From 1 July 2021, eligible Victorian workers and volunteers who suffer a work-related mental injury will be able to access ‘reasonable treatment’ and services for up to 13 weeks while their claim for compensation is being determined, regardless of the outcome of their claim. More information about these provisional payments is available from WorkSafe Victoria.
ANY INDUSTRY TRENDS YOU CAN SEE ARISING IN FY22?
The liability complexities associated with working from home and work-related mental injury claims continue to challenge the insurance market. This, coupled with the mismanagement of accepted claims has resulted in increased premium for clients.
At Honan, we have identified a gradual increase in the prevalence of liability exposures and subsequent claims activity. With this in mind, we are working with our clients on critical injury and illness prevention initiatives. For example, for clients that we identify as having a high risk of claims, we partner with rehabilitation experts to provide physical and mental health webinars and ergonomic assessments.
We encourage clients to adopt a proactive approach in the management of potential injury and illness. This includes empowering management teams to identify potential injuries and register concerns with Honan as early as possible.
The Future of Employee Health and Wellness Benefits
The COVID-19 pandemic has truly reshaped the way organisations and their employees approach work. As businesses navigate the transition to the ‘new normal’, those with robust employee health and wellbeing benefits will be best placed to attract and retain the top talent in the market, while enhancing their employee’s organisational performance.
Australia has done relatively well in containing the spread of the pandemic compared to many other countries, however, a recent survey by group insurer Metlife (1) shows our overall health and wellbeing has taken a significant hit in recent months. Some key concerns raised by Australian employees in the survey include:
While the statistics paint a somewhat grim picture, they present an opportunity for employers to respond and deep dive into the needs of their greatest assets – their employees.
Honan works with some of the world’s leading organisations in designing and coordinating their Employee Benefit programs. Partnering with these organisations over the past year has shown us the importance of supporting employees’ physical and mental wellbeing and the powerful engagement, productivity, and trust this fosters between employer and employee.
Below are three key trends likely to shape the future of employee health and wellbeing benefits in Australia:
Models of holistic wellbeing will be widely adopted
The days of simply providing office lunches or onsite yoga sessions are numbered. Increasingly, there is an expectation that leading organisations should play a more active role in supporting the overall health and wellbeing of their employees.
Employees are looking for organisations to demonstrate care and support outside the traditional financial benefits, to help keep them happy, healthy, and engaged in their work lives. This can be established by designing a holistic wellness offering that provides access to benefits promoting physical health, mental wellbeing, and lifestyle support services, which can be integrated into both the physical office space and remote working environments.
Benefits that offer a personalised experience will be key
Health and wellbeing programs that can be customised and tailored to employees’ needs will be an essential part of an organisation’s overall health and wellness benefits proposition. More and more, we expect to see standard ‘wellness webinars’ replaced with relatable, customised experiences, targeting the unique demographics of an organisation to create more impact. Nutrition consultations, 1-1 mental health coaching, skin checks, and health screenings are some great examples of initiatives that can be tailored to each employee and form part of a holistic wellness offering.
Technology will be at the centre of wellness benefits
The pandemic forced organisations and employees to adopt new technologies at an unprecedented pace. Employees expect technology to be the default option for most things in life and benefits are one of them. Digital employee wellbeing platforms will play a key role as an increasing number of companies look to bolster their employee wellbeing propositions.
Honan has a team of experts ready to assist you in developing the right employee wellness program tailored to your company’s unique needs. We have recently launched ourHonan Wellness Hub– a platform where you can discover the different Health, Wellbeing, and Employee Support Benefits we can incorporate into a custom program for your organisation and where you can catch up on the latest insights on our Wellness Blog, all in one place!
1 Metlife Survey: 2020 Employee Benefit Trends Study (EBTS), Key findings from the MetLife Australia 2020 EBTS. https://www.metlife.com.au/about-us/thought-leadership/Employee-Benefit-Trends-Study-2020/
This superannuation increase is a cost to businesses or employees or a combination of the two. An organisation’s remuneration structure will determine how this change is calculated and how it will impact employee’s take-home salaries. Regardless, clear and consistent communications from employers are more important than ever in helping employees understand how the changes will affect them.
Findings from a recent Employee Benefits Study by Metlife showed almost half of Australian employees surveyed suffered poor mental health due to COVID-19, with financial concerns being a key driver of mental ill-health. As such, organisations splitting the cost of the increase with employees or passing on the increase in full to their employees should communicate with empathy.
Employers who are currently contributing above the minimum threshold will also need to decide whether they will continue to pay above the minimum superannuation guarantee and any implications this may have for the attraction and retention of top talent.
WITH YOU ALL THE WAY
Reach out to Honan’s specialised Employee Benefits team for further information and assistance in developing your organisation’s Employee Benefits offering and communications.
With the 2021/22 financial year just around the corner, there are changes set to take place for Workers’ Compensation schemes around the country. To keep you up to date, we have compiled the latest legislative updates by State and Territory, outlined the key information you need to know, and included practical actions you can take to set your business and employees up for success in the year ahead.
The claim experience period for 2021/22 will be three years from 1 January 2018 to 31 December 2020. However, the last 12 months of that experience period (claims received between 1 January 2020 to 31 December 2020), will NOT have a statistical claims estimate (SCE) applied, or any medical and like expenses included. Furthermore, only actual weekly compensation payments will be used. This will have an impact on the premium payable for 2021/22 with reductions likely to occur, however, the full impact of SCE costs will be realised in 2022/23.
The average industry premium rate for 2021/22 will remain unchanged at 1.27%. Premium capping will also remain at 30% to limit any year-on-year rate increases.
VIC Premium notices for 2021/22 are expected to be available from 5 July 2021 and revised notices will be generated by Worksafe each weekend thereafter.
A 5% discount will be available for upfront premium payments made by 31 August 2021.
A 3% discount will be available for upfront premium payments made by 1 October 2021.
Payment by instalments will be available for all transactions after 1 October 2021.
Actual wages declarations are due 30 days after renewal.
TO DO: ENSURE REMUNERATION DETAILS ARE CURRENT
Any wage updates received before 30 June 2021 will be reflected in the 2021/22 premium calculation. Otherwise, WorkSafe calculates the premium based on the remuneration estimate for 2020/21, indexed by 4.75%. You must certify your Rateable Remuneration by 22 October 2021 for the 2020/21 policy period.
To avoid potential financial penalty, you will need to provide a revised remuneration estimate within 28 days, if, at any time, you become aware that:
Your remuneration has increased by more than 20% from the previous estimate, or
What you have paid in remuneration to date is greater than your current estimate for the whole financial year.
During the 30 June 2020 renewal period, icare excluded JobKeeper payments from premium calculations and held off passing on proposed industry rate increases. This year, however, icare is reviewing its position.
icare has announced premium increases ranging from 1.40% – 1.44% of wages for 2021/22, with the intent to increase this year-on-year for the next two years. For employers who struggled during COVID-19 or have experienced an increase in claims costs, this may have significant impacts on premiums. Many employers in NSW had a similar experience in 2016 when icare introduced its new premium methodology, resulting in premium increases of more than 30%.
NSW Premium notices for 2021/22 are expected to be received within 4 weeks from June 30 (or the Employer renewal date) and will renew automatically based on prior-year estimates with indexation applied.
Depending on the size of the employer, discounts of up to 5% will be available for upfront premium payments made within 1 month of the invoice date.
Payment by instalments available, subject to terms.
Actual wages due 30 days after renewal.
Changes to premiums are not expected in QLD for 2021/22.
Average premium rates were unchanged in 2020/21 at $1.20 per $100 of wages paid. Workcover QLD has not raised the average premium rate since 2015, which continues to provide stability for QLD businesses.
QLD Premium notices for 2021/22 are issued once the actual wages from 2020/21 are submitted.
Discounts of 5% will be available for upfront premium payments made before 13 September 2021.
Payment by instalments available, subject to terms.
Since the introduction of the Return-to-Work Scheme in 2015, the average premium paid by South Australian businesses has reduced from 2.75% to an all-time low of 1.65%, with the Scheme fully funded. Despite the financial impact of the COVID-19 pandemic, the ReturnToWorkSA Board kept the 2020-21 premium rate at this record-low rate and actively supported SA businesses by deciding to exclude Job Keeper payments from premium calculations.
Despite improving return to work performance in 2020-21, a higher number of claims are meeting the serious injury threshold than expected. The additional support and services provided to this group significantly increased Scheme costs. With increased cost pressure it is now necessary to increase the average premium rate to 1.70% for 2021-22.
SA Premium notices for 2021/22 are issued after the actual wages from 2020/21 are submitted. These are due by 17 September 2021.
Actual wages can be used to calculate deposit premium for 2021/22, removing the requirement for wage estimate submissions.
No discounts are available for early or upfront payments.
Payment by instalments available, subject to terms.
RISK STATES & TERRITORIES
Workcover WA has confirmed a 4% increase in the 2021/22 recommended premium rates for compulsory workers’ compensation insurance.
This translates to 1.70% of total wages (up from 1.64% the previous year).
Changes have occurred to the ACT State levy. The levy will now be 2.80% for all policies commencing on or after 1 July 2021.
Changes have occurred to the Tasmanian Asbestos levy. The levy will now be 2.50% for all policies commencing on or after 1 July 2021.
No changes. Stamp duty remains at 11% of coverage extensions (Common Law or Principles Indemnity)
Terms negotiated before the Client renewal date.
Premium to be paid within 14 days of receipt of invoice.
Payment by instalments available, subject to terms.
Actual wages are due 31 July 2021 for all accounts renewing on 30 June.
You may wish to consider a premium funding arrangement with Honan. The arrangement can involve financing the full payment as a lump sum, typically over a series of 6 – 10 instalments, to save upfront costs and give you access to discounts (where available).
Some points to note:
Financials are required for all loans over $150,000 (Management Accounts FY21 and Audited Financials FY20)
Clients will receive the maximum benefit in VIC, NSW, and QLD:
Worksafe VIC will provide a 5% discount if the premium is paid by 31 August 2021, or a 3% discount if paid by 1 October 2021
In NSW, icare will provide a 5% discount if the premium is paid within 1 month of the invoice being issued.
Workcover QLD will provide a 5% discount if the premium is paid by 17 September 2021
HAVE YOU REVIEWED YOUR INDUSTRY CLASSIFICATION?
Premiums are largely influenced by the industry classification of your business. If the industry classification is incorrect on your policy, you may be paying considerably more in premium than necessary. Honan can assist with the re-classification, please contact us using the below details to discuss further.
CERTIFICATE OF CURRENCY
If there is no outstanding premium to pay on your account, you can obtain a Certificate of Currency now, either online, directly from your insurer, or by requesting this from Honan.
WITH YOU ALL THE WAY
As always, the Honan Workplace Risk team is available to assist you. Feel free to reach out at any time.
MetLife’s 6th annual Employee Benefits Trend Study (EBTS) was released recently, and with a focus on how employees are navigating work-life pressures in the wake of the Pandemic, its findings come highly anticipated.
COVID-19 forced businesses the world over to re-engineer the way they do business and rethinking their employee experience was a big part of this. The key findings from this year’s EBTS showed:
businesses were positively surprised by how well their employees adapted to the challenges of COVID-19 and maintained productivity
overall employee health and wellbeing were generally better among businesses who responded positively to the Pandemic and provided their staff with practical tools to evolve and adapt.
So what additional employee benefits learnings can be drawn from the 2020 study, and how can businesses optimise their offerings from here?
KEY FACTORS IMPACTING EMPLOYEES: mental health, financial uncertainty, concern for family & friends
Mental Health – room to improve & measure impacts
70% of employers identified mental health as the primary focus in optimising employee health in the wake of the Pandemic. However, 40% of respondents stated their employer was NOT offering benefits or programs to support or enhance their wellbeing.
While it is encouraging to see close to 60% of employers had adopted strategies and benefits to assist employees, there is certainly room for improvement – particularly with close to half of Australians surveyed experiencing some form of mental ill-health due to COVID. While most employers are offering benefits/programs to support employees’ mental ill-health, 80% of employers surveyed were not tracking/measuring employee mental health.
Financial Uncertainty – more support needed
Financial health concerns were found to be the most common cause of stress and mental ill-health among employees, with 5 in 10 employees reporting their employer had not offered any form of financial health support or access to resources.
General Stress – on the rise
Whilst in Australia we have seen community transmission largely controlled, stress levels remain high, with 1 in 2 employees reporting they are more stressed now than before COVID, and 3 in 10 employees reported feeling run down and drained of their physical and emotional energy.
BACK TO BASICS: structured support from employers is essential
The findings show that active support from employers produces greater productivity, reduced stress levels, and enhances loyalty towards their employer. Employees who feel appreciated, are actively supported in working remotely (and provided with the tools to stay connected) are likely to be more productive, engaged, empowered, trust their employer’s leadership, and achieve their professional goals.
The top 5 programs employees would like from their employer to help ease their stress and improve their wellbeing are:
Structured flexible work arrangements
Increased paid time off
Work from home policy – ongoing post COVID
Additional Superannuation contributions
Mental wellness programs.
RESET TO REAP REWARDS
At Honan, we’re pleased to administer and implement local employee benefit programs for over 150 global and domestic companies. Many of our clients saw the Pandemic as an opportunity to review their procedures and workplace culture and they are now seeing increased productivity and employee satisfaction as a result.
Flexible work arrangements are now seen as a key benefit sought by prospective employees when applying for new roles. In MetLife’s findings, it’s encouraging to see that 73% of companies have implemented formal flexible working arrangements and have plans to continue these in the future.
Here are some key features employers can build into their employee benefits programs to enhance employee wellbeing, engagement, and loyalty:
Employee Assistance Programs (EAP)
Group Life/TPD and Income Protection cover and access to Financial Advice
Funded or co-funded Private Medical Plans – ensuring employees have access to market-leading coverage
Extended paid maternity/parental leave
Extra personal/carers’ leave
Formal Wellness initiatives e.g., free flu vaccinations, annual health checks, etc.
With you all the way
To learn more about how Honan can assist in tailoring a competitive local employee benefits program for your organisation, feel free to reach out at any time.
“I don’t own a house, so do I need life insurance?” is a question I receive a lot in my role. My response is always: “what is your most important asset?”
While the common replies to this question are “my car” or “my phone”, the real answer is actually something less tangible. For a large percentage of the working population, the ability to earn an income is your most important asset, and in many cases, your family’s most critical asset.
If you are unable to work for an extended period due to injury or illness, and your sick leave and annual leave allocations have been exhausted, it can be challenging to support yourself financially – particularly if you are self-employed. Here are some simple answers to other common questions and misconceptions about Income Protection.
WHAT IS INCOME PROTECTION AND HOW DOES IT WORK?
Income protection insurance is a monthly payment aligned to a maximum of 75% of your income at the time of application. If you need to make a claim, the benefit will start once the waiting period has been exhausted and will continue to pay a monthly benefit until you return to work or the benefit period expires, whichever comes first.
WHAT DOESN’T INCOME PROTECTION COVER?
Income protection will not cover you in the event of employment termination or if you are made redundant. It is designed to assist a policyholder in the event they cannot perform their job, due to illness or injury. As part of the application process, each policy is assessed individually, taking pre-existing medical conditions into consideration. At time of implementation, the policy terms will outline what is covered and any exclusions that apply.
WON’T MY SUPERANNUATION FUND COVER ME?
It is a common misconception that income protection insurance provided within superannuation is adequate in the event you are unable to work. While Income Protection, or Salary Continuance is included as a default in some superannuation funds, unless you have updated the sum insured to reflect your income, there will be a discrepancy between the amount you earn and the benefit you receive.
As an example, a common default sum insured is a $3,000 monthly benefit, which aligns with an annual salary of $48,000. The cover is usually limited to a 90-day waiting period with a 2-year benefit period. For someone who has not updated their sum insured to accurately reflect their income, relying on a superannuation fund for income protection can be extremely risky. It also highlights the importance of reviewing your policy to ensure you have the right cover in place.
ARE PREMIUMS TAX DEDUCTIBLE?
Income Protection premiums are tax deductible when you pay them yourself via credit card or direct debit. Alternatively, to free up cashflow, the premium can be funded via your superannuation fund.
With You All The Way
To find out more about income protection insurance and how it can be used to protect your financial wellbeing, feel free to reach out at any time.
In this update, we share practical insurance insights from the quarter that’s been, and forecasts for the quarter ahead.
KEY TAKEAWAYS FROM FY21: Q2?
2020 showed us that change can come literally overnight and that as individuals and businesses, we need to be adaptable and resilient. In the context of workers’ compensation, something that has not changed is our continued responsibility to provide a safe work environment for our people. The widespread shift to remote working arrangements for many businesses created the potential for new risk exposures, while legislative changes were introduced under certain workers’ compensation schemes in response to COVID-19.
34% related to mental health impacts associated with the pandemic.
29% involved testing or isolation requirements (some workers’ compensation schemes covered the costs of isolation arrangements and COVID-19 medical tests).
Claim numbers are expected to rise in response to Victoria’s second wave of infections that peaked in August 2020.
It has never been more important for businesses to understand their risk exposures, and ensure their processes, policies, and procedures remain relevant and responsive to the changing situation.
KEY CONSIDERATIONS FOR FY21: Q3?
CGU’s withdrawal from the Victorian Workers’ Compensation schemewas a big surprise for all. The transition plan is not yet finalised, with CGU’s existing contract with Worksafe valid until 30 June 2021, however, there has been discussion of this being brought forward to expire on 31 March 2021. A policy transfer freeze was implemented by CGU following the impact of COVID-19 and due to end on 31 December 2021. It has been indicated that a policy transfer freeze will be extended until 30 September 2021.
With allocation of the CGU book of business yet to be confirmed, it is anticipated that businesses will be permitted to put forward a submission for their preferred Agent once CGU finalise their tenure.
NSW icare has announced the appointment of Richard Harding as CEO and Managing Director. This will be an area to watch as Harding seeks to navigate the NSW scheme back from the challenges of 2020.
NSW icare has also announced the appointment of their legal panel for workers’ compensation claims, which means the scheme has now removed the option for Employers’ “client preferred” Solicitors. This will have a big impact for any Lawyers and Clients who relied on these long-standing relationships. A transition arrangement is in place with the new panel coming into full effect from 30 June 2021.
WHAT INDUSTRY TRENDS SHOULD CLIENTS MONITOR OVER THE COMING QUARTER?
With JobKeeper and JobSeeker payments due to end (on March 28 and March 31, respectively) and many businesses still being impacted by COVID-19 restrictions, there continues to be uncertainty around job security and income security. The reality is that many people will seek alternate options to close these gaps, and spikes in workers’ compensation claims are expected to continue.
To demonstrate your commitment to employee safety and wellbeing, we encourage businesses to continue communicating with staff about changes to Government subsidies and resulting impact to the business and your staff.
We’re With You All The Way
Feel free to reach out to discuss your risk exposures. We are here to help you ensure your processes, policies, and procedures reflect your evolving needs.
In an effort to harmonise the Work Health & Safety (WHS) regimes across Australia, Western Australia has now passed legislation to update its Work Health and Safety Act 2020 (WA), (the Act).
Workplace Health & Safety Overhaul
The new laws will likely come into place in April 2021. This will include several changes, with the most notable being the Industrial Manslaughter Legislation:
If a ‘Persons Conducting a Business or Undertaking’ (PCBUs) is engaging in conduct knowing the conduct is likely to cause death “or serious harm” to an individual, the crime will now carry potential imprisonment term for up to 20 years and a fine up to $5,000,000 for an individual person and up to $10,000,000 for a body corporate.
These new changes are intended to make safety front of mind and help prevent any future fatalities from occurring.
Under the new legislation, it is important to note that officers can also be charged for crimes committed by a PCBU in certain circumstances, including when the PCBU’s conduct was attributable to the officer’s neglect, or engaged in with the officer’s consent or connivance.
Officers (in particular) should ensure they understand their obligations with respect to the PCBU’s WHS duties and officer due diligence.
What about Insurance?
Up until now, companies could transfer the risk of these penalties via insurance, however this will now be prohibited going forward. Companies will therefore need to ensure that policies offering WHS Penalties cover are not entered into.
We’re with you all the way
To find out more about these changes, feel free to reach out at any time.
Simply put, to provide peace of mind to our clients. We provide personal insurance solutions to mitigate the economic loss in the event of death, disablement, or illness.
A QUOTE TO CAPTURE YOUR TEAM’S ETHOS / APPROACH / CULTURE?
“We enjoy looking after our clients just as much as we enjoy looking out for each other. We are always willing to lend a hand to support one another and bring some fun to the workplace”.
IF WE WERE A SPORTS TEAM, WE’D BE CALLED …
The Honey Badgers – Tenacious, unrelenting, and persistent…on behalf of our clients!
REFLECTING ON THE YEAR TO DATE, HIT US WITH YOUR TEAM’S TOP 3 HEADLINES.
Our transfer back to 100% Honan ownership – we’re home!
A number of successful claim results
Some great underwriting outcomes, resulting in favourable terms for our clients
HONAN’S ‘WITH YOU ALL THE WAY’ BRAND PROMISE IS ONE WE’RE PROUD TO HONOUR IN BOTH OUR DEALINGS WITH CLIENTS, BUT INTERNALLY ACROSS THE BUSINESS TOO. WHAT DOES ‘WITH YOU ALL THE WAY’ LOOK LIKE WITHIN YOUR TEAM? HOW DO YOU SUPPORT EACH OTHER THROUGH CHALLENGES AND WINS ALIKE?
Our process involves a collaborative approach from the entire team – without this we would not be able to achieve better outcomes for our clients. Our team all have quite different skill sets that we ensure are leveraged where necessary. We are honest enough to know there are areas where we require assistance, and we know we can depend on our colleagues to share their expertise.
IF YOU COULD PICK ONE BRILLIANT PERSON – DEAD OR ALIVE – TO JOIN YOUR TEAM, WHO WOULD IT BE AND WHY?
Australian Rules football great, Leigh Matthews – exceptionally skilled, hugely determined, and courageous!
LOOKING AHEAD, WHAT IS YOUR TEAM MOST LOOKING FORWARD TO OVER THE NEXT 6-12 MONTHS?
Continued collaboration across all parts of the Honan business. The opportunity to help even more clients and to provide them with the total Honan insurance solution is what motivates us!