Insurance is all about risk transfer where the risk of loss is transferred from your business to insurance. Unfortunately, currently, there are minimal options to transfer the risk of Coronavirus (COVID-19) to insurance. If you review your policy, you might see wording like:

Exclusion of Loss Due to Virus or Bacteria
“This endorsement makes an explicit statement regarding a risk that is not covered under your Commercial Property insurance. It points out that there is no coverage under such insurance for loss or damage caused by or resulting from any virus, bacterium or other microorganism that induces or is capable of inducing physical distress, illness or disease. The exclusion in this endorsement applies to all coverages provided by your Commercial Property insurance, including (if an) property damage and business income coverages.

Recently the ISO (Insurance Servicing Office) released two optional endorsements that can be used to provide limited Business Interruption coverage for businesses affected by Coronavirus. These endorsements only relate to civil authority business interruption losses (i.e. government denies access to your business property). These endorsements are not widely in use currently so stay tuned and we will keep you updated as more information becomes available.

Since the risk most likely isn’t transferred to insurance, we recommend avoidance of this exposure. To better protect your company, we recommend following the Centers for Disease Control and Prevention (CDC) guidelines for Prevention & Treatment of this virus:

Prevention & Treatment

Prevention
There is currently no vaccine to prevent coronavirus disease 2019 (COVID-19). The best way to prevent illness is to avoid being exposed to this virus. However, as a reminder, CDC always recommends everyday preventive actions to help prevent the spread of respiratory diseases, including:

• Avoid close contact with people who are sick.
• Avoid touching your eyes, nose, and mouth.
• Stay home when you are sick.
• Cover your cough or sneeze with a tissue, then throw the tissue in the trash.
• Clean and disinfect frequently touched objects and surfaces using a regular household cleaning spray or wipe.
• Follow CDC’s recommendations for using a facemask.
• CDC does not recommend that people who are well wear a facemask to protect themselves from respiratory diseases, including COVID-19.
• Facemasks should be used by people who show symptoms of COVID-19 to help prevent the spread of the disease to others. The use of facemasks is also crucial for health workers and people who are taking care of someone in close settings (at home or in a health care facility).
• Wash your hands often with soap and water for at least 20 seconds, especially after going to the bathroom; before eating; and after blowing your nose, coughing, or sneezing.
  • If soap and water are not readily available, use an alcohol-based hand sanitizer with at least 60% alcohol. Always wash hands with soap and water if hands are visibly dirty.
    For information about handwashing, see CDC’s Handwashing

For information specific to healthcare, see CDC’s Hand Hygiene in Healthcare Settings
These are everyday habits that can help prevent the spread of several viruses. CDC does have specific guidance for travelers.

Treatment

There is no specific antiviral treatment recommended for COVID-19. People with COVID-19 should receive supportive care to help relieve symptoms. For severe cases, treatment should include care to support vital organ functions.

People who think they may have been exposed to COVID-19 should contact their healthcare provider immediately.

See Interim Guidance for Healthcare Professionals for information on persons under investigation.

Source: https://www.cdc.gov/coronavirus/2019-ncov/about/prevention-treatment.html

If you have suffered a loss that you believe should be covered through insurance, discuss the situation with your insurance broker and have the claim filed with your insurance company as there may be some coverage available to you.

By Tobias Kennedy

The New Year has a tendency to bring new regulations and the dawning of 2020 will be no exception. Today, we will highlight a couple new varieties of “HRA” that will be entering the benefits fold this coming January 1st. Broadly speaking, an HRA is an account/arrangement that offers some positive tax treatment, and employers have tended to leverage these (when it makes sense for them) as a means of (a) assisting employees with their health care costs while (b) having a helpful tool for navigating overall taxable liability. HRAs themselves are not really a new thing, but there are a couple new variations coming soon, so here’s the scoop on the new guys…

Individual Coverage HRA (ICHRA)
First and foremost the ICHRA is designed for employers that either do not have a group medical plan or, (probably more likely), have certain classes of their population who are not offered the group coverage.

If this describes you, then the ICHRA may be a useful tool for you to finally assist those employees for whom you’ve historically been unable to extend coverage. ICHRAs are used to pay individual medical insurance premiums (individual….so, again, not your group plan), or Medicare premiums, and some out-of-pocket costs. So, if you have employees who are not offered group coverage at work, and buy an individual policy (either on or off the Exchange, or Medicare) you can now have them set up with an ICHRA where the employer sets aside funds to help the employee pay for that expense. The IRS does stipulate that Employers who choose to offer an ICHRA must do so uniformly for all employees in a class.

Excepted Benefit HRA (EBHRA)
The second type of new HRA that will be allowed in 2020 is the EBHRA. Whereas the ICHRA targeted employees that were not offered the group’s health insurance, the EBHRA is specifically designed only for those employees New HRAs Coming in 2020 that are offered the employer’s health insurance coverage—so this new HRA serves a totally different population of your staff. This HRA allows an employer to set aside money to help employees pay for things like medical co-pays, deductibles and non-covered expenses, and even to go towards premiums for “excepted benefits” like dental and vision. So, while it cannot go towards medical premiums, the money can help employees cover utilization cost shares on the medical (co-pays, deductibles etc.) and, again, it can go towards premiums of non-medical products (like dental and vision).

The quirky thing about this version of the HRA that Employers really need to note is #1 it must be offered to all “similarly situated employees” and (here comes the curve ball) #2 employees may use these EBHRA dollars even if they do not enroll in the group’s health plan. In other words, if an employer decides to offer this type of an account, then they should offer it to all benefits eligible employees, and understand that folks who waived the coverage in favor of a spouse plan (or individual product) can still access the allotted funds to cover their costs on the separate policy they have. Employers can contribute a maximum of $1,800 per plan year to an Excepted Benefit HRA. This limit is indexed for inflation, and also do note, that the $1,800 limit does not include carryover amounts—so, in theory, participants could have more than $1,800 available to them during a plan year. As with every January 1st new things are coming down the pike and if you have any questions on these or any other benefits, please don’t hesitate to reach out!

Employers can contribute a maximum of $1,800 per plan year to an Excepted Benefit HRA. This limit is indexed for inflation, and also do note, that the $1,800 limit does not include carryover amounts—so, in theory, participants could have more than $1,800 available to them during a plan year. As with every January 1st new things are coming down the pike and if you have any questions on these or any other benefits, please don’t hesitate to reach out!

By Danone Simpson

We at Montage Insurance Solutions are very proud to announce our client, Hydra Electric has just been purchased and are featured in the San Fernando Valley Business Journal.

When Gerry Schauer, the CFO called and asked me to assist him with risk management and their insurance needs I was happy to answer the call.

As told in their story recently published in the San Fernando Valley Business Journal it explains the executive team had a lot of work to do to get this aeronautical manufacturing business into shape after its owner passed away. The business was gifted to Cal Tech and the process to get it in shape to sell was a tall order for Mr. Schauer and his team. Their insurance had increased before we first met with Hydra almost $100k on P&C. We created a timeline for their safety and insurance needs from Employee Benefits to Property & Casualty.

We brought in our loss control and assessed their business needs from an insurance and risk management perspective. We did a walk through with our loss control expert and went to work to help them develop their Illness and Injury Prevention Program and a plan for quarterly safety meetings. Attending every safety committee meeting I along with my Property and Casualty Director or one or the other, we watched as they transformed their operations. Their sales increased and their first‐year premium reduced on their Property & Casualty, lowered on their Workers Compensation by $67k, despite their high mod. Their Property BI limits were increased, while their deductible was lowered from $50k to $5k with a savings of $24k. Other lines remained flat. Their Professional lines reduced by $10k despite the new Directors and Officers. The years afterwards brought flat renewals and further reductions in premiums and increased coverages.

On the employee benefits side we lowered their premiums, as they stayed with all carriers, then later changed a few carriers on the ancillary lines. A just under 1% renewal in 2017 and this last renewal the premium decreased by $65k under their original renewal. As they have been acquired, we are proud of our years with them during this successful transition.

By Brian Lacher

FMLA claims are on the rise and its costing employers up to millions of dollars.

• Employer cost is 2‐fold; 1) denial and mishandling of legitimate leaves result in costly legal affairs, 2) quality control issues can lead to approval of illegitimate leaves
• There are FMLA technology and resources to mitigate these losses
• At Montage Insurance Solutions, we regularly meet with subject experts to ensure we are up to‐date on these technology and resources. Just yesterday, we met with a leading provider of FMLA insurance to educate us on the latest policies and resources available in this space

The issues that arise from not having the right resources for FMLA review impact employers and employees on both sides: the denial of legitimate leaves and the approval of illegitimate leaves. When the employer mishandles legitimate leaves, it can result in costly legal negotiations and/or settlements. According to a recent article by Godfrey and Kahn S.C. in the National Law Review pertaining to FMLA, the number of lawsuits claiming employer violations has more than tripled since 2012. While most employers have EPLI coverage to protect from this type of catastrophic risk, those policies have retention limits (deductibles) and policy maximum limits leaving employers subject to out of pocket cost. On the other hand, when employers approve illegitimate leaves, they lose the valuable labor of that employee. This issue commonly arises when employers don’t have a formal FMLA solution and rely on makeshift Excel spreadsheets.

Given that the average cost of employee absences in the US is over 6% of payroll and that DOL fines can range into the hundreds of thousands, it’s imperative that employers utilize FMLA technology that can mitigate fines, legal fees and the often time hard to see cost of lost productivity. Formal FMLA programs usually only cost employers $1.50 up to $5.00 per employee per month. Startup fees can ran range from free up to $10,000. Although the cost is relative to the ROI, FMLA technology will almost certainly improve HR’s efficiency and give peace of mind to employers and employees that leaves are being handled appropriately. Recently at Montage Insurance Solutions, we had one of our trusted and valued carrier partners who is a leading provider of disability insurance and FMLA solutions at our office. They provided an update on FMLA and the resources available to employer groups of 100 or more employees. It’s important to Montage that we stay current on important topics like FMLA so that we can educate our employers on best practices and resources available to mitigate their risk of mishandling FMLA claims. As controlling the cost of absence management and increasing productivity become more complex, Montage is able to deliver solutions and technology that make absence management and FMLA a more polished process for both employers and employees.

Please feel free to contact myself or any other Account Executives at Montage Insurance Solutions to understand in more detail what FMLA solutions are available to you.