Guaranteed Cost Programs- There are two types of guaranteed cost programs: a) standard guaranteed cost plans and b) discounted guaranteed cost plans. These premiums are charged on a going-forward basis with a rate applied to an exposure base such as payroll, sales or vehicles. The premium varies only with changes to the exposure bases. This means that the premium is generally not loss sensitive. However, past years experience is taken into account in future years so while not directly loss sensitive, poor experience does adversely affect the cost of your future years premium. The insured forgoes flexibility in this arrangement in that the programs are not "unbundled" and claims handling service is provided by the insurance company because the insurance company is taking much of the risk. Because the premium is paid upfront the insured forgoes any benefit of cash flow other programs might offer. Guaranteed cost coverage is normally written for smaller companies that want "first dollar coverage" without a deductible. Larger companies that purchase this type of program generally have a "per claim" deductible. The deductible plus the loss of cash flow often makes this undesirable for larger companies. In a discounted cost plan the insurer invests the premium then gives the insured a discount based on that amount. The basic drawback with this type of plan from a cost containment perspective is that the insured (you, the employer) must use the services of the insurance company and there will be very little flexibility in any special arrangements you may want such as using a particular medical provider or PPO (group of providers), having on-site file reviews, engaging the insurance company in training programs, having the insurance adjuster contact the worker before and after medical appointments (unless this is part of their best practices), request participation from the carrier in your transitional duty programs, etc. Basically, you turn your claims over to the insurance company and have very little input in settlements, selection of defense counsel or other aspects of the claims. You CAN however, still manage the workplace injury procedures within your workplace including requiring the employees to obtain medical restrictions from their doctors on the first medical visit. You can require them to participate in transitional duty (unless prohibited by state law) when they are medically able to return to work, etc. For more information about what you CAN do from a cost control perspective consult your insurance broker and go to www.ReduceYourWorkersComp.com Thanks to Glenn Trutner at Advisen for his assistance on this article. WC Calculator www.ReduceYourWorkersComp.com/calculator.php TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php WC 101 www.ReduceYourWorkersComp.com/workers_comp.php Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel or other professionals 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
While this article applies specifically to New York, the concepts are applicable in every state. Attendance at hearings supports the employee and gives the employer a whole new perspective of the situation.
When the NY comp law was passed in 1914 hearings were held only when there were unanticipated problems to resolve. Other than a hearing officer (then called a “referee”) the only people to attend were the employer and the employee. If an award was made , the employer often paid it on the spot, in cash.
Gradually, that all changed. Today the hearings are attended by the employee, a carrier’s representative (often an attorney), perhaps an attorney for the employee, a law judge and a stenographer. But rarely an employer.
Employers are almost never seen unless they are called to testify in a contested claim – hardly a pleasant introduction to a system that one employee in thirty encounters every year. Yet employers are not barred from attending. And why should they be since in truth, they are the only ones paying, through premiums, for everyone and everything seen at a hearing?
So, what reason, other than curiosity, would an employer have for being at a hearing? The presence of the second most important party to a claim, the employer, forces all other persons present to behave in a far more professional manner and produces faster and more accurate adjudications. This is precisely why many persons prefer the lax, informal setting when the employer is not present.
The most important service the employer can provide is support for a valued worker in a time of need. Often the employer’s presence can bring to a halt an unwarranted contest of a claim before it becomes entrenched. The employer makes an impression on the law judge that is dangerous to ignore.
The knowledge gained by going to hearings will result in far less disruption to the workplace in future hearings. Without occasional attendance the employer is inviting higher comp costs, at least, and deadly misunderstandings. Listening to a person, often a worker, trying to describe their experiences in the comp system will make little sense without actual knowledge of the process.
In 1993 an FBI agent in the New York City office was assigned to create an insurance fraud unit and wanted to know how to learn the essentials of the work comp process as accurately as possible. He was told to dress in casual clothes, bring a newspaper and sit in the area where the workers were waiting for their hearing to be called. After two hours he agreed that he was unlikely to learn that much in any other way.
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.
WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp.
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp.
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
When your employee has a comp claim they will be required to attend hearings. They will often become extremely frustrated by these. Here are the basics of understanding the system and lowering anger and frustration in your work force. 1-New York annually has 200,000 hearings in its work comp system for 150,000 claims filed annually. It has 56 judges who must handle these hearings. The hearings, therefore, are necessarily very short. 2-Workers imagine that the judge will be happy to listen to their complaints and take appropriate action. In fact, the regulars at the hearing speak in an abbreviated code unintelligible to outsiders. When the hearing ends the worker hardly understands what has been said and is rarely asked to participate. 3-If your worker has an attorney, the attorney will likely be with the next worker awaiting a hearing and will have little time to talk to your worker. 4-Your workers will spend half a day travelling and waiting for a proceeding that usually lasts only 15 minutes. 5-Payments for lost time, in work comp, do not count days lost from work to attend hearings. Therefore, do everything to lessen the number of hearings that your workers have to attend. Always ask the worker before and after a hearing if there is anything you can do. Make sure the carrier has total wages for the year prior to the accident before the first hearing. Pay small bills (travel expenses, etc.) for the employee. Communicate with the carrier. Ask to speak to the lawyer they select to handle the hearing. Attend hearings by phone. Ask the carrier to call you during the hearing to resolve questions. (This is a new Board procedure designed to make it easier for doctors but it can also be used by employers.) Attorney Theodore Roncais 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. WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp. WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp. 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
Social Media Perspectives for the Insurance Industry — Summary of Webinar
On Thursday, March 19, 2009 a webinar was held covering social networking aspects for the insurance industry. Listed below is a wealth of information and many websites you will find helpful.
The thrust of the webinar focused on social networking being here and now and the importance of business, industry, and professionals taking advantage of this popular and useful marketing and advertising tool. Look at these stats.
Facebook: 150 million users worldwide. Twitter: 1 billion Tweets; 3 million tweets a day. YouTube: 70 million videos Wikipedia: 75,000 contributors; 2.5 million articles in English Blogosphere: 133 million blogs and 346 million reading; 900 posts in 24 hours. Yahoo IM: 248 million users Mobile Phones: 600 million subscribers
Walt Podgurski, CLU, CES, Chairman & CEO, Insurance Broadcasting moderated this fine panel. He encourages everyone to join the Social Media Study Group at Insurance Campus as a way to network and gain access to new ideas and information. Insurance Campus.org will soon be the largest insurance networking site on the Internet. What distinguishes this model is the "user-generated" nature of the content. Members create their own profile, groups, posts, blogs, photos, videos, and more.
InsuranceBroadcasting.Com is a next generation media organization facilitating the exchange of information between insurance industry professionals utilizing the improvements available from emerging technology to deliver meaningful information.
Insurance Newscast – A daily e-mail newsletter subscribed to by over 450,000 insurance professionals from over 40 countries.
Insurance Media Association – The premier network for professionals engaged in insurance media. Over 600 current members practice the disciplines of corporate communication, employee/internal communication, marketing communication, public relations / external communication, media relations, community relations, public affairs, investor relations, government relations, advertising, branding and marketing.
Insurance Webinars – Let us use the drawing power of our 450,000 newsletter subscribers and related media services to build an audience for your message delivered via the Internet.
Workplace Benefits Association - An organization of over 6,000 corporate and individual members engaged in the marketing of benefits that involve the relationship between an employer & their employees, a business & their customers, and an organization & their members.
Pat Ryan's presentation covered Web 2.0 Marketing describing the many areas of social media, such as PodCast, Search Engine Optimization and Search Engine Marketing, social bookmarking and micro blogging and application to business. Also included was a brief discussion of MySpace, Facebook, LinkedIn, ning, twitter, and others.
Rick Morgan gave an overview of Twitter – not only its well known "fun" view, but it's usefulness to business and business professionals. _____________________________________________________________________________________________________________________________- WC Calculator www.ReduceYourWorkersComp.com/calculator.php TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php WC 101 www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel or other professionals 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
Consider this. A large number of hours at the Board are wasted on hearings that are on just for the claimant to get reimbursed for mileage expenses. The amounts of money involved are small but important to the workers. The carriers take forever, forget them, drive the claimant crazy and cause defense expenses to soar. (The attorneys who cover these hearings for the carrier charge $125-250. This is added to the employer’s costs on the file. Plus what the carrier adds for administration which is likely a percentage of the claim costs.)
1- Pay Mileage - One way to build a bond between the employee and the employer is for the employer to pay these mileage expenses and NOT forward them to the carrier. The employer gets a tax deduction as a work comp expense even if it was the carrier’s responsibility.
2-Pay TV and phone in hosptial room – Here is another way to establish a bond with the worker. When they are in the hospital, usually for less than a week, comp will not pay for TV or the phone. Yet these are considered essential by most people. Again, this is a source of frustration to the worker and the worker’s family. The employer can pay this as a reasonable part comp expense knowing that the carrier never would.
These are all part of a larger program to take the friction out of claims and keep the worker away from the system on the 97% of the claims that are small and should stay small. Almost 10-15% of the claims produce a huge number of unnecessary hearings.
3-Request copies of all forms in the proceeding – Another thing would be to have the employer insist on being notified and copied on all forms in the proceeding. Frequently they are not. Then they should call or speak to the worker before and after any hearing. The employer should do the troubleshooting since they will be paying in multiples for the inefficiencies of the carrier and the Board. If the employer does these things attorney involvement will be far less.
Normally, companies do not put a program like this in place proactively if they are not currently having problems, but that’s the best thing to do. For employers who are worried about rising costs this is perfect. The program acts as the teaching tool for the HR staff and is a morale builder. The staff learns how to retake control of the claim. Lost time will plunge and there will be far fewer hearings.
There are thousands of employers in NY who could benefit in ways they cannot imagine. This would also reduce unemployement and discrimination claims which are often triggered by anger toward the comp system.
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.
WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp.
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp.
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
Can I charge for that report? — Sometimes, if is Workers’ Compensation in New York
No medical services delivery system is more time consuming, for fewer dollars, than New York workers’ compensation. It comes as a surprise, therefore, to many that there are exceptions. Evidentiary reports are one of them.
The Workers’ Compensation Law requires treating physicians to keep adequate records and file periodic reports. Therefore, payment for these is in the medical fee schedule, however inadequate it may be. However, some reports are necessary but are not the responsibility of the carrier. For these, a party can, and indeed must, pay directly.
Casual Relationship (death claim) The most common is a causal relationship report for a death claim. In most cases, the claim is made months, or even years, after death and the records make no reference to work, much less causal relationship. In those cases, a qualified physician is asked to review the records and provide a written opinion. A fee is charged directly to the claimant, usually a surviving spouse.
Therapeutic Report Another type of report, the “therapeutic report,” is no longer used but was necessary for closing a claim on a lump-sum settlement. The claimant was required to pay for the report. Many resisted and insisted their lawyers, who would be collecting a sizable fee, pay. The Board side-stepped the dispute by automatically adding $100 to the lawyers fee to cover the cost of the report prevailing in the 1960s. The lump sum legal fee was 10% plus $100. Few people remembered why the $100 was added and when the therapeutic report was abolished in the late 1970s the Board continued to award the $100, although it no longer knew why it was doing so.
Scheduled Loss Impairment A third type of report is now in a sort of limbo. When maximum medical improvement is reached, a patient may be examined for “schedule loss impairment.” Formerly, that was not asked of the treating physician or surgeon and claimants paid a non-treating doctor for the report. Currently, the question is asked on the C-4.3 form and the charge may now be subject to medical fee schedule.
Causal Relationship (occupational disease) A fourth type of report is a “causal relationship” report needed for occupational disease claims, since many diseases have no obvious connection to work. The report is similar to the report filed in death claims. However, a physician or surgeon is cautioned to avoid a type of abuse associated with occupational disease claims.
A few years ago, certain doctors would write the initial report and charge for it. If they were called to testify, the claimant had to pay for the doctor’s appearance directly. To get around this, the doctor would then begin minor treatment and claim to be a treating physician so that the testimony fee would have to be paid by the carrier. Such practices no longer work. The abuses were dealt with ten years ago and the memory is still fresh at the Board.
Another situation is where a worker has a work comp injury which is also the subject of a negligence claim. If a doctor is treating on both, the doctor may charge for reports which are needed for the negligence case even though the report can be used in the comp claim as well. Similarly, a doctor can be paid for reports necessary for a private insurance claim although the report can also be used in a work comp claim.
I want to emphasize the importance of communication among the workers, the employer and the medical community BEFORE the first hearing. Ground up claims “management” is the approach that works. I put “”management” in quotation marks because I don’t think of this as management but sensible cooperation and communication.
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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.
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WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp.
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp.
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
Here’s what happened
Employer’s Zero-Tolerance Policy for Major Preventable Accidents Trumps Driver’s Retaliatory Discharge Claim. A 60-year-old truck driver was injured when two worn straps used to secure the heavy load on his truck snapped. The resulting shift of cargo caused extensive damage to the truck as well. The driver was fired shortly after filing his application for workers’ compensation benefits. He then filed suit against the employer in federal court, alleging that the employer had discriminated against him on the basis of age, disability, and his application for workers’ compensation benefits, all in violation of California’s Fair Employment and Housing Act (FEHA). He also asserted that his employment was terminated in violation of public policy, and that the employer breached the implied covenant of good faith and fair dealing and intentionally or negligently caused him to suffer emotional distress. The employer contended the driver had been fired on the basis of the employer’s “zero tolerance” policy for major preventable accidents.
Here’s how the court ruled
In Copeland v. Ryder Servs. Corp., 2009 U.S. App. LEXIS 5607 (9th Cir., March 18, 2009), the U.S. Court of Appeals for the Ninth Circuit affirmed an order of a California district court granting summary judgment to the employer. The driver’s evidence that he suffered from disabling injuries, was 60 years old, was called “the old guy” by his coworkers, and heard a stray remark about retirement during the accident review board hearing only minimally pointed to discrimination. The statements regarding the driver’s workers’ compensation claim were isolated comments unrelated to the employer’s decision to terminate the driver’s employment. Weighing against the driver’s evidence was an earlier accident after which the driver had been warned about the importance of securing his cargo, the employer’s consistent application of its zero tolerance policy for major preventable accidents, and the reasonable conclusions by the safety manager and the accident review board that the billets on the trucker’s vehicle were not adequately secured. All in all, the court held there was insufficient evidence from which a fact finder could conclude that the driver’s termination was motivated by age or disability discrimination or by his application for workers’ compensation.
See generally Larson’s Workers’ Compensation Law SECTION 104.07.
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Tom Robinson, J.D. is the primary upkeep writer for Larson’s Workers’ Compensation Law (LexisNexis) and Larson’s Workers’ Compensation, Desk Edition (LexisNexis). He is a contributing writer for California Compensation Cases (LexisNexis) and Benefits Review Board – Longshore Reporter(LexisNexis), and is a contributing author to New York Workers’ Compensation Handbook(LexisNexis). Attorney Robinson is an authority in the area of workers’ compensation and we are happy to have him as a Guest Contributor to Workers’ Comp Kit Blog. Tom can be reached at: compwriter@gmail.com.
http://law.lexisnexis.com/practiceareas/Workers-Compensation
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WC Cost Calculator to show the REAL COST of workers www.ReduceYourWorkersComp.com/calculator.php
WC 101 for the basics about workers comp. www.ReduceYourWorkersComp.com/workers_comp.php
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
"Doctor, I need a report that says I can't work"… The above is a request increasingly made due to the explosive growth of disability programs – federal, state and private. But does this burden fall on the treating physician – or someone else? Nearly all disability programs measure entitlement by vocational, not medical, standards, except where injury or illness is so devastating that vocational considerations are not necessary. So who is most qualified to answer the question of ability to work? In the view of nearly all Social Security administrative law judges it is the testimony of the last employer that counts the most. The last employer is in a position to describe accurately the physical requirements for a job, what alternate employment might be available and – most importantly – what restrictions were obvious if the employee attempted trial work. Sadly, few attorneys make the effort to secure cooperation from this most valuable source of information. Those who do are praised by the judges for the quality of the presentation of a claim. So how should a medical group deal with the requests for a report? A brusque refusal is not advised. Instead, the medical group should advise the patient that records and reports, properly requested, will be forwarded but that the employer has a most vital role to play. If there is an attorney, this can be cleared up by an office manager with a single phone call. If not, tell the patient to have the employer contact the agency to determine how they can assist. Will the employer cooperate? Almost always yes, and with compassion. Employers and co-workers are a little appreciated support group for a worker with extended disability. Too often they believe they have nothing to contribute except sympathy – a failure in claim preparation, nothing else. A medical group can, therefore, respond to the request for a disability report with something far more valuable than a note that in the end carries little weight – it can provide the correct answer. 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. WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp. WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp. 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
Interview with Attorney Ted Ronca, on Long Island, New York… Question: Attorney Ronca, you have mentioned "trial work" several times. I use the term "modified work" or "transitional work" … is it the same thing, or are we talking about something different? Answer: Trial work" is a term I borrowed from Social Security which refers to any work done following a period of disability which attempts to establish a person's suitability for work tasks in what are really a series of controlled tests. Since there is no formal requirement in the workers' comp laws that this be done, no uniform terminology or methodology has arisen in NY. The impact on a comp claim has never been tested in NY decisions. Everyone, employer, union and the Board, wants to preserve flexibility. This is to preserve the status of these programs as bargaining chips in contract negotiations. The major players don't want this codified as it gives something to a large number of people who are not part of unions and these programs make little sense to smaller employers and would devastate many of them. This is why I stress the importance of face-to-face talks before anything is put in writing. If employers must have a uniform written offer for all comp claims it simply would not work. Any union rep will tell you, off the record, the number of "jealousy" complaints they get when a worker feels someone else received something they want. If these things are in writing for all to see they become the bare minimum and everyone expects a little something extra. That's why we customize each letter. The unions understand this and will happily work with a flexible system that produces results. 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. WC Cost Calculator www.ReduceYourWorkersComp.com/calculator.php REAL COST of work comp. WC 101 www.ReduceYourWorkersComp.com/workers_comp.php for the basics about workers comp. 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 these problems the same across the country – Is there anyplace where employers have no workers’ compensation worries?
Success is not a matter of location, but of management. Some states do have laws favorable to the employer, such as lower weekly payments. However, a company managing its workplace and its claims with an aggressive and comprehensive injury management program is able to control workers’ compensation costs regardless of where it is located. Conversely, companies located in states with laws thought of as favorable to the employer can still have abysmal workers’ compensation experience when they fail to properly manage the process.
In Connecticut, with one of the highest weekly benefit rates in the country and a reputation of being a rough workers’ compensation environment for employers, many companies are avoiding high workers’ compensation costs. They do this because they took control of the situation, with orderly procedures, focusing on returning employees to work as soon as they can perform some type of productive activity.
A successful company has a hand-picked physician experienced in occupational medicine, who has visited the plant, and has agreed not to prescribe time off until AFTER consulting with the employer. These employers educate their employees, their supervisors and their managers to understand that the company is paying a high cost for workers’ compensation coverage. They explain they want to pay legitimate claims promptly, but they emphasis they are going to monitor the system carefully for abuses. They work closely with their unions to bring them into the process early and gain their support. Surprisingly, there is more resistance to change by company management than by organized labor.
Workers’ compensation cost containment is not a matter of location, it’s a matter of management. It’s often a question of “just getting started.”
WC Calculator www.ReduceYourWorkersComp.com/calculator.php
TD Calculator www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101 www.ReduceYourWorkersComp.com/workers_comp.php
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel or other professionals 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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