours! :smug: For the same reason, while they were on vacation and injured themselves water skiing they might have a hard time claiming Workers' Comp!
Bennett Hall said:
...I propose that a standards and recommendations for best practices including worker safety be a part of the new PPFA with an aim at proactively working with the carrier to reduce the premiums for everyone. Given comp is about 10% of labor cost, and all staff needs raises as well, I suggest this become a coordinated priority
Indeed...Important, but I think the logistics of the task currently exceed the Admin Management's manpower. A good place to start, might be two ask each picture framing business here to identify and answer three questions...
1 - What is the category where YOUR state places Picture Framers, and with whom do you share that category?
2 - What is the exposure rate for Picture Framers in YOUR State?
3 - How many claims have you had in X number of years of business?
Regards,
John