Wednesday, March 27, 2013

ULLICO Casualty Company in Rehabilitation

ULLICO Casualty in Rehabilitation

You may ask, "What does this have to do with me? I am just a safety person."

Again, if you are in the staffing industry, you know that the lifeblood is Workers' Comp. Unless you work for a very large staffing company, that as a safety person/risk manager, you are involved with many aspects of the company: safety, risk management, underwriting, and maybe even insurance.

The loss of ULLICO reduces an already dwindling field of insurers for the staffing industry. Depending on how good your management team is and the broker you use, the loss of ULLICO could also mean the loss of your job.

ULLICO has long been known in our industry as a "fronting company" for another insurance company for the states that they were not in. California was the biggest. There were also those few staffing companies that had their own direct ULLICO policy. Most of these were grandfathered in from long ago. Now these seem to be going away.

As policies expire, they will not be renewed. So, do you have a policy to replace your ULLICO policy yet? We had a replacement 6 months before our ULLICO policy expires. Here are some tips for a replacement policy:

  • Don't assume that just because you were with big Insure CoI for a long time that every insurance company will welcome you with open arms. 
  •  You may need more than 1 carrier to replace your single carrier. 
  • Insurers may cherry-pick. Yes you may have had a client 10+ years, but if they are a poor performer, the new insurer may not want them. Don't be penny wise and pound foolish.
  • You may have to broker out some of your business. Again, don't be penny wise and pound foolish.
  • You may have to bring in outside help. Our company has been brought in by many other staffing companies looking to replace coverage. They bring us in to audit/fix/create their EHS programs,  help put a submission together and to take them to carriers that we have relationships with senior management with. 
  • You will probably have to raise rates. Remember, you are starting new with your replacement carrier.
  • If senior management is not aggressively seeking a replacement policy, you may need to start looking for a new job. 

Here is a copy of the rehab notice from the State of Delaware:

Notice of Rehabilitation of ULLICO CASUALTY COMPANY

On March 11, 2013, Ullico Casualty Company, a Delaware domestic property and casualty insurance company (“ULLICO CASUALTY”) was ordered into receivership for purposes of rehabilitation by the Court of Chancery of the State of Delaware (the “Court”). The Insurance Commissioner of the State of Delaware is the court appointed statutory Receiver of ULLICO CASUALTY. The Receiver appointed George J. Piccoli as the Deputy Receiver to carry out the responsibilities of the Receiver with respect to the rehabilitation of Ullico Casualty. The company consented to the receivership. A copy of the Rehabilitation and Injunction Order (the “Order”) is enclosed. The Order, and all subsequent proceedings concerning ULLICO CASUALTY, will be conducted in accordance with Chapter 59 of the Delaware Code (18 Del. C. § 5901 et seq).

ULLICO CASUALTY was licensed in May 1979, and is headquartered in Washington, DC, and Silver Springs, MD. The company writes Workers' Compensation, Fidelity/Surety, Fiduciary Liability, Professional Liability, Commercial Auto, Commercial Multi-Peril in forty-eight (48) States. Pursuant to the Order, all persons or entities are enjoined from instituting or further prosecuting any action at law or in equity, or proceeding with any pretrial conference, trial, application for judgment, or proceedings on judgment or settlements and such action at law, in equity, special, or other proceedings in which ULLICO CASUALTY is obligated to defend a party insured or any other person it is legally obligated to defend by virtue of its insurance contract for a period of 180 days from the date of the Order. All persons or entities having in their possession Assets or possible Assets are enjoined from transacting any business of, or on behalf of ULLICO CASUALTY or selling transferring, destroying, wasting, encumbering, or disposing of any of the Assets, without the prior written permission of the Receiver or upon further Order of the Court. All persons holding Assets of, or on behalf of ULLICO CASUALTY, are directed to comply with Paragraph 9 of the Order. The company’s existing policies are not cancelled by the Order. All persons are required to fully comply with the terms of the Order.

If You Have Any Questions:

Until further notice, policyholders, claimants, agents, brokers, attorneys, and other persons with questions regarding ULLICO CASUALTY, in REHABILITATION should visit the website at: (Please note that there is an underline between the words “rehab” and “bureau” in the website address.);

or call 1-800-218-1044

Contact the Deputy Receiver directly as follows:

c/o Delaware Insurance Department
Bureau of Rehabilitation and Liquidation
704 N. King Street, Suite 602
Wilmington, DE 19801

Thursday, March 21, 2013

CVS Anal Probes Employees [...well not really]... and Employers and Work Comp Carriers are opened to a New Exposure Under the Affordable Care Act (a.k.a. Obomacare)

I have always known that my role in safety, as the Risk Manager for my organization intersects with other areas of my organization, HR, IT, insurance, etc. These "intersections" are becoming more intertwined as regulation increases.
This post looks at "Employee Wellness Programs" and not only the risks that they pose to the EHS department, but to the organization as a whole. My goal is to make EHS personnel aware of the risks that they pose to EHS, risks that you, as a safety professional may not have been aware of.  
The risks are further complicated by the fact that the EHS department did not initiate these programs, and may even have no control over them. Still, EHS may be held accountable for consequences of them. Read on...
From: ABC News
One aspect of Affordable Care Act [Obamacare] allows employers to collect employees' personal information for health insurance purposes. CVS is telling its employees they need to reveal their height, weight, body fat percent and other personal information for health insurance purposes.
Thank you President Obama!
The Rhode Island-based company, which employs around 200,000 individuals, is telling workers who use its health insurance they need to have a wellness review done -- or pay up, about $600 a year additional.

CVS says it will pay for the health reviews and the information will go to a third party administrator of CVS's benefits, not CVS itself.  According to the company, CVS bosses will not be able to access their employees' health records.

The idea is to incentivize healthy living. CVS says the idea is nothing new. "The idea of an employee wellness plan is perfectly legal under the ADA. Courts held up these plans," said Joshua Kersey, a Tampa labor attorney. He says with "Obamacare" looming in 2014, practices like this wellness review are likely to become more common, because a lot of employers are expecting to pay more for their workers' health insurance. "The more money it's going to save the employer, the more incentive the employer has to affect these types of programs," he said.

In CVS's case, workers not comfortable getting the review done will have to pay a $600 annual penalty. "It is voluntary because you're welcome to get healthcare through someone else," he said. In a statement, CVS says it's implemented the program to try and keep employees as healthy as possible, and help them manage their costs.

 Feels Like an Anal Probe

Sounds good, get your employees healthy to cut health insurance costs. There is even evidence that healthy employees are less likely to be injured on the job and return to work quicker than unhealthy employees.
Note: I am not here to debate the ethics of interfering in people's private lives, whether by government or employers. I see both sides of the fence, as a business owner, I have to watch my bottom line. I am also a big advocate for privacy, my motto is "Leave me the hell alone!"
But to these employees, it must feel like an anal probe. To have to undergo medical testing and have the test results reported to your employer. Of course CVS says that supervisors will not have access to the information, that is being held by a third party. This seems like something right out of a Nazi concentration camp.

Great, not only do I have to worry about my employer having this info, because CVS does have access, now I have to worry about someone else having access. That is 2 times more people looking at it and 2times more likely that it will get leaked, hacked, stolen, etc.

CVS is not Alone

Here are some other companies that have mandatory wellness programs, healthy lifestyle requirements [no-smoking, BMI requirements], or charge more to employees for health insurance for unhealthy or nonparticipating employees:

    •    PepsiCo
    •    Volkswagon
    •    Scott's Miracle-Gro
    •    GE

In Ohio, the Scotts Miracle-Gro company revoked the employment of a new hire when he tested positive for nicotine in his system. (The company had a "no smoking" policy that applied equally to off hours.) In Pennsylvania, AmeriGas threatened to stop offering health insurance coverage for its employees unless they participated in the company wellness program.


The Hidden Risks

So what is the big deal? Many employers are doing it, and the courts have upheld that it is legal. There are obviously increased risks with this policy: lawsuits from discrimination, misuse of information, leaked/stolen information, ADA issues, etc. But there is a hidden risk that affects safety professionals: This can lead to an increase in work-related injuries.

Courts have also upheld that if an employee is injured at work, is travelling to a doctor's appointment for the work related injury and gets in a motor vehicle accident (MVA), that MVA becomes a work-related injury. Yes, this is true. I am fighting with a injury claim like this now! I know of what I speak! ...And the courts are sympathetic to the employee.

So, now if an employee is going to a doctor's appointment, and it does not have to be a primary care doctor, it could be a specialist, a MVA becomes a work-related injury. This is because, employee physical health has become [not a requirement per se, but] part of the job both on and off the clock.

Let us take this a step further. As long as an employee has a prescription from a doctor for blood work, and those prescriptions are good for a year, if the employee gets in to a MVA, and states he was on his way to get his blood work done, that injury is now work-related. Remember, no doctor's office draws blood anymore, you get a prescription and go to an outpatient facility. All this employee needs is a creative attorney [there are plenty of them, just look at the size of the "lawyer" section of the yellow pages], and a off-the-clock injury is now a work comp injury complete with paid lost time.

Slip on the floor at the blood draw clinic? That can be work-related too. Just make sure that you have your lab order with you. It reminds me of the "No Chicken, No Check" [Season 8, Episode 6] episode of "Married with Children" where Al Bundy gets Kelli cheap car insurance from the South Forty Insurance Company, insuring her car as farm-use vehicle. As long as Kelly is on official farm business [keeps a live chicken in the car] she is covered. Peggy sayss, "Al, correct me if I'm wrong, bud didn't the kids car insurance policy say, 'no chicken, no check?'"

 Let's take this concept to the fringe. I suffer from an extreme phobia of all things medical; doctors, dentists, needles, etc. I have an all encompassing "medical phobia," a combination of Iatraphobia, nosocomephobia, tomophobia, and so on. Just going to the doctor for a sore throat, I am on the verge of a panic attack. When I have to get bloodwork done, my wife comes and holds my hand.
This is a phobia, I know this. I have argued with my brain many times about this. It is not rational. The pain doesn't bother me, I have had stitches without anesthetic due to my fear of needles. It is also a recognized medical condition.

So what if an employee goes for a physical and has a full blown panic attack and suffers PTSD? That now becomes a work-related injury. What if the job becomes more stressful, and the employee starts eating chocolate cake to make me feel better? [See: New Evidence That Dark Chocolate Helps Ease Emotional Stress - Science Daily.] If the employee gets fat and the employer charges $600 a year more for health insurance, can the employee claim that as work-related?

Think about if your company had a "no smoking" policy that applied equally to off hours, and an employee tested positive for nicotine. Can this be claimed as a work-related injury if the stress at work caused the employee to smoke? Sure, the employee smoked before, and was prone to smoking. Even though you would think that it is not work-related, any lawyer "worth his salt" will argue that the stress aggravated of that underlying condition which then becomes work-related.

What about second hand smoke? If the employee is at a place where other people are smoking, but not the employee, and the employee tests positive, is this considered work related? 


Yes, I said non-employees. Is it possible for non-employees to claim a workplace injury simply because their spouse works there? Is there an implied employee-employer relationship [perhaps under English Common Law]? I know English Common Law very well, the PEO industry is legally defined by English Common Law.

In 2005, the Okemos, Mich., office of Meritain Health, a provider of self-funded health plans, stopped employing smokers. Employees and their spouses undergo annual health assessments, including being tested for nicotine. Employees were given one year to quit smoking before the policy went into effect. Four who did not stop smoking lost their jobs. The company also announced it would dock $50 per paycheck from any employee whose spouse smoked and refused to take part in a smoking-cessation program. According to the company, all spouses affected have enrolled in such a program and no one has yet been docked. [From: Now, the Stick - The Washington Post]

The Conundrum

Now I have made you aware of these new hazards, how do you protect your employees against these hazards? How do you train them? Can OSHA fine you for them, not protecting against them, not training employees about them? As a safety manager, is your salary/bonus on your accident rates? What will happen to your work comp premium?

Creepier, and Creepier...

The Healthy People 2010 Initiative has established 10 leading health indicators (LHI). In addition to physical activity and obesity, tobacco and substance abuse and responsible sexual behavior round out the top five. Mental health, injury and violence, environmental quality, immunizations and access to health care all reached the top 10 on the LHI list.

So what is The Healthy People 2010 Initiative? In January 2000, the Department of Health and Human Services launched Healthy People 2010, a comprehensive, nationwide health promotion and disease prevention agenda. Healthy People 2010 contains 467 objectives designed to serve as a framework for improving the health of all people in the United States during the first decade of the 21st century. [See: The Healthy People 2010 Initiative at the CDC's website here.]

Sexual behavior is mentioned. Many of these "Wellness Programs" want to know not only your sexual history, but your current sexual habits. "Do you cheat on your spouse, do you have sex with same sex partners, do you and your spouse have multiple partners.....?"

Environmental quality refers to the inside of your house. Are there smokers in your house, is your house clean, etc. If companies with "no smoking" policies drug test for nicotine, what are they going to do next, put a camera in their employee's bedroom?

Looking In Your Bedroom...

Say it can't happen? Look at what is happening in California:
[From: The Weekly Standard] In order to make sure gays and lesbians are adequately represented on the judicial bench, the state of California is requiring all judges and justices to reveal their sexual orientation. The announcement was made in an internal memo sent to all California judges and justices. “[The Administrative Office of the Courts] is contacting all judges and justices to gather data on race/ethnicity, gender identification, and sexual orientation,” reads an email sent by Romunda Price of the Administrative Office of the Courts. A copy of Price’s memo was obtained by THE WEEKLY STANDARD.

A Word of Caution!

Consult an employment law attorney before moving from a voluntary wellness program to one that’s mandatory. It’s a controversial practice that is likely to step on laws ranging from the Health Insurance Portability and Accountability Act (HIPAA) to the ADA.
Another view on wellness programs is: “If employers are really concerned, why don’t they start with something they can control and provide a safe and healthy workplace?” asks Nancy Lessin, a health and safety specialist with the Steelworkers. “As they are required to do by law.” [From the article: Coercive Wellness Programs Create Headaches]

Here are some laws that wellness plans must be in compliance with:

Genetic Information Non-Discrimination Act (GINA)

GINA makes it unlawful for employers to request, require employees to disclose or collect employees' genetic information - including family medical histories - in connection with:

    * Enrollment or eligibility in a wellness program
    * Giving lower insurance premiums, lower deductibles or cash-payouts as rewards or incentives under the program

This is a big liability here. Every doctor, as part of any exam, insists on taking a complete history, including family history.

American with Disabilities Act (ADA)

The ADA makes it illegal for employers to ask employees and potential employees disability-related questions unless the questions are job-related. If a wellness program involves a health risk assessment, employees must agree to complete it voluntarily, and they can't be punished or penalized for not doing so.

Age Discrimination in Employment Act (ADEA)

The ADEA bars employment discrimination based on age. It applies to workers 40 years old and over. So, any wellness program requiring workers to hit a certain level or score - such as blood pressure or cholesterol - must make allowances for differences in age and health conditions of older employees. Otherwise, it may violate the ADEA.

Wage and Hour Laws

If you require lifestyle changes of employees [24/7/365], are they being compensated for doing this off the clock? If you have requirements of spouses, are they being compensated? This is a potential for a "wage and hour lawsuit."


I don't have the answers to this problem. I believe that instituting a wellness program to help improve employees' lives is a good thing, and if you reduce the cost of your healthcare, that is a bonus for being a good person. If you make these mandatory, intrude into people's personal lives, require these of non-employees [spouses], this is GREED, pure and simple.

What will come of alienating your employees? Lawsuits.  You may save pennies on the cost of your health insurance, but will spend dollars on the lawsuits. Even if you have everything in place to ensure that your wellness program is legal and nondiscriminatory, there is NOTHING that you can do to prevent people from bringing a lawsuit against your company.

Anyone, for any reason can file a lawsuit against your company. At that point you get an attorney and try to get it dismissed for lack of merit. If you have ever had any dealings with the legal system when it comes to employees, you would quickly realize that [in the face of common sense], the legal system is sympathetic to employees.

At this point, you have either put out a retainer and had to pay legal fees from your own pocket, or filed a claim with your EPLI, DO, or liability insurance. Bottom line is that you spent money. Do the savings offset the expenses? But then again, when you are CVS, so large with so many employees, it may be cost effective even with the lawsuits factored in. Think the case of the Ford Pinto.

It may be legal. But is it ethical? Is it fair? Is it the right thing to do? Do you want your name as a safety professional or your company's name associated with one of these programs?

Thank you for reading.