Where Does the Money Go?

Occasionally I am asked “where does the premium go that is paid by MTM members?” I could break that down into more than two dozen categories but let me just give you a high-level view. If I took 2023 as an example year, I could put the percentages into three basic categories. No surprise, the number one category is claims including legal expenses with the second being administrative expenses which include company salaries, rent and of course, taxes. Not only are there income taxes to pay but we’re also required to pay assessments to the state and a percentage of the premium as a state premium tax. And the third category are the leftover funds which are paid to members as dividends. Again, going back to 2023, in rounded numbers, 55% of the premium is paid out in claims and claims handling costs with 25% paid for MTM administrative expenses and 20% was returned as member dividends.

By Donna Motley, Vice President of Claims

Seems like – what used to be simple, is not so simple anymore! Procedures are established for a reason – to simplify things!

In an ideal world, when an employee is injured at work, the injury is reported to the Supervisor, Safety Representative and/or Human Resource personnel. A claim is filed on the appropriate forms with your Workers’ Compensation carrier (MTMIC !). The employee is sent to the Occupational Clinic where treatment is rendered; the injured worker may be referred to a specialist. The injured worker will treat until the injury is resolved, then discharged from care, and the employee is released back to work. The steps seem pretty cut and dry and while medical care is not considered “cheap” by any means, Michigan Workers’ Compensation includes a fee sched-ule resulting in 40-60% savings on most medical bills. As an employer, I’m sure you are astounded at times, when you see the dollar amount spent on some work related injuries.

Experience Mod Calculation

It’s been some time since I wrote about Michigan workers’ compensation experience modifications and how they affect your workers’ comp premiums, so, it seems time for a refresher course. Experience modifications in Michigan are promulgated out by an outside rating agency that requires membership from all Michigan insurance companies. We submit to them data on every policy six months after it expires. We report payroll by class code and losses for every employer

This agency then produces an individual experience modification that is used by all insurance companies. To better walk you through this process, I’ve attached an exhibit with some letter designations for certain sections. Here is a simple explanation of the entire calculation.

By Travis Halsted, ARM, COSS, Loss Control Consultant

It was just a few months ago that I was discussing icy parking lots, and shoveling snowy walkways with many of you. Oh, how the seasons have changed. As the temperatures rise, so do the risks in the workplace. The brain and body take part in a dance to keep the body cool. Each year, over 600 Americans die from heat exhaustion. While the majority are well aware of the measures that we can put in place to help with heat levels while the employee is working (fans, air conditioning, breaks), I think we could even look at heat preparation from a different angle.

As the health and safety field is based on preventing injuries/accidents, it is paramount that we try to be proactive with employees before they even enter the workplace. The next few items will provide some proactive measures that employees can utilize at work, at home, and really any event where they can expect to enter a high temperature environment.

December 31 conjures up a whole bunch of thoughts. One of the more boring, but required duties is for us to prepare our calendar year profit and loss statements, and get a start on the taxes for the year. You go through the cost of raw materials, the cost/depreciation of equipment, the building expenses, utilities, labor expenses, benefit costs, and in the end hopefully find a profit was yielded. MTM goes through a similar process, and this process is important for not only tax purposes, but to also determine MTM member dividends.

While we go through many of the same things as your shop, there are some differences. The parts that are the same are that we go through the office rent expense, office utility cost, office supply expense, mailing costs, printing, staff wages and staff benefits. All of that matches up pretty well with your shop’s process. In MTM’s case, all of those items only account for 12% to 14% of the MTM total expenses. By far, and not surprising, MTM’s largest expense is paying claims.

By Donna Motley, Vice President of Claims

Work related injuries submitted to our department tend to occur in cycles. At a given time we may see an influx of shoulder injuries, then foot injuries or hernias. What we have been experiencing most recently are injuries involving “teeth”, where an employee either fell and damaged a tooth or teeth, or sustained a blow to the mouth resulting in damage or loss of a tooth or teeth. 

MTM Office and COVID

The MTM Board and Management position has been simple: If member companies are open, MTM needs to be open supporting member activities. Claims still happen, Loss Control services are needed, policy and billing changes occur. Because we never wanted our claims representative to be talking with a member company or injured worker in open space, every MTM employee has a separate office with a door. With this office layout, we have required spacing working at the office.

Here is a department update:

MTM’s Member Dividend Program – 2021

On December 23rd, the MTM Board approved a $3 million member dividend declaration to be paid March 1, 2021. Let me give you more details how the MTM member Board and MTM member Finance Committee came to this decision. Dividends are paid out of annual profits. While the year is not yet over, we have some predictions of what the year looks like, and all, at this point, look to show that 2020 was a profitable year. It is always the goal of the Board Committees and full Board to return profits to our member-owners. So, this process started on Thursday, December 3rd, with the regularly scheduled Board Finance Committee. This Committee is made up of members: Teena Kowalski – Repair Clinic, Barry Kavanagh – Avalon and Tahoe, Gary Sievert – Wellington Industries, Andrew Varenytsia – Romeo Rim, Jerry Decker – Precision Boring, Jack Accardo – Haller International Technologies, Joe Keppler – Shuert Industries and Gerd Walter – Creative Automation and Kurt Heuser. The Committee members took the management recommendation of $2.5 million and questioned management on assumptions and details for the 2020 profit projection. At the end of a hardy discussion, the Committee felt the profit would be likely higher than management suggested, and decided that instead of the $2.5 million profit estimate $3 million was more probable.

Every year, millions of employers are required to keep track of their workers’ injuries and illnesses by recording them in what is often called the “OSHA Logs.” The OSHA Logs consist of three separate documents: the Form 300 Log of Work- Related Injuries and Illnesses, the Form 300-A Summary of Work-Related Injuries and Illness Incident Report. It is required for all applicable employers (employers with 10 or more employees in certain industries) to retain the last five years of each of these documents. MIOSHA (Michigan Occupational Safety and Health Administration) will request to see them as needed during inspections and enforcement actions.

Under a Final Rule (Federal Registry Doc # 2016-10443) that became effective on January 1, 2017, OSHA revised its requirements for recording and submitting records of workplace injuries and illnesses to require that some of this recorded information be submitted to OSHA electronically for posting to the OSHA website via the Injury Tracking Application (ITA). After additional public commentary and feedback from employers, a second Final Rule (Federal Registry Doc # 2019-00101) was published by OSHA amending its original recordkeeping regulation. The current Final Rule was published on January 25, 2019, and made effective on February 25, 2019.

Certificate of Insurance

InsuranceA common request from our members is a Certificate of Insurance. Most often this is requested by a customer of our MTM member. That is a customer of our member is requesting that before they work at the customer’s location, the MTM member provides a Certificate of Insurance. For MTM members who work only at their own shop, a Certificate of Insurance rarely comes up. On the other hand, some of MTM members provide equipment maintenance/ repair/installation at their customer’s location, and this Certificate of Insurance is requested. There are two primary reasons that customers request this from our members.

By Donna Motley, Vice President of Claims

We are all familiar with the proverbial phrase “when life gives you lemons, make lemonade”. Turning a negative into a positive. The power of positive thinking. Lemons into lemonade is good, but, what about when life gives you COVID-19? How can something that has been so impactful or should I say, devastating to our lives and our country have anything “positive” associated with it? We have to adjust and evolve. And we are.

Having to wear a facial mask is now the “norm”. Aside from the health benefits, we are now also turning mask wearing into a fashion statement! You can buy a mask bearing the likeness of your favorite Superhero, Disney character, Sports Team, Flower, etc. You can buy a mask with rhinestones, sequins, beads, lace, fringe, etc. There are special masks made for Brides to wear on their special day! You can even buy a face mask holder/necklace so you can have your mask at your fingertips at any given moment.A global positive was the reduction in air pollution as there were less vehicles on the road. Science magazine reported up to 50% reduction in global seismic noise for the period March thru May, 2020. Amazing!

We have recently updated our website and portal with two new postings to protect automotive service workers from exposure to COVID-19. These postings are available in English and Spanish. If you have questions regarding COVID-19 postings or any required postings please reach out to your loss control representative or contact us at losscontrol@mtmic.com. 

By Chris Demeter, Senior Loss Control Consultant

While everyone loves to relax and enjoy vacations in the warm climates, someone who has to perform vigorous tasks in the hot environment is at risk. Over the years, I have learned to schedule certain accounts such as heat-treat, metal plating, foundries, and forging operations in the cooler months. Even though I am not in a hotshop for an entire shift, I would prefer not to break out in a sweat and then go to my next account. Heat stress can overcome anyone who does not properly acclimate themselves to the heat or watch for the signs and symptoms that may alert them to possible heat stress disorders. Informing employees of all risk factors and heat stress disorders that they may encounter and how to avoid serious complications can greatly reduce the risk of serious injury or death. According to the Centers for Disease Control (CDC), more than 600 people in the United States die by extreme heat every year. Some people are more at risk of developing a heat-related illness, including adults age 65 and older, those with chronic medical conditions, people who work outside, infants and children and athletes.

Second Quarter 2020 – Who Would Have Guessed?

The changes we have all made in the last 90 days are mind-boggling. We are accustomed to changes in work product and production, so change is a part of our DNA. However, in my last 48 years of being in the insurance industry, I cannot come up with any time with the degree of change as we have had in the last 90 days. When I think back to the February MTM Board and Committee meetings, we were reviewing 2019 results. The discussions were great – how much could the member dividend be? What will the payment disbursement plan look like? A week later, the first week of March, MTM staff produced 923 member dividend checks with the delivery process to start a few days later. After the first week or so of check deliveries shops closed, signs were up, and the news media scared us all. These were not little changes, everything we did changed, business and personal. As time went by, for some one of the most desired personal items was to get a haircut. I can’t remember an anniversary dinner where I treated my lovely bride to a drive through dinner at Taco Bell. For those that are curious, I did not get any brownie points for that fantastic 45th anniversary dinner.

By Travis Halsted, ARM, COSS, Loss Control Consultant

While writing this article, I took a few moments to reflect on the obstacles that the COVID-19 pandemic has provided for our policyholders. 2020 has provided us with one of the most challenging health exposures that most companies will ever face. Words such as social distancing, masks, virus, shutdown and stay at home will never have the same meanings for our country. I have spoken with many of you and have heard how this has affected you on a profound personal and business level. These have been trying times, but I am very pleased that this article will be reaching a much larger percentage of our policyholders than in the last couple of months. I can speak for the entire Loss Control Department when I say that we are thrilled to start policyholder visits again. With the Governor’s last order, employers are faced with several new COVID-19 requirements. These requirements cover topics that include training, screening, facility controls and exposures. One of the major parts of the COVID-19 back to work plan is the development and implementation of a COVID-19 Response Plan and screening protocol. As each of the new requirements can lead to more questions than answers, MTMIC has developed a Best Practices Manual and back to work checklist to assist you with meeting the requirements. The MTMIC Portal has these documents and several other COVID-19 related items available for your use. The next few sections are topics that are covered within the new requirements. 

By Megan Brown, ARM, CWCP, CAWCVice President of Sales & Marketing

We have recently redesigned the MTMIC website to allow for easier navigation as well as an updated look. An area has been added on the Contact Us page so you now have the ability to securely upload any documents that you need to get to us. Of course, this functionality is still available in the Claims section of the portal for uploading claim specific medical documentation. The Resources page has a number of documents that pertain to COVID-19 as well as other State and Federal forms. We have also added a link at the bottom of the website so that at any time you can tell us how we are doing. Click the link “How Are We Doing?” to let us know your thoughts.

The video training section of the MTMIC portal has been enhanced with a brand-new video library. We have over 730 videos with corresponding testing documents in multiple languages that cover topics such as:

• COVID-19
• America With Disabilities Act
• Drug & Alcohol Abuse in the Workplace
• Emergency Preparedness
• Ergonomics: Working from Home
• Workplace Stress: The Basics

The video library has a section announcing new releases and is sorted by the various types of training. At the end of each training, Certificates of Completion are available for your training files. If you do not have access to our portal or have a training that you are looking for, please do not hesitate to contact us at sales@mtmic.com. Check on the new website and/or training videos and let us know what you think.

Did you know that MTM has the ability to provide coverage for your out of state payroll/locations through a partner company? If you have a facility outside the state of Michigan, contact us at sales@mtmic.com to get a quote. 

log on to our website: www.mtmic.com/blog and click login (located at top right side of page)

• Your user id = your company 9 digit FEIN number (no dash)
• Your password = the last 6 digits of your workers’ compensation policy number – found on the Declaration and Information pages of your policy.
• You can add additional user id and passwords in the Security section for staff that need access.

By Donna Motley, Vice President of Claims

The New Year has begun! Some people may make “New Year’s Resolutions” while some people want to start the new year with a clean slate, and consider the new year as an opportunity to “clean house”, purge and get organized!

As an employer this may be a good time to clean house, purge and get organized, not just physical cleaning but take the time to review and address your company policies and procedures. As the State of Michigan has now legalized marijuana, you might want to review your current drug policy. Do you have a policy? Does the legalization of marijuana have an impact on your current policy? Is your current policy now outdated? How can it be adjusted? What about drug screening for new hires vs. work injuries? Don’t forget, drug screening includes more than just screening for marijuana.

In July of 2018, MTM and Michigan Manufacturers Association (MMA) began a partnership. This partnership seemed natural and in fact past due. Both entities have “manufacturing” as the key word in their organization’s name. Both entities have a long history of supporting Michigan manufacturers and both constantly search for ways to improve the working environment for Michigan manufacturers. The goals of each organization have been to constantly strengthen the organizational support for manufacturers in the state of Michigan.

I can say that after nearly a year and a half of the partnership, we have met our short-term goals. Our organizations talk every week and share data to strengthen each others’ activities. Recently, MTM and MMA have co-sponsored these events with additional events to be scheduled for 2020:

• Reasonable Suspicion Drug & Alcohol Training for Supervisors in Livonia and Lansing
• Drugs and Alcohol webinar available on the MTMIC portal

On November 7th, MMA held their annual Manufacturing Excellence Awards gala with over 300 people attending the event and celebration of Michigan Manufacturers. Here’s a list of the awards of the evening;

• Manufacturing Emerging Leader Award
• Manufacturing Community Impact Award
• Manufacturing Talent Champion Award
• Manufacturing Innovation Excellence Award
• Michigan Manufacturer of the Year
• Manufacturing Woman of the Year
• Coolest Thing Made in Michigan – People’s Choice Award
• Manufacturing Lifetime Achievement Award

Each of these awards included a story that was fascinating and educational. I recommend that you put this event on your checklist as a must-do for 2020. If you would like more information on the MMA and their events calendar, please contact Megan Brown @ megan.brown@mtmic.com/blog or (248)715-0012.

As this newsletter arrives we have already “enjoyed” our first single digit temp day. November was a bit early, but now we are ready for the cold snaps of winter. Let’s stay warm.