STATE ACCIDENT FUND

Workers’ Compensation: FAQs by Alexander Hamilton Institute on January 4, 2012

on Business Management Daily Fourth Quarter 2011

Table of Contents

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Workers’ Compensation: FAQ’s

The Quality Connection for Safety

Meet the New Commissioner

“Protecting you since 1943.”

Safe-mail first Quarter 2012

CorVel: PT Cost Savings

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FAQs about workers’ compensa-

tion

1. Is an employee who violates a

safety rule covered by workers’

compensation?

Yes. Even if an employee is injured

while violating a work rule, he/she

is usually covered by workers’

comp. Ignorance or bad judgment

alone will not usually lead to a de-

nial of benefits. Repeated violations

of safety rules, however, may lead

to a denial of benefits, if the em-

ployer is able to show that the em-

ployee had been disciplined in the

past.

** In SC, if an employee is in di-

rect violation of specific policy

and have been made aware to the

employee on previous occasions,

the claim can be denied under a

line of cases starting with Black v.

Town of Springfield.

2. Is an employee who injures him/

herself at a company-sponsored

picnic eligible for workers’ com-

pensation?

If attendance is mandatory, the pic-

nic is held during business hours,

and the employer derives a benefit

from it beyond improved employee

health and morale, then the employer

will probably have to pay up for any

injuries that may arise. To prevent

such extracurricular activities from

boosting your workers’ compensation

costs, try implementing these strate-

gies.

Make attendance optional. If you

don’t, you run the risk of making

it a condition of employment and

increasing your liability if some-

one gets hurt.

Don’t demand that workers help

with set-up and serving. Ask for

volunteers. A “special job

task” (one that is “concurrent” to

the job even though it’s off-

hours) may also increase your

WC liability.

Ban contact sports. Choose games

and activities, which don’t sig-

nificantly increase the risk of em-

ployee injury. And let employees

organize the games and provide

their own equipment. The more

out of the loop you are, the less

likely the company will be held liable for any resulting injuries.

“Even if an employee is injured

while violating a work rule, he/

she is usually covered by

workers’ comp. Ignorance or bad

judgment alone will not usually

lead to a denial of benefits.”

continued on page 5 …

Term of the Quarter

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What is a Premium Audit & Why Do We Do It? 4

Workers’ compensation premiums

are based on the frequency of a com-

pany’s injury claims. So it’s critical

to avoid paying claims for accidents

that are not covered, as well as in-

vestigate potential cases of fraud.

Also, return-to-work questions arise

in situations where workers’ com-

pensation interacts with the ADA

and the FMLA.

OSHA 300 Log By Ray Coleman

Safety and Loss Control/Team Leader

State Accident Fund Safe-mail first Quarter 2012

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a condition of their employment.

Which work related injuries and illnesses should you

record?

Record those work related injuries and illnesses that result

in:

Death

Loss of consciousness

Days away from work

Restricted work activity or job transfer

Medical treatment beyond first aid.

I know there are many other questions such as how to fill

out the log, what is medical treatment and what is the 301

Form. To answer these questions or any other safety ques-

tions, you may go to www.osha.gov or contact the State

Accident Fund and ask for Barney Derrick 803-896-5935

or myself, Ray Coleman at 803-896-5855.

“Safety and Loss Control—Encompassing all that a company does

to reduce or avoid injuries, illness, property damage, and employee lost time-is one of the top priorities of the

South Carolina State Accident Fund.”

Just a reminder that the OSHA 300 log is due February 1st. The following is the most often questions we are asked

about the 300 log.

When must you post the Summary of the 300 log?

You must post the summary only, not the Log, by February

1st and keep it posted until April 30th.

How long must you keep the Log and Summary on file?

You must keep the Log and Summary for 5 years following

the year to which they pertain.

Do you have to send these forms to OSHA at the end of

the year?

No. You do not have to send the completed forms to OSHA

unless specifically asked to do so.

When is an injury or illness considered work-related?

An injury or illness is considered work related if an event or

exposure in the work environment caused or contributed to

the condition or significantly aggravated a preexisting con-

dition. Work-relatedness is presumed for injuries and ill-

nesses resulting from events or exposures occurring in the

workplace, unless an exception specifically applies. See 29

CFR Part 1904.5(b)(2) for the exceptions. The work envi-

ronment includes the establishment and other locations

where one or more employees are working or are present as

State Accident Fund Safe-mail first Quarter 2012

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“A premium audit is conducted because at the beginning of a policy period, we can only estimate what the payroll might be for your organization.”

State Accident Fund Safe-mail First Quarter 2012

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A premium audit is a reconciliation of the premium

basis (for workers compensation, it is payroll) of an

insurance policy. A premium audit is conducted be-

cause at the beginning of a policy period, we can only

estimate what the payroll might be for your organiza-

tion. At the end of the policy period, we can obtain the

actual payroll records and determine whether the policy

was overestimated or underestimated. If it was overesti-

mated, we will owe you a refund if your policy is paid

in full. If underestimated, you will owe an additional

amount for coverage provided in excess of the original

premium.

An audit is completed after the policy

expires or is for some reason can-

celled. You will receive a “Payroll

Report” via the mail. The report

will ask you to provide the number

of employees and the amount of

Gross Payroll and Overtime in each

Classification Code. The type of

business operations determines the

Classification Codes used which, in

turn, determine how each employee is classed based

on his/her job duties. We ask for Total Overtime

pay because a portion of it can be used to reduce your

premium.

Please be sure to let us know who completed the re-

port and how to contact that person with any ques-

tions we may have.

You will have a form to add any volunteers that

should be covered on your policy. This may include,

but is not limited to, volunteer firefighters, reserve

police officers, board members, etc.

There will also be an “Application

for Drug and Alcohol Free Work-

place Premium Credit Program”.

If you have a Drug Free Program

formally implemented at your

workplace, please complete this

form and return it with your audit

for a 5% credit. Please be aware

that this credit is added only to an

audited policy period.

What is a Premium Audit

& Why Do We Do It?

Theresa Simmons, Premium Auditor

“Workers’ compensation

premiums are based on the

frequency of a company’s

injury claims.”

State Accident Fund Safe-mail first Quarter 2012

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Limit alcohol consumption. Or better yet, ban it alto-

gether. If you want to allow some drinking, try limit-

ing employees by using drink tickets or curtailing the

amount of time in which alcohol is served.

3. Can employees collect workers’ compensation

benefits for injuries sustained while they are off

company premises?

** SC specific answer: Yes, as long as the accident

arose out of and in the course of the injured worker’s

employment. In SC, it’s not usually the location of

the accident that is important. It’s what they were

doing when the accident occurred and was it work-

related.

4. What is an employer’s responsibility if an em-

ployee cannot physically perform the job he/she

was hired to do upon his/her return from workers’

compensation leave?

Workers’ comp statutes vary from state to state re-

garding whether or not you must restore employees to

their original jobs upon their return from WC leave.

Some WC laws require that the employee be rein-

stated to a part-time or light-duty job until he/she can

resume working in his/her old position. So it’s best to

check with your state’s particular WC law.

However, the WC law is not your only concern. If

this employee’s injury qualifies as a disability or seri-

ous health condition, you may also have to contend

with the Americans with Disabilities Act (ADA) and/

or the Family and Medical Leave Act (FMLA).

According to the ADA, you have a responsibility to

accommodate an employee with a disability who is

returning from leave if an accommodation is available

that would enable the employee to perform the essen-

tial functions of the job. Reassignment to another po-

sition may be considered an accommodation if the

employee with a disability can no longer perform the

essential functions of his/her original job.

The FMLA, on the

other hand, guarantees

job protection. Thus,

employees returning

from WC leave, who

also took concurrent

FMLA leave, are enti-

tled to their former (or

equivalent) positions.

However, the FMLA

stipulates that if an employee is unable to perform

an essential function of the same or an equivalent

position because of a physical or mental condition,

you aren’t required to reinstate him/her into another

job.

5. What are some measures employers can take to

minimize workers’ compensation fraud?

Workers’ compensation fraud is definitely a major

problem for today’s employers. Unfortunately, it

isn’t always as obvious as, for example, an individ-

ual who claims to have been injured at work on a

day that records show he/she was out sick.

One way to help fight fraud in your workplace is to

screen job applicants carefully. It’s illegal to ask

applicants about WC claims or to refuse to hire

someone because he/she has filed WC claims in the

past. But analyzing WC records after a tentative job

offer has been made can tell you about an appli-

cant’s ability to handle physically demanding jobs,

or for determining specific ailments that may keep

the person from performing a job successfully.

Another way to fight fraud is to hire an outside in-

vestigator to check out cases of possible fraud.

Make sure the information you give the investigator

is complete. Allow co-workers to be interviewed,

turn over any documentation, and provide a photo

of the employee, if outside surveillance is required.

A third way to prevent fraud is to be aware of and

watch for “red flags” of fraud, including inconsis-

tency in medical records; injuries that take much

longer to heal than predicted by a doctor; missed

doctor appointments; or that the employee can’t be

reached by phone during his/her normal working

hours. But remember, these are just warning signs;

they do not automatically indicate WC fraud. So

investigate carefully.

Workers’ Compensation: FAQs … continued from page 1…

State Accident Fund Safe-mail first Quarter 2012

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South Carolina State Accident Fund

“Protecting you since 1943.”

State Accident fund

Post Office Box 102100 Columbia, South Carolina 29221

(803) 896-5800 http://www.saf.sc.gov/

Cumulative injury: An injury that was caused by repeated events or repeated exposures at work. For example, hurting your wrist doing the same motion over and over or losing your hearing because of constant loud noise.

Commission Welcomes New Commissioner Gene McCaskill

On December 22, 2011 Governor Haley appointed Gene McCaskill of Camden, South Carolina to the Workers’ Compensation Commission effective January 3, 2012. Mr. McCaskill fills the vacant Commissioner position created by the resignation of David Huffstetler in November. Mr. McCaskill has extensive private and public sector experience having served the previous nine years as Senior Executive Assistant at the Office of the Attorney General and two decades as a grocer in Camden. Prior to his employment with the Attorney General’s Office, Mr. McCaskill served as Director of Admissions for Camden Military Academy, a member of the SC Commission on Consumer Affairs, and with the SC Educational Television Commission. (From the website of the South Carolina Workers’ Compensation Commission.)

Term of the Quarter: Cumulative Injury