Preparing the Home Care Industry for 2021

This past year has brought significant changes to many industries as they navigated the effects of COVID-19. Below is an overview of the effects to the home care industry and what employers can do to be better positioned in the marketplace.

Impact to the insurance industry as a whole

Even prior to COVID-19, several key events occurred which began impacting pricing:

• 2018 California Wildfires – over $12 billion in losses severely impacted the reinsurance marketplace causing a ripple effect to insurers, many of which weren’t even in the property insurance marketplace.

• AB 218 – This law was signed last year which eliminated many of the statutes of limitation for people to file child abuse claims. Though this related to those who work with children, the same carriers who insure  the home care industry also work with industries serving children. Claims have risen 500% since January 2020.

• Social Inflation – Recent trends have shown an increase in litigation, claims costs and plaintiff friendly legal decisions.

What impacts will COVID bring?

• SB 1159 – The presumption that COVID claims will be compensable under workers’ compensation is severely impacting the costs towards California insurers. Recent estimates suggest over $2 billion has been paid to date.

• Healthcare companies hit hardest – The vast majority of the claims are coming from the healthcare industry. With the heighten risk, we’ve seen carriers exit the marketplace and a hardening of the market for those remaining.  

What can Employers do?

• Make sure all your documentation is in order. This includes:

  • Written COVID-19 Prevention Plan Template

  • If you have had any incidents – proper documentation regarding what was done in response to the incident and if any changes were made moving forward to keep incidents from happening again.

  • Post all CDC, state and local health department required information and postings.

• Make sure you are being properly represented to the marketplace. Most insurance carriers are improperly categorizing home care companies as healthcare risks. The exposures to a home care companies are far less risky than that of a hospital or health center. However, without proper discussion between your broker and underwriter, you will be categorized as a health risk. Make sure your broker is communicating the true exposure of where your employees work and what they do and the exposures they are truly facing to help you get the best pricing.

To discuss your situation and prepare for 2021, contact Rancho Mesa Insurance Services at (619) 937-0164.

Top Three Benefits of Conducting an In-Home Health Care Safety Inspection

For many Home Health Care companies, conducting an in-home inspection on all new cases is standard practice. The intent of these inspections is to improve the quality of services offered; however, there is also an additional opportunity to improve the risk profile for those health care companies and thereby help them reduce their insurance costs.

Best practices suggest that Home Health Care companies conduct safety inspections in the home for all new clients prior to having a caregiver work the case.  If possible, have the caregiver(s) that will be in the home, conduct the inspection with you. Following are 3 ways inspections with an eye toward safety can help improve your risk profile.

1. Providing An Opportunity to Point out Safety Hazards
   The most obvious outcome is the opportunity to point out safety hazards.  Having two sets of eyes on the home will help to identify potential hazards such as a poorly lit staircase, an over stocked bookshelf where the caregiver might obtain supplies, a crowded kitchen, or loose carpet or rug.
    

2. Engaging the Employee as an Equal Partner in Safety
   Studies show claims are less likely to occur when the employee is engaged in the safety process.  For example, if the employee is involved with assessing their own hazards and determining their own safety, they are more likely follow the guidelines.
    

3. Improving your Frequency Rate
   Conducting pre-case safety inspections is known to reduce the frequency of claims.  It’s no surprise taking this step will positively impact the employer’s insurance premium. Not only is the likelihood of a claim reduced, the ability to react to a claim with proper corrective action increases, as well.  If an accident were to occur, prior inspections will speed up the discovery process and allow the proper changes to be made, in theory, reducing the likelihood of the incident occurring again.

Conducting safety inspections in the home prior to assigning a case workers is a great way to not only benefit pricing immediately, reduce the likelihood of a claim in the future, thereby helping you to sustain favorable pricing in the future.

If you would like to learn more, or have any questions, please contact Rancho Mesa at (619) 937-0164.