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robintek

Sep 01
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LEDBETTER ACT CREATES EXPANDED EMPLOYER EXPOSURE FOR UNEQUAL PAY CLAIMS

By Your Employee Matters

After the Supreme Court ruled against Lilly Ledbetter, the Congress got busy passing the Ledbetter Act. With a Democratic majority and president, it was passed into law this year. Section III of the Ledbetter Act amends Title VII as follows:

For purposes of this section, an unlawful employment practice occurs, with respect to discrimination in compensation in violation of this title, when a discriminatory compensation decision or other practice is adopted, when an individual becomes subject to a discriminatory compensation decision or other practice, or when an individual is affected by application of a discriminatory compensation decision or other practice, including wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice … Liability may accrue and an aggrieved person may obtain relief as provided in subsection (g)(1) including recovery of back pay for up to two years preceding the filing of the charge …

This means that employers are now subject to a possible two-year exposure for unequal pay claims even when that exposure was generated many years ago. What’s an employer to do?

In a sense, this situation is like finding out you had a wage and hour violation for misclassification of an employee and failure to pay overtime. The only difference is that under the Ledbetter Act the statute of limitations never really expires. Somebody can wait a long time to finally claim that they were treated unfairly and then seek the difference between pay scales of men and women during the past two years as their damages. Employers basically have three choices:

  1. Ignore the difference and hope it goes away. Since there’s a “rolling” statute of limitations which starts and expires every day for a two-year period, theoretically the claim of anyone who has worked for you for a while doesn’t expand much.
  2. Try to pay a “caught up” rate and hope that the employee doesn’t file a claim.
  3. Reimburse the employee for the difference during the past two years.

The court basically said that a woman can go as far back in time to show where the pay disparity started and how it affected her career. As a result, some attorneys are advising clients to save payroll records and compensation decisions forever. Since this is a brand new act, it will be interesting to see how the courts interpret it.

Sep 01
Love0

SO WHO’S RETIRING NOW?

By Your Employee Matters

According to the 19th Annual Retirement Confidence Survey published by the Employee Benefit Research Institute (www.ebri.org), a record low 13% of Americans say they’re confident that they have enough money to live comfortably in retirement. The percentage of those feeling confident about retirement has tumbled by half in the past two years.

In light of today’s economic realities, 28% of workers said they expect to retire later, and 72% will be seeking to supplement their income during retirement by working. According to the report, workers are reducing their expenses (81%), changing the way they invest (43%), working more hours or a second job (38%), saving more (25%), and seeking advice from a financial professional (25%).

Savvy employers should be aware of how addressing these needs can impact hiring and retaining a maturing workforce.

Sep 01
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EDITOR’S COLUMN: TRENDS IMPACTING THE FUTURE OF HR

By Your Employee Matters

Are you planning ahead for what’s coming your way? If you’re a human resource executive, or at least responsible for this role, you should be aware of these trends and have a plan to manage them:

  1. An aging workforce – Do you have a plan to keep your current employees well trained so they don’t become dinosaurs? Have you allowed your older employees to act as mentors and to be mentored by younger employees comfortable with technology skills? Have you considered possible phased retirement plans? Or “stepped down” roles within the organization (think Wal-Mart greeters)?
  2. An increasingly female workforce – More women than men are coming out of professional schools. Women will continue to demand flexible work schedules so they can perform their nurturing roles at home. Do you have a plan for flexible scheduling? Do you support day care and elder care needs? Have you allowed folks to “job share” or continue to collect benefits while working part-time?
  3. Heavier demand for retirement planning – Most Americans do a poor job of planning for their finances and health. Due to the recession, many employees can’t retire as planned. Many more employees won’t be able to retire because they failed to engage in retirement planning. As we grow older, health becomes a greater issue and impacts attendance as well as finances. To what degree have you brought in wellness programs, retirement advice, and so on? I predict that as we move forward, the most that many employers can afford to provide employees in these areas is an education.
  4. Continued outsourcing – As business structures continue to evolve, look for more and more outsourcing to PEOs and contingent workers. Remember this adage: If it walks and talks like an employee, it probably is one. You might be responsible for joint employment obligations and misclassifications. If you engage in these relationships, please read the HR That Works Special Reports on Contingent Workers and Independent Contractors.
  5. Technological innovation – We’re in a constant battle to keep up with the latest and greatest technology. Many employees are reluctant to learn new technologies; savvy companies will plan for this learning. Just as important, once employees are trained technologically, don’t lose them to a competitor looking for someone with this experience. I remember one head-hunter looking for people trained in SAP telling me that he calendared the date when a company got its SAP contracts and then two or three years later recruited SAP trained employees away from that company.
  6. Increasing minority presence in the workplace – Despite the fact we have an African American president and a shrinking percentage of white workers, the number of racial discrimination and harassment claims has grown significantly during the past six months. It’s not just African Americans filing these claims; more Hispanics and Asians will do so as well. White employees who feel that they’ve faced systematic discrimination will go to court, as did the New Haven firefighters who recently won their discrimination case before the US Supreme Court.
  7. Growing spirituality – More people are bringing their religion to work. Whether it’s owners or the rank and file, there’s far more discussion of spirituality in today’s workplace. The 60 million or so “cultural creatives” are seeking a deeper significance out of their daily grind. The employer who has a plan for tapping into this need will certainly attract these employees. As an employer, you’ll need to bring greater “meaning” to the workplace, while at the same time, avoiding claims of religious proselytizing or persecution.

These “mega-trends” affect the workforce no matter what business you’re in. The bottom line: Have a plan with goals and action items.

Sep 01
Love0

DON’T FALL PREY TO LONG-TERM CARE INSURANCE FALLACIES

By Life and Health

If you’ve decided to purchase Long-Term Care insurance (LTCI), good for you. There’s no question that LTCI can help protect your family’s finances by covering the exorbitant costs of long-term care if and when necessary.

However, because LTCI is such an important and sometimes costly purchase, it’s vital that you do your research and buy a policy for the right reasons. Too many insurance companies persuade consumers to buy LTCI with exaggerated claims and “facts.”

When purchasing an LTCI policy, keep your eye out for these top five sales pitches:

  1. An LTCI policy is a valuable tax write-off. This might be true in some cases, particularly for business owners, but this statement is a myth for many LTCI policy owners. Although premiums paid for a tax-qualified LTCI policy ultimately can reduce your tax bill, you have to itemize deductions to qualify.
    Additionally, for tax write-off purposes, LTCI premiums fall into the medical and dental expenses categories. This category is limited to expenses that surpass 7.5% of your income. So, if you’re income is $75,000, you’ll need more than $5,625 in unreimbursed health and dental care expenses before you can even add in your LTCI premiums.
    Plus, even if your LTCI premiums go above 7.5% of your income, you can’t include all of the payments in your medical and dental expenses deduction. Your premiums are deductible according to a sliding scale based on your age.
  2. All assisted-living facilities are created equal. Under current law, there is no national standard definition for “long-term care facility.” Therefore, if your LTCI policy says it covers a stay in an “assisted-living facility” or “adult day-care facility,” this could mean something different depending on the particular policy and the state where the policy was created.
    Therefore, if you purchase an LTCI policy and then move to another state, there’s a possibility that there are no facilities in your new state that match the definitions of your policy. Obviously, this could put you and your family in a serious bind if you ever require long-term care. Before you sign on the dotted line, ask plenty of questions and make sure you fully understand what type of facilities the policy covers.
  3. Buy now to lock in the price. When purchasing an LTCI policy, many consumers are under the false impression that their premiums will be the same forever. Although your premiums typically depend on your age at the time you purchase the policy, this does not mean the premiums will stay the same for the life of the policy. Your premiums can go up any time your insurance company enacts a rate increase, as long as the increase is approved by the state insurance commissioner.
    Additionally, LTCI is particularly vulnerable to rate increases because it’s relatively new to the insurance world. Insurance companies don’t have a sufficient amount of data to predict the number of long-term care claims they will face in coming years.
  4. You should replace your current LTCI policy with a newer one. Although some LTCI policies might have an added benefit that your current policy doesn’t include, it might not be a wise move to switch policies mid-game. First of all, your premiums are based on your age at the time you purchase the LTCI policy. Therefore, if you switch to a new policy, your premiums could increase. On top of that, you might have developed a pre-existing condition since you purchased the first policy, and this might not be covered by the new policy.
    If you want to add benefits to your policy, you’re probably better off to upgrade your current policy instead of buying a new one.
  5. An insurance company’s financial rating isn’t important. Before you buy an LTCI policy, check the company’s financial rating with Standard & Poor’s, Moody’s, A.M. Best, Fitch or Weiss — these are all reputable financial rating services. You might also want to contact your state’s insurance department for additional details on specific companies.
    Consult with one of our LTCI specialists to review these and other areas of this valuable coverage. We want to make sure that you’re getting the most for your LTCI premium.
Sep 01
Love0

ENGAGING IN RISKY BEHAVIOR MIGHT INCREASE YOUR LIFE INSURANCE PREMIUMS

By Life and Health

Do you enjoy scuba diving? How much do you love those flying lessons? Feel like going bungee jumping this weekend? If these questions fill you with a longing to go indulge in your favorite extreme sport, beware. That sport might just affect your Life insurance premiums.

When underwriters review your health, hobbies, and history, they are determining how much risk you pose to the insurance company. The more mortality risk you and your lifestyle present, the higher your premiums will be. It’s important also to consider that the risk you pose to the insurance company isn’t strictly dependent on your current health or medical history. Any risky hobbies (also called avocations) you enjoy on a regular basis will also expose the insurance company to a higher risk of your death and subsequent death benefit payout.

Insurance companies know they’ll sometimes have to pay out death benefits on policyholders who have paid in very little in terms of premium from an unpredictable death caused by an unexpected illness or accident. A dangerous hobby poses a predictable threat of death supported by historical data. This allows the insurance company to quantify the risk and attach a dollar value to it.

Depending on the type of hobbies in which you participate, you might find the underwriter of your insurance policy including an additional premium in order to subjugate the risk your hobby poses. That additional premium allows the insurance company to lessen the financial burden that your added risk creates.

There are many different ways that an insurance company can increase your premiums.

  • Flat Extra Premium: A flat extra premium is a flat dollar amount that is added to your premiums every month. That amount is fixed and included in your premiums for the life of your policy.
  • Table Rating: A table rating is an additional percentage of the premium you’ll be expected to pay each month. Again, this amount is fixed for the life of your policy.
  • Temporary Flat Extra: Like the flat extra premium, the temporary flat extra adds an additional fee to your premium but, in this case, only for a certain period of time. A temporary flat extra might be used for someone who is taking flying lessons or another dangerous activity that has a known end date.

Another option is to accept an exclusion from coverage for deaths caused by or in relation to that hobby. This could allow you to enjoy regular premiums with no additional charges, but does create the unease of having a dangerous sport go uncovered. A Supplemental Accidental Death policy might be your solution.

Be sure to disclose your risky hobby with our insurance agents, so we can help you to determine the best course of action.

Sep 01
Love0

GET A HANDLE ON UNDERWRITING GUIDELINES WHEN CONSIDERING DISABILITY INSURANCE

By Life and Health

Insurers develop their own specific guidelines for underwriting Disability insurance. However, what they all have in common is the criteria they use to determine eligibility, coverage type and amount, and rate. The following is a list of the key factors that help insurers make these decisions:

Age and gender – Younger applicants will pay less for coverage. Females typically pay more than males because they file more claims.

Occupation – Insurers examine both your job title and your specific duties to decide the type of coverage to extend you, and cost. Certain occupations, because of the nature of the duties performed, pose less risk than others.

Insurance companies group occupations together according to the level of risk they present, and they assign each grouping a rating class. This rating, represented by either a number or letter, indicates how hazardous the occupation is, the income level of individuals in the occupation, and the number and type of claims filed historically.

Income – This is a determinant of the type of coverage you’re eligible for, the amount of your monthly benefit, and your rate. Insurance companies use tables to decide how much monthly benefit you can receive based on your earnings. Insurers generally will issue at most 50% to 70% of your pretax earnings. This percentage will be higher if your income is low, and lower if your income is high. You’ll be asked to provide an income tax form or W2 as proof of your earnings.

Your level of income also affects the type of coverage you can buy. High income individuals can usually purchase policies with a broader definition of disability and more comprehensive coverage.

Medical history – Insurers will look at both the current state of your health and your health history to decide your eligibility. Your family’s medical history will be explored to see if you have a predisposition for certain medical conditions, such as diabetes, heart disease, or cancer.

In addition to the questions about your health, you’ll either be asked to take a paramedical examination, which includes a blood test and a urinalysis, or a full physical examination.

Lifestyle – The types of activities in which you take part can increase your chances of suffering a disability. Not only does the insurer ask you directly about your activities, but it might also get information from databases, credit bureaus, and other organizations. It can even question your friends and family.

After your insurance agent has gathered all of this information, it’s reviewed by a home office underwriter. Either you’ll be issued coverage right away, or you’ll be asked to submit additional information to determine whether you’re an acceptable risk.

You’ll be assigned to one of three risk categories:

  1. Preferred risk – You are less likely than other insureds to file a claim. Preferred risk status means you’ll pay less for coverage.
  2. Standard risk – This is the category assigned to most insureds. Being designated a standard risk means you’re no more or less likely to file a claim than any other insured.
  3. Special or substandard risk – Assignment to this category means that the insurer feels that there’s a high probability that you’ll file a future claim. If the insurance company decides to issue coverage, they’ll do so with the inclusion of an amendment that either fully excludes certain medical conditions or excludes them for a period of time. Your policy will have a longer elimination period, and a shorter benefit period. The rates charged to special risk insureds are much higher than for the other two categories.
Sep 01
Love0

TOUGH ECONOMY CONTRIBUTES TO DECLINE IN TRAFFIC DEATHS

By Personal Perspective

The number of Americans killed on U.S. highways in 2008 reached the lowest level since 1961, according to a recent release from the Department of Transportation. Higher gas prices, which caused many to limit their driving activity, certainly helped the cause together with increased seat belt usage in many states.

The Department of Transportation’s National Highway Traffic Safety Administration estimated that 37,313 people were killed in vehicle traffic crashes during 2008. That’s 9.1% lower than in 2007, when 41,059 died, and the fewest since 1961, when 36,285 deaths were reported.

Another positive, the nation’s fatality rate, the number of deaths per 100 million miles driven, reached a record low at 1.28 in 2008 down from 1.36 in 2007.

It’s not uncommon for tough economic times to cause similar declines in traffic deaths. From 1973 to 1974, such deaths fell more than 16% as the U.S. dealt with the oil crisis and rampant inflation. Similarly, deaths dropped nearly 11% from 1981 to 1982 as the nation battled a recession.

The government reported that miles driven in 2008 fell by about 3.6%, to 2.92 trillion miles, proving that many adjusted their driving habits as gas prices rose and the economy tumbled. The number of miles driven by motorists had risen steadily during the past three decades.

Nationwide seat belt usage reached a record 83% in 2008. Fourteen states and Washington, D.C. had usage rates of 90% or better. Michigan was the highest at 97.2%, followed by Hawaii with 97% and Washington state at 96.5%. Massachusetts had the lowest rate, 66.8%, while New Hampshire and Wyoming were also both under 70%.

Sep 01
Love0

VERIFY INSURANCE COVERAGE BEFORE HIRING CONTRACTOR

By Personal Perspective

When hiring a contractor to add value to your home investment, it makes sense to verify the contractor’s Workers Compensation coverage. Otherwise, you might be responsible for injuries incurred by the workers while they’re remodeling or repairing your home.

With this in mind, take a look at some important insurance issues before you select a contractor. To start, verify that the contractor you want to hire carries Workers Compensation coverage. If a contractor does not have this coverage, workers who are injured while working on your home could sue you. You might also want to see a copy of the contractor’s Workers Compensation policy and ask the same of subcontractors such as electricians and plumbers. It’s important to make sure all of the contractor’s employees are covered — full and part time. It’s advisable to get insurance policy numbers and to take that extra minute to call and verify that the insurance is still in effect.

You can also check the contractor’s or remodeler’s credentials, including whether the contractor or remodeler is licensed and/or a member of an applicable trade group. Of course, you’ll want to compare costs and solicit bids from more than one contractor or remodeler. When doing so, get all bids in writing and make sure each bid includes building specifications (what is being worked on and to what extent), labor costs, material costs, and time needed to complete the project. This will protect you from unforeseen costs while further protecting you from future misunderstandings and project mishaps.

You can call the Better Business Bureau (BBB) to verify local references quickly and easily. The local BBB office will also be a good source for letting you know if there have been complaints made against the contractor or remodeler.

Lastly, most contractors and remodelers will gladly show you work done at other nearby homes. Take them up on this offer and see for yourself their workmanship and check customer satisfaction. Talk to former clients and see what they think of the contractor’s ability to meet their needs while staying on schedule and within the projected budget.

Sep 01
Love0

MALE VS. FEMALE DRIVERS: HOW GENDER AFFECTS SAFETY ON THE ROAD

By Personal Perspective

For years, insurance companies have regularly charged female drivers less for Auto insurance coverage than males. Insurance companies claim it’s because women drivers statistically have fewer car crashes. However, no studies have actually proven that there is a difference between men and women’s driving abilities.

Looking at the stats

During the past 10 years or so, male fatalities have outnumbered female fatalities two-to-one in car accidents, according to the National Highway Traffic Safety Administration. Men also have a higher rate of collisions that result in just property damage — also a two-to-one ratio.

According to the American Insurance Association, men are involved in 50% more fatal crashes per 100 million miles driven than females. This divergence is most prominent in drivers in their late teens and early to mid-20s.

Examining the male crash phenomena

No one can pinpoint exactly why men have more car crashes than women. Many researchers argue nature versus nurture theories. Some researchers blame natural male biochemicals. One study claims that high testosterone levels in men cause them to take more risks behind the wheel. On the other hand, some researchers say that men are products of their culture. These experts say society has taught males to act more competitively in general, which makes them more aggressive drivers on the road. Other studies point out that women are better multi-taskers, which makes them better drivers.

However, many people simply don’t buy into any of these studies. Skeptics say a person’s gender simply cannot predict whether or not they are a safe driver. The National Organization for Women’s Insurance Project points out that men simply have more crashes than women because they drive more miles each year. Because men are on the road more, they expose themselves to more risk.

The gap narrows

Recent statistics show that the gap is narrowing between men and women crashes. Between 1975 and 2003, female fatalities in car accidents increased 14%, while male fatalities dropped by 11%.

Some experts say this is simply because women are on the road more these days. On top of that, an increasing number of women are becoming more aggressive on the road. If this trend continues, experts say insurance companies might soon stop taking gender into account as they calculate drivers’ insurance premiums.

A few states lead the way

Despite the latest research, insurance companies in most states continue to use gender as a factor in calculating premiums. Of course, insurers also take other things into account, including annual mileage, the type of car, the person’s previous driving record, and even their Zip code (whether they live in the city, the suburbs or a rural area).

However, a handful of states, including California, Connecticut, North Carolina and Pennsylvania, no longer allow insurance companies to use gender as a factor to assess risk and calculate premiums.

Sep 01
Love0

PROTECT YOUR BUSINESS BY UNDERSTANDING TENANT’S LIABILITY INSURANCE COVERAGE

By Business Protection Bulletin

Insurance companies, agents, and buyers tend to focus on the major coverages within the Commercial General Liability policy: Liability for injuries caused by a business’s premises, operations, products, or finished projects, and liability for property damage. However, for businesses that do not own the buildings in which they operate, there’s an often-overlooked coverage that could be very important. The policy declarations refer to it as “Damage to Premises Rented to You,” although it has traditionally been known as Fire Damage Legal Liability Coverage. It provides limited coverage for tenants who cause fire damage to rented premises.

Fire Damage Legal Liability is a “give-back” coverage. Coverage A – Bodily Injury and Property Damage Liability contains 14 exclusions — clauses that describe types of losses to which the coverage does not apply. The final paragraph states that the last 12 exclusions do not apply to fire damage to premises while rented to or temporarily occupied by the insured with permission of the owner, so it gives the coverage back from the exclusions. This means that, if the insured is legally liable for fire damage to premises rented or temporarily occupied, the policy will provide coverage for fire damage to premises in the insured’s care, custody or control, and fire damage resulting from release of pollutants, among others. This coverage has several limitations:

  • It usually has a limit of only $50,000 or $100,000.
  • It applies only to the premises, not to contents, such as furniture or wall coverings.
  • It covers fire damage only, not water damage or other types of losses.
  • It provides coverage only if the insured is legally liable for the damage. It does not cover liability the insured assumed under a contract.

These limitations can leave a business at least partially unprotected in a variety of situations. Some examples:

  • The business’s liability for damage to a rented space is $200,000.
  • The business is an auto body shop. While a car is being spray painted, a spark ignites the fumes and causes an explosion.
  • The business rents meeting space in a hotel. A projector overheats, starting a fire that damages tables, chairs, easels, and a cart holding refreshments.
  • The business’s lease makes it responsible for damage to the premises, regardless of cause. A nearsighted driver crashes his car into the display window.

In all of these situations, the insured will either have no coverage or insufficient coverage. If these limitations could cause a problem, the business might want to consider some options. It could look at buying a property Legal Liability Coverage Form. This policy covers the insured’s legal liability for damage to property described in the policy and in the insured’s care, custody, or control. An advantage of this is that it provides coverage for a variety of perils, not just fire. However, it does not cover liability assumed under a contract, so it still would not cover damage caused by the nearsighted driver. A regular Property insurance policy will provide broader coverage, but it probably duplicates the landlord’s coverage and is more expensive than other options. The tenant might want to ask the landlord to remove assumed liability from the lease.

To determine which coverage options are best for a particular situation, work with one of our experienced insurance agents. We can explain alternatives, give an idea as to their costs, and provide information about various insurance companies’ claim handling practices. Get the facts early — the time to find out about your coverage is before a loss occurs.

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