Thursday morning, February 17th, the MTM Board met to review the recommendations from both the Board Marketing committee and the Board Finance committee. Those two committees do a preliminary review of financial results, and also structure the MTM member dividend program. At the end of the Marketing committee, a recommendation was made to the full Board for the parameters of this year’s dividend program. The following week, the Board Finance committee met to review the actuarial loss report, and the financial information provided by MTM management.
With manufacturing in full swing, and limited employee resources, I am sad to say that in recent months, we have had a few severe amputation injuries resulting from employees not using safety die blocks when any body part (fingers, hand, arms, torso, etc.) reaches into a mechanical or hydraulic press. These safety die blocks are required when any body parts are in between the die set, punches, and bolster plates. During these injury events, employees were either making adjustments, troubleshooting, removing parts, or doing die repair and were not using die blocks.
With the fiscal year closed, Chris Doebler our CFO has been working long hours to put the 2021 loss and financial reports for our independent actuarial team together. At the end of January, Chris and I meet with our lead actuary to review the 134-page report on the year’s loss results. Lots of detail reviewed with evaluations completed with multiple methodologies. Predicting the future value of 2021 claims that recently happened and how prior year claims are being presently handled today is as much an art as it is a science. On January 31, the actuarial team, Chris and I all agreed on the 2021 “loss numbers”. Now we quickly plug those into the financial statements for profit review.
From an overall loss review, a few findings are apparent. The 2021 year was not a get back to “normal” year that we all had hoped for back in January 2021. The COVID disruptions were different than 2020, but still a significant factor in our business and personal lives. In aggerate our members activities grew for 2020, but not back to 2018 or 2019. Maybe this slower pace contributed to a reduction in frequency of severe losses. We had no fatalities in 2021 and fewer severe losses such as amputations. That is the good news. On the bad news side, we saw an increase in losses for new employees (90 days or less). Training was an issue in nearly all these cases. We understand the pressure to produce product and get the new employees in the production process. From our accident reviews, training and supervision of the new employees is a shop challenge. While it is most challenging to take the time to train in today’s world, I can report firsthand that a serious injury is the surest way to stop all shop production. It is important to the shop’s success that we send the employee home in the same condition as they arrived in the morning.
Our Loss Control staff is focusing on that issue for our members’ benefit. My task for the next couple weeks is to work the members’ dividend through the Board Marketing, Board Finance, and then full Board meetings. Our goal is to finalize MTM members’ declaration before February 17th and then manage the print and reporting process for deliveries to begin March 1st. In the meantime, you can help our next year’s dividend by paying special attention to your newest employees.
It is a New Year! It seems some things change and some things remain the same, almost as if we are in some sort of time warp!
What’s new?
For the year 2022 the new maximum weekly Workers’ Compensation benefit rate is $1,048.00. The State bases this rate on a State Average Weekly Wage of $1,163.79. Compare the Workers’ Compensation maximum which is “non-taxable” to the State Unemployment weekly maximum benefit that IS TAXABLE, $362.00. Obviously, the Workers’ Compensation weekly benefit is determined by averaging the highest 39 of 52 gross weekly wages, pre-dating the date of injury. The maximum Workers’ Compensation weekly benefit rate for 2021 was $975.00.
The new mileage rate paid for 2022 covering mileage to and from medical appointments is $.585. The mileage rate paid for 2021 was $.56.
In December 2021 one of the appointed Workers’ Compensation Court Magistrates “quit”. The State’s Governor appoints the Workers’ Compensation Court Magistrates. A replacement Magistrate was appointed with an expiring term of January 26, 2023. Effective January 26, 2023, 7 of the 14 currently appointed Magistrates have a term expiration. The remaining 7 Magistrates remain through January 26, 2025. There is a gubernatorial election in November 2022. It would appear that the “incoming” governor would be responsible for the new Magistrate appointments.
Michigan Workers’ Compensation Plaintiff Attorneys got a pay increase. Their fee has been calculated at 15% of the first $25,000 (settlement), then 10% of the settlement balance. Their fee is now calculated at 20% of the first $100,000 (settlement), then 15% of the settlement balance.
Michigan Workers’ Compensation Courts are open but will still conduct business via Zoom and Affidavits on a case by case basis.
Per the Michigan Workers’ Compensation Act, wage loss benefits can be coordinated with Unemployment Benefits, with Workers’ Compensation taking a 100% credit of the Unemployment Benefits paid. During COVID, workers alleging work related disability were allowed to receive both State and Federal (Unemployment) benefits. Attorneys representing injured workers are diligently attempting to have orders passed eliminating Workers’ Compensation coordinating with Federal benefits.
Multiple platforms continue to push for legislation citing COVID as a work related occupational disease/condition. Said attempts are at both, State and Federal levels, and vary from state to state.
What is not new ?
Employees continue to diagnose with COVID/Omicron, continue to “test” for COVID/Omicron, allege exposure to COVID requiring the necessity to quarantine. Employers still suffer from a labor shortage, consumer products are experiencing shortages, a significant portion of the workforce continue to work from home, doctor offices limit visitor attendance, physician appointments are being cancelled and rescheduled. Debate continues over vaccination and vaccine mandates. Recreational marijuana is legal. Stress levels remain high. Everyone is anxious for Spring/Summer!
When hiring new employees, please make sure they receive proper training and instruction to perform their job duties. We have seen an increase in serious injuries of recent hire employees. Please stress the importance of NOT taking shortcuts – the results can be serious. Please make sure new employees are familiar with your company policies, procedures and protocols. While a short-cut may seem like a good idea at the time, taking a short cut can create serious long-term issues. Employers must also keep MIOSHA regulations in mind at all times.
Late Friday afternoon, December 31st, we closed the 2021 financial year for MTM. As we get close to the end of the year, management’s concern always increases. We have a good year and hopefully nothing happens in the last week, two weeks or month that would harm the good year that was already on the books. I’m pleased to report that no large claims occurred in the last week and month. December loss ratio looks good and that is attached to a good loss ratio year for 2021. While we have our raw loss numbers, we send our loss data for an independent actuarial review which is completed in January. This process is detailed.
By Travis Halsted, ARM, COSS Loss Control Consultant
I hope that we are all getting excited about the holidays coming up, and that we are able to take a few moments to be thankful for positive aspects of our daily lives. I know that I am truly thankful for all of the efforts that our wonderful policyholders have done during these tough times to make safer workplaces.
A couple months ago I wrote you about out-of-state staff i.e., when you have employees in states other than Michigan. Trying to avoid the 27-point test, I broke it down to a few simple points that work in nearly all cases. That article prompted many calls from you, and I think we answered your individual questions. With that topic mostly behind us, the next logical area is “when are my subcontractors (and their employees) MY employees?” Like the complicated list of test questions for an employee’s coverage state, the sub-contactor test is just as complicated and varies widely by state. I will focus on Michigan rules but use a couple other state examples to illustrate the state differences.
Is this the employee covered in Michigan, or another state?
Part of my daily tasks is answering member’s questions. When a particular question begins to surface weekly, it’s time to share the question and answer with all of our members. The recent regular question looks like this “Is my employee in Indiana covered by my MTM policy?” With more remote working going on especially in sales and clerical/engineering jobs it seems logical that this question is coming up more.
While the rules can vary by state, and in fact even in Michigan there is a complicated more than 15 question criteria that is used, there are three or four much more simple questions that answer the vast majority of situations. Because our members need quick reference answers, let me walk you through this simple criteria.
Summer is over, schools are back in session and hopefully, more people are returning to work. Everyone is aware of the “worker” shortage. Employers are placing signs outside their establishment seeking candidates. Some fast food restaurants have limited their hours of operation and some only operate the drive through window.
Advertised are: sign-on bonuses, paid college tuition, health care benefits, etc. Now that recreational marijuana has been legalized, prospective employees have one less hurdle to worry about. I just can’t imagine being on lay-off status and not looking for work.
Over the years, I have been in more fab shops than I can remember. The equipment in these shops may vary, but most are equipped with different types of saws, welders, and various pieces of metalworking equipment. One of the most common pieces of metalworking equipment is the power press brake. These metalworking machines bend and form parts through the use of tooling (dies) attached to a ram or slide and a bed. Metal working occurs by placing stock, primarily sheet metal, on a bottom die and pressing it with a top die attached to the movable ram. Press brakes are mechanically or hydraulically powered, or both (hydra-mechanical brakes combine both). Mechanical (flywheel) press brakes use either mechanical friction or air friction clutches that can be disengaged at any point before the crankshaft has completed a full revolution and the press slide has completed a full stroke. By inching and slipping the clutch, these presses allow the operator to drop the slide to the work piece and stop, adjust, or align the work piece, and then complete the stroke. Hydraulic press brakes can normally be stopped at any point in their cycle and the force exerted by the dies can be varied. Operating speeds are normally slower than mechanical presses; however, because of their slower operating speeds they are normally not fully automated. Hydra-mechanical press brakes combine hydraulic and mechanical operations into one system.
Normally each month I update you on changes in workers’ compensation law, operating environment, MTM news or questions I have recently received from members. An important item, that I should inform you about is how to we manage the money MTM members entrust us with. That ties into a very common question, tell me about MTM’s financial security. MTM is NOT a billion dollar national insurance company. We ARE a mutual insurer owned by 941 Michigan employers. One can argue that there is more stability in these large international companies, but events over the last ten years have shown that large does not necessarily mean stable. Financial stability also factors into how the MTM Board of Directors review our annual members’ dividend. Over the last seven years, the MTM Board of Directors has returned $27 million dollars as owner member dividends. That equates on average to 30% of the annual premium. Dividend payments starts with financial stability. It does not do any good to return monies to member owners only to say that we’ve come up short and need more money to pay claims. So while the dividend part of the member equation is critical, making sure that the financial stability of MTM comes first.
We have received many requests in relation to whether or not employers can mandate COVID-19 vaccinations for their employees. I reached out to one of our attorneys, William Buie of Conklin Benham to provide information that could be shared with our policyholders. Below is the information that I received from him:
The U.S. Equal Employment Opportunity Commission (EEOC) recently issued guidance stating that employers can generally mandate Covid-19 vaccines for employees who physically enter the workplace without violating federal antidiscrimination laws. However, employers requiring employees to get vaccinated need to consider religious and disability related objections and explore reasonable accommodations that may be required under the Americans with Disability Act.
Every quarter the MTM Board of Directors meet. No surprise the MTM management team prepare a variety of reports for Board review. The 11 MTM Board members are just like you, shop owners, CFOs, plant managers, safety managers, H.R and the like. For the upcoming meeting, I thought the Board would be interested in a big picture of what we learned from the completed payroll/premium audits for 2020 policies. Those audits often take 3-6 months before all is finalized.
Back in January/February of 2020 there was some chatter about a contagious disease, but nothing much changed until mid-March. Then most everything was locked down. MTM had just begun delivering member dividend checks and we found we had to slip the check under the door if someone was at the shop at all. With a rapid decrease in shop payroll, we offered to make premium payment adjustments, knowing that some shops were closed or operating at very reduced staff. To our surprise, we had fewer shops requesting that assistance than we expected. That gave us the feeling that more shops were operating as essential than we first thought.
Finally, as promised, the Workers’ Compensation Courts are now open for “in person” business! Any way you look at it, this is a good thing! Over the last one and one-half years, the Workers’ Compensation Courts were still conducting business, but like everyone else in the business world, communication was via telephone or (computer) Zoom. While I can’t necessarily speak for Plaintiffs, I can tell you the Defense side of Workers’ Compensation is happy with the re-opening. It will take a while to get cases back “on track” but so far everyone in the litigation field seems anxious to get back to work.
As my team and I continue to assist you with the most recent COVID-19 rules and regulations, we are still fielding questions regarding outbreaks and what to do if an employee tests positive. Awhile back, MIOSHA dialed back their requirements for protecting your employees from COVID-19 and are now highly recommending that employers follow the updated CDC guidelines due to the Delta variant.
Finally, back to some normalcy. It’s been over a year, but finally MTM Board and Committee members are together again. Maybe 2/3’s of the members were at the MTM office and 1/3 via Zoom. It was great to see our Board and Committee members. It was like a family reunion. At the May 20th Board meeting Joe Keppler, MTM Chairman of the Board welcomed our new Board member Barry Kavanagh. Barry might hit a memory cell for you because about 3 years ago I introduced him as a new Board Finance Committee member.
Here’s a refresher: Barry received his bachelor degree from Waterford Institute of Technology in his native Ireland. He is a Fellow of the Association of Chartered Certified Accountants (ACCA), the main accountancy body in the United Kingdom, Europe, and Asia. He also holds a certified management accounting certification from the U.S. Institute of Management Accountants. Barry has been involved with MTM for nearly 15 years. At the beginning we worked with Barry when he was the Controller at a Lansing member’s shop. For the last 8 years, Barry has been the VP of Finance at Avalon & Tahoe Mfg. Inc. That company name might sound familiar too. Avalon & Tahoe is a high end Michigan manufacturer of pontoon boats. They make virtually everything on their boats except the motors and gauges. It is a fascinating company. The company won the Michigan Manufacturers Association “Michigan Manufacturer of the Year” award for 2019.
Well, back to Barry. After two and a half years of successful work on the Board Finance Committee, the Board asked him to join them on the full Board. Consistent with Barry’s enthusiasm on the Board Finance Committee, he agreed to the new position as long as he could retain his Board Finance Committee assignment. The Chairman of the Board of MTM approved his request. Barry has been a valuable contributor to the Board Finance Committee, and we are expecting that same solid contribution to the full MTM Board.
Lastly, with many of our in person activities resuming, we are planning the Annual Member’s Meeting October 21st (11 a.m. – 2 p.m.). As it has been for the last 6 years, the get together will be held at The Inn at St. Johns, Plymouth, Michigan. The Inn is a first class location and there is no “convention food” served. All Board and Committee members attend this meeting as does the entire MTM staff. We hope you can join us.
By Travis Halsted, ARM, COSS, Loss Control Consultant
It was just a few months ago that I was discussing icy parking lots, and shoveling snowy walkways with many of you. Oh, how the seasons have changed. As the temperatures rise, so do the risks in the workplace. The brain and body take part in a dance to keep the body cool. Each year, over 600 Americans die from heat exhaustion. While the majority are well aware of the measures that we can put in place to help with heat levels while the employee is working (fans, air conditioning, breaks), I think we could even look at heat preparation from a different angle.
As the health and safety field is based on preventing injuries/accidents, it is paramount that we try to be proactive with employees before they even enter the workplace. The next few items will provide some proactive measures that employees can utilize at work, at home, and really any event where they can expect to enter a high temperature environment.
Recently, MIOSHA has rescinded their Emergency Order and dialed down their requirements. They are strongly encouraging businesses to follow the CDC and OSHA guidance concerning protecting your workers from COVID-19 and allowing you to use your judgement in continuing using your COVID-19 Response Plans. What does that mean exactly? What are your obligations to your employees? Will they fine you? The good thing is, you are already prepared to follow the CDC/OSHA guidelines, you have your COVID-19 Response Plan, you are completing your health screenings, and you are protecting your unvaccinated employees by social distancing and/or requiring them to wear masks when they can’t maintain six feet of distance from others.
As referenced by OSHA, the CDC’s Interim Public Health Recommendations for Fully Vaccinated People explain that under most circumstances, fully vaccinated people need not take all the precautions that unvaccinated people should take. For example, CDC advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance. OHSA is recognizing the vaccination status of your employees, so if 100% of your employees are fully vaccinated, then you may stop reading and go about your life as if there is no pandemic, this is the carrot of the governing agencies. However, if you have employee’s that are not fully vaccinated, then continue on with the read. Remember, MIOSHA does have the duty to protect Michigan workers and has the flexibility to rule under OSHA.
I didn’t grow up in a wealthy family. I received an allowance for weekly chores. Chores were not gender specific – my sisters and I did everything. We were expected to learn to budget our money. I can remember specifically receiving 25 cents per week and saving up to buy a record album that cost $3.50. Once I started to babysit (at age 12), I no longer received an allowance nor did my mother buy me clothes other than for birthday or Christmas. I was expected to buy my own clothes with the exception of an occasional purchase of material by my mother so I could sew my clothing. My best friend had the identical situation. I couldn’t wait to start working, which I did while in high-school at the age of 17. And yes, I would still babysit (at 25 to 75 cents an hour)! Right or wrong, it sure motivated me! I couldn’t wait to start working and earning money.
The point of my story – “COVID” Unemployment insurance and all the extras, is due to end – or least be substantially reduced. Theoretically, that should put a flood of people back in the workforce. I know employers are screaming for employees. It seems EVERYONE needs help! Bless the first responders and front line workers, but I think they are suffering from “burn out”. I drove past a cemetery last week that had a sign out front indicating “Help Wanted – $15.00 per hour”. The $15.00 per hour seems to be the magic number. I’m sure the cemetery is not looking for someone to dig holes in the ground – that would be a heavy equipment operator earning much more per hour. How hard could the job be? Picking up pine cones dropped by the trees? Trimming around headstones? Picking up trash? Painting a gate? While it might not be a career choice, it would certainly put money in your pocket.
So, if and when applicants are at your door, (assuming they will be), there are a few things you should consider:
MTM Annual Members Meeting is October 21, 2021 at the Inn at St. John’s. We are pleased to have Kristi Stepp, a partner with Sigred Solutions as our keynote speaker presenting, Leading With a Growth Mindset. Kristi has over 25 years of human resources experience in the automotive, healthcare, food/beverage and workforce solutions industries and has a broad international and multicultural expertise.
Before joining Sigred Solutions, Kristi served in strategic human resource roles at several leading global organizations including General Motors, Kelly Services, Pepsi-Cola and Volkswagen. Kristi holds a bachelor’s degree from the University of Michigan and master’s degrees from Central Michigan University and Fielding Graduate University. In addition, she is a certified Global Professional in Human Resources (GPHR), holds the Master Human Capital Strategist (MHCS) designation, and is a Senior Certified Human Resources Professional (SHRM-SCP). Kristi gives back to the community as a board member of Focus: HOPE and as a board trustee for Pewabic Pottery, both based in Detroit, Michigan.
