Archive for September, 2016

New Law Tightens Workers’ Comp Exclusion for Officers, Board Members

Pensive construction worker with halo of light

A new law has made changes to the officer exclusion for workers’ compensation in California but it could cause problems for policies that do not incept on Jan. 1.

Starting in 2017, an officer can be only excluded from workers’ comp coverage if he or she owns 15% or more of the company’s stock. That’s changed from the current rules that set no ownership levels for officers and directors that want to claim a workers’ comp exclusion, which has created confusion as well as an opportunity for fraud.

However, the law is written in such a way that it also applies to policies that are in effect as of 2017 and not just those incepting on Jan. 1. In other words, your policy incepts at another point in the year, if you have owners or officers who are claiming this exemption, you will need to bring your policy into compliance before the start of the year.

Current law

To be eligible for a workers’ comp exclusion:

  • The employee must be an executive officer of the corporation (president, vice president, secretary, assistant secretary, treasurer, assistant treasurer, for example).
  • The employee must own some stock in the corporation.
  • The company must be a “closed corporation.” That means that all of the company stock must be owned by the executive officers and directors, and no one else.

The problem with current law

The election process to opt out of coverage is not very clear under current law.  Beyond one limited statutory reference and very little regulatory guidance, insurers and LLCs are left to figure it out for themselves.

The Association of California Insurance Companies, one of the supporters of the bill – AB 2883 – argues that this lack of clarity has led to abuses that have hurt injured workers and driven fraudulent activity.

There have been cases of some companies making a janitor the “vice president of janitorial services” in order to avoid paying for their workers’ comp coverage.

What’s new for 2017

AB 2883 requires:

  • That an officer or member of the board of directors own at least 15% of the stock of the corporation in order to opt out of workers’ compensation coverage.
  • That the officer or member of the board of directors sign a waiver stating that the individual is a qualifying officer or member.
  • To continue receiving the exemption, you will have to submit a waiver to your insurer by Dec. 31. Your insurer will send you the form.
  • If the signed waiver/exclusion form is not received on or before Dec. 31, individuals will be included for coverage effective Jan. 1, 2017 and subject to officer minimum/maximum payrolls.
  • The minimum officer payroll for 2017 is $48,100 and the maximum officer payroll is $122,200.
  • Officer premiums will be determined based on job duties, class code rates and payroll.

Cal/OSHA Ramping up Inspections: How to Prepare


California businesses can expect more inspections in the coming years as Cal/OSHA ramps up its personnel after its workforce was cut back as a result of the effects of the Great Recession that started in 2008.

In 2015, Cal/OSHA inspections reached the highest level in five years and the number of violations cited was the most since 2008, according to the workplace safety agency. Inspectors were also writing out more serious violations – also the highest since 2008.

As the agency continues to beef up its ranks of inspectors, Cal/OSHA will be able to visit more workplaces in the coming years. So, if you’ve been complacent about workplace safety, now is the time to make a change so that you are not hit with citations if your facilities are inspected.

Cal/OSHA has been working to rebuild its inspection force since it was severely curtailed after the recession took hold in 2008. Since the state economy has been recovering, the agency has started hiring new inspectors in positions that were lost to attrition.

While the numbers are ticking upwards, the number of inspections and resulting fines are nowhere near the amounts from the early 2000s.

Although any worksite can be inspected at random, or as part of a special emphasis program on a certain industry, the majority of inspections are in response to workplace injuries or complaints about unsafe workplaces – mostly by employees.

Construction by far received the most onsite inspections in 2015, at more than 2,500, a third of the total. It was followed by the services industry (more than 1,700) and manufacturing (1,200-plus).

Construction also was on the receiving end of the most citations, at more than 5,500, followed by manufacturing, at almost 4,700, and services at more than 3,800 alleged violations.

Manufacturing had the highest percentage of serious violations, at 26%. The lowest was public administration – at 8%.

While you might feel that your business flies under the radar and it could be 15 or 20 years until you are inspected, the best bet is to play it safe.

Safety and Health magazine recommends taking the following approach to surviving an OSHA inspection:


Establish a response plan

You should have in place an action plan that outlines procedures to follow in case OSHA comes calling.

Start by appointing one of your staff, preferably one involved in safety, to be responsible for escorting the inspector. Have an alternate on staff as well, in case your designee is away from work on inspection day.

You should select a room for opening and closing conferences with the inspector.

Sometimes an employee representative is invited to join these meetings. You can have your safety committee appoint a representative.


Meeting day

To make sure you’re dealing with a bona fide OSHA inspector, ask to see the person’s identification. The ID will include the inspector’s photo, name and office. It will not be a badge.

You should take note of the inspector’s name, phone number and office.


Opening conference

The inspector will ask your designated representative to join him for an opening conference, during which he will explain what prompted the inspection and provide backup documentation.

Next he will explain what he will be inspecting, including details like machinery and procedures. But mind you, if the inspector spies a safety violation that is outside the parameters of the inspection, he may investigate further.

Your point person should know the basic information of the facility, like the types of work being performed, how many employees there are, the names of supervisors and managers, and how to quickly produce injury logs upon request.

If you are prepared, you’re likely to be treated more fairly than if you’re unorganized and have incomplete documentation. If the inspector finds holes in your logs, you can expect that the inspection will be expanded.


During the walkaround

Courteously show the inspector the areas of operation he asks to see and make sure your point person and management act professionally.

Don’t offer to show areas that the inspector hasn’t asked to see.

Feel free to ask the inspector to postpone the inspection if he shows up at an inconvenient time, such as when production is under deadline pressure and it would be difficult to make accommodations. But keep in mind that this would be a short-term solution, and the compliance officer may not agree to the postponement.

Even if the inspector is willing to put off the walkaround, he will still request various files and will want to take a quick look around to observe operations.



Rates Expected to Climb 4% in 2017 as Workers Grow Weary of Cost-shifting


A new survey by Mercer Human Resources has found that average premiums for group health plans should increase by about 4% for 2017 after employers make plan changes like increasing deductibles and switching carriers.

Employers have enjoyed health plan cost increases of about 4% or less each year since 2011. Prior to that, essentially before the Affordable Care Act became law, costs were increasing by double-digit percentages for many years.

The new findings come after the Kaiser Family Foundation and Health Research & Educational Trust released its own employer health benefits survey, which found similar increases for this year.

Premiums for single and family coverage increased on average by about 3% in 2016, an amount that is one of the lowest on record, the survey found. The average family premium, which includes the amount contributed by both the employer and the employee, was $18,142 in 2016. Individual employer coverage cost an average of $6,435 in total.

The projected underlying cost growth from 2016 to 2017 is at a new low of just 5.5%, Mercer noted. That’s the increase employers would expect if they made no changes to their medical plans.

The difference between the underlying cost growth and actual cost growth reflects how much employers are shifting costs via higher deductibles or out-of-pocket expenses, or reducing the value of their health plans by offering plans with narrower networkers, for example.

A difference of just 1.5 percentage points for 2017 suggests employers do not plan to do much cost-shifting in 2017. For the past eight years, the difference has been approximately 3 percentage points, and has not been less than 2 points.

For the most part, employers have been able to keep cost increases low by pushing plans that have higher deductibles and out-of-pocket expenses for employees.

Another way that employers have been reducing their costs is to offer HMO plans with narrow hospital and doctor networks, which require enrollees to pay more out of pocket if they use providers outside the network.


Are workers growing weary?

But while the employers that have been pushing high-deductible plans and narrow network plans are reducing their own costs, it may be coming at a price.

The Mercer survey found that many workers are starting to feel their employer-sponsored coverage has become less of a benefit and more like a way to shift out-of-pocket costs onto the backs of workers.

Kaiser has reached an astounding conclusion about this.

While the average worker’s earnings increased by 60% between 1999 and 2016, their premiums in employer-sponsored plans soared 240% over the same period. In addition to those premium increases, the amount they paid out of pocket for health care services also jumped to a similar degree, Kaiser found.

Deductibles in employer-sponsored health plans started their steep climb in 2008, before the ACA was enacted. Between 2008 and 2016, the average annual deductible doubled to $1,478 from $735.

Deductible amounts also vary depending on employer size. For example, staff in companies with fewer than 200 employees had average deductibles of $2,000 this year, Kaiser found.


What employers want to see

Mercer asked employers that it surveyed what they would like to see changed about the ACA:

  • 80% said they would like to see the excise tax (also known as the Cadillac tax) eliminated (the tax of 40% on premiums above a certain threshold has already been delayed until 2020).
  • 61% want to eliminate the employer mandate that requires firms with 50 or more employees to offer health coverage or pay a penalty.
  • 47% want to repeal and replace the ACA entirely.


One bright note was that only 2% of large employers (those with 500 or more workers) and 9% of those with less than 500 would prefer to send their employees to public exchanges to buy coverage. That’s compared with 2010, when 6% of large employers and 20% of small employers said it was likely they would terminate their plans.



Ransom Often the Smallest Cost of Ransomware


One of the least understood cyber threats to businesses is ransomware, which hackers use to shut down an organization’s computer system until the victim pays a ransom to unlock it.

While most organizations focus on the cost of the ransom, which is typically less than $1,000, the costlier damage is to the company’s operations, which can be hampered or completely shut down after their systems are rendered unusable.

Ransomware is one of the fastest-growing cyber threats and attacks are expected to grow 300% in 2016 from the year prior, making it vital for your organization to have in place systems to reduce the chances of becoming victimized.

Ransomware typically enters a company’s systems after an employee clicks on a link in a rogue e-mail, which allows the malicious code to infect the company’s systems and eventually shut them down, locking out all users and making all or some of the data inaccessible. After it has frozen the systems, it will demand a ransom to unlock it.

According to a recent survey by Hiscox, the bulk of ransomware attacks lead to business interruption losses:

  • Corporate loss of business income or services: 36%
  • Corporate loss of digital assets: 16%
  • Corporate loss of financial assets: 3%
  • Breach of personally identifiable information: 25%
  • Breach of personal financial identity: 17%
  • Breach of personal health information: 3%


But, experts believe that a significant portion of ransomware attacks go unreported, making it difficult to get a grasp on the full effects.

And while most states have laws requiring organizations to report privacy breaches, that’s not true for ransomware attacks.


The full damage

According to the FBI, there were 2,400 ransomware complaints in 2015, resulting in total estimated losses of more than $24 million with the average ransom demand being $10,000. But when smaller companies are targeted, the ransom can sometimes be as low as $500 to $1,000.

The ransom is usually the smallest cost to a company, as most businesses also have to contend with:

  • The cost of lost productivity
  • Lost profits
  • Harm to business reputation
  • The cost of reconstructing data


Ransomware typically targets your most important data, but sometimes it just makes your entire system unusable. It may also lock down your marketing materials, payroll data, intellectual property, financial transactions and health records.

Some companies try to beat the hackers by hiring outside professionals to decrypt all of the information that the ransomware perpetrators have frozen.

But that’s a risky proposition because it often leads to incomplete data recovery. Full recovery is usually only possible with the decryption key.

Ransomware criminals who are not paid will often destroy the key, leaving affected companies in a more serious bind.

If you’re lucky, a ransomware attack may only be confined to one server or computer. But if it hits the right servers, it can spread throughout your organization to all users and, if you are connected with vendors or partners, it can even spread to their systems.

There are a number of tactics that ransomware criminals use, such as:

  • Holding the data hostage
  • Threatening to disclose confidential or proprietary information
  • Threatening to sell or auction confidential or proprietary information


Controlling risk

CFO magazine recommends that you do the following to reduce the risk of being hit by ransomware:

  • Train and educate personnel on an ongoing basis.
  • Specifically address and plan for ransomware in your disaster recovery and business continuity plans, including testing of those plans.
  • Ensure that all anti-virus and other security software is properly updated. This software will detect and eliminate many forms of ransomware.
  • Engage a third-party expert security vendor to assess your organization’s systems and procedures.



If you suffer a ransomware attack, you should:

  • Identify and isolate infected and potentially infected systems.
  • Disable shared network drives connected to the infected systems.
  • Consider suspending regular backups of those systems to prevent the virus from spreading further.
  • Engage an information security consulting firm that specializes in assessing and mitigating these sorts of attacks.
  • Send out a memo to all your staff warning them of the infiltration and to not open e-mail and attachments from suspicious sources.



Cyber insurance can help pay for the effects of a ransomware attack. Depending on the insurer, some policies will pay the ransom, while others expressly exclude it, citing the “moral hazard” of such coverage.

If you are concerned about the damage a ransomware attack could inflict on your organization, call us to discuss your cyber insurance options.


Hackers Can Tap USB Devices in New Attacks, Researchers Warn

Cyber Security on the Mechanism of Metal Gears.

New research says that USB devices like thumb drives, and even keyboards and mice, pose one of the biggest cyber threats to enterprises.

Two scientists and researchers with Berlin’s SR Labs presented on the newest cyber threat at the recent “Black Hat” hacking conference in Las Vegas in a presentation titled: “Bad USB – On Accessories that Turn Evil.”

Malicious code can creep into these devices through malware on a computer and be used to hack both personal and business computers, according to SR Labs. Karsten Nohl, chief scientist at the German company, said that hackers or malware can load malicious software onto the computer chips that control the functions of USB devices, which typically don’t have any protection against tampering with their code.

Even more disconcerting is the fact that it’s virtually impossible to tell from where the virus originated.

SR Labs is known for uncovering major flaws in mobile phone technology.

The new research indicates just how easy it is for hackers to exploit weaknesses in simple devices in order to do serious damage to a computer or network.

SR Labs has performed attacks by writing malicious code onto USB control chips used in thumb drives and smart phones. Once the USB device is attached to a computer, the malicious software can log keystrokes, spy on communications and destroy data, he said.

A USB device that appears completely empty can still contain malware, even when formatted.

Interestingly, the computer to which the infected USB device is attached does not detect the virus because anti-virus programs only scan software written into a computer or a device’s memory. However, these viruses can be implanted in the “firmware” which controls the device’s functions, and anti-virus programs do not scan firmware.

SR Labs, when running its tests, was able to gain remote access to a computer by having the USB instruct the computer to download a malicious program with instructions that the PC believed were coming from a keyboard. The virus in the USB device was also able to change DNS network settings on a computer, instructing it to route all of its Internet traffic through malicious servers.

Once a computer is infected, it could be programmed to infect all USB devices that are subsequently attached to it, which would then in turn corrupt machines that they contact. In other words, if one tainted USB device is inserted into a workplace computer attached to a network, it can infect all USB devices in your workplace.

“It becomes self-propagating and extremely persistent,” Nohl said in a prepared statement. “You can never remove it.”

In one demo, shown off at the “Black Hat” conference, a standard USB drive was inserted into a normal computer. Malicious code implanted on the stick tricked the machine into thinking a keyboard had been plugged in.

After just a few moments, the “keyboard” began typing in commands – and instructed the computer to download a malicious program from the Internet.

Another demo involved a Samsung smart phone. When plugged in to charge, the phone would trick the computer into thinking it was in fact a network card. It meant that when the user accessed the Internet, their browsing was secretly hijacked.

Nohl demonstrated how they were able to create a fake copy of PayPal’s website, and steal user log-in details as a result.

Unlike other similar attacks, where simply looking at the Web address can give away a scam website, there were no visible clues that a user was under threat.


The takeaway

USB is ubiquitous across all devices, and all desktop and laptops have at least two and often more than four USB outlets for plugging in keyboards, mice, peripherals like printers and scanners, mobile phones, tablets and USB devices.

If you have not already done so, you should have a policy prohibiting your staff from plugging in USB devices that were not issued to them at work. In fact, you may want to consider even prohibiting your staff from using company-issued USB devices such as memory sticks or mobile phones.


Cyber Security on the Mechanism of Metal Gears.

Cyber Security on the Mechanism of Metal Gears.

The New Threat to Your Officers and Directors: Cyber


The top brass at companies are increasingly being held accountable by partners and shareholders for cyber attacks that occur under their watch, putting their directors’ and officers’ personal assets at risk when lawsuits ensue.

While actions by officers and directors have always been held under scrutiny, the cyber threat expands their potential liability significantly, according to a new report by Fitch Ratings.

And with new regulations that hold organizations accountable for cyber breaches and responsible for remediation, mitigation and recovery from cyber attacks, the onus is even greater now on your directors and officers if they are deemed negligent for failing to protect the company’s data.

Companies and corporate boards have generally not paid as much attention to cyber security as to other corporate risks. However, the 2014 shareholder derivative suits faced by Target Corp. and Wyndham Worldwide Corp. have changed the litigation landscape.

Fitch Ratings probably summed up the risk to directors and officers best in its report:

“D&O-related exposures from cyber events arise through allegations that ineffective or negligent corporate governance and board oversight were contributing factors behind inadequate systems defenses and a breach that led to losses and/or a sharp decline in share value.”


That warning means that board members can’t afford to not monitor their company’s cyber security efforts.

Fitch noted that to date there had been no events that led to significant director’s and officer’s liability settlements, but the growing threat of cyber attacks “will create more potential for cyber-related D&O actions going forward.”

If you have a board, you should already have director’s and officer’s liability insurance. Policies indemnify a firm’s directors and officers and/or the company itself for expenses and losses suffered in connection with lawsuits that accuse them of wrongful or negligent acts.

For publicly traded companies, D&O policies mainly indemnify for securities claims, but for private companies, such policies generally contain no such limitation and may provide coverage when claims are brought by plaintiffs who are not shareholders – like customers, creditors and suppliers.

The big question going forward is whether the typical D&O policy will continue indemnifying for lawsuits alleging personal negligence on the part of directors and officers. Already, some insurers include clauses in their policies excluding coverage for claims alleging negligence over cyber security.

Now various insurers are developing new policies that are designed specifically to cover directors and officers for claims related to cyber breaches.

D&O coverage will vary depending on the specific language of each policy.


Cyber security and insurance advice

There are a number of steps organizations can take to reduce the risk that their data is secured and not susceptible to being compromised.

The board and management should work with competent outside vendors to handle their data and protect their systems, test their cyber security measures and ensure that the company has appropriate insurance in place, including cyber insurance and D&O liability insurance.

To prepare for the aftermath of a breach, your board and management should be prepared to answer difficult questions about the actions they took to protect their company’s data.

You should have the right insurance coverage that is specific to the risks in your industry and company.

Without D&O coverage, directors and officers could be left on their own to defend against lawsuits and pay any potential liability.

That risk is even greater for smaller companies that may not have the same resources to voluntarily indemnify directors and officers.



Inexperienced Workers More Apt to Sustain Workplace Injuries


As an employer you need to pay special attention to the safety of inexperienced workers, who account for nearly half of all reported workplace accidents, according to a new survey.

The survey, by the Golden Triangle Business Roundtable in Texas, found that workers with less than five years’ experience accounted for 43% of reported workplace injuries.

It also found that workers with between five and 10 years’ experience accounted for another 34% of incidents.

OSHA says there are a few reasons younger and inexperienced workers are more prone to workplace injuries:

  • They are often are employed in industries that have a higher frequency of injury hazards (think hazards in restaurant settings associated with slippery floors and use of knives and cooking equipment).
  • Inexperience and lack of safety training.
  • Less aversion to taking risks.


The risk is more acute in construction and other craft fields that already have high rates of workplace incidents.

“Decision-making continues to be reported as leading accident causes and risk-taking continues to be a pre-existing cause for accidents,” the Golden Triangle Business Roundtable report said.

 Inexperienced workers get injured or sick on the job for many reasons, according to OSHA, including:

  • Unsafe equipment
  • Inadequate safety training
  • Inadequate supervision
  • They are more apt to take risks
  • Dangerous work that is illegal or inappropriate for youths under 18
  • Pressure to work faster
  • Stressful conditions


OSHA recommends taking the following actions:

  • Ensure that young or inexperienced workers receive training to recognize hazards and are competent in safe work practices particular to your worksite. Training should be in vocabulary that workers can understand and should include prevention of fires, accidents and violent situations – and what to do if injured.
  • Drive home the point that workers should not take any risks when doing their jobs. They should not stray from standard operating procedure to get the job done.
  • Implement a mentoring or buddy system for new employees. Have an experienced young worker answer questions and help the new worker learn the ropes.
  • Encourage young workers to ask questions about tasks or procedures that are unclear or not understood. Tell them whom to ask.
  • Ensure that equipment operated by young workers is both legal and safe for them to use. Employers should label equipment that young employees are not allowed to operate.
  • Make sure all workers know whom to talk to if they are hurt on the job.


Supervision is crucial

The only way to ensure your workers are carrying out their safety obligations is to supervise them adequately.

The amount of supervision will depend on the nature of the work and the control measures you already have in place. So, if you have a risky activity or low control measures, more supervision may be necessary.

But, supervision does not mean the constant surveillance of your workers’ work activities – rather, it means general direction, coordination and oversight.

To identify activities that may need greater supervision, you should answer the following questions:

  • Do any work tasks involve a high degree of risk?
  • Are new or inexperienced workers performing the tasks?
  • Are apprentices or young workers performing the work?
  • Are workers using new or recently modified machinery?
  • Do any of your workers have language difficulties or physical restrictions/limitations?
  • Do any tasks require interaction between many different workers?


If you answered yes to one or more of these questions, you should step back and analyze the work tasks and risks and then determine how much supervision may be required to ensure the safety of your less experienced employees.


Countdown to New Overtime Exemption Rules


If you have not yet done so, now is the time to start preparing all of your accounting and payroll systems for the onset of the Department of Labor’s new overtime exemption rules.

The final regulation changes the salary level that must be met before an employee can be exempt from overtime if they satisfy the “duty requirement,” meaning they have to be engaged in certain “white collar” jobs, like management.

The White House estimates that some 4 million workers who are currently considered “exempt” from overtime pay of time and a half for working more than 40 hours in a week, will now earn that rate for extra time worked if their salaries remain below the new threshold.

But while the rules are generally straightforward, employers in California will have a different standard to meet in the years to come and compliance will become trickier.

Under the DOL’s final rule, starting Dec. 1, employers will be required to pay overtime to full-time employees who earn less than $913 per week ($47,476 per year), regardless of their duties.

This new high threshold, more than double the current $455 per week ($23,660 annually), will be higher than in any states that have their own current thresholds. In such cases, the law that provides the most protection for workers takes precedence.

Currently, the salary threshold for the overtime exemption for white collar workers in California is $41,600 a year, or $3,466.67 per month.

But California’s overtime exemption level is based on twice the state minimum wage, which is set to substantially increase in the coming years, hitting $12 an hour in 2019 and $15 an hour by 2022. After that, it will continue to rise based on a statutory-required formula.

For example, beginning January 1, 2019, when California’s minimum wage hits $12 per hour, the overtime-exempt threshold for California employers will be $49,920. That’s $2,444 higher than the impending federal threshold.

Do the math for 2022, and the California threshold will hit $62,400.

The federal minimum salary threshold will also be automatically updated – every three years. The first update will be in 2020, and a White House projection has figured that the salary threshold will rise to $51,000 at that time.


Duties test

California also has a different duties test than that of the Fair Labor Standards Act (FLSA).

The federal duties test for white collar exemptions requires exempt employees to be “primarily engaged” in certain duties, like managing people and making decisions independently. In California, an exempt employee must spend more than half of his or her time engaged in exempt work.


Get current now

With the new rule about to take effect, it is imperative that you get all of your systems and procedures in place before the change.

Here is a checklist of action items that you should address immediately:

  • Check whether your salaried employees satisfy the duties and salaries components of the FLSA White Collar Exemptions (or your state law).
  • Identify all of the positions that will require reclassification under the new rule and decide whether it is worth it to increase someone’s salary.
  • Analyze the financial impact of reclassifying employees as nonexempt.
  • Consider reassigning certain tasks to reduce the effects of the rule.
  • Make plans to conduct reviews regularly – like every three years for federal law compliance or more frequently in some states, like California ahead of minimum wage changes.





More Small Firms Restore Health Benefits

Businessman leaning on desk, explaining to four colleagues sitting.

Many small employers that dropped health insurance coverage for their employees after the Affordable Care Act took effect have reinstated the benefits as competition for talent increases.

Companies with fewer than 50 employees are not required to provide health insurance benefits to their workers under the ACA, and after the law took effect, many dropped coverage to let their workers instead buy coverage on public insurance exchanges.

Most small businesses also made the change to shift their employees to individual coverage because their workers were eligible for significant government subsidies.

But since the exchanges began operating in 2014, the labor market has changed and competition for good employees is increasing. And in many places around the country, the options for coverage on public exchanges can be meager, often with shrinking plan choices and plans with narrow networks, placing a higher burden on individuals who buy coverage through exchanges.

The Wall Street Journal interviewed several small business owners – most with fewer than 20 employees – that had dropped grouped coverage in 2014 due to the cost and complexities of picking the right plan for their workers.

One small business owner in Missouri dropped coverage and instead gave her employees a raise so they could buy it on their own.

The owner is now looking at group health insurance again, particularly after her job offers were turned down by some prospects who cited the lack of group health benefits for their decision.

On top of that, the insurer she is covered by through a public health insurance exchange has decided to pull out of Missouri for the 2017 plan year.

There are no clear estimates of how many small businesses offer group coverage. The Kaiser Family Foundation conducted a survey in 2015 that found that 54% of companies with three to 49 workers offered health benefits last year, about the same as in 2014 but down from 66% in 2000.

Companies with three to 50 employees paid an average of $15,602 annually for each worker who elects family coverage, according to Kaiser, up from an average of $12,809 in 2010.

Brokers around the country are seeing small businesses that dropped coverage looking to restart it for 2017.

The economics of offering coverage and a growing economy that has started to result in an uptick in competition for workers is the driving force behind the renewed interest.

And employers that did drop group health coverage also felt the effects from employees who believed they were missing out on a benefit that is standard at many other companies.

The effects of dropped coverage on employee morale cannot be overestimated when those workers had to sit down, do homework, fill out applications on exchange websites and start paying their own health premiums out of pocket.

Also, employees who have been shunted into exchanges are seeing coverage that is growing less attractive as insurers shrink their networks of doctors and hospitals and reduce the number and types of medication they will pay for.

Employers are recognizing the hardships that their employees have encountered as a result of using exchange-purchased coverage. And some of those employers are reinstating group health benefits out of a sense of duty to their staff, the Wall Street Journal reported.


Businessman leaning on desk, explaining to four colleagues sitting.

Businessman leaning on desk, explaining to four colleagues sitting.