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.

Billing changes due to endorsements can catch policyholders off guard.

When agents receive a notice of an endorsement, they can help ease the concerns of policyholders by alerting them right away. Although clients may expect changes because of their annual premium audit, they may be less familiar with the process involving endorsements.

As a reminder, endorsements can be made for a variety of reasons, such as adding or removing a state of operation, changing their installment plan, changing their payroll amounts or changing their address. Sometimes these changes affect their premium amount; sometimes they do not.

At SFM, the premium audit occurs just after a client’s policy period ends, so at that point they are making payments on their new policy for the year — those payments could potentially go up depending on what was discovered in the audit. It should be noted that when there is an audit premium impact, it is billed more quickly than premium-bearing endorsements.

That’s why it’s doubly important to give policyholders a heads-up regarding any endorsements.

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A new U.S. Department of Labor (DOL) rule regarding who qualifies as an independent contractor took effect in the spring of 2024.

The new rule adopted a new six-factor test for determining whether a worker is an independent contractor. (However, employers must also be aware of their respective state requirements.)

Due to this change, some employers may have questions on whether they need workers’ compensation policies to cover independent contractors. Generally, employers are required to provide coverage for lost wages and medical costs due to work injuries for an employee, but not an independent contractor.

Also, depending on the jurisdiction or contract requirements, workers’ compensation policies for subcontractors may be required from the general contractor in order to secure a job.

Agents can help employers navigate these complexities by checking out our blog, Are your workers independent contractors or employees?

This new DOL rule also underscores the value of breaking out work comp coverage from a group insurance plan. Using SFM provides an extra layer of service and expertise for employers who may find challenges navigating the independent contractor rule and its implications for workers’ compensation.

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Agents and policyholders can now access the latest batch of SFM promotional videos on YouTube.

The four videos highlight the strengths SFM brings to policyholders.

Check out the videos on YouTube:

• SFM Mutual Insurance – Protecting workers from harm
• SFM Mutual Insurance – 34 states with coverage
• SFM Mutual Insurance – Your trusted partner in workers’ comp coverage
• SFM Mutual Insurance – Let’s work together

Also, the videos are available on our Marketing videos page.

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The recording of SFM’s recent webinar on safe driving and the implications for workers’ compensation is now available for agents and clients.

During the hourlong webinar, held in June 2024, SFM professionals shared their extensive knowledge on:

• Why driving is the most dangerous work activity
• Types of driving-related injuries
• The claims process, including investigations
• How to prevent driving incidents and establish a safe driving program
• The consequences of a driving-related injury for the company and the employee
• Question-and-answer session

Also, you can find previous webinars on our website, featuring a number of important work comp topics, including:

• Hiring and onboarding
• Claims 101
• Avoiding litigated claims
• Fundamentals of a return-to-work program
• Loss prevention 101
• Winter slips and falls

Lastly, be sure to sign up for alerts on future SFM webinars.

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You can find a wealth of information on current policies in SFM Agency Manager (SAM), including the upcoming e-mod for policies that are renewing soon.

Renewal e-mods are typically available in SAM as early as 90 days prior to the renewal.

To find it, just log in to SAM and go to “Policies,” and click on the policy you’re interested in. On the policy overview screen, you’ll find the upcoming e-mod in the right column, toward the bottom just under the current e-mod.

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SFM is planning to participate in several industry events in the coming months, including:

• July 28-31: American Association of State Insurance Compensation Funds annual conference in Providence, R.I.
• Aug. 27-28: Independent Insurance Agents of Iowa annual convention in Altoona, Iowa.
• Sept. 8-10: Independent Insurance Agents of South Dakota annual convention in Sioux Falls, S.D.
• Oct. 5-8: Insurors of Tennessee annual convention in Nashville, Tenn.
• Oct. 9-11: Independent Insurance Agents of Nebraska annual convention in Kearney, Neb.
• Sept. 23-26: International Association of Industrial Accident Boards 110th convention in Toronto, Canada
• Nov. 11-12: Big I Indiana annual convention in Indianapolis

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