While pricing and coverage difficulties persist in other property and casualty segments, especially property insurance, agents shouldn’t let workers’ compensation insurance fall by the wayside.

Other lines of insurance may garner more headlines, as well as your attention, but there are several benefits to working with a work comp expert, especially considering some of the industry developments in recent years. Some concerning trends carriers are watching include:

• Higher claims severity
• Aging workforce
• Rise in workplace violence claims
• Mental health issues
• Increase in litigated claims
• High rates of injury frequency among newer employees
• Medical inflation

At the same time, multistate employers may face difficulties navigating the differences in claims rules and regulations, which can vary based on the jurisdiction.

“Workers’ compensation insurance has its own unique challenges for employers, which is why it makes sense to ensure policyholders are getting the best possible service and value,” said Cody Allen, Territory Manager at SFM. “By working with an insurer specifically dedicated to work comp, agents have access to the tools they need to streamline their processes. And equally important is the high level of care the injured worker receives.”

These factors contribute significantly to SFM’s 96% retention rate.

So, while property renewals may be a headache for many agencies today, don’t sleep on the importance of partnering with a strong work comp insurer.

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Cody Allen, SFM Territory Manager, has been elected to the governing board at the Indiana Compensation Rating Bureau (ICRB).

The ICRB is a private nonprofit association that includes all insurance companies licensed to write workers’ compensation insurance in Indiana. Chosen to join the group in in early October 2024, Allen will serve a two-year term that is already underway.

“I’m excited and honored to be chosen to join an organization like this,” Allen said. “SFM is proud to be involved in a state where workers’ compensation has been well run and profitable. The ICRB has provided strong leadership for years and created a robust work comp environment in Indiana.”

Established in 1935, the ICRB gathers information from its member companies that may be necessary to establish fair and adequate advisory rates, according to the organization’s website. That information is submitted to the Indiana Department of Insurance for review, then distributed to all member companies.

In addition to the data collection and ratemaking responsibilities, the ICRB is involved in other aspects of workers’ compensation in Indiana, including:

• Rules promulgation
• Experience rating
• Inspection and classification
• Assigned risk administration
• Industry education
• Dispute resolution

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Policyholders should know that new employees are among the most likely to be injured on the job.

In fact, SFM data over the past 13 years has shown a steady uptick in the number of claims for employees with four or fewer months on the job.

That’s why SFM has created several resources to help employers with safety practices for new hires.

New employee safety: Get your new hires off to a safe start (blog)

Effectively training new employees on safety can be challenging, but it’s key to protecting and retaining quality employees.

Cut down the risk of injury for your new employees (blog)

Make sure prospective hires understand the job and that new employees are properly trained to cut down the risk of injury.

Occupational injuries for new workers (fact sheet)

SFM conducted original research to identify injury risks for new employees. This fact sheet quickly details the findings.

Safety Orientation Success (guide)

Use this step-by-step guide to train employees in safety on the job.

You can also find onboarding checklists for specific industries, and a wealth of other safety information, on the SFM Resource Catalog.

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Did you know that large policyholders who switch to SFM see on average a 7-point reduction in their experience modification (e-mod)?

Check out this chart for the specifics:

This chart shows SFM policyholders with $50,000 or more in manual premium that qualified for an experience modification factor. Each of these policyholders had continuous workers’ compensation coverage with SFM through a minimum of five policy terms.

How does SFM achieve such success for its customers? There are several reasons, including our approach to loss prevention and claim management.

Claim management

• Low caseloads per adjuster
• 24/7 nurse triage for injury reporting

Loss prevention

• In-person services and training
• Online safety resources

Cost containment

• PPO networks
• In-house bill review

Workers’ compensation expertise

• Focused approach
• Leaders in the industry

Learn more about how we can help you get the most from your workers’ comp coverage.

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You can now see whether your customers have submitted their premium audit information in SFM Agency Manager (SAM).

To view a policy’s premium audit status:

1. Go to the “Policies” tab and your list of policies will appear.
2. Select the policy you want to check on from the list, and the overview screen will appear.
3. Click “Audit summary” on the left.

From the audit summary screen, you’ll be able to see details on any open audits including the date the audit was opened, current audit status, and correspondence sent to the policyholder.

Also, here are a few other reminders on recent SAM upgrades:

• Upcoming e-mods available in SAM
• SFM continues to improve SAM system
• SAM security enhancements

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General contractors or contractors who sub-contract work to independent contractors should remember to have the sub-contracted individuals complete the South Dakota Affidavit of Exempt Status form.

The South Dakota Affidavit of Exempt Status, when signed, creates a presumption that an individual independent contractor is not an employee for the purposes of the state’s Workers Compensation Act. Few things to note about the affidavit:

• The affidavit only creates a rebuttable presumption; the presumption is not bulletproof to additional fact finding during a claim, audit or legal proceeding
• The affidavit may not be completed by independent contractors who could be considered an employer or by owner-operators
• The SFM Independent Contractor checklist does not replace the affidavit and does not create the same presumption

The affidavit creates the strongest presumption of employee v. independent contractor status. Without this affidavit, SFM must start with the presumption that the individual is an employee of the insured/contractor/general contractor.

Due to these factors, it is critical that where appropriate the affidavit is completed, signed, and returned to SFM for documentation purposes. Having these on file will speed up employee v. independent contractor determinations on both claims and audits.

The Affidavit of Exempt Status, as well as other workers’ compensation forms, can be found on the South Dakota Department of Labor and Regulation website .

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Written premium continues to increase in SFM’s core states during the outset of 2024.

The first few months of the year continued the momentum of 2023, when SFM saw its market share increase in all its core states (with the exception of Minnesota, where SFM remains No. 1). There were also notable spikes in two of SFM’s newer markets, Indiana and Tennessee.

Longstanding partners can attest to the fact that SFM believes in steady, measured growth. Recent successes across the enterprise underscore the wisdom of this approach, bringing value to both established partners and newly appointed agents.

SFM’s carrier ranking in its top five states, based on 2023 written premium:

• Minnesota – 1
• South Dakota – 3
• Iowa – 6
• Nebraska – 8
• Wisconsin – 12

Meanwhile, SFM has seen significant jumps in Kansas, Indiana and Tennessee since 2019.

The latest figures come from regular industry reports issued by SNL Financial. SNL, a data analytics firm within the S&P Global organization, issues an annual insurance industry study that compares market share and ranks carriers within each state of operation.

“Today, 43 percent of SFM’s business is from outside of Minnesota. SFM is proud of our sustained success in recent years, especially in our newer markets,” said Mike Happe, Senior VP and Chief Marketing Officer. “In addition to expanding the lead we’ve held in Minnesota for over 20 years, it’s great to see that the majority of our growth is coming from our other core states.

State highlights

As SFM continues to gain a foothold in its newer states, the results have been striking.

For instance, this year in Indiana SFM has written 22% more new business than last year. Tennessee is up 46%.

“Agents are getting to know us and appreciate what we offer,” said Mark Lewis, Small Business Marketing Representative. “We are seeing strong results as SFM’s reputation for unmatched customer service continues to permeate our new markets.”

Future growth

The new relationships SFM has built with agents over past few years have contributed to the company’s success in its new and core states.

“We’re pleased to have continued annual upticks in our market share,” said Business Development Specialist Cody Allen. “Thanks to the support and efforts of our strategic partners, as well as referrals from existing agencies in our other states, we’ve quickly built up a solid agency force and new business is exceeding our expectations.”

Allen went on to point out that SFM is actively working to recruit new agency partners, welcoming additional referrals throughout its expanding territory. If you know any agents who would be interested in learning more about working with SFM, don’t hesitate to refer them to Allen. He can be reached at 952-838-4207.

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As paid leave laws continue to be passed in states, counties and cities across the U.S., employers may wonder how these statutes intersect with workers’ compensation benefits.

Paid leave legislation generally includes several requirements of employers, often accompanied with guidance from government agencies to help businesses remain compliant.

Of SFM’s core states, only Minnesota has passed paid leave laws — both paid sick leave and paid family and medical leave. However, similar legislation has been introduced elsewhere in recent years, including:

• Wisconsin
• Nebraska (ballot initiative being pushed)
• Kansas
• Iowa

Still, the tide of new paid leave is growing. Tennessee, for example, passed a law regarding paid parental leave for public school teachers and staff.

It’s up to employers to understand these laws and the potential implications with workers’ compensation.

Minnesota paid leave and work comp

Minnesota’s Earned Sick and Safe Time (ESST) law went into effect at the outset of 2024.

SFM’s corporate counsel provides a rundown of the legislation and its impact on workers’ compensation.

An employee can use ESST for a work-related injury.

But what if an employee receives both ESST and workers’ compensation benefits?

The wage-coordination provisions in the workers’ compensation laws are intended to avoid duplication of wage-loss benefits so that an employee does not receive a double recovery. Minnesota’s ESST law, however, is silent on the implications of an employee receiving both ESST and workers’ compensation benefits for the same time period.

The ESST law provides that an employer’s PTO program may satisfy ESST. If an employee uses ESST/PTO to cover hours subsequently covered by workers’ compensation, the employee’s ESST/PTO could be repaid. This could be done in one of two ways:

1. If the employee is back to work, the employer could add ESST/PTO hours back to the employee’s ESST/PTO account to offset hours paid by workers’ compensation benefits
2. If the employee is not back to work, or their imminent return to work is unlikely, then the employer may need to assert in a pleading its claim for reimbursement. The claim for payment could be by way of offset, credit, or reimbursement

Employers should carefully monitor when an employee uses ESST or PTO time for a work-related injury. Employers should also be mindful that ESST does not replace workers’ compensation benefits owed.

If an employee uses ESST and then receives workers’ compensation benefits, the employer should make sure that any ESST time used is credited back to the employee’s ESST account. On the other hand, if an employee receives both ESST and workers’ compensation benefits simultaneously, the employer may have the opportunity to assert a claim for reimbursement of those payments by way of offset or credit. Employers should discuss with their claims representative or defense attorney when ESST or PTRO are used during periods also covered by workers’ compensation benefits to ensure proper coordination.

Conclusion

The complexities of Minnesota’s law and the intersection with work comp illustrates the challenges employers face as new statutes continue to go into effect across the U.S.

Make sure policyholders are aware of the current state of fines for workplace noncompliance.

In addition to the federal Occupational Safety and Health Administration (OSHA), several states in which SFM operates have their own occupational safety and health administrations. Each has the authority to issue fines for a number of workplace violations.

For the primary states in which SFM operates, the following have their own Occupational Safety and Health Plans :

• Minnesota
• Iowa
• Indiana
• Tennessee

South Dakota, Nebraska and Kansas follow federal OSHA standards.

Below is a rundown of information agents may want to communicate to policyholders about these states, and the risks associated with workplace violations.

Federal OSHA penalties

To begin, the U.S. Occupational Safety and Health Administration has its own set of fines for violations.

As of this writing, these are the maximum penalty amounts for of certain types workplace malpractice:

• Serious; other-than-serious; posting requirements – $16,131 per violation
• Failure to abate – $16,131 per day beyond the abatement date
• Willful or repeated – $161,323 per violation

Note that OSHA typically updates its fine amounts annually.

Minnesota OSHA penalties

In Minnesota, the maximum penalties for violations are as follows:

• Nonserious violation – $15,625
• Serious violation – $15,625
• Willful violation – $156,259 (smaller penalties may be assessed to smaller employers)
• Repeated violation – $156,259 per violation
• Failure to abate violation – $15,625 per day beyond the prescribed abatement date
• Fatality penalty – $50,000 (minimum total negotiable fine)

Iowa

Iowa’s rules regarding maximum citations for workplace noncompliance are:

• Willful violation – $156,259
• Repeated violation – $156,259
• Serious violation – $15,625
• Other-than-serious violation – $15,625
• Failure to correct violation – $15,625 per day
• Posting, reporting or record-keeping violation – $15,625

Indiana

Indiana OSHA penalties are assessed in accordance with state law and can be calculated using the Indiana Field Operations Manual . Maximum fines for certain types of violations are:

• Posting Requirements – $7,000 per violation
• Nonserious – $7,000 per violation
• Serious – $7,000 per violation
• Knowing (did not contribute to employee fatality) – $70,000 per violation
• Repeat – $70,000 per violation
• Knowing (contributed to employee fatality) – $132,598 per violation
• Failure to correct – $7,000 per violation per day it continues (30-day maximum)

Tennessee

Lastly, Tennessee OSHA has its own Penalty Program, which investigates and assesses penalties for violations of the Tennessee Workers’ Compensation Act other than those covered by the Uninsured Employers Fund and the Employee Misclassification Education and Enforcement Fund. 

The department’s website lists dozens of penalties for workers’ compensation violations.

Conclusion

While most employers don’t set out to violate OSHA standards, agents should remind policyholders of the potential for hefty fines for noncompliance.