“Dumping Sick Employees” – it’s legal but is it right?

September 30, 2014 2 comments

A minor but potentially significant omission from the voluminous ACA regulations may result in a material adverse impact on the risk mix and rate stability of the individuals signing up for health insurance under state and federal exchanges. As written, the ACA regulators will allow an employer who can identify their sickest chronic employees to potentially incent those members to drop their group coverage and sign up for the local state exchange. Nothing in the federal regulations today prohibits an employee from waiving their group health care and buying individual coverage on the exchange – an omission that may prove costly for the government exchanges.

It works like this: an employer has a medical plan where a handful of employees are identified with upcoming or ongoing claims in excess of a threshold, say $75,000 a year. These employees traditionally drive 70%-80% of the overall plan cost and contribute to a high rate renewal and the inability of the employer to shop for a different more affordable plan. The employer approaches those employees Read more…

Cyber liability Q&A: Important questions for all policyholders

September 26, 2014 Leave a comment

cyberlockDespite ongoing efforts to thwart off the threat of cyber crime, businesses today continue to face ongoing challenges when it comes to mitigating their risks. The evolving challenges posed by major data breaches have left both insurers and policyholders in a constant state of flux as the marketplace aims to manage, and stay ahead of the issue. Below are several key questions and answers about cyber liability insurance and some best practices for dealing with cyber loss.

It seems like every week there’s news of another company facing cyber losses from a large data breach. How has the marketplace changed since the onset of these crises?

While the onset of these breaches has prompted many changes to occur, one of the most important for policyholders relates to first party expenses, such as Forensics, Notification, Public Relations and Credit Monitoring. Historically, many insurance carriers would sublimit the first party expense limits to cap their exposure. Now that more carriers have entered the Cyber insurance market and created competition, many have started offering full limits on first party coverages in order to stay competitive. I believe this is one of the most positive developments for policyholders because typically the largest payout on a Cyber claim is on the first party coverages, especially forensics. Read more…

Categories: Property & Casualty

ISIS terror is making K&R policies all the more critical

September 23, 2014 Leave a comment

isisThe release of a third video showing the Islamic State in Iraq and Syria (ISIS) executing a foreign hostage has ignited global unrest and brought heightened awareness to the growing threat of kidnapping and terrorist activities in the Middle East. In August, American journalist James Foley became the first U.S. national to have been executed since the start of the Syrian conflict in 2011. Within two weeks, the militant group publicly killed another U.S. hostage, followed by a third video in which a British national was beheaded. ISIS claimed each execution an act of retribution for the ongoing U.S. airstrikes against the group’s position in Northern Iraq. While debate ensues over the relationship between ransom payments and funding terrorism (the U.S. and U.K. governments currently both have non-payment policies for ransom demands), the risks facing foreign national workers living in these areas of extreme danger continue to mount. Aid workers and media personnel (including journalists) sent to work and report on the conflict in Syria have become primary targets of ISIS. According to data from Reporters without Borders, 65 journalists killed last year while covering stories in country, while an estimated 25 to 40 individuals are currently being held hostage.  Read more…

Attention doctors and drug makers: Sunshine Act database goes live Sept. 30th

September 18, 2014 Leave a comment

money_medical_computerOn September 30th, the Centers for Medicare and Medicaid Services (“CMS”) will publicly release all sales and marketing expenses from drug companies to doctors and hospitals. While cost transparency tends to focus on medical providers and insurers, the financial relationships between drug manufacturers, physicians and teaching hospitals have become heavily scrutinized. The initiative, arising from a section of PPACA commonly known as the “Sunshine Act,” is part of nationwide effort to promote transparency throughout the healthcare industry. The law requires applicable manufacturers of covered drugs, devices, biological products and medical supplies to report to CMS information about payments made to physicians and teaching hospitals as well as any ownership and investment interests held. Submitting the information to a federal entity will hopefully reduce gifts and kickbacks that doctors sometimes receive when agreeing to use a drug company’s product.  Read more…

CA drought and the water energy nexus

September 15, 2014 Leave a comment

folsom_lakeIn 1955, Mormon Island, a gold-rush era mining town in Northern California, was flooded to create the Folsom Lake and Dam to supply drinking water and hydroelectric power to residents in the area. Today, due to historically low water levels, the abandoned town is resurfacing, with building remnants and artifacts turning up in the lake’s receding water after being submerged for nearly 60 years. While tourists are flocking to the site, it is one of the many ominous symbols of the worst drought in California history.

With an increasing number of lakes, rivers and reservoirs at record low levels, hydropower plants like the one at Folsom, are being forced to reduce or discontinue hydropower generation. As a result, California utility companies are now turning to thermoelectric power plants to make up the shortfall. Thermoelectric power plants, which include coal, nuclear, and natural gas generation, use over 200 billion gallons of water every year in the U.S. in for operation and cooling. Thus perpetuating the state’s drought issues with more water needed for power generation Read more…

Employer marijuana policies go to court over conflicting federal and state laws

September 9, 2014 Leave a comment

gavel_potPress reports highlight new conflicts over the inconsistencies between federal and state laws over marijuana usage by employees. Federal law requires government contractors to have drug-free policies that apply to federally controlled substances. In Colorado, the application of that policy via Dish Network’s employment practice led to the firing of Brandon Coats, after a drug test showed him to be a medical marijuana user. Coats, having lost his case at two levels is now arguing his case before the Colorado Supreme Court.

Coats maintains that his marijuana use is essential medical therapy. He also says that his usage is during off-work hours, so any impairment caused by marijuana is not evident in his work. He compares marijuana usage to recreational liquor usage. Read more…

Planning an IPO? Pre-launch stage calls for critical D&O coverage

September 2, 2014 Leave a comment

ipo_2With IPO activity on pace to increase for the third consecutive year, (112 IPO’s completed in the first half of 2014 alone) the active market has encouraged an unprecedented number of companies, both large and small, to start planning an initial public offering. Yet as several recent cases have shown, many companies involved in the initial or “pre” IPO planning stage fail to consider the numerous liability risks and claims they face, well before they go public. Many may not realize the significance of the pre-IPO period and the exposures presented during this time, which often include organizational shifts, accounting and debt restructuring and other corporate changes. Pre-IPO activities, such as private placement agreements or pre-offering disclosures, can lead to claims from angry investors and others involved in the process if the company fails to launch its IPO. Read more…

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