2018 was another eventful year for Employee Benefits and Compliance. Presented by the Hays Benefits Research and Compliance Department, this recorded webinar is an opportunity to get ready for 2019 and ensure you are in compliance with the new laws and changes for the upcoming year.
What to do if you get a 226J Penalty letter form the IRS (hint, it has to do with employer reporting of coverage).
The individual mandate penalty goes to $0 next year. What does this mean?
This year’s spending resolution has delayed the “Cadillac” tax once again. There are other future impacts as well.
AARP vs. the EEOC: the potential impact on wellness programs
Association Health Plans and Limited Duration Health Plans: when, what, where, why and how.
On the horizon: a loosening of the HSA and health FSA rules?
Large scale catastrophic events can have significant impacts to your business for many reasons. The most obvious is direct damage to your facilities, which can also result in impaired operations. However, there are many secondary issues which can have detrimental effects. Utilities (including power, water, sewer, gas, etc.) often become unreliable due to wind damage or flooding. Infrastructure can sustain damage, which impedes access to and from your facilities. Governmental or other civil authorities may issue orders which restricts access to your locations. Even if your business is not located in a catastrophe-prone area, you can be impacted if large customers or suppliers sustain damage which hinders their production.
Catastrophic conditions often trigger ancillary additional coverages that are included in many policies. Frequently these additional coverages have their own sublimits, specific deductibles or waiting periods. It is important to review your specific policy terms and conditions. The following discussion is not intended to be a comprehensive review of coverages, but rather provide an idea on what to look for depending on your circumstances.
Protection & Preservation of Property (Property Damage & Time Element) – frequently costs are incurred to temporarily protect your property from an impending threat (for example boarding up in advance of a hurricane). This may also cause a business to shut down, resulting in a loss of income. Issues to consider specific to this coverage may include:
The costs generally need to be spent on insured property due to an imminent threat from insured physical loss or damage and be considered temporary in nature.
If the event ultimately does not materialize, generally the deductible for the event that would have happened is what is applied to the coverage.
There may be a stipulated recovery time for Time Element losses (for example 48 hours before & after protecting property).
Ingress/Egress (Time Element) – there may not be access to your property due to damage to roadways, bridges, tunnels or other infrastructure. This may result in Time Element losses. Issues to consider specific to this coverage can include:
The prevention of access generally must be from physical damage of the type insured to property of the type insured and at an insured location.
Whether the damage needs to be within a certain radius of an insured location.
There may be a specific number of days that the coverage is afforded for or separate sublimit.
Whether access need to be totally shut off, or if partial impairment qualifies coverage.
Civil/Military Authority (Time Element) – authorities may restrict access to your facility, resulting in a Time Element loss. Issues to consider specific to this coverage can include:
The order must be from physical damage of the type insured at an insured location or within a specified radius from the impacted location.
There may be a specific number of days that the coverage is afforded for or separate sublimit.
Whether access need to be totally shut off, or if partial impairment qualifies coverage.
Whether there is a specified amount of time that the order must be in place (Waiting Period):
For coverage to apply, and is subject to a different deductible OR
Which serves as the deductible for this coverage
Service Interruption (Property Damage & Time Element) – your facility may sustain damage from a loss of incoming/outgoing gas, sewer, electricity water, refrigerant, etc. This may also result in a Time Element loss for operations which rely heavily on utilities for their processes. Issues to consider specific to this coverage can include:
Review exclusions to confirm if change of temperature or spoilage is covered specifically for Service Interruption (for operations where this may apply).
Does physical loss/damage of the type insured to property of the type insured apply or can any accidental event to the utility provider’s property occur to trigger coverage. Some policies require that a specified peril (i.e. wind, flood, etc.) damage the utility’s property before coverage applies. Additionally, damage to certain types of the utility’s property may be excluded (transmission and distribution systems for example).
The damage to the utility’s property may need to have occurred within a certain distance from your affected location.
Losses may be subject to a specified waiting period before coverage applies (24 hours for example). This measurement may be different between Property Damage (the length of time utilities are interrupted) and Time Element (the length of outage and the amount of time to resume normal operations). The waiting period can serve as a coverage qualifier with a separate deductible applicable or can be considered the deductible itself.
The insured may need to notify the utility of the outage (save this documentation in support of your claim).
Contingent Time Element – Even if one of your locations is not in an area affected by the storm, customers or suppliers critical to your operations can be damaged by a catastrophic event. These types of scenarios can become complicated quickly as the damage has not occurred to your property and you may have very limited control over the situation. Issues to consider specific to this coverage can include:
Generally, the customer/supplier must have been impacted by physical loss or damage of the type insured to property of the type insured and at a contingent time element location.
The definition of a contingent time element location should be reviewed closely to confirm the number of customer/supplier tiers included. Policies can consider only the first/direct tier, a specified number of tiers, or include all tiers.
There may be specific sublimits/deductibles for Contingent Time Element coverage, which can also be scheduled on a per customer/supplier basis.
Attraction Property (Time Element) – Your property can be spared from significant damage, but it may rely heavily on a nearby property, which you do not own or control, that becomes damaged (for example, a hotel which relies on guests being attracted to a nearby non-owned theme park). Issues to consider specific to this coverage can include:
Generally, the Attraction Property must have been impacted by physical loss or damage of the type insured to property of the type insured.
The Attraction Property may need to be within a specified radius from your location.
There may be a specific number of days that the coverage is afforded for or separate sublimit
Deductibles: Deductibles may seem like a relatively straight forward issue, but can quickly become complicated if there are multiple perils involved (i.e. flood & wind in a hurricane), several locations, or if they are calculated on a non-monetary basis. Deductibles can apply on a:
Per Occurrence basis-one deductible applies to all losses associated with the same event (no matter the number of locations involved).
Per Location basis – a separate deductible is applied to each location involved, even if more than one location is involved in an event.
Combined Property Damage/Time Element basis or separately for each coverage type.
Generally, only the largest deductible applies to a loss, unless it is otherwise specified in the policy.
There can be several different ways that deductible values are determined. Some examples are as follows:
Monetary Deductibles-a specific stated dollar amount.
Percentage Deductibles-generally a stated percentage in the policy is applied to the values present at a damaged location (Property Damage) or to the annual Time Element value that would have been earned (Time Element) to determine the monetary value of the deductible. Depending on policy wording, the percentage can be applied to all values combined or separately to each individual unit of insurance involved (Building, Stock, Contents, Time Element, etc.). Percent deductibles are often applicable to properties that are in high hazard wind or flood zones.
Day Equivalent (or Average Daily Value)-a stated number of days multiplied by the total daily Time Element value at the affected location (plus the proportion of the Time Element value at any affected interdependent locations).
Day Equivalent Contribution-a stated number of days multiplied by the Time Element value for which the damaged property contributes to the entire affected location (plus the proportion of the Time Element value at any affected interdependent locations). This deductible can have a significant advantage over the Day Equivalent when a location has a loss where only part of operations are affected. For example, consider a plant that has three lines; all which contribute to 1/3 of the operations’ value. If only one line is damaged, then the Day Equivalent Contribution deductible only applies to the Time Element value passing through the damaged line. This results in a deductible which would be 1/3 of the Day Equivalent, which considers the total Time Element present.
In an increasingly complex and interdependent marketplace, insurance claims can quickly become complicated and confusing-especially following a catastrophic event. Hays has the expertise to assist with navigating complex property damage and time element claims; with the goal of mitigating operational impacts and expediting the claims process.
Hays is here to help. When trying to clean up the damage caused by a storm of this magnitude, it can be overwhelming to know where to begin. We have you covered with our dedicated disaster recovery team.
After receiving the official announcement from authorities that it is safe to return and you find you have sustained property damage or business interruption, you should:
Track all expenses you incur to mitigate your loss and continue business.
Exercise caution when inspecting damage. Do not try to inspect damaged utilities and appliances; contact a professional to do so.
Do what you can to prevent further damage to your property, (e.g., putting a tarp on a damaged roof), as insurance may not cover additional damage that occurs after the storm.
Secure Inventory – prior to a storm’s arrival, you should have compiled an inventory of all of your possessions at your home or business. If you did not create one, start as soon as possible.
File a Claim Immediately – it is in your best interest to file a claim as quickly as possible. Insurance adjusters may not be able to access the property right away, but it helps insurers to know where to look for damage and how to contact you in the coming weeks.
Hays has the expertise to support you with navigating the complicated claims process, which allows you to focus more of your time and energy on assisting employees, mitigating losses and restoring business operations.
We suggest the following three-phase approach to facilitate an efficient and successful recovery.
Phase I – Emergency Response
1. Notify Hays and your insurer of the loss as soon as possible.
2. Coordinate your loss response team and direct responsibilities for each individual. Typical parties which may be involved include the following: Risk Management, Finance, Operations, Supply Chain, Logistics, Third-Party Vendors, and your Hays Claims Consultant. We suggest appointing a singular direct point of contact with the adjuster (often the risk manager).
3. Establish accounting procedures for capturing loss activity (typically a separate accounting string to which all loss-related expenses are tracked).
4. Contact remediation contractor(s) to complete emergency repairs (water extraction/drying equipment). Protect buildings and equipment from additional damage by making temporary repairs. Restore service to fire protection systems as quickly as possible. Document conditions with photographs.
5. Evaluate and separate damaged from undamaged stock. Document with photos and retain all property for the adjuster to inspect. Create an itemized inventory of the property including type (SKU, make/model, S/N, etc.), description, quantity, disposition (undamaged, reprocess, dispose of) and price.
6. Create a recovery plan for re-establishing operations and mitigating business interruption. Typical options include the use of undamaged inventory on hand, outsourcing to sister facilities, implementation of additional shifts/OT, and rental of temporary alternate locations.
7. Review applicable leases (Landlord/tenant, leased machinery/equipment, etc.) for insurance requirements and notify third parties who may have an additional interest.
Phase II – Recovery and Claim Submission
1. Review of policy jointly with Hays to identify policy provisions and deductibles which may be relevant. Frequently there are special coverages, sublimits or deductibles that apply to hurricane-related losses.
2. Commence with reconstruction. This should be coordinated with the adjuster to ensure agreement on the scope of work and how invoices will be issued (competitive bid, agreed lump sum, or time & materials basis).
3. Track and document all loss-related repair expenses (emergency response, temporary repairs, reconstruction, inventories, etc.).
4. Identify and document loss-related issues that impair operations, which may include: direct physical damage at your location(s), infrastructure damage (bridges, roadways, etc.), utility interruption (sewer, power, gas, etc.), damaged facilities of customers/suppliers and orders issued by civil/governmental entities. For issues that do not originate at your location, confirm the specific cause and site where the damage occurred.
5. Prepare loss analyses demonstrating Business Interruption losses and Extra Expenses in a clear and concise format, in accordance with your insurance policy.
6. Prepare overall damage estimates and communicate potential loss exposures with the adjuster to ensure they understand the total impact to your business.
7. Submit claim(s) to your insurer including explanatory narrative, calculations and supporting documentation. Request advance payments from your insurer as necessary. It is essential to communicate timelines for payment expectation with the adjuster well in advance, to allow adequate time for evaluation and processing.
8. Continually monitor timelines for claim process and business recovery.
Phase III – Ongoing Activities, Adjustment, and Settlement
1. Respond to inquiries from your insurer and their representatives.
2. Direct timely and complete exchange of claim documentation. Analyze insurer’s evaluation/response to determine areas of difference and coordinate with Hays to strategically respond.
3. Prepare for and embark upon final claim negotiations and settlement with the insurer.
Please contact your Property marketing representative or the claims team at any time to discuss your claim and how Hays may be of assistance.
A new bill hailed as the most comprehensive workers’ compensation legislation in the last twenty years was recently signed into law in Minnesota. Following both houses’ unanimous approval, Governor Mark Dayton also gave the bill his signature on May 20th.
The bill, H.F. 3878, included recommendations from the Workers’ Compensation Advisory Council, a group comprised of appointed representative as well as the presidents of the largest statewide Minnesota business organization and the largest organized labor association. Supporters of the bill believe it will help improve the system’s administrative process, and directly benefit employers, health care providers and injured workers.
At a high level, the following changes will be enacted as a result of the bill’s passage:
The maximum number of weeks of TPD benefits eligibility has increased from 225 weeks to 275 weeks
The PPD benefits schedule has been increased
PTD benefits eligibility has increased from age 67 to age 72
These changes will go into effect for injuries on or after October 1st, 2018. If you have question about how the new legislation will impact your business, please contact your local Hays representative or email us at email@example.com.
To view the complete language for 2018 Minnesota Sessions Laws Chapter 185—H.F.No.3873, please click here.
Hays Companies is pleased to announce that our Minneapolis office, which is also the location of our corporate Headquarters, was named the largest insurance brokerage in the Minneapolis/St. Paul metro area (also known as the Twin Cities) by the Minneapolis/St. Paul Business Journal.
The publication, which is amongst the most prestigious business news outlets in the state of Minnesota, surveyed offices located within the 24-county metro area. For businesses that are headquartered in the Twin Cities, such as ours, results were based on companywide revenue for all operations as well as the number of employees.
We’re especially honored by this recognition as it not only reflective of our growth as an organization, but also the continued support of the community in which we were founded.
Brian Squire, Managing Executive Senior Vice President at Hays Companies, recently sat down with Lisa Miller on her Podcast “The Florida Insurance Roundup” to lend his insights on the National Flood Insurance Program (NFIP) as well as strategies on how to navigate it as a Florida resident.
Congress continues to debate how to reform the beleaguered National Flood Insurance Program (NFIP) that 1.8 million Floridians depend on for their property flood protection. Congress must also reauthorize the program because without it federally-backed home mortgages which require flood coverage for high-risk zoned properties may be at risk. The taxpayer-subsidized NFIP is $25 billion in debt and relies on old flood data and maps, with rates that do not match risk. Congress is considering reauthorization under a package of reform bills called the 21st Century Flood Reform Act.
Podcast Host Lisa Miller, a former Florida deputy insurance commissioner, explores two key reforms on this program: what to do with grandfathered properties that are still enjoying 1960’s-era premiums and riddled with repetitive losses, and how best to encourage private flood insurance market alternatives. It is estimated that 77% of Florida properties would see lower premiums with private market policies.
Joining Lisa are presenters Brian Squire, Managing Executive Senior Vice President at Hays Companies in Destin, Florida and Helen Devlin, Senior Lobbyist with the National Association of Realtors in Washington D.C. Together, they outline what is at stake for Florida NFIP policyholders and ideas on how best to balance flood insurance affordability with NFIP sustainability, without hurting Florida’s growing real estate market.
Hays Companies was named one of the Top 25 Property/Casualty Agencies in the United States by the Insurance Journal, a leading industry publication for the Property/Casualty arena. The list is based on total revenue for 2017 and is comprised of agencies focused on retail policies.
Per the Insurance Journal, the list is indicative of “the nation’s most successful independent insurance agencies and brokerages.”
Hays Companies ranked 22nd this year, after experiencing $90,300,000 in total Property/Casualty revenue. This is the 25th year of consecutive growth for Hays.
“Our customers are at the center of everything we do,” explained Jim Hays, CEO of Hays Companies. “Each year, we are growing organically and extending our reach to better meet the needs of our clients. We will continue to be an industry leading company by going above and beyond to ensure we are the broker of choice for our customers.”
Hays Companies is pleased to announce that they were recently named as the 22nd largest insurance broker in the United States by Business Insurance Magazine. This is the 25th year of consecutive revenue growth for Hays Companies.
Hays’ 2018 ranking is reflective of the entrepreneurial spirit on which they were founded and was an increase from their 2017 standings (for which they were ranked #23). As a privately-held organization, Hays’ organic growth has been entirely accomplished by their team of experienced professionals.
Of Hays’ explosive trajectory, CEO Jim Hays said “We have continued our growth by investing in our people and building client-focused teams. Our business model encourages creative, out-of-the-box solutions that allow us to adapt quickly to the evolving needs of our clients.”
The list, which is generated annually, ranks the 100 largest insurance brokers in the country by revenue for all U.S. based clients in the previous calendar year. Hays Companies’ 2017 brokerage revenues of $197,600,000 were up 2.2% over the 2018 fiscal year.
For almost a decade, Hays Companies has built a strong partnership with Habitat for Humanity to combat homelessness and provide affordable housing for families within the communities where we work and live.
This month, Hays team members assisted with building a Habitat for Humanity home in St. Paul, Minnesota. Of the experience, Robert Rangel, Hays Companies’ Director of Claims Management and Volunteer Committee Chair said, “It was a fulfilling day for our team. It’s not every day you have the opportunity to learn how to construct a garage and build a roof with your colleagues. We were grateful to be out in the community together giving back to a wonderful organization.”
One of Hays Companies’ core values is being impactful and contributing to the communities we serve. Habitat for Humanity is a great outlet for employees to live out this value by volunteering. “We encourage our employees to get involved with organizations in the community that they’re passionate about. Habitat for Humanity is an organization with a mission that Hays’ employees believe in,” stated Chief Executive Officer, Jim Hays.