Elimination of the Anniversary Rating Date (ARD) Rule

The National Council on Compensation Insurance, Inc. (NCCI) is eliminating the anniversary rating date (ARD) rule on May 1, 2017. The ARD is defined as the effective month and day of a workers’ compensation policy and each anniversary thereafter, unless a different date has been established by NCCI or another licensed rating organization.


When the ARD rule originated in 1923, its purpose was to ensure that in the event of a midterm policy cancellation, the rewritten policy would use the same rates that applied to the canceled policy.

Consider the following example:

  • An employer has a full-term policy effective Jan. 1, 2015, with a Jan. 1, 2015, ARD.
  • The policy is canceled short term, effective Aug. 15, 2015.
  • The rewritten policy is a full-term policy effective Aug. 15, 2015, through Aug. 15, 2016. The policy would use the following two sets of rates:
    1. Jan. 1, 2015, rates would apply from Aug. 15, 2015, through Jan. 1, 2016.
    2. Jan. 1, 2016, rates would apply from Jan. 1, 2016, through Aug. 15, 2016.

Under the proposed change, the rewritten policy effective on Aug. 15, 2015, uses rates effective on that date, not the rates effective on Jan. 1, 2015. In most cases, the rates would not have changed between the original effective date and the cancellation date, so the initial rates would continue to apply. However, if a rate change was approved during the time between the original effective date and the cancellation date, the new rates as of Aug. 15, 2015, would be applied to the rewritten policy.

Reason for Elimination

The NCCI is eliminating the ARD because it is a source of confusion for employers, as it is unique to workers’ compensation policies.

Effective Date

The ARD will be eliminated for new and renewal policies effective May 1, 2017. The effective date will be the same across the country to make it less confusing for employers who have employees across state lines.

Impact on Employers

Under the ARD rule, if an employer was to cancel its policy in the middle of the term due to an approved rate decrease, the employer would have to wait until the policy’s original effective date (the ARD) in order to benefit from the rate decrease. In contrast, with the elimination of the ARD, the employer would benefit from the lower rate as soon as it obtains a new policy to replace the one canceled midterm.

Employers should feel very limited impact from this elimination since approximately 90 percent of policies nationwide have an ARD that is the same as the policy effective date. Those that are affected by a cancellation will see the new rates, rules and classifications on their new policies.

© 2017 Zywave, Inc. All rights reserved.

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Antique & Classic Car Insurance

Since you have purchased a classic or antique vehicle, you’ll want to insure it properly, as it is an investment.

Coverage Inclusions

A typical classic car insurance policy includes the following:

  • Agreed value coverage: Pays for the car’s full-insured value with no depreciation in the event of a total loss, less your deductible.
  • Inflation guard: To compensate for how classic cars increase in value over time, the policy increases the vehicle’s value quarterly.
  • Spare parts coverage
  • Flexible usage: Ability to drive the vehicle up to 2,500 or 5,000 miles annually. Not limited to “parades only.”

Additional Coverage Options

You can also purchase these additional coverage options for more specific protection:

  • Emergency towing in case of a breakdown.
  • Roadside assistance for items such as a flat tire, dead battery or running out of gas.
  • Emergency lockout
  • Lost key return
  • Emergency travel expenses in case your classic vehicle breaks down while away from home.
  • Car show expenses: Policy will pay for expenses associated with missing a car show due to a breakdown.
  • Theft reward
  • Personal effects: Policy will reimburse you for items that are vandalized or stolen when reported to police.

Live in the past while protecting your vehicle for the future! Contact Lovitt & Touché, Inc today at mailto:lhaas@lovitt-touche.com to learn more about all of our insurance solutions for your automobile needs.

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DHS Issues Electronic Device Ban for Certain U.S. Inbound Flights

On March 21, 2017, the U.S. Department of Homeland Security (DHS) issued a directive that bans carrying any electronic device larger than a cellular or smartphone into an airplane cabin in U.S. inbound flights that originate from certain countries. Affected devices include laptops, tablets, e-readers, cameras, portable DVD players, electronic game units (larger than a phone), and travel printers and scanners.

The ban affects only flights from 10 international airports in Egypt, Jordan, Kuwait, Morocco, Qatar, Saudi Arabia, Turkey and the United Arab Emirates. Domestic U.S. flights and flights departing the United States are not affected.

Airlines are expected to comply with this directive by March 25, 2017. The directive will remain in force indefinitely, until the threat currently perceived by DHS diminishes.

Impact on Employers

  • Employers should review their travel procedures to evaluate whether their personnel may be affected by this directive.
  • Employers should ensure that affected employees are aware of the directive so they can plan ahead with respect to electronic devices (such as checking luggage).

The Electronic Device Ban

The ban requires affected passengers to check affected electronic devices with their luggage. This means that affected passengers will not be able to carry affected devices with them into the cabin or simply store them in their carry-on luggage. DHS explained that the directive was issued to prevent possible terrorists from smuggling explosive devices in various consumer items.

More Information

Please visit the DHS website or consult the corresponding FAQs for more information regarding this directive.


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Future of Certain ACA Taxes & Fees

Several steps have been taken in 2017 toward repealing the Affordable Care Act (ACA), including the introduction of the American Health Care Act (AHCA). Although the AHCA was withdrawn by Republicans, Congress may choose to pursue another ACA repeal and replacement bill in the future.

While the future of the ACA as a whole is currently unclear, some definitive changes have been made to some ACA taxes and fees for 2017.

  • Implementation of the Cadillac tax on high-cost group health coverage was delayed for two years, until 2020.
  • A moratorium applies for 2017 on the health insurance providers fee and the medical device excise tax.
  • The reinsurance fee expired after 2016.


Employers should be aware of the evolving applicability of existing ACA taxes and fees so that they know how the ACA affects their bottom lines. Lovitt & Touché, Inc will continue to keep you informed of changes.


A federal budget bill enacted for 2016 made the following significant changes to three ACA tax provisions:

  • Delayed implementation of the ACA’s Cadillac tax for two years, until 2020;
  • Imposed a one-year moratorium on the ACA’s health insurance providers fee for 2017; and
  • Imposed a two-year moratorium on the ACA’s medical device excise tax for 2016 and 2017.

In addition, the ACA’s reinsurance fee expired after 2016, although the 2016 fees will be paid in 2017.

Failure of the AHCA

On March 24, 2017, Republican leadership in the U.S. House of Representatives withdrew the AHCA—their proposed legislation to repeal and replace the ACA. A House vote was scheduled to take place on that day, but House Republicans could not secure enough votes to approve the legislation and, instead, canceled the vote. As a result, the ACA will remain in place at this time.

Because the House was unable to pass the AHCA, the ACA remains current law, and employers must continue to comply with all applicable ACA provisions. Both President Donald Trump and House Republican leadership have stated that they now intend to focus on other issues. Despite this, Congress may choose to pursue their own ACA repeal and replacement in the future.

Cadillac Tax Delayed

The ACA imposes a 40 percent excise tax on high-cost group health coverage, also known as the “Cadillac tax.” This provision taxes the amount, if any, by which the monthly cost of an employee’s applicable employer-sponsored health coverage exceeds the annual limitation (called the employee’s excess benefit). The tax amount for each employee’s coverage will be calculated by the employer and paid by the coverage provider who provided the coverage.

Although originally intended to take effect in 2013, the Cadillac tax was immediately delayed until 2018 following the ACA’s enactment. The 2016 federal budget further delayed implementation of this tax for an additional two years, until 2020. The 2016 federal budget bill also:

  • Removed a provision prohibiting the Cadillac tax from being deducted as a business expense; and
  • Required a study to be conducted on the age and gender adjustment to the annual limit.

There is some indication that this additional delay will lead to an eventual repeal of the Cadillac tax provision altogether. Over the past several years, a number of bills have been introduced into Congress to repeal this tax. Although President Trump has not directly indicated that he intends to repeal the Cadillac tax, he has stated that repealing and replacing the ACA is a main goal for his administration.

The AHCA would have delayed the Cadillac tax’s effective date even further, so that it would have applied only for taxable periods beginning after Dec. 31, 2025. However, the AHCA was withdrawn before the House vote.

Moratorium on the Providers Fee

Beginning in 2014, the ACA imposed an annual, nondeductible fee on the health insurance sector, allocated across the industry according to market share. This health insurance providers fee, which is treated as an excise tax, is required to be paid by Sept. 30 of each calendar year. The first fees were due Sept. 30, 2014.

The 2016 federal budget suspended collection of the health insurance providers fee for the 2017 calendar year. Thus, health insurance issuers are not required to pay these fees for 2017. Employers are not directly subject to the health insurance providers fee. However, in many cases, providers of insured plans have been passing the cost of the fee on to the employers sponsoring the coverage. As a result, this one-year moratorium may result in significant savings for some employers on their health insurance rates.

Moratorium on the Medical Devices Tax

The ACA also imposes a 2.3 percent excise tax on the sales price of certain medical devices, effective beginning in 2013. Generally, the manufacturer or importer of a taxable medical device is responsible for reporting and paying this tax to the IRS.

The 2016 federal budget suspended collection of the medical devices tax for two years, in 2016 and 2017. As a result, this tax does not apply to sales made between Jan. 1, 2016, and Dec. 31, 2017.

Reinsurance Fees

Under the ACA, health insurance issuers and self-funded group health plans must also pay fees to support a transitional reinsurance program for the first three years of Exchange operation (2014-16) to help stabilize premiums for individual market coverage. Fully insured plan sponsors do not have to pay the fee directly.

Because the transitional reinsurance program was operational only through 2016, reinsurance fees do not apply for 2017 and beyond (although the 2016 fees will be paid in 2017). Reinsurance fees may be paid in either one lump sum or in two installments. For the 2016 benefit year, reinsurance fees are due as follows:


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In Touch Newsletter – March 2017

Welcome to the latest edition of the Lovitt & Touché newsletter.


In this edition:

Wellness Corner:


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House Republicans Release ACA Replacement Plan

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On Feb. 16, 2017, Republican leadership in the U.S. House of Representatives issued a policy brief describing its intended approach for replacing the Affordable Care Act (ACA).

In this policy brief, House Republicans reiterated their goals of repealing the ACA and implementing a replacement plan aimed at providing more choices, lower costs and greater control for consumers over their health care. In addition, the policy brief promised a “stable transition period to a patient-centered health care system” following the ACA’s repeal, until a replacement plan can be implemented.


The ACA and its requirements remain intact for now, and employers should continue to comply. However, efforts are underway to make changes to the law’s key provisions.

Legislation may be advanced in the weeks ahead to repeal and replace the ACA. The policy brief provides valuable insight into how many aspects of the current health care system, including employer plan rules, could be impacted.


The policy brief outlines key failures of the ACA as identified by House Republicans, and describes the ways in which they intend to address those failures. According to the policy brief, key failures of the ACA include:

  1. Higher premiums for health insurance coverage;
  2. Low issuer participation in the Exchanges;
  3. A new class of uninsured—those that don’t qualify for subsidies and can’t afford health coverage, and those that have plans with high premiums and deductibles, prohibiting access to actually receiving care; and
  4. An additional $1 trillion in taxes imposed on individuals and businesses.

The replacement plan described in the policy brief would address these issues by building on a proposed approach created by House Republicans in June 2016, called the “Better Way” health care plan. Key elements of the new replacement plan include:

  1. Providing relief from the ACA’s taxes and mandates, including eliminating the individual mandate and employer shared responsibility penalties;
  2. Providing portable, monthly tax credits that individuals can use to purchase health insurance;
  3. Enhancing health savings accounts (HSAs) by increasing the amount that can be contributed and allowing them to be used to pay for over-the-counter (OTC) medications;
  4. Providing more flexibility and control to states in managing their Medicaid programs; and
  5. Utilizing state innovation grants.

Relief from ACA Taxes

In an effort to lower the cost of health care, the Republicans’ replacement plan would provide relief from all the ACA tax increases, including:

  1. The health insurance providers’ fee;
  2. Restrictions on using HSAs for OTC medications;
  3. The medical devices excise tax;
  4. The annual fee on manufacturers of branded prescription drugs; and
  5. The increased expense threshold for deducting medical expenses.

The proposed plan would also eliminate the ACA’s individual and employer penalty taxes immediately.

Health Care Tax Credits

The Republicans’ replacement plan would repeal the ACA’s system of health insurance subsidies, and instead provide a portable, monthly tax credit to all individuals that can be used to purchase individual health insurance coverage. The tax credit could be used to purchase any eligible plan approved by a state and sold in its individual insurance market, including catastrophic coverage.

The new tax credit would be both advanceable and refundable, and would not be based on income. In addition, it would be:

  1. Universal: It would be available for all citizens or qualified aliens not offered other qualifying insurance (although incarcerated individuals would not be eligible);
  2. Age-rated: Older individuals will receive a higher credit amount than younger individuals, reflecting the higher cost of insurance for older individuals;
  3. Available for dependent children up to age 26: Taxpayers would be able to receive credits for their dependents, including children up to the age of 26; and
  4. Portable: It can travel with individuals from job to job, state to state, into the home to start a business or raise a family, or even into retirement.

If an employer does not subsidize COBRA coverage, the individual would be able use the credit to help pay unsubsidized COBRA premiums while he or she is between jobs. Additionally, if an individual does not use the full value of the credit, he or she can deposit the excess amount into an HSA.

The credit would not be available to individuals who are eligible for coverage through other sources (specifically, through an employer or government program). In addition, it would not be available to be used for plans that cover abortion.

To provide relief during the transition period, individuals eligible for the ACA’s health insurance subsidy will be able to use their credit for expanded options, including catastrophic plans. To promote market stability and premium stabilization during the transition period, the ACA subsidies would be adjusted slightly to provide additional assistance for younger individuals and reduce over-subsidization of older individuals.

Enhance HSAs

HSAs are tax-advantaged savings accounts that are tied to a high deductible health plan (HDHP), which can be used to pay for certain medical expenses. According to House Republicans, HSAs tied to HDHPs allow individuals and families to control their health care utilization by providing incentives to shop around, making health care more affordable and increasing quality.

Therefore, the House Republicans’ replacement plan would increase the amount of money that can be contributed to an HSA, and allow HSA dollars to be used on OTC health care items. It would also allow spouses to make additional contributions, and expand the amount of time a consumer can use an HSA on certain expenses.

According to the Republicans, they have continued to advance legislation to expand access and accessibility of these plans, especially in the context of ACA repeal and replacement. Their proposed policies include:

  1. Increase the Maximum HSA Contribution Limit: Currently, the maximum amount that can be contributed (both employer and individual contributions) to an HSA for 2017 is $3,400 for self-only coverage and $6,750 for family coverage. H.R. 1270 and A Better Way significantly increase the HSA contribution limits by allowing HSA contributions to equal the maximum out-of-pocket limits allowed by law. For 2017, those amounts are $6,550 for self-only coverage and $13,100 for family coverage.
  2. Allow Both Spouses to Make Catch-up Contributions to the Same HSA: H.R. 1270 and A Better Way provide that if both spouses of a married couple are eligible for catch-up contributions and either has family coverage, the annual contribution limit that can be divided between them includes both catch-up contribution amounts. Thus, for example, they can agree that their combined catch-up contribution amount is allocated to one spouse to be contributed to that spouse’s HSA. In other cases (as under present law), a spouse’s catch-up contribution amount is not eligible for division between the spouses. The catch-up contribution must be made to the HSA of that spouse.
  3. Administrative Fix for Expenses Incurred Prior to Establishment of HSA: H.R. 1270 and A Better Way provide that, if a taxpayer establishes an HSA within 60 days of the date that the taxpayer’s HDHP coverage begins, any distribution from an HSA used as a payment for a medical expense incurred during that 60-day period after the HDHP coverage began is excludible from gross income as a payment used for a qualified medical expense, even though the expense was incurred before the date that the HSA was established.

Modernize Medicaid

According to Republicans, many state Medicaid programs suffer from significant waste, fraud and abuse, due to failures in state and federal oversight. In addition, Medicaid’s incentives often lead states to offer more benefits, but cut payments to health care providers, causing less access to quality care for low-income patients. As a result, Republicans believe that the Medicaid program in its current state is unsustainable.

In their replacement plan, Republicans are proposing the following changes to the Medicaid program:

  1. Repealing the ACA’s Medicaid Expansion: The replacement plan would repeal the ACA’s Medicaid expansion for able-bodied adults, while providing a period of stability in the interim. States that chose to expand their Medicaid programs under the ACA could continue to receive enhanced federal payments for currently enrolled beneficiaries for a limited period of time. However, after a certain date, if states choose to keep their Medicaid programs open to new enrollees in the expansion population, states would be reimbursed at their traditional match rates for these beneficiaries. To provide equity, non-expansion states could be eligible to receive additional temporary resources for safety net providers during this time frame.
  2. Establishing a Budget for Medicaid Using a Per Capita Allotment: Based on A Better Way, House Republicans are looking at transitioning Medicaid’s financing to a per capita allotment. Under this change, a total federal Medicaid allotment would be available for each state to draw down based on its federal medical assistance percentage (FMAP). The amount of the federal allotment will be calculated as the product of the state’s per capita allotment for major beneficiary categories—aged, blind and disabled, children and adults—and multiplied by the number of enrollees in each group. The per capita allotments for each beneficiary group will be determined by each state’s average Medicaid spending in a base year, grown by an inflationary index. Some federal payments—including disproportionate share hospital (DSH) payments, administrative costs and others—are excluded from the total allotment.
  3. Giving States the Choice to Receive a Medicaid Block Grant: Under this approach, states would also have the choice to receive federal Medicaid funding in the form of a block grant or global waiver. Block grant funding would be determined using a base year, and would assume that states transition individuals currently enrolled in the Medicaid expansion out of the expansion population into other coverage. States would have flexibility in how Medicaid funds are spent, but would be required to provide required services to the most vulnerable elderly and disabled individuals who are mandatory populations under current law.
  4. Repealing the ACA’s Medicaid DSH Cuts: Federal law requires states to make Medicaid DSH payments to hospitals treating large numbers of Medicaid and uninsured patients. The federal government provides each state an annual maximum DSH allotment, which was reduced under the ACA. Under their replacement plan, House Republicans would repeal the Medicaid DSH cuts.

Utilize State Innovation Grants

The proposed replacement plan would also implement state innovation grants, in an effort to allow states to repair their health insurance markets. House Republicans believe that providing funding for state innovation programs—whether it is high-risk pools, cutting out-of-pocket costs or promoting access to health care services—will allow states to gain the resources to best take care of their unique patient populations.

Under these new state innovation grants, states would have sole flexibility to use the funds as they see fit to help lower the cost of care for some of their most vulnerable patients. Among other purposes, states could use these state innovation grants to:

  1. Reduce patients’ out-of-pocket costs (such as copayments, coinsurance, premiums and deductibles);
  2. Promote access to preventive services (such as an annual checkup), as well as dental and vision care;
  3. Lower the cost of providing care to high utilization patients;
  4. Stabilize the individual and small group markets; or
  5. Promote participation in private health care plans.

Also, states could choose to funnel the money through a now-dormant high-risk pool to achieve the same goals of the dated program.

This ACA Compliance Bulletin is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.
© 2017 Zywave, Inc. All rights reserved.

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Underwriting Considerations for D&O Insurance

Directors and officers (D&O) liability insurance is an insurance coverage sought by public, private and non-profit organizations to help protect their executives from costly legal actions. Over the years, insurance companies have refined their underwriting practices for D&O insurance to reward organizations that implement proactive risk management measures.

While organizations across the United States have developed a greater appreciation for the importance of D&O insurance, many misconceptions about the underwriting process for D&O insurance persist. This Coverage Insights article examines some of the information that underwriters generally review when they receive an application for D&O liability insurance.

The Basics

Applications for D&O insurance generally start by asking applicants for a basic profile of their organization. In particular, underwriters want to establish the organization’s size, location and industry. While this information may seem basic, it impacts an underwriter’s willingness to accept an application for coverage, and sets the price, terms and conditions of the policy.

It should be noted that an organization’s industry may contribute to an insurance company’s perception of the D&O risk posed by an applicant. When forming an opinion of a potential new client, underwriters will often take into consideration any recent litigation trends, along with their own underwriting experience with organizations in that sector.

The Organization’s Financial Condition

Typically, underwriters will require organizations to submit a copy of their audited financial statements along with their application for D&O coverage. Underwriters require this information in order to develop an understanding of an organization’s financial circumstances, particularly its key income statement components and balance sheet components. This information is used to create a range of financial ratios and can be used by an insurance company to benchmark an applicant to other similar organizations within its industry.

One of the main questions the underwriters will be trying to answer is whether an organization has sufficient cash or credit available to fund its operations and service its debt obligations for the proposed policy period.

Organizations with a strong financial standing operating in an industry with positive economic outlook are generally looked upon favorably by underwriters.

Claims History

Insurance companies, by their nature, want to extend coverage to organizations that will allow them to remain profitable. Insurance companies generally view an organization with a history of frequent claims or pending litigation as undesirable, and may decline to offer coverage or charge more for coverage based on the likelihood of a future loss.

While each insurance company has its own internal D&O underwriting practices, underwriters typically look at the following:

  • Recent civil or criminal action, or administrative proceedings alleging violation of a federal, state or foreign securities law
  • Involvement in insolvency or bankruptcy proceedings
  • Instances of employment or labor-related litigation or proceedings
  • Disputes over employee benefit or pension plan
  • Mergers and Acquisitions

If an organization has been involved in merger or acquisition (M&A) activity, underwriters will typically investigate the reasons for these transactions to gain an understanding of its associated risk. Insurance companies are interested in this information because financing activities and M&A activity are events that often lead to D&O claims.

Depending on the nature of an organization’s M&A activity, an underwriter may recommend certain conditions or restrictions in the D&O coverage provided to the organization or choose to decline coverage altogether.

Employment Practices

Current and former employees are a common source of D&O insurance claims, especially for private and non-profit organizations. In order to get a better sense of how likely an organization’s directors and officers are to be pulled into a dispute with employees, insurance companies will typically ask a series of questions related to employment practices. Common questions include, but are not limited to, the following:

  • Does your organization have a formal human resources department?
  • Does your organization have an employee handbook?
  • Has your organization recently completed any layoffs, facility closures or early retirement programs?
  • What is your organization’s annual turnover rate?
  • Does your organization have policies forbidding discriminatory conduct in the workplace?
  • Does your organization have formal hiring and interviewing guidelines?

International Exposures

Organizations that have operations in foreign countries tend to face a higher degree of D&O risk due to the complex compliance requirements that exist in each jurisdiction. Accordingly, underwriters will typically ask an organization applying for D&O coverage what percentage of its business is done in the United States and other countries.

Diversity of Business Activities

Generally, D&O risk is lower for organizations that concentrate their efforts in one core business activity. For this reason, underwriters may look more critically at organizations that are involved in too many unrelated areas where the directors don’t have expertise in that type of operation. As a rule of thumb, the longer an organization has been involved in a business activity, the D&O risk associated with performing that activity decreases.

Additional Considerations for Public Companies

For publicly traded companies, insurance companies often require additional analysis from their underwriters during the application process. In addition to the areas previously mentioned, D&O underwriters may examine a publicly traded company’s accounting practices, corporate structure, stock price volatility, executive compensation, disclosure practices and corporate governance.

This Coverage Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2017 Zywave, Inc. All rights reserved.


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Know Your Insurance: Cancellation vs. Nonrenewal in Auto Policies

Receiving a letter from the insurance company concerning the status of your policy may make you a bit tense. Yet, before you get worried, you must understand the difference between a cancellation of your policy and a nonrenewal. These terms are vastly different and require different responses on your part.

Nonrenewal Explanation:

A policy nonrenewal occurs after the insurance company or you, as the insured, decide not to renew your policy when it expires.

If your insurance company decides not to renew, they must give you adequate notice based on the laws established in your state, and must outline the reasons as to why they have chosen not to renew your policy for another year. If you think their reasoning is unjust, you may call the insurer for more explanation. Here are some reasons why your policy may not be renewed:

  • The insurer no longer carries that particular line of coverage.
  • The insurer decided to write fewer policies under that specific line of coverage in your area.
  • You committed an act that raised the insurer’s risks significantly. That usually means that you filed too many claims during a policy period. Obtaining a new policy after a nonrenewal is typically not a difficult process. Your premiums may be slightly higher but you will be better off as compared to having your policy cancelled.

Cancellation Explanation:

The insurance company cannot cancel your policy if it has been in effect for more than 60 days except under the following conditions:

  • You did not pay your premium.
  • You have committed fraud.
  • You have made serious misrepresentations about yourself on your application. If your policy is going to be cancelled, you will receive notice well in advance. After a cancellation, it can be difficult to obtain a new policy, as other companies may see you as an undesirable risk.

If you do receive a cancellation notice because you failed to pay your premium, you may be able to resurrect your policy with the insurer by paying for an entire year’s worth of premiums upfront. If that is not an option for you, then you may have to opt for a high-risk policy.

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Reducing Worksite Injuries

Workplace injuries are a significant risk for any business, and they can lead to incredibly costly medical bills, lost productivity and increased insurance premiums. You likely have safety protocols to help prevent on-the-job accidents, but another type of injury could be just as costly. Work-related musculoskeletal disorders (WMSDs) are not caused by accidents, but rather from job conditions or tasks that lead to or contribute to the condition. This article discusses WMSDs and includes tactics to address and prevent them in your workplace.

What is a WMSD?

A musculoskeletal disorder (MSD) is an injury or disorder of the muscles, nerves, tendons, joints, cartilage or spinal discs. Work-related MSDs are conditions in which the work environment and performance of work contribute significantly to the condition, and/or the condition is made worse or persists longer due to work conditions. Examples of workplace conditions that may lead to WMSDs include routine lifting of heavy objects, daily exposure to whole body vibration, routine overhead work, work with the neck in a chronic flexion position (head bent forward) or performing repetitive forceful tasks.

Examples of MSDs are sprains, tears, back pain, carpal tunnel syndrome, arthritis and hernia. MSDs are associated with high costs to employers such as absenteeism and lost productivity, as well as increased health care, disability and workers’ compensation costs. In addition, many of these conditions are or can become chronic, further escalating the costs to employers.

Workplace Strategies

There are a variety of strategies employers can implement to reduce WMSDs in their workplace. They may not all make sense for your business, but consider the following ideas to help minimize the impact of WMSDs and prevent them altogether.

  • Examine your workplace and look for ways to reduce the chance of injury. For instance, you may be able to change the way materials, parts and products are transported in order to relieve burden on employees. Also consider altering the layout of workstations to be more ergonomic.
  • Promote healthy lifestyles, including physical activity and weight management. Improving physical health and maintaining a healthy weight can reduce pain for individuals with arthritis and back problems, and can help employees prevent these and other MSDs.
  • Provide training to management and workers regarding risks for workplace injuries, including:
    • Training on how to reduce and avoid injuries
    • Training to help management and workers recognize potential workplace risks for MSDs and mitigate those risks
    • Raising awareness of WMSDs among employees and management, as well as educating employees to recognize a potential injury and know when to seek medical evaluation
  • Make administrative changes as they make sense in your workplace to reduce the risk of injuries. These may include reducing shift length, limiting overtime, scheduling more breaks for rest and recovery, rotating workers through jobs that are physically taxing and instituting pre-shift stretching sessions.
  • Develop policies that support a corporate culture of good health, safety and injury management, such as:
    • Required use of personal protective equipment (PPE), plus training on how to properly use it
    • Ergonomic workplace initiatives
    • Workplace safety programs
    • Disability management policies
    • Return-to-work programs
  • Encourage early reporting of WMSDs by employees, and prompt evaluation by health care providers. Many workplaces stress early reporting for injuries, but employees may understand that to mean only sudden injuries, like accidents, slips and falls. Even though WMSDs occur over time, employees should still report them and get evaluated early—employee education can help promote this practice in your workplace.
  • Educate employees on workers’ compensation and disability benefits, including protections and accommodations offered by the Americans with Disabilities Act (ADA).


Source: The Centers for Disease Control and Prevention

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