For This Award-Winning County, Employee Safety Begins Before the Job Offer

Monmouth County, New Jersey, used a combination of advanced technology and safety-and-wellness programs to lower claims 44 percent and losses by 76 percent from 2009 to 2017.

By: Jared Shelly | October 30, 2018

As a man lifts weights over his head, an ergonomist carefully analyzes his movements: Are the feet spread far enough apart to distribute weight evenly? Are there any weak points that seem out of the ordinary? Is the shoulder angle correct?

Rather than watching and taking their best guess, the ergonomist uses motion capture technology that displays a likeness of the man’s skeleton and real-time movements on a computer screen — offering precise information about posture, capabilities and limitations. It’s the kind of technology used in filmmaking and digital gaming — but in Monmouth County, New Jersey, it’s being used to mimic the actual day-to-day tasks of a parks department employee.

The test is one of many innovative solutions implemented by Monmouth County leadership to spur a dramatic turnaround in its workers’ compensation program. Back in 2009, the County saw over 400 new claims and losses of $5.5 million. They hired too many people not physically capable of the job tasks. Injured workers could get full pay and benefits for up to a year. Light duty was underutilized.

Departments hardly communicated. Newly appointed manager of benefits and workers’ compensation William McGuane knew something needed to change — fast.

“When I got here, I saw a workers’ compensation policy that actually lessened the employees’ ability to return to work safely and consistently,” said McGuane. “When you can stay home and make full pay, there’s not a lot of incentive to come back to work.”

Through a combination of safety-and-wellness programs, advanced technology and modernized labor union agreements, Monmouth has seen a dramatic turnaround. From 2009 to 2017, claims dropped by 44 percent and losses dropped 76 percent. The effort led Monmouth County to receive a 2018 Teddy Award, for excellence in workers’ compensation risk management.

Digging In

First things first — who is getting hurt? There are 4,100 workers in the County doing incredibly varied jobs. There are corrections officers and librarians. There are maintenance workers and nursing home employees. So who’s driving these massive comp claims?

William McGuane, manager of benefits and workers’ compensation, Monmouth County, N.J.

After digging into the data, McGuane found workers in their first 90 days were particularly susceptible to injury — especially those working the most strenuous jobs like building, grounds, corrections, highway, law enforcement and in the parks departments.

“We were hiring people incapable of doing the jobs,” said McGuane. “It became evident that they couldn’t do it safely.”

To combat that, the County had ergonomists and physical therapists from Hackensack Meridian Health measure the dynamic forces employees endured while doing their normal job functions. Then came motion capture.

“We have them do all those job functions in front of a physical therapist, guiding them on proper technique. If they don’t pass, they don’t get the job — and that weeds out a lot of potential injuries down the road,” said Dr. Jared Schulman, corporate medical director, occupational health, Hackensack Meridian Health.

The parks department was a particularly high driver of injuries — generating nearly half of the County’s total incurred costs in some years.

“We consistently saw seasonal injuries. Tick bites in summer are unavoidable, heat exposure and poison ivy are pretty consistent, too,” said Schulman. “Overall, musculoskeletal complaints are most frequent — low back injuries, shoulders, knees.”

So the County piloted a safety-and-loss-prevention program in the parks department, working with risk management solutions firm PMA Companies to teach workers and supervisors how to lift and move ergonomically. They also conducted a safety survey and the results were clear — there were serious discrepancies between employees’ and supervisors’ views of safety policies. And that led to a major lack of communication.

“We helped train their supervisors to understand their role in the safety process,” said Justin Wilkinson, account executive at PMA Companies. “You’re not disciplining an employee by telling them they’re doing something wrong, you’re helping them stay safe.”

“What they’ve been able to do is phenomenal. A big part of that is Monmouth County being transparent with their employees and respectful. It sends a message to the whole organization that health and safety are important to them.” — Dr. Jared Schulman, corporate medical director, occupational health, Hackensack Meridian Health

The safety-and-loss-prevention program is a winner, as new claims volume for the parks department has declined 22 percent from 2011 to 2017. The pilot program will soon be rolled out to other departments in the County.

Another population that represented heavy claims were people returning to work after injuries. Part of the problem was antiquated job descriptions. Revamping them to accurately portray the physicality of each position led to an expansion of light duty. Getting them to light duty greatly increased the chance of a return-to-work success story.

“Bringing them back early hurt them to a greater degree. That’s when claims got out of control and employees didn’t return to work and ugly scenarios emerged that we didn’t want to see,” said McGuane.

Changing a Culture

Another major hurdle: Existing labor union contracts provided full salary continuation for up to a year for an employee’s work-related injury. Workers could then get FMLA leave tacked on afterwards. It damaged morale, strained overtime budgets and — most importantly — kept people out of work far too long.

“They can develop what I call the I Love Lucy syndrome, where sitting on the couch and getting atrophied becomes their lifestyle,” said McGuane. “It’s no way to have a fulfilling life. It does a disservice to the injured worker and a disservice to all levels of the organization.”

Over three years of negotiations with 32 labor unions, they brought that number down to six months.

“We explained the unintended consequence of what was happening. Getting them back in the building in some type of capacity was far more humane than having them sit on the couch someplace,” said McGuane.

Another major initiative was the wellness program — highlighted by the “Pledge 10” initiative aimed at getting employees to lose 10 pounds over a 12-week period. For the naturally thin or people already in shape, they could maintain their ideal weight. They also offered free biometric screenings, flu shots, wellness seminars and an annual physical — where employees were entered into a raffle to win a free personal day.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better,” said McGuane. “We’ve had people lose 30 and 40 pounds.”

Changing Lives

Monmouth saw tremendous results from its efforts. Overall claims costs fell from over $5.5 million incurred in accident years 2009 and 2010 to under $2.1 million in 2016 and $1.3 million in 2017.

Total new claim volume decreased 44 percent, from 410 in 2009 to 230 in 2017. Lost-time claims decreased from 80 in 2009 to 34 in 2017. Open outstanding claims decreased from 332 in 2010 to 254 claims today. The County’s calendar year paid totals have been trending downward from $5.1 million in 2010 to $4.4 million in 2017.

“Over the course of 10 years, the program has just gotten better,” said Wilkinson. “We hope to drive our clients to have the kind of success Monmouth County is having. We use them as a model when we market to other counties. We’ve had success with other accounts, but this one stands out.”

Schulman is equally impressed: “What they’ve been able to do is phenomenal. A big part of that is Monmouth County being transparent with their employees and respectful. It sends a message to the whole organization that health and safety are important to them.”

For McGuane, the workforce and workers’ comp program he inherited years ago feels incredibly different. It’s a safer place to work. Injured workers are more likely to get better. Claims are no longer out of control.

“I’ve seen people’s lives change as a result of the program we’ve done,” he said. “It’s one of the most gratifying things I’ve ever seen professionally.” &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected].

Consistency and Stability

Sandy Bigglestone, Deputy Commissioner for the State of Vermont’s Captive Insurance Division

With the commercial insurance market so unstable, companies are turning to captives to house their exposures. Vermont, a long-time domicile, is getting increased attention because of their strong reputation and their leadership as the top domicile worldwide.

“All stakeholders enjoy the stable political and regulatory environment Vermont has to offer to operate in,” Bigglestone said.

Of course, a lot of consideration goes into deciding whether or not a captive is the right choice for a particular company. Businesses need to assess their exposures and their books to make sure they can adequately operate a captive.

There are significant advantages, however. “For low frequency, high severity risks, captives can access the reinsurance markets directly, so it’s very attractive for businesses to put a captive in place,” Bigglestone said.

And carriers are more accepting of captives as part of a broader insurance program.

“Captives are changing the relationship businesses have with commercial carriers,” Bigglestone said. “Commercial carriers are wanting to see companies with skin in the game; therefore, the relationships have evolved to be less transactional and more strategic.”

Balancing Bureaucracy

With 76 global domiciles, companies have a lot of options when it comes to selecting a captive partner. “Captive insurance domiciles compete globally for the business,” Bigglestone said. “If you were to put all 7,000-plus captive insurance companies around the world, all in New York, it wouldn’t have the same economic impact as 700 captives in Vermont does. The captive insurance industry is very important to our state and we will continue to support it in any way we can.”

Businesses should look for domiciles that balance a need for quality regulations with a process that isn’t overly bureaucratic and is seamless for business owners to navigate.

“Companies are attracted to an environment with quality regulatory standards and a stable regulatory environment,” Bigglestone said. “Vermont sets the regulatory standard in terms of financial analysis and examinations.”

In addition to quality regulations, firms will want to seek out a domicile that is agile enough to license captive insurance companies that fit their unique needs. It is important that a domicile have firm but fair regulation and the experience to consider new ideas and implement them. Companies must consider a variety of factors when choosing a domicile and not everyone will be the right fit for every company.

“You have to consider the captive owner and the industry sector that that owner operates in, as well as the insurance risks that are going into the captive program,” Bigglestone said. “Captive laws and regulations have to have a reasonable degree of flexibility to accommodate all the varying needs of owners and then impose rules based on the merits of each captive program.”

She added that creativity is a critical part of the process: “The ability to vet concepts and ideas with trusted individuals is key to having quality standards,” Bigglestone said. “And it can make captives appealing to insureds who are tired of commercial carriers not meeting the needs of the business, and who desire more control over their insurance programs.”

“When you think about the commercial marketplace, commercial insurers are supposed to operate in each jurisdiction in a competitive manner. Commercial carriers often look the same. They sell auto coverage to anyone with a driver’s license. The rules and regulations imposed upon commercial insurance companies are designed to be more formulaic for that reason,” Bigglestone said.

“Uniform regulatory standards apply to commercial carriers for the protection of the policyholders. These are standards all insurance regulators focus on, and standards captive insurance regulators need to understand, but with a specialized focus.”

A Quality Domicile Built for the Future

A combination of experience, regulatory standards and talent make Vermont a top domicile for companies looking to form a captive. The longevity of licensing captive insurance companies for over forty years is a testament to the quality work they’ve provided in the past and will continue to provide for many years to come.

Vermont’s reputation has helped the state attract and retain top captive talent, ensuring the businesses it serves are in good hands. The state has 32 employees dedicated to captives, and their average employee retention is 15 years. The Vermont Captive Insurance Association, the largest captive insurance trade organization, also helps companies connect with professional services needed to make their captive successful.

“There’s a whole host of service providers with proven expertise right here in Vermont,” Bigglestone said.

Taken together, Vermont’s resources, expertise and talent make it a prime domicile. They’ve been on a growth trajectory over the last few years and that’s unlikely to change anytime soon. Companies can trust their captive will be in good hands when they choose Vermont.

“Vermont has always competed on quality,” Bigglestone said. “We do have a mission and that hasn’t changed in over 40 years. It’s to maintain a system, or domicile that attracts quality business to Vermont, to promote our reputation in the industry, and to uphold a regulatory framework to protect the solvency of the companies that choose to place their business here.”

To learn more, visit: www.vermontcaptive.com

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with State of Vermont. The editorial staff of Risk & Insurance had no role in its preparation.

The State of Vermont, known as the “Gold Standard” of captive domiciles, is the leading onshore captive insurance domicile, with over 1,200 licensed captive insurance companies, including 48 of the Fortune 100 and 18 of the companies that make up the Dow 30.