MYTH: Workers' compensation cost containment programs are a "quick fix" to the high costs of workers' compensation. REALITY: An effective workers' compensation cost containment program is a systematic and thorough approach to cost reduction – not a "quick fix." It focuses on multiple areas which are all tied together with an effective communication strategy. The design and development of a workers' compensation cost containment program can be done within a few months if there are dedicated resources making this a priority. Robert Elliott, senior vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality. Contact him at: Robert_Elliott@reduceyourworkerscomp.com or 860-553-6604 For more cost-saving tips go to WC Cost Reduction Tips. Show the REAL cost of workers' comp with the Real Cost Calculator. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
MYTH: High workers’ compensation costs are caused by aggressive plaintiff’s attorneys and laws which favor employees.
REALITY: While it is true to a limited extent that aggressive plaintiffs’ lawyers prolong an employees time out of work, thus making the cost of the claim higher, and that laws which are viewed as claimant-oriented also drive the cost of a claim higher, what plays a larger role in driving the cost of a claim are several workplace factors which a company CAN control. Inaction and lack of planning, poor communication with the employee, adjuster and medical providers are major gaps which drive the cost of workers’ compensation higher. Poor workplace morale and failure to take advantage of existing opportunities are other gaps in company processes which drive costs higher. These gaps cost companies millions of dollars each year by failing to use the tools already available to them.
For example, if you operate in a state where employees are allowed to go to the physician of their choice, you can “coach” them to a physician who is an advocate of transitional duty. Some will use the doctor you suggest. If the employee’s doctor has visited your operation to see the jobs the employees perform, it can be helpful to build a solid relationship between the company and the treating doctor. There are many things a company CAN DO, which are within their control, to reduce their costs.
Robert Elliott, senior vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality. Contact him at: Robert_Elliott@reduceyourworkerscomp.com or 860-553-6604
For more cost-saving tips go to WC Cost Reduction Tips.
Show the REAL cost of workers’ comp with the Real Cost Calculator.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Whether the cause of disability is work-related or not, maintain a strong RTW policy. Employees will soon call a lawyer if it looks like they will have to file for SSDB*. Those lawyers are good at spotting unfiled comp claims, as well as ADA or discrimination claims.
Key Communication Concepts:
1- Always maintain frequent (1 per week) and regular (Same time, same day) communications with employee. Breaking off communication means that whatever they think or believe may be a picture painted by someone you don’t know (a lawyer) and you will be that last to find out what the consequences will be.
2- Always hold out possibility of return to work.
3- Always offer to be the center of communications (with worker, doctor, carrier, workers’ comp board, group health, LTD, Soc Sec). Sounds difficult (it’s not) but prevents big problems from ever arising.
Workers’ comp and SSDB overlap: You can collect both. However, if comp and SSDB (monthly) exceed 80% of your Social Security “monthly wage” (incredibly difficult to compute) the excess is deducted from SSDB in some states, or from the work comp in others. There are cost of living benefit raises, if awarded by Congress in later years.
In work comp, total disability (with certain exceptions for the blind) means no work whatsoever can be performed. In SSDB, you can earn up to $300/month and still collect SSDB. (That is to encourage a return to a workplace. You can also return for a 9-month trial period at any higher salary.)
An example of non-occupational RTW in modified position: a young woman with totally disabling colitis was a brilliant young worker. No workers’ comp claim was filed in this example as it was a non-occupational illness. Her employer allowed her to work from home for six months before saying it was no longer an option.
Her manager no longer worked with employer, but our firm located him. He wrote the judge a full letter detailing the work from home situation because on the books it looked as though she was working normally. This letter resulted in $20,000 additional benefits and immediate Medicare coverage for a worker who was otherwise unable to work. Employer and manager never realized the significance of their participation although employer was a major city in southern CA.
Potential Benefits to the employer are:
(1) establishing objective evidence of wage earning capacity (sometimes this is in favor of the employer),
(2) compliance with ADA,
(3) employer assistance on a trial return to work period, can be used to defend against ADA claims since they document employer’s efforts to return disabled to work,
(4) engaging in a “work-hardening” effort which is most advantageous for rehab,
(5) less disruption of work flow (this worker was a highly specialized engineer involved in ongoing projects for which she could not easily be replaced),
(6) lower “demoralization downside”, resulting from lack of compassion for seriously injured member of workplace team.
Since she was a municipal employee there might have been benefits to the employer in her contract but these never surfaced. Had her condition improved slightly she would have returned to work. However, without the work from home all hope of any recovery would have been lost one year sooner. Instead she had a series of surgeries which ruled that out. With home work stations, many clerical positions can be done, part time at least, from home and this can make a big difference in returning these workers.
*Abbreviations:
SSDI means Social Security Disability Insurance.
SSDB means Social Security Disability Benefits.
SSI is Supplementary Security Income which are disability benefits for people w/o an earnings record. Low benefits and lawyers hardly ever get involved.
Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Limiting Employee Lost Time in Workers' Compensation by Communicating the Proper Message to Employees and their families. In workers' compensation, lost time is a multiple of what it is for a similar injury covered by a disability plan. This means that large gains from an optimistic return-to-work effort are a realistic goal in work comp claims. However, the most effective efforts begin on the day of the injury and the day following. To the family of a worker even seemingly minor injuries throw the family finances into turmoil. Therefore, the employer should be aware that the worker's own family is the employer's strongest ally for return-to-work efforts. Yet this alliance will not take place unless the employer communicates the proper message. 1- On the day of the injury, the employer must send the highest ranking executive available directly to the accident site. If more than on-site first aid is required, the same executive should accompany the worker to a medical facility and assure the worker, in the presence of the admitting desk, that medical bills will be paid. NEVER leave an employee wondering if a bill will be paid. This is the single greatest cause of litigation and extended absence. 2- Next, the employer must ensure that the employee contacts a family member and communicates that the situation is under control. Wherever possible, the employee should make the first call but the employer should be available to reassure the family that assistance is underway. 3- Following that, if the employee will not be admitted, arrangements must be made to transport the employee home, again accompanied by the executive, with a plan to secure and return the employee's car to the house. At the home, the executive must ascertain if the family will need assistance for essential errands. 4- During the initial period of lost time, phone contact should be maintained with the employee and family on a regular basis to monitor progress, provide reassurance, communicate with the workers' comp insurance carrier, and always to plan for a return to work program as soon as the treating physician agrees, even on a modified or reduced-time basis. Spouse as Ally in Return to Work Efforts. A secret, well-known to workers' compensation attorneys who represent workers, is how often a spouse will call (on a confidential basis) and plead that someone get the worker out of the house and back to gainful employment. Another fact known to workers' attorneys is how many claims are generated by the anger in a spouse who feels that the employer has abandoned the worker (and the family). This attitude will become set in stone long before a carrier can begin to manage a claim unless the employer has maintained the proper relationship. The emotions which arise in the first two days will persist throughout the claim. If they are positive the employee's family will assist in a rapid resolution of the claim. For the employer, this will translate into less lost time, lower workers' compensation costs and higher workplace morale. There will be other benefits, unseen but firmly fixed, in the gratitude of a family that is a member of your business community. Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers' compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100. Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Returning employees to work after an injury becomes more difficult with each passing week. A turning point occurs 26 weeks after lost time begins. Six months post injury presents some unique challenges — and opportunities. This is the week when many programs end and others begin. Short-term disability shifts to long-term disability and Social Security disability claims begin to be filed in earnest.
This time is troubling to a worker and the family. What they had hoped would be a few weeks of lost time is dragging on with no end in sight – and that is the way it will stay unless the employer can provide supportive assistance.
At this point, the employer’s best course is to offer the employee assistance in filing a Social Security disability benefits claim. Surprisingly, this can prove to be the most effective method of securing employee cooperation with a return-to-work effort. It shows that the employer is not closing any doors and that assistance will be provided no matter what the future holds.
Social Security provides for a nine month trial work period, during which the employee can continue to receive disability benefits while receiving wages;however, many employers and employees are unaware of this. The period need not occur only after Social Security benefits are awarded. A worker can begin the trial work period before the claim is allowed, or even filed, without loss of benefits.
This will allay the fears of a worker that such an effort will jeopardize a workers’ compensation or Social Security claim. In fact, it will help both since any difficulties the worker is experiencing will no longer be the subject of speculation and will demonstrate willingness to minimize the aftermath of injury. At the same time, if the effort fails, the employer can, and should, testify in support of the Social Security claim. An employer’s testimony is every bit as important as a medical report in such claims.
The strongest force for successful return to work is the establishment of a regular routine where the employee travels to the same place, at the same time each day. Habits are quickly ingrained and work is a far better habit than disability.
Attorney Theodore Ronca is a practicing lawyer from Aquebogue, NY. He is a frequent writer and speaker, and has represented employers in the areas of workers’ compensation, Social Security disability, employee disability plans and subrogation for over 30 years. Attorney Ronca can be reached at 631-722-2100.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Conduct a Chemistry Experiment Partnerships with law firms in containing workers compensation costs are doomed to failure if the team members are incompatible. Unfortunately, there is nothing comparable to eHarmony.com in determining the right match for you from the comp defense bar. Nevertheless, you can and should conduct a chemistry experiment. Like it or not, personality enters into the equation when picking a good workers compensation defense attorney. Aside from professional competence, compatibility should be another criterion for picking a workers compensation defense attorney. Can you get along for the long haul? Does the attorney listen as well as talk? Does the attorney ask you what your needs are? Is she accessible by phone? How well with the lawyer come across to a Hearing Commissioner? Subjective as these factors are, they are nevertheless legitimate considerations in picking good workers compensation defense attorneys. These factors also highlight the wisdom of meeting candidate counsel face to face before making the choice. Yogi Berra was not thinking of counsel selection when he said, "You can learn a lot by watching," but he could have been. Take Yogi's advise and you have a better chance of not striking out when it comes to finding the best workers compensation defense attorney for you and your company. Litigation management is a skill and a skill that any insurance, risk or claim professional can learn. Litigation management applies not just to general liability, product liability or mass tort claims. It applies to workers compensation claim management as well. Whether you are insured, self-insured or some blend of the two, you can use the tips provided in this series to upgrade the caliber of your workers compensation defense counsel. Get involved in counsel selection. Do not wait until you have a contested claim. Use this checklist of seven factors to professionalize the due diligence procedure. Better defense counsel can pay dividends in lower transaction costs and more "wins" on contested cases! Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com THANK YOU KEVIN. GREAT TIPS AND INSIGHT YOU HAVE SHARED. Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Are You on the Same Defense Philosophy Wavelength? More great tips from Kevin Quinley, nationally known claims expert and author.
For the best chance of taming the workers compensation beast, you must make sure that your claim approach is in sync with that of your defense lawyers. As part if your due diligence, determine the attorney’s and firm’s claim philosophy. Does your approach to case resolution match that of your defense attorney? This is something for the risk or claims manager to explore up front.
First, some self-assessment is needed. Does your company prefer to settle claims to avoid protracted litigation or divisive union issues? If so, a bulldog litigator who sees himself as a gladiator may not be a good fit, until you have the “must win” claim that you are determined to fight to the death. Maybe you prefer to stand and fight “grey area” cases or claims you think are bogus. You may feel that doing so sends a message that you are not a “soft touch” for dubious claims. You would rather pay your workers compensation defense lawyer than to pay an employee who you think is trying to milk you. If this is your philosophy, a settlement-oriented attorney is the wrong choice.
Ideally, the defense attorney should adapt her defense philosophy to yours. Caution: many lawyers, especially at the “courting” stage, will tell you this is what they do anyway.
Don’t believe it automatically! Ingrained traits die hard, and your defense attorney must be on the same philosophical wavelength in order to avoid extra expense, working at cross-purposes and hard feelings down the road. You never know until you ask!
Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Does the Firm Have Multi-Jurisdictional Experience?
Continuing with Kevin Quinley’s “how to” tips about improving the quality of defense counsel employer’s use, he suggests several ways to make sure the firm has experience in your jurisdiction. Kevin has years of experience and is an authority in claims management.
Realtors will tell you that, in matters of real estate value, the three most important factors are location, location and location. To a lesser extent, this is also in assessing the value of workers compensation defense counsel. As part of the vetting process, consider the attorney‘s and firm’s multi-jurisdictional experience. For risk or claim managers handling files for more than one state, an attorney’s flexibility is key.
Work compensation defense skill is not necessarily or easily transferred from jurisdiction to jurisdiction. You may find a superb defense attorney in California, but that may do little good when you need a specialist defending claims under the Longshore and Harbor Workers Compensation Act. Does the firm have offices in the states where you are likely to have claims? Are compensation specialists staffed in those other locations?
Having defense counsel with multi-jurisdictional experience can be a plus in various situations. One is if your employees travel locally but in a multi-state area. For example, I live and work in the Washington D.C. area. Employees there often travel daily between Maryland, Virginia and the District of Columbia. Each of these three jurisdictions have materially different benefit structures, making jurisdiction a huge financial factor in workers compensation costs. Having a defense firm steeped in all three jurisdiction’s laws is an asset. Or maybe your CFO is attending a tax conference in California. While showering in his room at the Marriott, he slips and breaks his wrist. Is this compensable and, if so, would California comp benefits apply? Having a firm with multi-jurisdictional experience can help here too.
Location is also a factor in assessing the attorney’s proximity to the workers compensation venue: How close is the lawyer to the courthouse or commission office holding work comp hearings? If the attorney must travel long distances, the client may pay dearly in costs. Attorneys close to the courthouse can also often more easily keep tabs on the pulse of the compensation system: what arguments succeed and which fail, the likes, dislikes, personalities and idiosyncrasies of the Hearing Commissioners along with courthouse scuttlebutt that may be useful in workers compensation claim defense.
Kevin Quinley CPCU, AIC, ARM is a noted claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
MYTH: Once implemented, your workers’ compensation premiums will immediately go down.
REALITY: The loss costs (as distinguished from the premium) will fall immediately, but the premiums take several years to fall because they are based on a company’s experience modification which is a 3-year rolling average. As one good year “rolls” into your experience, a bad year drops out so it takes three years for the full benefit of a workers’ compensation cost containment program to be reflected in your premiums.
However, the full value of every dollar you save on each claim that is within your deductible, will be a dollar you save immediately. For companies with high deductibles of $250,000 to 2 Million dollars, every claim dollar is saved immediately. Actually, because you save that money off the bottom line, the real value of the savings is much greater.
For example, if you bring an employee back 30 days earlier, and that employee’s pay is $80/day, and the replacement employee is paid $2,000, the total amount the company will save by bringing the employee back in a Transitional Duty position is $67,692.31 assuming a 6.5% profit margin. Try an example for your company TD Calculator.
For more cost-saving tips go to WC Cost Reduction Tips.
Show the REAL cost of workers’ comp with the Real Cost Calculator.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
How cost-efficient is the attorney and firm? You want to look at hourly rates but also not mistake them as the biggest factor in managing costs. Law firms can quote a lower hourly rate but manage to “bill with a heavy pencil” on tasks to compensate for the low rate. Conversely, a worker’s compensation defense attorney with a lofty rate may be a bargain if, due to her experience, she can do the same task in half the time it would take the average lawyer to accomplish it. By all means, ask for a fee schedule but do not be beguiled or seduced by a low hourly rate.
Avoid approaching workers compensation legal services with a gasoline price war mentality. This week I drove behind a lawn service truck bearing the following message, “The bitterness of a poor job lingers long past the sweetness of a low price.” If you hire a “cheap” lawyer with a low hourly rate and he ends up botching a winnable contested comp case, the boss will not console you with the fact that you saved $10 per hour on the lawyer’s hourly rate. This is being penny-wise and pound foolish.
In conducting due diligence on workers compensation legal defense costs, dig deeper into the firm’s billing culture. Possible questions include:
- Do your attorneys have annual billing quotas? If so, what are they?
- How heavily are billings factored in associate and partner performance reviews?
- If we pick your firm, can you lock in these rates for a three-year period?
- Can you give us budgets up-front estimating the time and expense of each case?
- Are you willing to consider any alternative to time-and-expense billing?
Focus not just on costs but also on the firm’s value. Does the firm offer any value-added services? For example, some law firms publish a newsletter highlighting changes and implications of the comp laws. Some put on free seminars for adjusters. Some may even send an attorney to your office to do a short in-service presentation on a topic germane to workers compensation defense.
Ask and encourage your firms to offer these!
Kevin Quinley CPCU, AIC, ARM is a claims consultant, trainer, speaker and expert witness. He is the author of ten books on various aspects of claims management. He is a contributing author to the IIA textbook for the Associate in Claims courses, Principles of Workers Compensation Claims (Second Edition) 1998. You can reach Kevin at kquinley@cox.net, by phoning (703) 239-1694 or via his website, www.kevinquinley.com
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
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