W C T I A N N UA L M E E T I N G M E M B E R O R I E N TA T I O N

Friday, May 6th, 2016

W E L C OM E T O T H E WC TI M E M B E R S H I P OR I E N TA TI ON HI LTON L I S L E / NA P E RV IL L E F r i d a y, M a y 6 th , 2 0 1 6

WC T I M I S S I ON

The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that have pooled The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers their excellent loss experience to self-insure their that have pooled their excellent loss experience to self-insure their workers’ compensation risk. workers’ compensation risk. Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

Members are committed to managing progressive safety programs and are actively intheir thegreatest fair and All members share the philosophy that their involved employees are asset and that a safe workplace is their highest priority. expedient management of claims. All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

Managing Risk-Self Insurance

1980-Illinois Workers’ Compensation Act Amended The Workers’1981-WCTI Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers established (35 Years of Service)

that have pooled their excellent loss experience to self-insure their workers’ compensation risk. Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

Member companies receive:

Progressive safety programs Aggressive claims management Conservative budgeting Regulative oversight

All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

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W C T I V i d e o – I t ’ s i n Yo u r H a n d s

The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that have pooled their excellent loss experience to self-insure their workers’ compensation risk. Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims. All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

W C T I M e m b e r Te s t i m o n i a l

Valley Fastener Group, LLC has been working with WCTI since 2007. Originally we became interested based on the initial savings over conventional workers’ compensation insurance have come to focused find that theyManufacturers have so The Workers’ Compensation Trustprograms of Illinois but is a group of safety Illinois muchpooled moretheir to offer. Historically we hadtogood loss control experience but we risk. that have excellent loss experience self-insure their workers’ compensation were lacking a formal safety program. WCTI/CCMSI has individuals with practical knowledge that were able to assist in expanding the scope of our Members areprogram. committed to managing progressive safety programs andcontrol are actively involved in safety Through the help and guidance of the loss the fair and expedient management ofand claims. committee, specifically, Diane Meredith, we have developed a thorough safety program, increased employee awareness and created a safer work environment. thetheir “Train the Trainer” programs, All members share theAdditionally, philosophy that employees are their greatest ergonomic asset and that a safe studies and monthly Risk Reminders are valuable tools to continue the workplace is their highest priority. education and awareness for all our employees. We are fortunate to have partnered with WCTI and l would recommend them to other businesses looking to lower costs and improve safety. David Speers, Plant Manager, Valley Fastener Group, LLC

WC T I B o a r d o f Tr u s te e s

• The Board is comprised of 11 Trustees who The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers Member that haveserve pooled their excellent losscompanies. experience to self-insure their workers’ compensation risk. Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

• The Trustees are executives of Member All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority. companies with responsibility for defining and making policies and have fiscal responsibility at their company.

Tr ustees – Claims Committee

• Sue Meyer, Rockford Spring Company

The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that have pooled their excellent loss experience to self-insure their workers’ compensation risk.

• Tom Eliasek, Harris Steel

Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

• Phil Kretekos, Metal Impact • Brad Irle, TH Synder

All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

Tr ustees – Claims Committee

• Provides the additional settlement authority that is required for claims over $10,000 and shared claims, after the member company The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers been consulted. that havehas pooled their excellent loss experience to self-insure their workers’ compensation risk. • Review the activities on all shared claims that are valued over Members$100,000. are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims. • Reviews Quarterly Managed Care Savings Report. All members share thenumber philosophy theirthat employees are theirand greatest asset that a safe • Tracks the of that claims are opened closed forand each workplace is their highest priority. policy year. • Reviews the average cost of indemnity and medical claims and yearly trending of those costs. • Identifies and reviews members that have experienced claim difficulties and determines suggestions for improvement.

Tr ustees – Loss Control Committee

• Bryan Webster, Webster-Hoff Corporation

The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that have pooled their excellent loss experience to self-insure their workers’ compensation risk.

• Tom Simeone, Manor Tool & Manufacturing

Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

• Kevin Dunne, Flexible Steel Lacing • Stacey Moon, Parr Instrument

All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

Tr ustees – Loss Control Committee

• Approves a developed set of comprehensive principles on which to base safety procedures and policies to be provided for member The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that havecompanies. pooled their excellent loss experience to self-insure their workers’ compensation risk. • Reviews existing WCTI safety programs and revises as needed. Members are committed to managing progressive safety programs and are actively involved in • Reviews activities that can contribute to injury prevention and cost the fair and expedient management of claims. reduction. All members share the philosophy that their arethat theirare greatest asset and that a safe • Analyzes trends in injuries andemployees members experiencing workplace is their highest priority. problematic losses resulting in shared claims and identifies loss control remedial action plans to provide guidance and assistance for achieving improvement. • Helps develop performance goals for members and the Trust as a whole.

Tr ustees – Loss Control Committee

The Loss Control Committee meets with officers of member companies if the below triggers are met: • Loss Ratio of 100% or greater and a cumulative loss ratio of 39% or more The Workers’ Trust of Illinois is a group of safety focused Illinois Manufacturers • LOTOCompensation Incident that have pooled their excellent loss experience to self-insure their workers’ compensation risk. • Machine guarding incident or an amputation with a total incurred greater than $10,000 within the quarter in which it was reported Members are committed to managing progressive safety programs and are actively involved in • and MSAP score of 55% or less year end the fair expedient management ofat claims. • No response to a Notice of Continued Excessive Loss Letter All members share the philosophy that their employees are their greatest asset and that a safe • If a Member satisfies three triggers in twelve months, they will workplace is their highest priority. automatically be placed on Member Probation. • If a Member does not attend a meeting when the invitation is extended and declines two subsequent invitations, they will be placed on Member Probation

Tr ustees – Finance Committee

• Scott Szafasz, Bimba Manufacturing Co. The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers that have pooled their excellent loss experience to self-insure their workers’ compensation risk.

• Joe Kulisek, United Displaycraft

Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims.

• Daryl Dishong, The Intec Group

All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority.

Tr ustees – Finance Committee

• Analyzes the quarterly financial statements. • Reviews investment results. The Workers’ Compensation Trust of Illinois is a group of safety Illinoispolicy Manufacturers • Tracks Accounts Receivable andfocused makes that have pooled their excellent loss experience to self-insure their workers’ compensation risk. recommendations regarding delinquent Members are committed to managing progressive safety programs and are actively involved in accounts, terminated members and other the fair and expedient management of claims. financial matters. All members share the philosophy that their employees are their greatest asset and that a safe • Reviews the annual WCTI budget and provides workplace is their highest priority. recommendations to the Board for approval of the budget. • Reviews the Adjustment Bill.

Resources –

w w w. w ct i. in f o

• Claims, Loss Control and Policy Documents • Calendar of Events The Workers’ Compensation Trust of Illinois is a group of safety focused Illinois Manufacturers • Scoreboard that have pooled their excellent loss experience to self-insure their workers’ compensation risk. • Membership Contact List Members are committed to managing progressive safety programs and are actively involved in the fair and expedient management of claims. • Risk Reminders All members share the philosophy that their employees are their greatest asset and that a safe workplace is their highest priority. • Power Point Presentations for the Task Force and Train the Trainer Sessions

Resources –

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iC E

Internet Claims Edge Produces a variety of reports, charts & graphs Analyze your loss trends View your claim detail and notes Track payments Report Incidents On-Line Up-to-date Live Information

Resources –

can be accessed 2 ways:

iC E .

Resources –

C C M S I S er vice Tea m

Resources –

N et wo rkin g a n d Tra in in g

• Annual Meeting • Train the Trainer • Task Force Meetings • OSHA 10 Hour Training

M em b er S a f et y Au d it P ro g ra m ( M S A P )

Member Safety Audit Program (MSAP) is provided at no additional cost to all WCTI Members. The MSAP is a detailed performance-based safety audit which provides members with a quantitative analysis of their safety program. The MSAP targets top claim categories and common manufacturing OSHA citations. 62 Member Companies scored greater than 90% in 2015.

Res o u rces – C la im H a n d lin g

• Aggressive, thorough, and prompt claims handling • Provides high level of effective client services • Knowledge of Illinois Workers Compensation • Onsite claims reviews • Aggressively pursues subrogation • Managed Care Program

M em b er Req u irem en t s

• A commitment to transitional employment for injured employees • Participation in the Member Safety Audit Program • MSAP is a structured plan that will help create improved performance in our members’ safety programs. Ultimately this will mean increased employee participation, reduced injuries and lower workers’ compensation costs. • Post accident and pre-employment drug and alcohol testing. • Reporting of claims to CCMSI, preferably within 24 hours, but at the latest within 5 days

M em b er Req u irem en t s ( co n t . )

• Payment of WCTI invoices in a timely fashion • Maintenance of a positive management safety commitment • Participation in all scheduled loss control visits • Maintenance of group health insurance • No in house payment of medical bills related to a work injury. All injuries requiring medical treatment must be submitted to CCMSI.

H o w t o Rea d a Po licy Q u o t e Coverage Period: 01/01/2015 to 1/1/2016 12:01 AM Code

Classification

4484

PLASTIC /MOLDED PROD MFG NOC

8742

SALES/REPORTER/METER COLLECTOR

8810

CLERICAL OFFICE EMPLOYEES, NOC Total

Payroll

Rate

Premium

$2,730,000

$4.47

$122,031

$360,000

$.44

$1,584

$4,600,000

$.20

$9,200

$7,690,000

$132,815 Experience Modification 0.77 Standard Premium $102,268

Manual Premium is calculated by taking the payroll times the rate and then dividing by 100 to equal premium. Then we take the manual premium of $132,815 times the modifier of .77 to equal the standard premium of $102,268.

$41,987

Trended Expected Losses

The Minimum Claim Fund is $12,000 or TEL or 15% of Standard Premium, whichever is greater. The Maximum Claim Fund is 80% of the Standard Premium. Claim Fund Admin Fee (Standard Premium multiplied by 17.1%) Excess Fee (Standard Premium multiplied by 4.98%) State Total Total:

Actual Deposit Contribution

Potential Max Contribution

$41,987 $17,488 $5,093

$81,814 $17,488 $5,093

$64,568 $64,568

$104,395 $104,395

NOTE: This quotation is good for 30 days and is based upon information made available to the company at the time the quotation was issued. Subsequent information may alter the terms and conditions quoted. This quotation is subject to change with the endorsement of a final modification factor.

H o w t o Rea d a Po licy Q u o t e LOSS HISTORY LIABILITY PERIOD

PAYROLL

# OF CLAIMS

PAID AMOUNT

RESERVE AMOUNT

TOTAL INCURRED

VALUE DATE

SOURCE

PAYROLL LOSS RATIO

1/112

- 12/31/12

$7,580,136 A

6

$80,216

$0

$60,216 1-Sept -2014

LOSS RUN

1.11%

1/1/13

- 12/31/13

$7,288,152 A

1

$5,562

$0

$5,562 1-Sept -2014

LOSS RUN

0.10%

1/1/14

- 12/31/14

$7,300,000 E

3

$3,189

$20,870

$24,060 1-Sept -2014

LOSS RUN

0.48%

10

$68,967

$20,870

$89,838

TOTAL

$22,168,288

Period

Total Incurred

Maximum Claim Fund

1/1/2012 – 1/1/2012

$80,216

$55,872

Less Total Incurred Or Maximum $55,872

1/1/2013 – 1/1/2013

$ 5,562

$55,872

$ 5,562

1/1/2014 – 1/1/2014

$24,060

$55,872

$24,060

TOTAL

$89,838

$167,616

$85,494

EXPECTED LOSS CALCULATION

Three Year Pure Payroll Loss Ratio 0.0039 (Use the total of the three years incurred losses or Maximum Total divided by payroll. $85,494 divided by $22,168,288 equals .0039) Expected Losses $29,991 (Multiply the current payroll times the pure payroll loss ratio. $7,690,000 times .0039 equals $29,991) Trend Factor (Factor that is used for undeveloped claims)

1.40

Trended Expected Losses $41,987 (Multiply the expected losses by the trend factor. $29,991 times 1.40 equals $41,987) Trended Expected Loss Ratio 41.06% (Divide the trended expected losses by the standard premium. $41,987/$102,268 equals 41.06%)

W C T I Po licies & P ro ced u res

New Member Policy: – A member must maintain a standard premium of $15,000 to remain in the program. – A prior WCTI member will be allowed to rejoin the Trust one time.

New Location / Acquisition Policy: – If a current Member opens a new location or acquires a new business, the new business must be under the management control of the member company and must be on the approved WCTI class code list. The new facility must be visited by a WCTI loss control representative, who will complete the WCTI prospect report. A physical payroll audit should be done in the year following the business addition.

W C T I Po licies & P ro ced u res

Rights and Obligations of Participating Member: – Members must cooperate with payroll audits in a timely way. Non-Compliance will result in the use of current policy year estimated payroll or the prior policy year audited payroll increased by 33 1/3%, whichever is higher. – WCTI member that request mid-term cancellation of their WCTI coverage will be charged a 25% withdrawal fee equal to three months additional annual standard premium based on the annualized audit.

Loss Control Policy: – If a member fails to respond appropriately to participation with a oss control representative for scheduled loss control visits, recommendations of the Trust’s loss prevention or claims staff or consults, experiences a loss ratio in excess of 50% combined with a frequency in excess of 10 claims per 100 employees per year for any two consecutive years of coverage, the member will be placed on probation.

W C T I Po licies & P ro ced u res

Loss Control Policy: – An Award for Safety Excellence will be given to members that have a loss ratio that is less than or equal to 10% for the fund year, has a 95% completion rate on the MSAP, is in good standing in all administrative issues and submits an essay describing their safety program and activities for the year. These companies will be considered for the Chairman's Award for Safety.

Claims Policy : – The member has the authority to settle disputed and non-disputed non shared claims for the level of $10,000. Any settlement over that amount needs the additional approval of the Claims Committee or Claims committee Chairperson. The member will be involved in settlement discussions for disputed and non-disputed shared claims but he Claims Committee or Claims Committee Chairperson has the final authority. If the excess carrier is involved, settlement authority will be granted by the insurance carrier as well.

W C T I Po licies & P ro ced u res

Accounting Policy: – Payment of invoices is due before the 1st of the month. – If payment of invoices is not received within 30 days, a first contact will be made advising the status and requesting payment date. If payment is not received in 15 days of first contact, a notice will be sent advising that coverage will be cancelled, if payment is not received in10 days. The account should then be placed with a collection agency. Late payments may be subject to a finance charge of 1.5% per month. – Adjustment Bills are valued as of January 31st every year.

W C T I I m p o r t a n t D a t es t o Rem em b er

– January 31st loss runs are used in the calculations for the Annual Adjustment Billing. Members are advised to pay close attention to any substantial changes in the total incurred for each year so they can be prepared for the upcoming adjustment bill. – The Annual Adjustment Billing is prepared for mailing in May. All members receive a detailed summary of claims fund adjustments as well as any adjustments made as a result of the payroll audit. Checks will be mailed to member who have a credit, invoices for all others will be due in June. – June 30th loss runs will be checked for any members whose current year paid losses exceed their annualized claims fund deposit by at east $10,000. If necessary, a Mid-Year Adjustment Bill will be sent in August (due September 1st).

W C T I I m p o r t a n t D a t es t o Rem em b er

– A renewal survey will be mailed to all members on August 1st. Replies are requested by September 15th. This information is required for our excess carrier and is also used to update our member listing. The updated payroll estimates will be used for the renewal proposals. – September 30th loss runs will be checked for any members whose current year paid losses exceed their annualized claims fund deposit by at east $10,000. If necessary, a Mid-Year Adjustment Bill will be sent in November (due December 1st). – November 1st is when the final monthly installment is due. All member accounts should be paid in full at this time.

S u g g es t io n s a n d C o m m en t s _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

CCMSI Attention: Darla Duckwitz 2 East Main Street, Suite 208 Danville, IL 61832 Phone: 217-444-1186 Fax: 217-477-6999 [email protected]

TH A N K YOU

FOR

A TTE N D I N G

THE

M E M B E R S H I P O R I E N TA T I O N S E S S I O N HI LTON L I S L E / NA P E RV IL L E F r i d a y, M a y 6 th , 2 0 1 6