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Worker Compensation –It’s a Partnership
Provider
Employer
Employee
Insurance
SAFETY
Regulatory Compliance
Worker Compensation
PROACTIVE REACTIVE
Worker Compensation –It’s a Partnership
Upton Sinclair, socialist author of The Jungle, a novel detailing the horrors experienced by a Lithuanian immigrant working in the Chicago slaughterhouses and the Triangle Shirtwaist Factory Fire.
WC is a form of insurance with stipulation – compensation for wages and medical treatment who are injured during the course of employment in exchange for mandatory relinquishment of employee’s right to sue the company for the tort of negligence
Worker Compensation is paid for by the employer, either self funded or by purchasing WC insurance.
Worker Compensation –It’s a Partnership
Before WC, if an employee was injured and off work – it was “too bad for you”
The employer could be faced with a lawsuit
It was the injured who had the burden of proof of negligence on the part of the employer – tough job
Worker Compensation –It’s a Partnership
The cost of Worker Compensation Insurance is determined by two basic things –
What is your risk and exposure (determined by the classification of employees) and by your history of claims
Worker Compensation –It’s a Partnership
What you can control -The basic formula for WC Insurance cost is: 1.Determine the classification code for your employees2.Determine the rate for each classification code3.Calculate the total annual payroll for each class code4.Divide the total annual payroll for each class by 1005.Multiply the new number by the class code rate6.Add the premiums for all codes together, this is your base rate
7.Multiply by your experience or mod rate
Worker Compensation –It’s a Partnership
Determine the classification code for your employees 5 secretaries at $12.75/hr 25 house builders at $22.90/hr 5 carpenters at $24.70/hr 2 debris removal at $14.50/hr
Worker Compensation –It’s a Partnership
Divide the total annual payroll for each class by 100 5 secretaries = $127,500 / 100 = $1,275 25 builders = $1,096,250 / 100 = $10,962 5 carpenters = $265,525 / 100 = $2,655 2 debris pickup = $58,000 / 100 = $580Multiply the new number by the class code rate$1,275 X Add the premiums for all codes together, this is your base rate
Multiply by your experience or mod rate
Worker Compensation –It’s a Partnership
Multiply the new number by the class code rate secretaries $1,275 X (class 8810 rate).850 = $1,083.75 builders = $10,962 X (class 5645 rate) 3.10 = $33,982.20
carpenters = $2,655 X (class 5651 rate) 1.98 = $5,256.90
debris pickup = $580 X (class 5650 rate) 2.25 = $1,305
Add the premiums for all codes together, this is your base rate
$41,627.85
Worker Compensation –It’s a Partnership
Add the premiums for all codes together, this is your base rate
$41,627.85
Now multiply by your experience or mod rate:Base rate X mod rate = amount paid for WC insurance $41,627.85 X 1.00 = $41,627.85 $41,627.85 X 1.20 = $49,953.42 (+ $8,325.57) $41,627.85 X .80 = $33,302.28 ( - $8,325.57)
Worker Compensation –It’s a Partnership
Now multiply by your experience or mod rate:
Experience modifier or mod rate is a term used in WC insurance. It is the adjustment of annual premium based on previous loss experience. Usually 3 years are used to determine the mod rate for a WC policy.
THIS IS SOMETHING YOU CAN CONTROL/MANAGE!
I =(C*(1–A)+G)+(A*F) E+(C*(1-A)+G)+(A*C)
A = Weight Factor G = Ballast I = Actual Primary
Losses H = Actual Incurred Losses F = Actual Excess Losses (H-I) E = Expected Primary Losses D = Expected Incurred Losses C = Expected Excess Losses (D-E)
Worker Compensation –It’s a Partnership
Worker Compensation –It’s a Partnership
“The modern system of workers' compensation is so complex and arcane it produces considerable grief to those who must deal with it on a daily basis. Yet these often cumbersome regulations are so ultimately vital to society they appear, in one form or another, in all
industrialized nations. “ Iowa Orthop
J. 1999; 19: 106–110.
Worker Compensation –It’s a Partnership
It’s a Partnership and everyone has their role –
Employee – must report the injury, follow doctor’s orders and keep the employer informed
Employer – must ensure injured employee receives medical attention as needed, report to insurance company within 7 days and keep insurance company informed
Claims – must gather information, determine if claim is work related or not, pay employee benefits, settle the claim
Provider – must treat patient and determine restrictions or limitations, determine if work related, release employee back to work when appropriate
Worker Compensation –It’s a Partnership
1. Injury/illness must arise out of “employment” 2.Seek medical attention as necessary3.Employee has up to 2 years to report
injury/illness (30 days)4.HIPAA does not apply to WC cases5.Keep a written record of all facts6.File report with insurance company (must be
filed within 7 days)7.The insurance company will gather information
from employee and any medical treatment
Worker Compensation –It’s a Partnership
The insurance company will gather information from employee and any medical treatment –
So what is your role??
DOCUMENT
INVESTIGATE
FOLLOW-UP
Worker Compensation –It’s a Partnership
Things to Document• Physical symptoms, such as sharp pain, stiffness, loss
of motion, etc• How long the symptoms lasted; if and when they
recurred.• Names of any witnesses • The doctors seen and the date of each visit. • Money spent on doctors, exams, treatment, medicines
and mileage. • Days lost from work because of the injury/illness. • Any statement made to the employer or the insurance
company. • Copies of any agreement or final receipt signed for a WC
claim.
Worker Compensation –It’s a Partnership
The employee gains by RTW when a doctor allows
1.This is your time to be talking to the doctor, you have every right as HIPAA does not apply.2.If you aren’t talking to the doctor, the injured employee is.3.Why pay a top wage earner to do lesser jobs that a restricted worker could be doing?4.Workers will return sooner rather than go from totally off work to full duties.5.Gets you involved and gives you some control of the recovery.6. Many workers want to come back to work.
Worker Compensation –It’s a Partnership
Return To Work
Convey to the doctor your concern to stay within the physical capabilities and ensure employee’s recovery
Make these temporary work assignments giving you control to end them. Suggested 12 weeks max of light duty.
You can give the employee any job to do as long as it does not go beyond those physical capabilities. (Think outside the box)
Worker Compensation –It’s a Partnership
EARLY RETURN TO WORK ... IT WORKS FOR YOU!!
The employee may be reluctant to start working again for fear of pain, re-injury or not being able to perform as well. If a different job is required because of the injury, there may also be a concern about trying something new. (and will convey this reluctance to the doctor)
We may not be willing to bring workers back to work, for many of the same reasons. It is helpful if employers have some type of limited duty, or alternate work, to help workers gradually get used to being back in the workforce
Worker Compensation –It’s a Partnership
If the employee is not satisfied with the first doctor, one more choice is allowed; however, the worker must notify the employer of this second choice. Only 2 choices are allowed to employee.
Worker Compensation –It’s a PartnershipOn written request, an employee
should submit promptly to a reasonable examination by any doctor (physician, chiropractor, psychologist, dentist, physician assistant, advanced practice nurse prescriber or podiatrist) named by the employer or insurance company.
IME (Independent Medical Exam)
Worker Compensation –It’s a Partnership
•If a WC claim goes to court, it can be two or three years later – go back and look at your notes from a couple of years ago. Are the notes clear enough you can understand the details of the incident? Were witnesses statements taken? Photos? Doctor notes? Supervisor's notes?
It’s a little late now!
Worker Compensation –It’s a PartnershipWhen an employee has stopped
receiving weekly compensation benefits for temporary or permanent disability after an accidental injury, the claim may be reopened at any time within 12 years from the date compensation was last paid. This 12-year period does not apply, however, where a compromise agreement has been made and approved by the department or where a final award has been issued after a hearing.
Worker Compensation –It’s a Partnership
Lost Time expenses are calculated at 100%
Restricted Day expenses are calculated at 30%
BIG DIFFERENCE, BIG INCENTIVE FOR RTW
Worker Compensation –It’s a Partnership
What do I do?1. Make sure your risk classifications are correct for
employeesa. Build a relationship with your insurance
carrier/claims
2. MANAGE claims –a. Make sure your policy requires immediate
reporting of injuriesb. Make sure your supervisors have training on
accidents and are responsible for RTWc. Document, document, document
Worker Compensation –It’s a Partnership
What do I do?a.Form a relationship with the medical providersb.Develop your company policyc.Form a relationship with injured employeesd.Return to work programe.Be informed, follow up, know what is going on
Worker Compensation –It’s a Partnership
THE MORE YOU KNOW – THE MORE YOU CONTROL
Worker Compensation –It’s a Partnership
Provider
Employer
Employee
Insurance