Who would even think of discussing the topic of workers’ comp using that phrase, and yet that’s exactly what Michael A. DiManno of Samuel Hale did.
Many California employers are suffering under a broken workers’ comp system, and the exorbitantly high cost of coverage is putting companies out of business or even driving them out of California. Employers are feeling stressed and fearful. They may even feel like the situation is hopeless and there is nothing they can do, but they are wrong.
This is where Samuel Hale steps in – drastically reducing the cost of employment by taking control of the workers’ comp claims process.
STARTING BACKWARDS TO MOVE FORWARDS
DiManno opens with a unique observation that he built Samuel Hale “in reverse based on trying to figure out how to reduce workers’ comp costs for employers.”
Instead of having a solution and applying it to a problem, he started with a problem and worked backwards. A problem that there was no solution for - the problem of high workers’ comp costs for California businesses.
He stresses the fact that, “We built the whole company around this one component because it saves our clients about 50 cents on the dollar in terms of what the claims are.”
This raises the question of how. How does Samuel Hale save thier clients on claims costs?
DiManno’s answer: “Samuel Hale has a very unique ADR agreement with the state of California that allows us to bypass the bloated California workers’ comp system for resolving disputes.”
For those who don’t know, ADR stands for Alternative Dispute Resolution. It’s an alternative to litigation. By taking advantage of the ADR process through Samuel Hale, a company can drastically reduce or in some cases completely eliminate fraud and litigation in their workers’ comp claims.
He goes on to provide the fact that “at the end of the day, workers’ comp is just a historical look at how your claims have done compared to the averages” and California’s averages are high. In fact, “California pays 400-500% more than their neighboring states.”
And according to DiManno, “the primary reason is litigation.”
A BIG DEAL
“This is a big deal,” he says, “because a lot of the folks we work with are experiencing significant cost increases. And those cost increases aren’t typically planned for.”
In fact, “When someone gets a big increase in their experience [modifier], they give up salary. They maybe have to cut employees, capital expenditures and equipment.”
He pauses - then states, “It becomes a very personal thing.”
And he’s speaking from experience.
In 2015, when he was CEO of a light industrial staffing agency in California, his company had a very low ex-mod, under 90 points. But in just one year, his ex-mod went up by 100 points and practically destroyed his business – almost all attributed to litigation.
STOPPING THE "STUFF"
He goes on to explain, “We’re able to come in, and not only provide immediate relief on the rates, but we can stop the stuff that’s been causing those big rate increases, and that creates, not just a cost savings but a tremendous relief for our clients.”
That “stuff” is litigation.
And he has the facts to back this up.
DiManno comments that after one year, the 11 groups, which Samuel Hale had the longest experience with, originally “had 4.5 million dollars of claims” and “about 70% of that 4.5 million was litigated.”
But under the new Samuel Hale model, “all of those companies together only had 257 thousand dollars of claims.” There was “zero litigation” and “75% of the claims were closed.”
That’s when he knew statistically it was going to work.
THE FIRST TO SHARE
However, not everyone has access to the power of the ADR agreement because “it’s a long process and very difficult to apply for and get approved” by the state of California.
He stresses that, “Not many businesses have this.”
And while Samuel Hale is not the sole company who has approval by the state, they are “the first company to take this labor code and apply it this way.”
He points out, “Most of the companies that have the approval by the state, do it for their own employees and ONLY their own employees.”
He strongly stresses the word “only” to really hammer home the fact that Samuel Hale’s ADR agreement solution is truly unique. The way this is possible is through Samuel Hale’s staffing and PEO model.
He points out that, “We’re able to share that benefit with many people. A year ago, it was sort of science fiction – now everybody’s talking about it. Everybody’s trying to figure out how to get it because they’ve done the research and realized it’s a real thing.”
GRATEFUL AND WORTH IT
Overall, DiManno stresses his gratitude that he’s happy to offer the program to more than just the Samuel Hale employees and feels that all the work it took to get California state approval was worthwhile.
For more information on how Samuel Hale can help stop your high workers’ comp claims, you can reach out to him directly at firstname.lastname@example.org or visit www.samuelhale.com.
Interviewer: Ben Baker
Date: April 18, 2018
Location: Folsom, CA