WORKERS’ COMPENSATIONCHANGES AFFECTING CONTRACTORS

FAMILY & BEDTIME

Email: contact@oilpatchinsurance.com | jdeboer@fdands.com

Phone: 918-504-6723 | 918-582-8206

JOSH DEBOERFred Daniel & Sons, Inc. and

Founder Oil Patch Insurance

OPENING REMARKS02

CLASS OVERVIEW03

Overview of New

WC Law

Excavation Contractor

Exposure Assessment

“Best In Class”

Excavation Contractor

Exposure Controls

“Best In Class”

Workers’ Compensation

Premium Credit Application

Risk Control

Services

Questions &

Answers

04

OK NEW WC LAW OVERVIEW

AVERAGE COST PER WORKER05

OKLAHOMA $830

TEXAS $297

ARKANSAS $292

(NCCI Annual Statistical Bulletin [ASB] Exhibit XI)

OVERVIEW OF NEW LAW06

Administrative Workers' Compensation Act

Oklahoma Employee Injury Benefit Act-Oklahoma Option

Workers' Compensation Arbitration

S.B. 1062 was signed into law into law in 2013 and became effective Feb 1.

2014. Law created Title 85A, a new set of workers' compensation statutes

which has fundamentally changed the workers' compensation system in

Oklahoma.

SB 1062 - WORK COMP REFORMADMINISTRATIVE WORKERS' COMPENSATION ACT

Establishes the Workers' Compensation

Administrative System

- Became effective February 1, 2014

- Injuries before this time will be

determined by the current Workers'

Compensation Court - Which will be

renamed The Court of Existing

Claims

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NEW WC COMMISSION

The WC Commission has jurisdiction over workers'

compensation claims filed under the new act

The WC Commission replaced the WC Court for all

claims filed after 2/1/14

The WC Commission oversees claim reporting data

collection and dispute resolution

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The minimum benefit levels for the

Oklahoma Workers' Compensation

Administrative System and the Oklahoma

Option are the same

BENEFITLEVELS

BENEFIT LIMITATIONS-COMMON SENSE REGULATIONS

No benefits for TTD (Temporary Total Disability) if the

employee receives unemployment benefit unless TTD is

greater than the unemployment benefit in a disputed

claim

Non-surgical TTD cannot exceed 8 weeks

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BENEFIT LIMITATIONS-COMMON SENSE REGULATIONS

Age is not considered in determining change of

condition

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No compensation for "ordinary disease of life"

Employees given 30 days for injury notification-

previously had 2 years to file a claim.

- Oral or Written

BENEFIT LIMITATIONS-COMMON SENSE REGULATIONS

Claim barred unless filed with the Commission

within one year

Claim barred if no treatment or compensation is

received within one year of filing with Commission

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BENEFIT LIMITATIONS-COMMON SENSE REGULATIONS

Occupational disease claim barred after two

years from last exposure

Silicosis/asbestosis claims have one year after

disablement, which must occur within three

years from last exposure

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BENEFIT LIMITATIONS-COMMON SENSE REGULATIONS

Death claims must be filed within two years

If death doesn't occur within one year from accident or

within three years of receiving compensation benefits

then a rebuttable presumption arises that the death did

not occur from the injury

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FRAUD AND PENALTIES

Employees making false statements to receive worker's

compensation are guilty of a felony

The Attorney General's Worker's Compensation Fraud

Investigation Unit IS funded through the Commission

If an "injured" employee is charged with fraud then all

compensation will be halted

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EXCLUSIVE REMEDY

Exclusive remedy remains under the Administrative

System and the Oklahoma Option

Exclusive remedy does not apply in cases of intentional

torts or if the employer fails to pay compensation

In an intentional tort case employees can choose to

pursue their action with either the Commission or the

district court but not both

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EMPLOYER'S CHOICE

Employers must choose either:

- Workers' Compensation Administrative System, or

- Oklahoma Option

Employers may choose:

- Purchase Insurance

- Self-Insure

- Employer may use a blend of insurance/self-insurance

- Employer may also fund programs through a Captive Insurer

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CHOOSING THE OPTION

An employer interested in leaving the administrative

system will need to follow a 5-step process:

- Submit request to become a Qualified Employer with

the Oklahoma Insurance Department

- Notify all employees of the changes

- Establish a written benefit plan-ERISA

- Pay an annual filing fee of $1,500

- Receive confirmation from the Oklahoma Insurance

Department

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Employer Industry % Claim Cost Savings

ATrucking &

Distribution81%

B Health Care 76%

C Manufacturing 75%

D Retail 73%

E Retail 58%

F Miscellaneous 63%

G Retail 97%

H Retail 38%

I Miscellaneous 66%

J Health Care 82%

• 63 Oklahoma Companies have Opted-Out of purchasing

workers’ compensation and have purchased the OK Option

• Data for each employer ranges from 4 to 18 months with 5 at a

year or more.

• Estimated savings for each employer range from $94,000 to

$890,000 and total claim cost savings are estimated at

$5,000,000.

• Estimated savings are after development to ultimate cost using

traditional actuarial development methodologies, including loss

development factors and 5% annual trending.

• These savings are after reducing historical Oklahoma workers’

compensation losses for changes associated with the new

Oklahoma administrative workers’ compensation program.

Oklahoma Option Preliminary Cost Savings AnalysisFebruary, 6th 2016

OKLAHOMA WC REFORM SUMMARY19

Employer’s workers’ compensation costs in OK have decreased on average 25%

Time compression of claims (from inception to resolution)

Reduction in TTD and PPD benefit duration

Reduction in Attorney’s fees

THE NEW LAW IS WORKING

LAND IMPROVEMENT CONTRACTORS WORKERS’ COMP20

The U.S. Bureau of Labor Statistics (BLS) data shows

271 workers died in trenching or excavation cave-ins

from 2000 through 2006. These fatalities could have

been prevented if the risks associated with

underground work were properly identified during

pre-planning meetings.

CNA Analysis of Loss Exposures: Land Improvement Contractors21

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Excavation ContractorExposure Assessment

See Handout

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Excavation ContractorExposure Controls

See Handout

26Workers’ Compensation

Premium Credit Application

CCPAP APPLICATION23

20 %

CONTRACTORS CLASSIFICATION PREMIUM CREDIT APPLICATION PROGRAM27

CCPAP

Premium Credit Highlights

- The CCPAP provides premium credits as a specified discount to employers who pay

higher than average wages to employees classified within contracting class codes.

- The CCPAP is designed to adjust an employer’s workers’ compensation premium by

way of a premium credit.

- Provides a premium credit for a policy that contains one or more contracting

classifications.

- Usually, the higher the wage, the higher the credit.

- State approved program in the following states: Alaska, Connecticut, Florida, Hawaii,

Illinois, Maryland, Missouri, Montana, Nebraska, New Mexico, Oklahoma, Oregon, &

Virginia.

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Risk ControlServices

RISK CONTROL ANALYSIS: CNA Industry Guide Series29

SEE HANDOUT

- Land Improvement Contractors Industry Defined

- Loss Exposures in Industry Analysis

RISK CONTROL-OSHA CHECKLIST: FROM LIBERTY MUTUAL30

Excavation Safety program OSHA 29 CFR 1926

Subpart P - See Handout

RISK CONTROL-TECHNICAL CAPABILITIES FROM LIBERTY MUTUAL-SEE HANDOUT31

Essential Services

- Corporate Safety Program Review

Managing Key Exposures

- Assistance Developing Controls & Solutions

Pre-operational Safety Planning

- Pre-construction planning

- Phase planning

- Task planning

Managing Key Exposures

Complimentary Safety Resources

- Construction Safety Webinars and Seminars

Webinars and seminars are designed to cover key topics relevant to the risk and exposures common to contractors.

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Risk Control Consulting Center-Liberty Mutual

Risk Control Services Bulletin-Liberty Mutual

Improving Workplace Safety-Liberty Mutual Safety Net

Trench Safety-Quarterly Newsletter

Trenches/Excavation/Shoring-Construction Safety Talks

RISK CONTROL-ADDITIONAL HANDOUTS

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Questionsand Answers

Cell Phone: 918-504-6723 Office Number: 918-582-8206

Emails: contact@oilpatchinsurance.com | jdeboer@fdands.com

QUESTION & ANSWERS34

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