By Donna Motley, Vice President of Claims
As I was reading the newspaper recently and a heading caught my eye – “OFFICE FASHION – TATTOOS ARE IN – TIES ARE OUT”! WHAT? I was shocked. I know I’m going to “date” myself (first of all, I was “reading” an actual newspaper), but when I first started in the world of Claims for a large self-insured company, the claims were handled within the Law Department. As is somewhat customary, there was a senior attorney and a junior attorney. I worked for the junior attorney – and he had a “moustache”. You would have thought he committed a crime – attorneys at that time were frowned upon if they had any facial hair! (Again, I know I am dating myself.) Now, when at the Workers’ Compensation Agency, in addition to facial hair, I’ve even seen a pony tail or two!
By the time you receive this newsletter, MTM staff will be in the final phase of delivering the 2018 member dividends. This year’s dividend is $4 million made up of two Board declarations. The $3.5 million amount matches the dividend amounts from March, 2017 and March, 2016. Plus this year the Board declared an additional $500,000 from savings of the tax bill signed into law in December. The total dividend amounts to an average dividend of 22% of member’s premium. Staff has 802 dividend checks. Delivery methods vary from mailing, to agency delivery, MTM Loss Control Reps, Megan Brown – VP of Marketing and Sales and me. Last year Megan and I drove over 12,000 miles in 3 weeks delivering checks to members. Each stop was a surprise, great conversation, plant tour and pictures.
By Travis, Loss Control Consultant
Through every loss control visit, one particular hazard can be found in each facility. The hazard that I am speaking of is electricity. With each cord, disconnect, panel, receptacle and connection there are a plethora of hazards that must be guarded. Each of these electrical items have rules that pertain to them and failure to abide by these rules can not only provide the opportunity for severe injuries and possibly fatalities, but also the potential for substantial fines from the MIOSHA enforcement division. During a recent MIOSHA training class, the speakers informed the class that any and all electrical infractions will now hold a minimum $5,000 fine. That is only a minimum, as if they feel that the particular infraction is negligent then the fine will only escalate from there. While the fines are an eye opening factor, the safety of the employees should always remain as our top priority.
MTM Member Dividends
On February 15th, the MTM Board of Directors met and approved a member’s dividend based on calendar year 2017 results. With the dividend proposal approved, we will be hitting the road beginning Monday, March 5th for delivery of those checks. Before I get into the details of the dividend, I will update you on the events of the last six weeks in case my recent article on this was missed.
This is a time of year when we see many MTM member requests for a certificate of insurance or waiver of subrogation. Many of our shop members never need either of these items. However, if your shop does installation work of a product or is often at a customer’s plant location, you know full well about the use of these two documents. This year we’ve seen an uptick in the number of members that request these forms and thought it was a good time to review for all of MTM members.For a global perspective on these documents, you need to know that these are documents requested by customers of our MTM members. Neither document provides coverage for the MTM member, but rather it provides coverage certainty to the MTM customers. In the case of the certificate of insurance, if your worker is at a customer’s location and gets injured, the customer wants to know that you have workers’ compensation coverage. The customer does not want to “inherit” the injured worker’s claims costs. Similarly, for your shop if you hire a company to work at your plant and an employee of the hired company is hurt, does that company you hired have workers’ compensation coverage? If not, that loss most often moves to the next employer in line, which would be the MTM member. This “ladder” of coverage for workers’ comp was intended to find coverage for an injured worker. If his direct employer is not covered, then the system works up the ladder until coverage is found. With a certificate of insurance, you are getting certainty that an injured worker will be covered by his employer.
By Donna Motley, Vice President of Claims
We’ve had good days and we’ve had bad days – winter weather that is. About a week ago it snowed 6 days out of 7 days – I know, because I had to shovel the snow! The most recent week, we’ve had a couple days of solid rain and it reached 60 degrees. All in February! What does that kind of weather do to a Claims Department that handles accidents and injuries?
The MTMIC Annual Meeting is scheduled for Thursday, October 18th. We will be meeting at the same location, The Inn at St. John’s and providing lunch along with a brief meeting and exciting speakers. Please mark your calendars and be on the lookout for more details to follow.
Interesting Ending for 2017
On December 30th we closed the MTM financial year. The same day we sent all of our claims data and premium information to our actuary for loss reserve calculations. This review with independent peer evaluation takes about three weeks and is required by the Michigan Insurance department. When this is completed we will have a final picture of the financial results for 2017. One item different for MTM this year is that a member dividend was declared before the final results were completed. We have never done that before and have always waited until the complete financial picture is available before management’s estimates are disclosed. Our traditional method is the more precise way to handle our member’s dividend calculation.
However this year was different. Just before Christmas, President Trump signed a new tax law. Part of this law changed the company tax rate from 35% to 21%. This law affects your shops 1and MTM. Member dividends paid by MTM are a deduction from income and therefore reduce MTM taxes. On Christmas day, the MTM CFO contacted me to say he thinks we need to take advantage of the higher deduction in 2017 versus 2018 and declare the dividend early. This early dividend would reduce our taxable income for 2017. The net effect would be a 13% savings on every million dollars of income. Using the $3.5 million dividend from last year, a deduction on 12/28 results in a significant savings. This tax savings would turn into a benefit to MTM members.
On December 26th we ran the situation by the MTM Board Chairman, Jack Accardo. He jumped right in with management and contacted other Board members about the situation. A special Board vote was held December 27th and by a vote of 10 to 0, the Board declared a member dividend of $3.5 million payable in the usual time frame of early March. This was a little out of sequence but just as our shops sometimes have to do, you use the facts that are in front of you and manage the situation the best you can.A $3.5 million member dividend with a significant tax savings is a great way to start 2018.
Happy New Year.
By Glenda Moyle, Premium Accounting Manager
This is just a reminder that our auditing company, The Aprise Group will be completing the final audits for all MTMIC policyholders again this year. We have had a partnership with The Aprise Group for the past 25+ years. Once your policy expires, The Aprise Group will be contacting you within 30 days to set up an appointment to complete your audit. If you have any questions, please contact me at glenda.moyle@mtmic.com/blog or (248) 715-0015. Thank you for being a member of MTMIC.
2017 OSHA Injury Tracking of Electronic Submission of Injury and Illness Records
By Ruth Kiefer, Loss Control Manager, MSc, ARM
As I know many of you have just finished submitting your 2016 injury data that was either submitted on a 300A or 300 injury log onto the OHSA website this past December. But I want to remind you that you will also need to submit your 2017 injury data as well. If you are a covered establishment (determined by your NAICS code), you may start submitting either the 300 or 300A now through April 1, 2018.
Sexual Harassment and Discrimination Training Videos Added
We are pleased to announce that 6 new sexual harassment and discrimination training videos have been added to the customer portal. The videos are in English and Spanish and cover the office and industrial settings. There are management and employee editions also available and all videos have the associated training documents. Please contact me at patricia.allen@mtmic.com/blog or 248-715-0013 with questions or for access to the portal.
Did you know that according to the American Heart Association, cardiovascular disease, heart disease and stroke, remains the leading cause of death exceeding 17.3 million deaths per year? Alarmingly that number is expected to rise to 23.6 million by 2030.
A recent study showed starting an exercise program as late as age 65 can improve your heart health. As the body ages, the heart stiffens which can lead to heart failure. It was determined that individuals aged 45-64 were able to reduce the effects of decades of a sedentary lifestyle by merely exercising 4-5 times a week for a period of 2 years. The study showed that this age group actually improved the structure of their heart to that of a 30 year old. While it is easy to become sedentary this time of year, exercise including walking your dog, playing with your grandchildren as well as a physician approved exercise regimen may not only improve your heart health but provide overall health benefits as well.
**Study completed by Dr. Levine, UT Southwestern Researcher
By Donna Motley, Vice President of Claims
Welcome to the New Year – 2018! Do people still make New Year Resolutions? To lose weight, get in shape, become more active, volunteer in the community, etc.? These are all wonderful resolutions and can result in a better, more satisfying and hopefully, longer lifespan. But there are more benefits than those listed. Being in better physical shape, healthy eating, proper sleep patterns carry over to the employment atmosphere and aid in avoiding accidents and injuries. Being more alert, having more energy, a more positive attitude can provide long lasting results in the workplace. And, should an injury occur, it may be a minor, less serious injury. Statistics have shown, the better the condition of your mind and body, the quicker recovery from an injury or surgery. I’ve written in the past about how “co-morbidities” can affect an injury and recovery. Prescriptions and physical therapy that would aid in recovery may be limited because it would interfere with other health conditions and treatment.
Whether you believe in “Seasonal Affective Disorder” or not, the Mayo Clinic describes “Seasonal Affective Disorder” as a type of depression, but it is more than that. It saps energy levels, can make a person feel moody. Old schoolers would call this the “Winter Blues”. Symptoms can be depression, low energy, a loss of interest in activities normally enjoyed, problems sleeping (that can result in “oversleeping”), a change in appetite (typically craving carbohydrates) resulting in weight loss or weight gain, and difficulty concentrating. All these symptoms can have a negative effect on a person’s professional, social and recreational life. The main, acknowledged cause of Seasonal Affective Disorder – SAD – is believed to be related to decreased sunlight. Decreased sunlight is thought to disrupt your body’s internal clock, drop the serotonin level which is a brain chemical that affects mood, and disrupts the body’s balance of melatonin levels. Let’s face it, we live in Michigan, not the sunniest of places ! The majority of us probably suffer from SAD in one form or another. Do you ever notice how much happier people seem on a sunny day – even in winter? The mere fact that the sun is shining seems to make things more bearable. According to the Mayo Clinic, there is a reason why.
So, if your general health is poor, you have poor eating habits, don’t exercise, don’t get enough sleep or sleep excessively, you have a lack of energy or just feel kind of “down in the dumps” and you add a lack of sunshine to the list, is it a wonder accidents happen? Some things we cannot change – but there are things we can have control over – particularly how we live our life and what we do with our bodies. It’s tough to get through winter in Michigan, people typically get the “after holiday blues”, so now is the time to think positive, make positive choices. Even small changes in a positive direction can snowball into big changes in every aspect of your life.
If a healthy, alert person sustains no work injury; just think of the positive impact that can have on the work environment; the employee is happy, the employer is happy – it’s a win, win situation and everyone keeps moving forward in a positive direction. And should an injury occur, think positive that that will be the only injury for the year. Seize the opportunity to make it an educational, learning or training process. Investigate and see “why” the injury occurred and take “positive” steps to avoid the same thing occurring again. A positive attitude can be contagious!
Hope you’re having a wonderful holiday.
At MTM, staff in underwriting, sales and loss control are working hard on the December and January member renewals. While many members have minor renewal changes, others have added/deleted locations, new contracts with higher payroll or new operations in class codes. Sales and underwriting are working to apply the new member’s experience modifications and also making sure discounts each member has earned are applied to their policy renewal.
The MTM claims department and CFO are focused on closing out 2017 successfully. On December 30, our CFO sends 2017 financial and claims data to our actuary. The actuary studies our numbers compared to prior years and then trends these to come up with year-end financial results. Based on what management knows from our monthly reviews, 2017 will be a good year and member dividends are most likely. We will have the final data in late January.
Once Management has the final 2017 numbers; we go to the MTM Board Finance Committee, Board Marketing Committee and finally the Board of Directors in the first half of February. These meetings involve dividend discussions and final decisions are made. As a reminder all Board Committee members and Board members are MTM members themselves.
After the Committees and Board complete their work and decisions are made, MTM Management is next in the process. MTM staff produce the reports that back up the dividends and then Megan and I lead the delivery process. I should also note that the fun of member check deliveries are enjoyed/conducted by our loss control team also. In the last three years MTM has distributed $9.5 million to its members. We are excited to make this the fourth year in a row. We only have 9 days until the close of 2017. Just like young children at Christmas, MTM Management are counting the days to a successful year end. Finally a big thank you needs to go to you, our MTM members for your loss control work. In the end, our lower rates and member dividends are made possible only because of our member’s support of the loss control efforts and your assistance in claims cost management.
More dividend news soon.
By Travis Halsted, Loss Control Consultant
While visiting any of our valued policyholders, I am witness to some incredible machinery that complete even more amazing processes. While so much attention is paid to the machinery and the guarding that is required, there are tools that are often overlooked. Within each work area there is often a work bench that is filled with screwdrivers, clamps, pliers, files, and wrenches. In other facilities, a maintenance area may hold axes, hammers, mauls, circular saws, powder actuated tools and pneumatic grinders. With each of these tools there are rules regarding maintenance and testing.
Updated sets of the State and Federal Labor Law posters have been mailed out to all current policyholders. If you have any questions or need additional sets please contact Patty Allen at patricia.allen@mtmic.com/blog or (248) 715-0013.
At the MTM annual members meeting October 19th, we had a couple terrific guest speakers and presented the current status for a members dividend in March 2018. At the meeting we also had the handoff of the MTM Chairman’s leadership from Kurt Heuser to Jack Accardo. Kurt was the Chairman for 5 years and below are some words about his experience.
For those of you who were unable to attend the October Annual Members meeting, an important leadership change was announced. After 5 years of being honored with the position of Chairman of the MTM Board of Directors, it was time for a new leader to take the reins. With nearly 100 MTM members present, I handed the Chairman’s gavel to Mr. Jack Accardo.
Jack is a long time MTM Board Member, Chairman of the MTM Finance Committee and CFO of Haller Industries in Detroit. Jack has the ability to bring common sense solutions to the table. I have known Jack for 15 years and I am confident about his leadership qualities.
Looking back I am very proud of the MTM Board, Officers, Staff and Member Owners. Here is what we accomplished together:
- Our membership count has increased by 51% (Special thanks to the MTM Marketing staff).
- Our premium income increased by 42%.
- Our claims frequency is nearly half of what it was (special thanks to the MTM Claims and Loss Control staff).
- The MTM staff is stable (last new hire or departure was over 4 ½ years ago) and with deep knowledge of the Michigan law.
- The financial strength, member surplus increased by 280% (Special thank you to our Treasurer).
I would also like to thank: Mr. Al Gardner, investment advisor for MTM and Mr. Gary Wood. Gary retired as COO from the MTM in 2013. Today Gary continues with MTM as an underwriting advisor. Mr. John Karlen, President and CEO of MTMIC. John’s vast experience and knowledge has brought continuous innovation to the organization.
All of these factors contributed to some amazing owner benefits. In 2015, $2,500,000 was returned to members in the form of a dividend. In 2016, we were able to increase the dividend to $3,500,000. In 2017, a $3,500,000 dividend was returned with an added benefit of also an increase in premium credits (i.e. lower premiums paid by our members) that benefited our members to the tune of $1,700,000.
Together our Members, Staff and Board Directors have accomplished some amazing results. I am confident in the continued strength of the organization as we move forward.
As for myself, I continue as Director on the Board of MTM along with my duties as President of Bokum Tool Company, Inc. Bokum Tool is a 3rd generation cutting tool company located in Madison Heights and was founded in 1937.
Sincerely, Kurt Heuser
By Donna MotleyVice President of Claims
The American Diabetes Association reports that as of 2015, 30.3 million Americans (9.4%) had diabetes. Of the 30.3 million Americans, only 23.1 were diagnosed, with 7.2 million Americans undiagnosed. On top of that, 84.1 million Americans (18 years or older) were considered “pre-diabetic”. As of 2015, diabetes was the 7th leading cause of death in the United States; a statistic most likely under-reported.
So what relationship does diabetes have with a work injury? Obviously, work does not “cause” diabetes. But can diabetes “cause” a work injury?
Over the last several months I have given you profiles on the MTM Board of Directors, Board Finance and Marketing Committees and staff. It is easy to overlook another integral part of the MTM team, and that is our outside actuary. First let me describe how the outside actuary comes into play in the insurance world. Once a year, as required by state insurance law, all insurance companies must get an outside opinion of its financial condition, specifically evaluations of losses and the adequacy of loss reserves to pay all claims. MTM management, each month and quarter, evaluates our claims cost. In insurance, different than most of our members’ production process, it can take years for us to know the final cost of our product. That is, a workers’ comp claim happens today, and we could be paying on that claim, if it was a disability claim, for months and years. Therefore, the cost of our claims becomes complicated by using estimates on what we know about the claim today, and what we will likely learn about our claims in the future.
While management does this monthly/quarterly review, each year at 12/31 we use an outside actuary to validate or change our estimates. For the last 16 years our outside actuary has been Cecilia LePere. A little bit of background on Cecilia. She graduated from Bloomsburg State University, with a Bachelor’s degree in Mathematics and followed that by getting her Master’s degree in Mathematics from Penn State. She passed her actuarial exams in 1986. She is a Senior Vice President at Casualty Actuarial Consultants, Inc. of Brentwood, Tennessee and has been there for 24 years.
Every 12/31, Cecilia takes all management reports and trending estimates from prior years, to come up with her own evaluation of loss costs as of 12/31. Near the end of January, Chris Doebler, MTM CFO and I meet with Cecilia to review her findings. At the completion of this review, we have an official number to publish to the regulators at the State of Michigan Insurance Department. With this number, we then are able to go to the MTM Board of Directors in February to declare how the year finally gets booked and what member dividend is possible.
For the last three years we have had great news for our members. You may recall that in March of 2015, the Board declared a $2.5 million member dividend. A year later in March of 2016, the Board increased the dividend to $3.5 million, and in March of 2017, the Board of Directors declared another $3.5 million dividend.
To get an early look of each year, we also ask Cecilia to complete a midyear 6/30 abbreviated review. This does not give us a firm number, but does provide information on how the year will likely end. This is helpful to the management team in Board meetings held in August and October, and is also for reporting to our members at the Annual Members meeting in October.
That is the Insurance 101 lesson for the month and shows another side of the MTM business. Cecilia is an important part of our process, and I can report that Chris Doebler and I enjoy working with Cecilia in having a debate about assumptions that go into making the final calculation. The net result to our members is that we have a financially stable company that gets high independent rating agency marks and also allows us to return profits to our members.