Legal Alert

Carrier Premium Credits and ERISA Fiduciary Obligations

Due to COVID-19 and state and local stay-at-home orders, utilization of group medical and dental insurance benefits is down.  As a result, some carriers recently notified employers that they will be issued premium credits. When asking how these premium credits should be treated by the employer, we often compare then to the ACA’s medical loss ratio (MLR) rebates.  While these premium credits are not MLR rebates, a similar decision must be made to determine whether they, like MLR rebates, are ERISA plan assets.

Background

As background, the Affordable Care Act’s MLR rule requires health insurers to spend a certain percentage of premium dollars on claims or activities that improve health care quality, otherwise they must provide a rebate to employers. At the same time the U.S. Department of Health and Human Services issued the MLR rule, the U.S. Department of Labor (DOL) issued Technical Release 2011-04 (TR 2011-04), which clarifies how rebates should be treated under ERISA.  Under ERISA, anyone who has control over plan assets, such as the plan sponsor, has fiduciary obligations and must act accordingly.

Clearly, the premium credits we are seeing are not subject to the MLR rule; however, a similar analysis applies.   TR 2011-04 clarified that insurers must provide any MLR rebates to the policyholder of an ERISA plan.  However, while the DOL’s analysis was focused on MLR rebates, it recognized that distributions from carriers can take a variety of forms, such as “refunds, dividends, excess surplus distributions, and premium rebates.”  Regardless of the form or how the carrier describes them, to the extent that a carrier credit, rebate, dividend, or distribution is provided to a plan governed by ERISA, then the employer must always consider whether it is a “plan asset” subject to Title I of ERISA.  If it is, then as the party with authority and control over the “plan assets,” the employer is a fiduciary subject to Section 404 of ERISA and bound by the prohibited transactions provisions of Section 406.  In other words, to the extent that a refund is a plan asset, it must be used for the exclusive benefit of plan participants, which may include using it to enhance plan benefits or returning it to employees in the form of a premium reduction or cash refund.

Treatment of Premium Credits to Employers

In situations where an employer uses a trust to hold the insurance policies, the DOL’s position is that the rebates are generally assets of the plan.  However, in situations where the employer is the policyholder, the employer may, under certain circumstances, retain some or all of a rebate, credit, refund, or dividend.  When considering whether a rebate is a plan asset, the terms of the plan should be reviewed.  As discussed below, some employers draft their plan documents in a manner that allows them to retain these types of refunds.  If the terms of the plan are ambiguous, the DOL recommends employers use “ordinary notions of property rights” as a guide.

When determining whether carrier credits, dividends, distributions or rebates are ERISA plan assets, the DOL will look to the terms of the documents governing the plan, including the insurance policy.  If these governing documents are silent on the issue or unclear, then the DOL will take into consideration the source of funding for the insurance premium payments.  In such situations, the amount of a premium credit that is not a plan asset (and that the employer may therefore retain) is generally proportional to the amount that the employer contributed to the cost of insurance coverage.  For example, if an employer and its employees each pay a fixed percentage of the cost, a percentage of the premium credit equal to the percentage of participants’ cost would be attributable to participant contributions.  In the event that there are multiple benefit options, a premium credit attributable to one benefit option cannot be used to benefit enrollees in another benefit option.

The Plan Document

Employers can draft their plans to make it clear that the employer retains all rebates, credits, distributions, etc. if the rebates, credits, distributions, etc. do not exceed the employer’s contribution towards the benefit.  If given this flexibility in the plan, the employer may not have to return a portion of the premium credit to employees or use the credit to provide a premium reduction.  While this gives employers more flexibility, employers should consider that carriers communicate some premium refunds, such as an MLR rebates, to both the policyholder and participants, therefore employees know the employer received money back from the carrier and they may expect something in return.   Therefore, there is the potential for employee relations issues with this approach.

If the plan document does not provide this flexibility to the employer, is silent with regard to the use of such funds, or is unclear about how such funds are allocated, then the employer should treat any premium credits like they are ERISA plan assets (to the extent they’re attributable to employee contributions) and allocate them accordingly.

Allocating the Employees’ Share of a Premium Credit

The portion of the premium credit that is considered a plan asset must be handled according to ERISA’s general standards of fiduciary conduct.  However, as long as the employer adheres to these standards, it has some discretion when allocating the premium credit.

If an ERISA plan is 100 percent employee paid, then the premium credit must be used for the benefit of employees. If the cost of the benefit is shared between the employer and participants, then the premium credit can be shared between the employer and plan participants.

There is some flexibility here.  For example, if the employer finds that the cost of distributing shares of a premium credit to former participants approximates the amount of the proceeds, the employer may decide to distribute the portion of a premium credit attributable to employee contributions to current participants using a “reasonable, fair, and objective” method of allocation.  Similarly, if distributing cash payments to participants is not cost-effective (for example, the payments would be de minimis amounts, or would have tax consequences for participants) the employer may apply the premium credit toward future premium payments or benefit enhancements.  An employer may also vary the premium credit so that employees who paid a larger share of the premium will receive a larger share of the premium credit. 

Ultimately, many employers provide the employees’ share of the premium credit in the form of a premium reduction or discount to all employees participating in the plan at the time the premium credit is distributed.  Employers should review all relevant facts and circumstances when determining how such a credit will be distributed.

Regardless, to avoid ERISA’s trust requirement, the portion of a premium credit that is plan assets must be used within three months of receipt by the policyholder.

Conclusion

Employers that would like additional flexibility in how to treat carrier premium credits should work with counsel to update their plan documents. Even for plans with flexibility built into the terms, we encourage consultation with counsel to review the facts and circumstances surrounding any such premium credits to ensure compliance with ERISA. 

As has been the case since 1950, the professional agents and underwriters at Morris & Reynolds Insurance are happy to help you. Whether you have a question about this topic or need help with any form of insurance, please contact us at any time at 305.238.1000.

COVID-19 Reopening Considerations

The COVID-19 pandemic has forced many restaurants and food service businesses to shift to survival strategies like carryout or delivery service. Some even had to close their doors for an extended period. As the COVID-19 threat shifts, several states have officially begun implementing reopening measures. However, as restaurants prepare to open their dining rooms, there are numerous factors to consider in order to preserve the health and safety of both employees and guests. As you plan to reopen your restaurant, it’s important to update your existing policies and procedures.

Review the following guidance to help keep your employees and guests safe as you resume normal operations and ensure a successful reopening. Keep in mind that this guidance is general in nature. Depending on the location of your business, you may need to account for additional state and local requirements or restrictions.

Employee Health and Safety

It’s important to check that employees are healthy as they report to work and come into contact with other employees, food or guests. It doesn’t matter if the employee works in the front or back of the house—per the Centers for Disease Control and Prevention (CDC) guidance, any employee who is sick should stay home. Similarly, if an employee becomes ill or shows symptoms during a prework screening, they should be sent home.

Make sure your policies clearly indicate when ill employees can return to work. At a minimum, you should follow CDC guidelines and have employees self-quarantine for seven days from the onset of their symptoms.

It should be noted that the CDC has not mandated taking employees’ temperatures. If your establishment chooses to do so, it’s best to adopt policies that align with proper procedures and consult local health officials if you have questions. To further protect your employees’ health and safety, consider the following measures:

  • Provide clear instruction and guidance so employees know what is expected during opening, prep, service and closing procedures.
  • Train all employees on the importance of frequent hand-washing, the use of hand sanitizers and avoiding touching their hands to face.
  • Require employees to wear a mask or face covering. Provide all personal protective equipment required for employees to do their jobs, including masks and gloves.
  • Limit the number of employees allowed simultaneously in break rooms or other communal areas.

It’s understandable that policies may need to evolve as local regulations change, so frequent and transparent communication to employees will be vital to the success of your restaurant’s reopening. Be upfront with employee expectations and consequences, and continue to document protocols and procedures.

Cleaning and Sanitizing

Familiarize yourself with requirements from your local health department, and make sure you are adhering to them. It’s important to train employees on cleaning and disinfecting procedures and protective measures per the CDC and Food and Drug Administration. Additionally, consider these measures:

  • Sanitize and deep clean your entire facility, especially if it’s been closed due to the COVID-19 pandemic. Don’t overlook seldom-touched surfaces either.
  • Utilize appropriate cleaning chemicals in food preparation and contact areas.
  • Sanitize high-contact areas in the front and back of the house (e.g., touch screens, doorknobs, buttons, cooler doors and checkout counters) every two hours or after each guest leaves the area, if possible.
  • Clean and sanitize table condiments, digital-ordering devices, check presenters, self-service areas and tabletops between guests. Additionally, consider providing condiments by request or offering single-use, disposable containers.
  • Sanitize restrooms frequently. Sinks in restrooms should have running water and be stocked with hand soap, disposable paper towels and a plastic-lined waste container.
  • Clean and sanitize reusable menus after each use. If using paper menus, discard them after each use.
  • Do not use disinfecting wipes to clean more than one surface. Use one wipe per item or area, and discard them after each use or when they are visibly soiled.
  • Provide hand sanitizers at entrances, exits, service counters and any other guest touch points. Consider touchless solutions as well.

Food Safety

Food safety has always been a priority for the restaurant industry. Follow and maintain food-safety practices carefully as you consider new COVID-19 safety protocols. Specifically, keep in mind the following measures:

  • Change, wash and sanitize utensils frequently. Use rolled silverware and napkins stored in sealed bags. Employees should roll silverware in designated sanitary areas and should not preset tables.
  • Use single-use gloves or deli tissue when handling food, if appropriate.
  • Discard all out-of-date food items.
  • Wrap food containers to prevent cross contamination.
  • Stock coolers at minimum levels if providing grab-and-go service.
  • Close all self-service food and drink stations (e.g., coffee carafes, fountain soda machines, salad bars and buffets).
  • Ensure the person in charge of food service operations is ServSafe certified, and that their certification is up to date.
  • Provide a food handling training refresher to all employees upon reopening. Ongoing education protects your business, employees and guests.

Social Distancing

Guests, as well as employees, should practice social distancing. Social distancing is an important strategy to reduce the spread of COVID-19. Consider the following guidance to protect everyone who walks through your doors:

  • Consider separate entrances and exits to limit customer contact with other patrons.
  • Post signage at the entrance stating that no one with a fever or symptoms of COVID-19 can enter the restaurant.
  • Base social distancing measures on square footage in both service and guest areas.
  • Update floor plans and seating arrangements as follows:
    • Maintain 6 feet of separation between tables.
    • Leave two bar stools empty between guests who are not in the same party.
    • Apply similar rules to outdoor patio areas.
  • Limit party sizes based on recommendations provided by your local and state government.
  • Monitor the number of guests on your premises.
  • Limit contact between wait staff and guests.
  • Consider a reservations-only or call-ahead-seating process to better space guests and control party sizes.
  • Ensure guests stay separated while waiting for seating and don’t congregate in waiting or bar areas. For example, you could create floor markings or have guests wait outside—6 feet apart—or in their vehicles.
  • Ensure employees and guests adhere to social distancing guidelines when using the restroom.
  • Install physical barriers where practical, (e.g., booth seating or partitions).
  • Use technology to reduce person-to-person interactions (e.g., cashless payments, mobile ordering, menu tablets, contactless payment and mobile texting for waiting and seating updates).
  • Remind outside partners or suppliers about internal distancing requirements.

Delivery and Carryout

During the COVID-19 pandemic, many restaurants focused on being able to provide carryout and delivery service. As dining rooms open up, you can continue offering online sales, pickup and delivery to reduce the number of guests coming inside to limit face-to-face interaction. You may also consider allowing guests to preorder dine-in meals to reduce guests’ time on site. If you’re offering carryout options:

  • Establish a designated pickup zone.
  • Provide guides (e.g., tape on floor) or signage to inform customers of food pickup protocols.
  • Offer curbside pickup.
  • Practice social distancing by offering to place orders in vehicle trunks.

Remind third-party delivery drivers about internal distancing requirements when they are picking up orders. If you’re offering delivery options:

  • Encourage no-touch deliveries.
  • Provide order updates via text messages or phone calls.
  • Ensure coolers and other transport containers are cleaned and sanitized.
  • Maintain time and temperature controls.
  • Avoid cross contamination (e.g., wrap food during transport).
  • Carry hand sanitizer or wipes to clean hands often.

Continued Safety

By following these precautions, your restaurant can benefit from providing quality food and service to your community once again. As stay-at-home mandates are loosened, it’s important for restaurants and other food service businesses to keep their employees and customers as healthy and safe as possible.

For additional reopening resources and guidance as businesses move into COVID-19 recovery mode, contact Morris & Reynolds Insurance today at 305.238.1000.

COVID-19 Reopening Considerations for Hair and Nail Salons

While the COVID-19 pandemic has forced many organizations to close their doors for an extended period, states across the country have officially begun implementing reopening measures, allowing some employers to resume operations. However, as organizations prepare to open their doors once again, there are numerous factors to consider in order to preserve the health and safety of both employees and customers.

Specifically, hair and nail salon owners face unique challenges in minimizing the risks of reopening. After all, the nature of these organizations can make it extremely difficult to maintain social distancing measures, avoid person-to-person contact and keep high-touch surfaces clean—all of which contribute to the spread of COVID-19.

Review the following guidance to help keep your employees and customers safe as you resume operations and to ensure a successful salon reopening. Keep in mind that this guidance is general—depending on the location of your salon, you may need to account for additional state and local requirements or restrictions.

Employee Health and Safety

Before you can allow customers to enter your salon, it’s crucial to implement workplace adjustments and procedures to ensure the health and safety of your staff. Consider these measures:

  • Utilize routine communications to inform staff about the steps being taken to prevent COVID-19 exposure at your salon.
  • Provide an adequate supply of paper towel, soap and hand sanitizer to allow staff to maintain proper hand hygiene.
  • Offer tissues to ensure employees follow proper cough and sneeze etiquette, as well as no-touch trash bins for tissue disposal.
  • Educate employees on the common symptoms of COVID-19 (e.g., fever, cough and shortness of breath). Tell them to stay home from work if they have any symptoms.
  • Conduct a wellness check on employees each day to ensure they are healthy and safe to enter the salon. If employees answer “yes” to either of the following questions, send them home:
    • Have you or any person you’ve been in close contact with (e.g., family members) been diagnosed with COVID-19 in the past 14 days?
    • Have you experienced any cold- or flu-like symptoms (e.g., fever, chills, cough, sore throat, headache, stuffy or runny nose, vomiting or diarrhea) in the past 72 hours?
  • Provide employees with adequate personal protective equipment (PPE). At a glance, salon employees should use the following PPE:
    • Masks or face coverings
    • Gloves
    • Face shields or eye goggles
    • Smocks
  • Require employees to wash their hands after entering the salon, working with a customer, touching their mask or face covering, using the restroom and leaving the salon.
  • Encourage staff to carry a towel with them at all times. Instruct them to use the towel to cover their nose and mouth if they get a sudden urge to sneeze or cough. After using the towel, require staff to wash their hands and face before returning to work.
  • Train employees on the following topics:
    • How to safely put on, use, remove and store PPE
    • How to maintain proper hand hygiene and follow sneeze and cough etiquette
    • How to maintain social distancing guidelines
    • How to clean and disinfect surfaces, workstations, tools and equipment properly
    • How to enforce health and safety requirements with customers
    • How to recognize and report areas or practices that increase the risk of COVID-19 exposure
  • Implement proper signage throughout the salon to remind staff of proper health and safety practices.
  • Establish a process for reviewing employees’ workplace health and safety concerns related to COVID-19 exposure and determining mitigation methods in a timely manner.

Cleaning and Disinfection Practices

Because your salon offers services that require person-to-person contact between staff and customers (e.g., hairstyling, manicures and pedicures) and possesses a wide range of surfaces that both customers and employees frequently touch, utilizing proper cleaning and disinfection measures is vital. Use these cleaning and disinfection best practices:

  • Maintain a stocked supply of cleaning and disinfection products. Be sure to purchase products that meet Environmental Protection Agency criteria for use against COVID-19. Further, review all product labels, safety data sheets and manufacturer specifications to ensure proper storage and use.
  • Designate specific staff members to be responsible for maintaining proper cleaning and disinfection practices.
  • Clean dirty surfaces or equipment with soap and water or detergent before disinfecting them.
  • Utilize a well-documented system to track how often cleaning and disinfection occurs. Increase cleaning and disinfection frequency for the entire salon, paying special attention to high-risk areas and items—including workstations, tools, equipment and restrooms.
  • Have employees clean and disinfect the following salon tools, equipment and surfaces between each customer and at the beginning and end of each shift:
    • Salon chairs
    • Combs, brushes and scissors
    • Hair dryers, straighteners and curling irons
    • Shampoo, conditioner and any other hair product bottles or containers
    • Hair-washing stations and sinks
    • Mirrors and countertops
    • Nail polish containers and filing tools
  • Never allow a customer to sit in a salon chair before it has been properly cleaned and disinfected. Consider designating employees to be responsible for identifying areas that are ready to be cleaned and disinfected.
    • Consider placing disposable covers on salon chairs to allow for quick and easy cleanup.
  • Provide each client with a disposable neck strip and clean cape before beginning a hairstyling service. Try to ensure a sufficient supply of capes to avoid reuse throughout the day. Have all used capes laundered at the end of each day.
  • Consider making these changes to restrooms:
    • Allow for doors to multi-stall restrooms to be opened and closed without occupants touching the handles with their bare hands, if feasible. This could entail adding a foot pull or encouraging occupants to touch the door handle with a paper towel.
    • In single-occupancy restrooms, use proper signage and materials (e.g., paper towels and trash cans) to encourage occupants not to touch door handles. Restrict access to single-occupancy restrooms with a key to allow staff to monitor its use and disinfect it regularly.
    • Use signage to encourage occupants to close toilet lids before flushing and wash their hands before and after using the restroom.
    • Provide paper towels for drying hands and adequate trash bins. Prohibit the use of air dryers.
  • Install numerous hand-washing stations throughout your salon. If this isn’t possible at your salon, install numerous hand-sanitizing stations. Specifically, make sure you have these stations located at the entrance and exit of the salon. Implement signage encouraging employees and customers to use these stations frequently.
  • Prevent staff from sharing any workplace tools or equipment. If employees must share any tools or equipment, establish proper cleaning and disinfecting procedures before and after each use.
  • Ensure proper air ventilation throughout the salon. Be sure to clean HVAC systems regularly.
  • Have employees place their towels, smocks and work clothing in a sealed plastic bag after each use, as if the materials are contaminated. Have these materials laundered by washing and drying on the highest temperature setting possible for the fabric. Ensure staff wear masks or face coverings when handling dirty laundry. If your salon does not provide laundry services, provide employees with instructions for safely washing and drying their materials at home.
  • Use disposable equipment and tools instead of reusable ones when possible. Ensure adequate trash bins and bolster trash removal practices to accommodate extra waste.

Customer Health and Safety

There are several factors that you must consider to promote proper health and safety standards for your customers. First, it’s important to reduce transmission risks. Follow these tips:

  • Consider conducting a wellness check on customers, similar to that of your employees, to ensure they are healthy and safe to enter the salon. If customers answer “yes” to either of the following questions, do not let them enter the salon:
    • Have you or any person you’ve been in close contact with (e.g., family members) been diagnosed with COVID-19 in the past 14 days?
    • Have you experienced any cold- or flu-like symptoms (e.g., fever, chills, cough, sore throat, headache, stuffy or runny nose, vomiting or diarrhea) in the past 72 hours?
  • Limit the number of customers in the salon at any given time. Only allow customers that are getting their hair or nails done to be in the salon (as opposed to socializing). In addition, consider offering special hours for vulnerable customers only (e.g., older adults). Keep in mind that depending on the location of your salon, you may need to account for additional state and local restrictions regarding the number of customers allowed in the salon at a time. Be sure to comply with all applicable rules.
  • Utilize an online reservation system for customers to make appointments. Do not allow walk-in appointments.
  • Allow customers to check-in upon arrival to the salon via email or text. Send them an email or text when after completing all cleaning and disinfection procedures to let them know they can enter the salon for their appointment.
  • Utilize contactless payment procedures. Discourage the use of cash and credit cards. If contactless payment procedures are not feasible, place a barrier or partition between customers and staff.
  • Limit face-to-face interaction between staff and customers as much as possible. This might include having employees stand behind customers while providing hair services and placing a partition between employees and customers for nail services.
  • Use floor markings and signage to enforce social distancing guidelines.
  • Try to space salon workstations at least 6 feet apart. If this is not possible, consider having employees service customers at every other workstation. If possible, implement physical barriers to further separate salon workstations.
  • Utilize an isolated area for delivery companies to drop off materials quickly and minimize their time in the salon.

In addition to these practices, it’s also crucial to communicate the steps your organization is taking to protect customers and the rules that they need to follow to do their part via your website, email, social media and salon signage. Include the following information for customers in your communications:

  • If you are sick or have any COVID-19 symptoms, stay home. If anyone in your household is sick, stay home as well.
  • Reserve your salon appointment online. Walk-in appointments are not permitted. Stay outside the salon or in your personal vehicle until you are notified via email or text that you are permitted to enter the salon for your appointment.
  • Minimize contact with employees and other customers as much as possible within the salon.
  • Limit the items you touch in the salon to only those you intend to purchase.
  • Wear a mask or face covering at all times within the salon. Wash or sanitize your hands before and after leaving the salon.
  • If you get the urge to sneeze or cough, cover your nose and mouth with a tissue. Wash your face and hands before returning to your salon chair.
  • Keep in mind that the salon has the right to refuse service to anyone that has COVID-19 symptoms or fails to follow salon guidelines.

Additional Considerations

Lastly, be sure to review your salon’s operations and make any additional adjustments necessary to help limit the spread of COVID-19 and keep your staff and customers safe. Follow these measures:

  • Keep any areas that are unable to follow social distancing or proper sanitation guidelines closed.
  • Maintain adequate records of all customers—including names, contact information and visit dates—to be able to assist if contact tracing is needed. Do the same for employee records.
  • Ensure that all of your operations and reopening plans are compliant with federal, state and local guidelines, as well as industry best practices. Consider designating one or multiple employees to be responsible for ensuring compliance.

By following these precautions, your organization can provide salon services to your community once again, while also keeping employees and customers as healthy and safe as possible. For additional reopening resources and the latest COVID-19 developments, contact us today at 305.238.1000.

COVID-19 Reopening Considerations for Gyms and Fitness Centers

While the COVID-19 pandemic has forced many organizations to close their doors for an extended period, several states across the country have officially begun implementing reopening measures, allowing some employers to resume operations. However, as organizations prepare to open their doors once again, there are numerous factors to consider in order to preserve the health and safety of both employees and customers.

Specifically, gym and fitness center owners face unique challenges in minimizing the risks of reopening. After all, the nature of these organizations can make it difficult to maintain social distancing measures and keep high-touch surfaces clean—both of which contribute to the spread of COVID-19.

Review the following guidance to help keep your employees and members safe as you resume operations and ensure a successful facility reopening. Keep in mind that this guidance is general—depending on the location of your facility, you may need to account for additional state and local requirements or restrictions.

Employee Health and Safety

Before you can allow members to enter your facility, it’s crucial to implement workplace adjustments and procedures to ensure the health and safety of your staff. Consider these measures:

  • Utilize routine meetings and emails to communicate with staff about the steps being taken to prevent COVID-19 exposure at your facility.
  • Provide an adequate supply of paper towels, soap and hand sanitizer to allow staff to maintain proper hand hygiene.
  • Offer tissues to ensure employees follow proper cough and sneeze etiquette, as well as no-touch trash bins for tissue disposal.
  • Educate employees on the common symptoms of COVID-19 (e.g., fever, cough and shortness of breath). Tell them to stay home from work if they have any symptoms.
  • Conduct a wellness check on employees each day to ensure they are healthy and safe to enter the facility. If employees answer “yes” to either of the following questions, send them home:
    • Have you or any person you’ve been in close contact with (e.g., family members) been diagnosed with COVID-19 in the past 14 days?
    • Have you experienced any cold- or flu-like symptoms (e.g., fever, chills, cough, sore throat, headache, stuffy or runny nose, vomiting or diarrhea) in the past 72 hours?
  • Provide employees with adequate personal protective equipment (PPE) for their specific job tasks (e.g., personal training, cleaning the facility or checking members in). Require all employees to wear masks or face coverings at all times.
  • Require employees to wash their hands after entering the facility, working with a member, touching their mask or face covering, using the restroom and leaving the facility.
  • Encourage staff to carry a towel with them at all times. Instruct them to use the towel to cover their nose and mouth if they get a sudden urge to sneeze or cough. After using the towel, require staff to wash their hands and face before returning to work.
  • Train employees on the following topics:
    • How to safely put on, use, remove and store PPE
    • How to maintain proper hand hygiene and follow sneeze and cough etiquette
    • How to maintain social distancing guidelines
    • How to clean and disinfect surfaces properly
    • How to enforce health and safety requirements with members
    • How to recognize areas or practices that increase the risk of COVID-19 exposure, as well as how to report these concerns
  • Implement proper signage throughout the facility to remind staff of proper health and safety practices.
  • Establish a process for reviewing employees’ workplace health and safety concerns related to COVID-19 exposure and determining mitigation methods in a timely manner.

Cleaning and Disinfection Practices

Because your facility possesses a wide range of equipment and surfaces that both members and employees touch frequently, utilizing proper cleaning and disinfection measures is vital. Although health experts have found that COVID-19 cannot be spread through sweat, it can be spread through respiratory droplets—which can easily settle on equipment and surfaces throughout your facility. Use these cleaning and disinfection best practices:

  • Maintain a stocked supply of cleaning and disinfection products. Be sure to purchase products that meet Environmental Protection Agency criteria for use against COVID-19. Further, review all product labels, safety data sheets and manufacturer specifications to ensure proper storage and use.
  • Designate specific staff members to be responsible for maintaining proper cleaning and disinfection practices.
  • Keep in mind that if surfaces or equipment are dirty, they should be cleaned with soap and water or detergent prior to disinfection.
  • Utilize a well-documented system to track how often cleaning and disinfection take place. Increase cleaning and disinfection frequency for the entire facility, paying special attention to high-risk areas— including equipment, restrooms, showers and locker rooms.
  • Consider the following changes to restrooms, showers and locker rooms:
    • Only allow these areas to be open if social distancing and proper sanitation can be enforced. If this is not possible, these areas should remain closed.
    • Allow for doors to multi-stall restrooms to be opened and closed without touching handles, if feasible. This could entail adding a foot pull or encouraging occupants to touch the door handle with a paper towel.
    • In single-occupancy restrooms, use proper signage and materials (e.g., paper towels and trash cans) to encourage occupants to not touch handles. Restrict access to single-occupancy restrooms with a key to allow staff to monitor its use and disinfect it regularly.
    • Use signage to encourage occupants to close toilet lids before flushing and wash their hands before and after using the restroom.
    • Provide paper towels for drying hands and adequate trash bins. Prohibit the use of air dryers.
    • Require occupants to wear shoes in the locker room at all times. This includes wearing water shoes in shower areas.
  • Install numerous hand-washing (or hand-sanitizing, if hand-washing is not possible) stations throughout your facility. Specifically, make sure you have these stations located at the entrance and exit of the facility and at the entrance and exit of the locker rooms. Implement signage encouraging employees and members to use these stations frequently.
  • If you don’t already, be sure to provide numerous wipe stations throughout your facility for members to disinfect equipment after use. Implement signage to encourage members to do so.
    • In the event that members forget or neglect to wipe equipment after use, designate employees who are responsible for identifying and disinfecting this equipment before another member uses it.
  • Prevent staff from sharing any workplace tools or equipment, such as phones, keyboards and cash registers. If employees must share any tools or equipment, establish proper cleaning and disinfecting procedures before and after each use.
  • Ensure proper air ventilation throughout the facility. Be sure to clean HVAC systems regularly.
  • Have employees place their towels and work clothing in a sealed plastic bag after each use, as if the materials are contaminated. Have these materials laundered by washing and drying on the highest temperature setting possible for the fabric. Ensure staff wear masks or face coverings when handling dirty laundry. If your facility does not provide laundry services, provide employees with instructions for safely washing and drying their materials at home.
  • Use disposable rather than reusable items when possible. Ensure adequate trash bins and bolster trash removal practices to accommodate extra waste.

Member Health and Safety

There are several factors that you must consider in order to promote proper health and safety standards for your members. First, it’s important to reduce equipment, activity and transmission risks. Follow these tips:

  • Consider conducting a wellness check on members, similar to that of your employees, to ensure they are healthy and safe to enter the facility. If members answer “yes” to either of the following questions, do not let them enter the facility:
    • Have you or any person you’ve been in close contact with (e.g., family members) been diagnosed with COVID-19 in the past 14 days?
    • Have you experienced any cold- or flu-like symptoms (e.g., fever, chills, cough, sore throat, headache, stuffy or runny nose, vomiting or diarrhea) in the past 72 hours?
  • Limit the number of members in the facility at any given time. Only allow members who are actually exercising (as opposed to just socializing) inside the facility. In addition, consider offering special hours for vulnerable members only (e.g., older adults).
  • Consider implementing an online sign-up system for members to reserve set-duration workout periods and limit their time in the facility.
  • Utilize contactless payment, check-in and check-out procedures. Discourage the use of cash, credit cards and reward cards. If contactless procedures are not feasible, place a barrier or partition between members and staff.
  • Remove any unnecessary touchpoints (especially those that cannot be cleaned or disinfected).
  • Use floor markings and signage to enforce social distancing guidelines.
  • Try to space exercise equipment at least 6 feet apart, with even greater distancing for high-exertion cardio machines. If this is not possible, consider having members use every other machine.
  • Implement physical barriers, if possible, to further separate equipment.
  • Prohibit the use of water fountains. Encourage members to bring their own water.
  • Consider offering workout plans for members that promote social distancing and disinfection practices.
  • Close or restrict areas and activities where physical contact could occur or social distancing isn’t feasible. This includes basketball courts, swimming pools, saunas, hot tubs and group exercise classes.
  • Utilize an isolated area for delivery companies to drop off materials quickly and minimize their time in the facility.

Apart from these practices, it’s also crucial to communicate with members via your website, email, social media and facility signage about the steps your organization is taking to protect them and the steps that they need to take on their part. Include the following information for members in your communications:

  • If you are sick or have any COVID-19 symptoms, stay home. If anyone in your household is sick, stay home as well.
  • Continue to use online workout services if possible.
  • Maintain social distancing guidelines within the facility at all times. Plan your workout ahead of time to avoid lingering or socializing.
  • Limit the items you touch in the facility to only those you intend to use or purchase. Wipe down facility equipment before and after you use it, using a fresh wipe each time. Dispose of the wipes appropriately.
  • Wear a mask or face covering at all times within the facility.
  • Avoid using lifting gloves or any other personal items that are difficult to clean while in the facility.
  • Wash or sanitize your hands before and after leaving the facility.
  • If you get the urge to sneeze or cough, cover your nose and mouth with a tissue. Wash your face and hands before touching any equipment or returning to your activity.
  • Keep in mind that the facility has the right to refuse service to anyone that has COVID-19 symptoms or fails to follow facility guidelines.

Additional Considerations

Lastly, be sure to review your facility’s operations and make any additional adjustments necessary to help limit the spread of COVID-19 and keep your staff and members safe. Follow these measures:

  • Keep any areas that are unable to follow social distancing or proper sanitation guidelines closed.
  • Maintain adequate records of all members—including names, contact information and visit dates—to be able to assist if contact tracing is needed. Do the same for employee records and work schedules.
  • Ensure that all of your operations and reopening plans are compliant with federal, state and local guidelines, as well as industry best practices. Consider designating one or multiple employees to be responsible for ensuring compliance.

By following these precautions, your organization can reap the benefits of providing fitness services to your community once again, while also keeping employees and members as healthy and safe as possible.

For additional reopening resources and the latest COVID-19 developments, the professional agents and underwriters at Morris & Reynolds Insurance are happy to help you. Whether you have a question about this topic or need help with any form of insurance, please contact us at any time at 305.238.1000.

Business Travel After COVID-19

Travel—for both business and leisure—worldwide has virtually come to a standstill during the coronavirus pandemic. At this point, nobody knows when it will come back. Whenever that time comes though, travel will certainly be different than it was before. Airports, airlines, hotels and car rental companies will likely be taking new precautions as companies start greenlighting travel for business purposes.

The Global Business Travel Association (GBTA) estimates that the coronavirus potentially costs the travel industry $46.6 billion each month as people stay home. A GBTA survey found that employers canceled or suspended nearly all previously booked or planned international business travel. Ninety-two percent of respondents said all or most domestic business travel had been canceled or suspended.

Will Travel Return?

The short answer is yes. After safer-at-home orders are lifted and companies move into recovery mode, business travel is likely to return—just as leisure travel will. In the corporate world, it may be tough to establish a business relationship with someone you’ve never met in person. Video conferencing has been helping fill that gap during lockdown, but it doesn’t necessarily replicate face-to-face meetings.

Major events and tradeshows are continuing to be canceled or postponed throughout the summer. Some organizations have even switched their events to be in a virtual setting. As in-person events start getting put back on the calendar, attendance and travel will pick up.

After months of no traveling or not being in the office, there may be a pent-up desire to travel. Business travelers often are known to grumble about frequent travel and living out of a suitcase, but after the coronavirus pandemic, there’s a chance everyone is looking forward to the opportunity to pack a carry-on bag or book a red-eye flight.

What Will Travel Be Like?

There’s no way to know exactly what business travel will look like once the threat of COVID-19 subsides. But we can start thinking about the ways that travel may be different:

  • Affordability—Not all travel industry companies will make it through the global pandemic, and revenue losses may impact companies for several years to come. Just as those companies have been taking a financial hit, financial pains happen at a personal level, too. Overall, it may be tough for companies and individuals to afford to travel frequently again.
  • Transportation—Post-coronavirus, leisure travelers may opt for automobile or train trips and stay closer to home. However, business travelers will most likely not shift their behavior and return to flying as their main mode of transportation.
  • Destination—Additionally, there’s a prediction that business trips will be focused on shorter trips within the same region. That means that Americans will focus on traveling within America and limit going overseas.
  • Cleaning—Cleaning and other health safety precautions will be critical for travelers to feel comfortable in an aircraft, airport or hotels. Cleaning and sanitization standards will improve overall. Safety is going to be critical to get travelers back on the road or in the air.
  • Communication—As travelers are getting used to frequent and transparent communications from travel industry companies, there will be an expectation for that to continue as people are more comfortable traveling again. Companies should provide the same timely, factual and transparent communications to employees and be proactive about revising travel policies.

Some business travel may disappear altogether due to company failure. Additionally, businesspeople are learning during this period of severe travel restrictions that some travel can actually be replaced by teleconferencing technology. As people quickly adapted to working from home, teleconferencing became a staple in today’s workplace, and—as we move into recovery mode—it may be the new norm. Technology will likely evolve with more functionality and higher quality as time goes on and demand stays high. Businesspeople are learning that they can still get work done with teleconferencing, and at a much lower cost.

What’s Next?

Right now, it’s a waiting game as states and employers move into recovery mode from COVID-19. Safety is going to be the main priority for all travelers. Therefore, decision-makers should lean on travel advisories from the Centers for Disease and Prevention and the World Health Organization. Companies will do well to err on the side of caution and keep in mind that it’s not just the destination, but the trip itself where business travelers are at risk for exposure.

Travel agencies can help when the time is right to travel again by providing guidance on locations and logistics. Please contact us at
305.238.1000 with any questions that you might have on this or any other topic as we are happy to help.