OVERLAND PARK, Kan. — The second annual Aftermarket Industry Conference, sponsored by Universal Underwriters Group (UUG) and held late last year, addressed issues like the increasing burden of lawsuits, choosing employee benefits, worker’s compensation and loss prevention, all of which will be pertinent as we begin 2005.
Associations and legislation
Participants, especially associations, were concerned with escalating lawsuits against businesses and consumers. Randy Seiner, vice-president and the director of state government affairs for Zurich North America and Universal Underwriters said, “Associations that align their interests and message can exponentially increase their political power.”
He outlined four questions that should be asked to determine chances of legislative success:
- What is the problem?
- Can my problem be solved without the state legislature?
- Does the state legislature have the legal authority to resolve the issue (state vs. federal authority)?
- Will the state legislature solve my problem for me? This depends on the association’s political strength assessment, said Seiner.
Health care options
Rising health care costs were also a concern at the conference. The Association Health Plan (AHP) legislation, sponsored by Missouri Sen. Jim Talent, allows small businesses to pool together and purchase health insurance like larger companies. If it passes, the number of uninsured Americans will decrease without costing taxpayers anything, said Talent.
This bill’s opponents cite the restraints on national insurance providers to raise premiums to cover their costs. They add that states don’t want to lose their regulation rights.
Health care options include Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs), Flexible Funding Alternatives and Defined Contribution Plans.
An HRA is a federally approved funding method that lets employers reimburse employees for a portion of their health expenses by covering part of their deductible. It is solely employer funded and can be combined with any health plan. A June 2004 study by AETNA, a national insurance provider, reported that the average renewal cost increase of HRA plans was 3.7 percent compared to 11 percent for traditional plans. Preventive care programs saw a 23-percent increase.
A flexible funding account allows the employer to pay for actual claims that occur on an individual or group basis. It is not necessary to prepay claims that do not occur. Groups with more than 15 employees, a better-than-average claims experience and a majority of employees under 50 years old have the best results with this plan.
With a defined contribution plan, employers provide two or more plan designs to choose from. The employer designates a high deductible plan and provides a defined contribution amount per employee. The employee may choose the lower deductible plan at his or her own expense. This plan allows an employer to budget his or her employee cost benefit.
Worker’s comp
How are worker’s compensation classifications determined for the automotive industry? This is an important consideration because NCCI, a non-profit organization funded by affiliated insurance carriers, has a classification system that is supposed to provide fair and equitable distribution of premiums among employers. It also develops statistical information to prepare loss costs and manual rates.
Jennifer McKenney, CPCU and Classification Assurance consultant, said that automotive aftermarket businesses are grouped based on the type of work they perform and not on job categories.
Safety regulations
Richard Fairfax, director of enforcement programs for the U.S. Occupational Safety and Health Administration (OSHA), discussed loss prevention tools that are available from insurance companies, including loss prevention guidebooks, OSHA safety handbooks, bulletins, videos and surveys.
He reports that some of the top violations in the industry were in the areas of hazard communication, personal protective equipment, blocked exit routes, electrical system design and housekeeping.
