Blog

Walgreens to Terminate Participation in Express Scripts

Walgreens has notified Express Scripts that it will no longer participate in the Express Scripts retail pharmacy network as of January 1, 2012.  This also includes Walgreens Specialty Pharmacy.  Group members using Walgreens as their pharmacy will need to choose another pharmacy to receive their Express Scripts prescriptions.  There is always the chance that the two parties could rectify the situation, but for now, planning ahead for another outlet is certainly a good idea.

Blue Cross Blue Shield Group Plan Termination Announcements

Blue Cross Blue Shield of Massachusetts recently communicated that they continue to reserve their right to terminate group plans if full payment of charges is not received within thirty days of the due date.  Comparatively, the insurance industry must have the lowest aged receivables figures in the nation.  If manufacturers could figure out a way to stop their product from working if they didn't get paid, their receivables would drop too!

Estate Planning - Foresight and Future Caring

Estate Planning is something that many people don't like to think about, because it basically means discussing one's demise.  Grim as it may be, it really is a huge issue that needs to be addressed before its too late.  You can't buy homeowners insurance today to cover your house that burned down yesterday!

Read this true story about how estate planning and long term care insurance came into play when one man became mentally incapacitated.  It shows how caring travels a long, long way down the road.

Construction Insurance - Third Party Action-Over Claims

Last week, the Massachusetts Supreme Judicial Court affirmed the right of an employee of an uninsured subcontractor to pursue third party action against the general contractor that hired them due to injuries sustained at a job site. One man was killed and another suffered severe injuries in the course of working for the subcontractor when an unexpected explosion occurred.   The two were employed by a subcontractor that did not carry workers compensation insurance.

The General Contractor had workers compensation in force, which eventually paid out lump sum settlements to both men.  Shortly after that, however, one of the worker’s family members filed suit against the General Contractor’s General Liability policy alleging lack of controls and work site negligence. 

Attorneys for the GC argued that the claimants had accepted the lump sum workers compensation settlements, and as such, that Massachusetts G.L. c. 152, 23 bars workers from maintaining negligence claims against their employers if they have accepted workers' compensation benefits.  Initially, this argument was successful, prompting the trial court to issue a summary judgment in favor of the GC.  However, this judgment was later overturned by the Appeals Court.  The SJC decision last week affirmed the Appeals Court ruling.

The ruling for both the Appeals Court and the SJC centered on the fact that the claimants were not employees of the general contractor, and that that Massachusetts G.L. c. 152, 18 clarified that suits were not barred against general contractors obligated to pay workers' compensation benefits to uninsured subcontractor's employees. The ruling vacated the summary judgment and the case was remanded for further proceedings.

This particular case is a stark reminder to all (owners, GC’s and subcontractors) who subcontract any portion of their work; they need to maintain and execute proper risk management on each and every job site.  By itself, insurance for contractors is simply not enough.  They must remember that they have a responsibility for anyone they bring or authorize to do work at their job site.  Standard operating procedures should include:

• An executed written contract that includes a Hold Harmless/Indemnification agreement in your favor and minimum insurance requirements.
• Certificate of Insurance evidencing carriers, limits and coverage in place for WC, GL, Auto, etc should be obtained before any work is performed.
• As the upper tier party you should look to be added as  Additional Insured on all liability policies of your subcontractor.
• All policies should include a waiver of subrogation in your favor to limit to possibility of being pulled into a claim of a subcontractor.

Small Data Breach, Large Data Breach; Cyber Insurance Anyone?

In the past week, more data breaches were reported in both local and national news. 

Last week, The Briar Group, which is a Boston area restaurant chain, was fined $110,000 by the state attorney general for failure to protect customer credit and debit card information.  The restaurant chain was alleged to have experience a data breach on their computer system in 2009 that compromised customer card information, and that the glitch took eight months to fix.

Contrasting the relatively small Briar Group breach is the Epsilon breach, in which email addresses estimated in multiple of millions were compromised.  Epsilon public commentary is not surprisingly sparse at this point.  The only message to the general public is that the breach was limited to email addresses only, and that no social security numbers or credit card information was compromised.  Of course, that remains to be seen, but industry security experts are nonetheless calling the breach as "massive", and according to Computer World's blog, as the "hack of the century".  This one is going to take a while to flush out, but as an observer, it certainly seems to be ominous to say the least.

Stepping on to my trusty soap box, I tell you once again that data breaches are real, they are local or national, and they are going to continue.  Get to know your data security measures, because you are legally married to them. 

Who knows what the logistics are behind the Briar Group breach, but regardless, they were breached.  Smaller businesses supposedly work with 3rd party vendors that take care of their data security.  Hmmm.  Conversely, large companies are supposed to have the means to handle their own data security.  Hmmm. 

It's becoming somewhat obvious that companies of any size are vulnerable, regardless of how magnificent their security solution is.  Cyber Insurance anyone?

Exeter Hospital and Core Physicians Agreement Reached

Blue Cross Blue Shield New England recently announced that effective March 2nd, some physicians affiliated with Core Physicians Services LLC would no longer be participating in BCBS health plans.  Exeter Hospital, located in Exeter, New Hampshire, has now reached a contract agreement with Core Physicians, and as a result both Exeter Hospital and Core Physicians will remain in the BCBS provider network.  Those under care with physicians within the Core Physicians group should confirm with them to determine whether or not they are remaining in the BCBS provider network.

2011 Individual Tax Liability for Uninsured Increases

Effective at the beginning of 2011, penalties for failing to obtain health insurance coverage have increased. Part of the Commonwealth's Health Care reform Law, passed in 2006, requires all residents to have health insurance or face tax penalties. Starting this month, anyone 27 and older who makes more than three times the poverty level, or approximately $32,500 annually, faces penalties of $101 per month or $1,212 per year. That's an increase from the 2010 rate of $93 per month or $1,116 per year.

Those 18 to 26 who earn more than $35,000 annually face penalties of $72 per month or $864 annually, up from $66 per month or $792 annually in 2010.

Individuals with incomes up to 150 percent of the poverty level, approximately $16,300 per year, are not subject to a penalty.

Marine Insurance Alert - Cargo Thefts Rise in 2010

According to logistics provider FreightWatch International, cargo thefts rose by over 4% in 2010 to 899, which is the highest number on record.  81% of the reported incidents involved full truck loads or container thefts.  The most commonly stolen products were food and drinks, accounting for 21% of the reported thefts, followed by electronics at 19%.

Within the overall data, FreightWatch noted some trends;

• Cargo criminals are increasingly targeting multiple trailers in the same incident, evidencing their increasing efficiency and improving expertise.
• Cargo theft in New Jersey more than doubled in 2010.  Based on the routing and other logistical information, it is becoming apparent that there is a “clear relationship between cargo theft gangs in New Jersey and those operating out of South Florida”.
• Precious metals appear to be another target that is increasing, which is certainly tied to rapidly increasing market value of copper, aluminum, and other metals.

What does this mean?  Obviously, having marine insurance is more important than ever.  Just like any business, criminals are always looking to improve their business, and seem to be succeeding.  As such, implementing logistical strategies are now becoming important even for small businesses that ship cargo on a regular basis.  If the trends continue, marine insurance companies will eventually have to make changes, which could mean higher premiums and restrictive terms.  In the future, it won’t be the Jones that you’ll have to keep with; it will be the cargo criminals!

MA Employer Fair Share Contribution Notice

The Massachusetts Department of Workforce Development mailed out the Employer Fair Share Contribution (FSC) notices earlier this month.  Be on the lookout for the notice, which requires businesses to complete an on-line filing process for the next FSC base period of 10/1/10 through 12/31/10.  The deadline for the on-line filing is February 15th.

The FSC requirements were part of state healthcare legislation enacted in 2006, focusing on businesses who employ eleven (11) or more full-time equivalent (FTE) employees. Employers meeting this minimum employment threshold must file a Fair Share Contribution (FSC) report.  Employers with eleven (11) or more FTE employees who do not make a "fair and reasonable contribution" to their employees’ health insurance, as defined in Division of Health Care Finance and Policy (DHCFP) regulation (114.5 CMR 16.00), are required to pay a per-employee FSC to the Commonwealth Care Fund.

To begin the filing process, go to the FSC Self-Service web site at https://fsc.detma.org

EEOC Reports Record Discrimination Filings in 2010

The Equal Employment Opportunity Commission (EEOC) announced yesterday that workplace discrimination filings against private companies hit a record nationwide level of 99,922 during the 2010 fiscal year.  The EEOC says it filed 250 lawsuits, resolved 285 lawsuits, and resolved 104,999 private sector charges.  Through EEOC efforts, more than $404 million was secured in compensation from employers, which is the most ever obtained by the Commission.

Conclusion?  It appears that claims against employers continue to rise, and if there was ever a need for employment practices liability insurance (EPL), now is the time.  Oddly enough, the market for employment practices insurance continue to soften.  Of course, nothing takes the place of sound HR practices, which is one of the reasons that EPL premiums continue to fall.  However, regardless of how closely you follow the book with HR best practices, EEOC filings will still come, as evidenced by yesterday's announcement.  The game plan is simple and hasn't changed; stick to solid HR practices, and have insurance as the safety net that statistics show that you will more than likely need.