Independent Contractors: Who Is. Who Isn’t. What Happens When Employers Confuse Independent Contractors with “Real” Employees?
Disclaimer:
None of this information is intended as legal advice. If you have any doubts as to which of your workers are employees (covered by your workers’ compensation insurance) and which of your workers qualify as independent contractors, please hire a good outside lawyer (an independent contractor) to provide you with guidance on this topic.
Employee vs. Independent Contractor
Often the distinction between employee and independent contractor (IC) is blurred. Coverage for workers’ compensation in most states is for employees only, but there are exceptions. For instance, Massachusetts requires employers to carry work comp coverage for both their employees and their independent contractors, with some exceptions and some ways to opt out.
(Editor’s Note: Obviously, if your IC runs a legitimate business, has a federal identification number for IRS purposes, and works from the IC’s office with no or minimal work out of the employer’s workplace, then the issue of providing work comp coverage and status as an IC is clearer.)
It is the exceptions and opting out that creates the most difficulty for the work comp insurers and employers in establishing who is covered by the work comp coverage. Some states address the issue by using licensing as a mechanism to determine independent contractor status. If the license to do business is in the employer's name, the worker is an employee. If the license to do business is in the worker's name, the worker is an independent contractor. Of course there are exceptions to this, too. A license to do business is not absolute proof of independent contractor status in most states.
Another approach taken by some employers is a certification form or contract signed by the worker stating worker is an independent contractor. However, Workers’ Compensation Boards and the courts often look for coverage for the injured worker. The work comp carriers and employers find to their dismay the certification form or contract is ignored by the Board or the court and work comp coverage is provided to the injured worker.
Each jurisdiction takes its own approach to deter
mining independent contractor status for workers’ compensation. Some jurisdictions use what is called a Bright Line Test — a specified and binding set of criteria requiring proof in order for the worker to be an independent contractor. Other states use the Weight of Evidence — all criteria is considered and balanced in determining whether or not a worker is an independent contractor. Of course, there exceptions to this, too. Some states combine the Bright Line Test and the Weight of Evidence to establish independent contractor status.
So Who is an Independent Contractor?
It depends. The 50 states have 50 different sets of guidelines, with some similarities and some total opposite points of view as to what constitutes a worker being an employee or an independent contractor.
Here are some general guidelines to assist your company in determining who might be an employee and who might be an independent contractor.
1. The worker performs work only for your company—employee; the worker performs work for your company and other companies—independent contractor.
2. Your company controls the hours the worker works—employee; the worker determines the hours she works—independent contractor.
3. The worker does not have any employees—employee; the worker has employees of his own—independent contractor.
4. Your company furnishes the worker with the materials, equipment and tools—employee; the worker furnishes her own materials, equipment and tools—independent contractor.
5. The worker cannot make extra profit on a job or suffer a loss—employee; the worker can make a profit or suffer a loss—independent contractor.
6. Your company controls the means and methods by which the work is done—employee; the worker controls the means and methods by which the work is done—independent contractor.
7. The worker's pay is based upon the amount of time to complete the work—employee; the worker's pay is a set amount not based on the amount of time worked—independent contractor.
8. The worker does not carry his own workers’ compensation coverage—employee; the worker does carry his own work comp policy—independent contractor.
When Employers Confuse ICs with “Real” Employees
With the passage of the new health insurance laws, a lot of small businesses will be taking a long hard look at cutting labor cost including the cost of workers' compensation. Reclassifying all your workers from employees to independent contractors is not how to do it. Just because you call a worker an independent contractor does not prevent the injured worker from filing a workers' compensation, especially if the injury is severe.
What happens then? You have just entered the twilight zone of injury claims. If you classified a worker as an independent contractor (and did not pay work comp insurance premiums), your work comp carrier will probably side with you, the employer, and deny the injured worker work comp coverage. The injured worker and her attorney will file a claim with the Workers' Compensation Board. Also, depending on the jurisdiction, they may either file a negligence lawsuit for millions of dollars against your company at the same time, or wait on the decision of the Workers’ Compensation Board before filing the tort lawsuit.
When you send the tort lawsuit to your general liability insurance company, your general liability insurance carrier will probably not be as understanding as your workers’ compensation carrier. Your liability insurance company will probably side with the injured worker's assertion that she is an employee and will deny coverage to you.
Now you get to bring in a real independent contractor, a defense lawyer (unless he only works for your company) to try to resolve the mess you created by classifying the worker as an independent contractor.
If you are very lucky, the Workers' Compensation Board will award coverage to the injured worker and you will only get a premium audit and cancellation by your workers' compensation carrier. But, the work comp carrier, who may now be liable for lifetime medical and the state maximum on indemnity benefits, might ask the Department of Insurance or the state Attorney General's office to investigate your company for insurance fraud.
OR you could be very unlucky. The Workers’ Compensation Board denies the work comp claim; the state court finds in favor of your general liability carrier that there is no coverage for the worker — resulting in your company owing the injured worker millions of dollars. To make matters worse, the Attorney General’s office successfully prosecutes the principal(s) of your company for insurance fraud with maximum jail time. (workersxzcompxzkit)
Employers and their legal counsel need to carefully evaluate the status of their workers and be very careful who they classify as an independent contractor, especially if the worker is working out of the employers workplace. Chances are there may be liability when any person is injured in the course of their working for you – employee or independent contractor.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
What Is It and When to Use It – sometimes we need to review what seems obvious to some risk managers. We understand that not everyone has tons of experience in this field – some are literally thrown into the field without any experience whatsoever…
As the risk manager of your mid-size company, you want to consider self-insurance in the jurisdictions where you are allowed to do so. But your company is mid-size, not a Fortune 500 company. While you have the resources to handle most workers' compensation claims, you are concerned a catastrophic work comp claim could do serious damage to your company's current and long term financial outlook. The solution is the excess workers' compensation insurance carrier.
What is Excess Workers' Compensation Insurance?
A workers' compensation excess insurance policy is written to indemnify the self insured employer for workers' compensation claims (and Employers' Liability claims) exceeding a designated dollar amount. The excess work comp insurance covers all work comp losses up to a specified cap, or it can be unlimited.
For example, you decide your company can afford the cost of paying almost all work comp claims, but do not want to be on the hook to pay claims where the total cost exceeds the company’s set $500,000 limit. The way to handle the rare catastrophic work comp claim is to buy excess workers' compensation insurance. The excess workers' compensation insurer indemnifies your company only on those claims exceeding $500,000 in total cost.
The excess workers’ compensation insurance carrier may be willing to insure some risk but does not want to have unlimited medical exposure on your work comp claims. They may put a cap on their exposure, for example $1,000,000 is the most they are willing to pay over and above the $500,000 your company pays on a catastrophic injury claim. You will then need another excess policy over and above the “second layer of coverage” (the self insurance being the first layer of coverage). The second excess workers' comp carrier only reimburses your company for claims exceeding $1,500,000 (and is the third layer of coverage).
The first excess workers' comp insurance carrier may be willing to write all your coverage over and above your cap. If they do agree to take on the unlimited medical exposure on your catastrophic injury claims, the excess workers' compensation insurer will in turn most likely have a policy of reinsurance in with another insurance company.
That is, they will buy another insurance policy from another insurer to cover all their losses over and above a set dollar limit, say $1,500,000 per claim. Or they may cede the other insurance company, i.e., give the other insurance company part of your premium in exchange for the other insurance company's promise to pay any claims over and above the agreed upon dollar amount.
Benefits of Excess Workers' Compensation Insurance
Besides the obvious benefit of being reimbursed for catastrophic work comp claims exceeding your self-insurance cap, excess workers' compensation insurance provides additional benefits to your company.
Most self insurers are not able to be self insured without the excess workers' compensation policy. Self insurance allows the risk manager more control over the cost of the insurance program, more control over the claims handling, and improves the cash flow by lowering the cost of work comp insurance (by eliminating the profit portion of the premium paid to a first dollar insurance carrier).
Often the excess workers' compensation insurer offers the self-insured employer additional services and works as a partner with the self insured. Some of the services offered by the excess work comp insurer may include:
1. Underwriting guidance
2. Guidance in meeting the regulatory requirements
3. Industry specific loss control services to assist in managing workplace hazards
4. On site safety assessments
5. Best practices for managing work comp claims
6. Emergency planning and preparation
7. Catastrophic claim management
What to Look For in Selecting an Excess Workers' Compensation Insurer
In addition to the services noted above, look for an excess insurer who includes the allocated loss adjustment expenses (the cost of handling the claims) in the definition of loss per claim, not just what is paid to the employee in benefits.
Also, if your company is exposed to longshore and harbor workers claims, Jones Act claims, railroad work comp, coal mine, or migrant and seasonal workers, be sure your excess workers' comp insurer covers these types of claims. (Some excess policies exclude some or all of them).
You want an excess workers' comp carrier whose is flexible in their underwriting, that is they will allow your company to set your own self-insurance retention cap, and are willing to endorse their policy to eliminate exclusions that might affect your coverage. (workersxzcompxzkit)
Correctly managed, a self insurance program in conjunction with an excess workers' comp insurance policy can provide your company with the work comp coverage you need while saving your company part of the cost of workers' compensation.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
Business Owners and Secretary Facing Prison on Workers' Comp Fraud Charges
The owners of a drywall and painting company allegedly lied to their workers’ compensation insurer for nearly a decade in an attempt to lower premiums.
The Ventura County District Attorney’s office recently arraigned the owners, along with the company's secretary, on five felony counts of insurance premium fraud and two counts of conspiracy to commit insurance fraud. According to authorities, the three lied to their insurer to save an estimated $500,000, making it appear their employees were more experienced than they actually were. The three pleaded not guilty to all charges. Each defendant faces 12 years in state prison due to the fraud officials said. (workersxzcompxzkit)
Authorities said the defendants were also charged with a special enhancement for causing losses of more than $100,000. Under California’s “freeze and seize” law, the district attorney’s office froze $1.5 million of the defendants’ assets to preserve money for restitution and fines.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
If you think it is difficult to know all the workers' compensation laws in your state, pity the workers' compensation manager at the large corporation where he/she may need to know the work comp laws of 20 or 30 states, or all 50 states, plus the District of Columbia,
Puerto Rico, the Virgin Islands and Guam. While every jurisdiction provides for workers' compensation coverage, no two jurisdictions go about it in the same way.
A national workers' compensation claims auditor was recently contacted and asked, “What is the maximum weekly benefit in Kansas?” All the professional auditor could do was answer “I will be glad to research it for you and let you know.” Why couldn't the expert on workers’ comp claims answer the question? The reason is because every state addresses the various aspects of the workers’ comp laws in their own way.
Compulsory Coverage
The point where the jurisdictions are most alike is in the requirement that all employers (with certain minor exceptions for very small businesses) carry workers' compensation coverage for their employees. Two states, New Jersey and Texas, do not describe their workers' compensation as compulsory, but as elective.
In New Jersey while work comp coverage is described as elective, in actuality it is compulsory as the employer can be subject to both fines and a misdemeanor criminal offense for not carrying work comp coverage.
Texas is the only state where workers' compensation is truly elective, but if the employer is not insured, “going bare,” the employer is liable to suit without defenses.
Self Insurance
Most of states allow employers to self insure. Single employer self insurance for workers’ comp is a viable option only for very large employers. Groups of employers joining together to self-insure, for example several hospitals in the same state, is allowed in most states. The monopolistic states/jurisdictions where only the state itself can sell work comp coverage to employers do not allow self insurance for work comp. The monopolistic jurisdictions include Guam, North Dakota, Ohio, Puerto Rico, Virgin Islands, Washington state and Wyoming.
Exceptions
While there is workers’ compensation insurance in every jurisdiction, each jurisdiction carves out its own exceptions to the work comp coverage requirement.
The most common exceptions, allowed by most of the states, to having work comp coverage are the exclusion of work comp coverage for employees who are volunteer workers, seasonal farm workers and domestic servants. Other types of employees who can be excluded from work comp coverage in some of the states includes real estate agents, over the road truckers, charity workers, sales people paid by commission only, casual laborers, ministers, barbers and professional athletes.
Then some states have exceptions for work comp coverage unique to that state alone. For example, in Louisiana “crews of crop spraying aircraft engaged in agriculture” can be excluded from work comp coverage. If you think an employee might not covered or if you are unsure if there is work comp coverage, please consult with a workers’ compensation lawyer for the jurisdiction in question.
Major Benefits
In all the jurisdictions, the work comp laws provide for income benefits, medical benefits and rehabilitation benefits — including both vocational rehab and medical rehab.
Income benefits can be broken down into four categories: temporary total disability benefits (TTD), permanent total disability benefits (PTD), temporary partial disability benefits (TPD) and permanent partial disability benefits (PPD). There are several different methods used by the various jurisdictions on how to compute the income benefits.
Let's look at some of ways the most common income benefit, TTD is calculated. In most states the employee is paid two thirds of his gross average weekly wage, with maximum and minimum caps. However, some states compute the benefits differently. In a few states, the TTD is based on 80% of spendable income or 75% of after tax income or 70% of gross average weekly wage.
There is more variance in the ways PPD benefits and PTD benefits are calculated. In some states the weekly amount paid for PPD or PTD is the same as the weekly amount paid for TTD. In other states, the weekly amount paid for PPD and PTD will be significantly less than the TTD rate. Some states have caps on the maximum amount the employee can receive for PPD or PTD, other states have no caps.
Medical Benefits are fairly consistent across all the jurisdictions. The biggest area of difference is in who selects the medical providers. In about half of the jurisdictions the employee can select their own medical provider, while in the other half of the jurisdictions the employer or insurer will determine who the medical providers will be.
Rehabilitation benefits for both vocational rehabilitation and medical rehabilitation vary greatly. All jurisdictions require medical rehab but not all states require vocational rehab. The limitations placed on vocational rehab depend upon the state.
IMEs and Ratings
In all of the jurisdictions if the employer or employee is unhappy with the medical diagnosis or
impairment rating given by the medical provider chosen by the other party, they can question it. The means to do so varies from jurisdiction to jurisdiction. In some states the party not in control of the medical selection can have an independent medical examination of the employee by requesting it from the other side of the claim. In other states the employee or employer must petition the Workers’ compensation Board for the Board to provide an independent medical evaluator. Then there are a few states where the claims adjuster for the employer can request a peer review—where a doctor evaluates the medical diagnosis provided.
Most of the jurisdictions use the American Medical Association Guidelines to calculate impairment ratings. But then each jurisdiction applies them differently. Some jurisdiction will multiple the impairment rating by a set number of weeks and then multiply that number against the TTD rate or the PTD rate. Other jurisdiction will increase the impairment rating by half or double or some other local variance.
Death Benefits
Death benefits also vary considerably by jurisdiction. In some states the death benefit will be equal to a certain number of weeks of the TTD benefit or the PPD benefit, for examples 400 weeks of TTD. In other states the death benefit will be capped at a dollar amount, like in Kansas where the death benefit payable to the employee's spouse and dependent children is $250,000.
Other Differences
There are many other areas where the workers’ comp laws will differ from jurisdiction to jurisdiction. For instance, some jurisdictions allow subrogation or workers’ comp payments, other jurisdictions do not allow subrogation. Most jurisdictions do not cover independent contractors for workers’ comp, but a few do. Some jurisdictions allow the insurance company to settle future medical cost with the employee, while some jurisdictions require the employee to have life time medical care made available. (workersxzcompxzkit)
Summary
Neither the multi-state workers’ compensation claims manager or the professional claims auditor will know all the work comps laws in the entire jurisdiction. Please feel free to contact us with any of your work comp questions. We won't know the law in every jurisdiction, but we will be glad to assist you in learning the answer to your question.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
Vocational rehabilitation is for the purpose of returning the seriously injured employee to:
1. The prior job with the employer or,
2. A new job with the employer or,
3. A new job with another employer.
Most jurisdictions have a section within their workers' compensation statutes mandating vocational rehabilitation for the injured workers who need it.
Vocational Rehabilitation Starts with Job Restrictions
When the treating physician determines the employee has reached maximum medical improvement, the employee is then released from further medical care. However, if the employee's functional ability is below what the employee was able to accomplish prior to the work comp injury, the treating physician may determine the employee needs restrictions on future work activities to prevent the employee from a re-injury.
In a typical claim of this type, for instance a back injury, the treating physician assigns an impairment rating to the employee. For example, the employee had back surgery and the physician determines the employee has 20% permanent disability to the back. For the employee's safety, the physician releases the employee to return to work with a restriction stating the employee is not to lift more than 25 pounds at one time. However the employee's job routinely requires the employee to lift 25 pounds or more. This is the typical vocational rehabilitation case.
Start Vocational Rehabilitation Timely
Experienced work comp claims adjusters know the earlier the injured worker is started in vocational rehabilitation, the higher the probability of success. The success rate is also higher for workers who return to work with the same employer. When the status of the work comp claim is such that the adjuster knows from the medical records that an impairment rating is probable, the adjuster should start then with vocational rehabilitation to return the worker to the former job.
Primary Vocational Rehabilitation Activities
A trained vocational rehabilitation counselor works with the treating physician to establish the course of action necessary to minimize the employee's limitations on returning to work. Three areas the physician and the vocational rehabilitation counselor normally consider are:
1. Work hardening programs.
2. Functional capacity evaluations.
3. Ergonomic work station assessments.
The work hardening program prepares the employee for the physical requirements of the former job. The employee who for months has had no physical activity is not physically able to do the labor done before the injury, even if the employee was not injured. The work hardening program is physical exercise mimicin the work the employee did before. It is designed to gradually build up the employee’s strength and endurance so that s/he can lift, pull, push or drag weight similar to what s/he was doing prior to the injury. The work hardening program can go on for weeks as the employee rebuilds physical endurance.
A functional capacity evaluation is a one-time evaluation performed by a physical therapist after the employee completes all physical therapy treatments. During a functional capacity evaluation the employee is evaluated doing simulated work. The therapist observes and scores the employee's ability to complete task similar to what the employee would do on the job. The purpose of the functional capacity evaluation is to give the insurer or the employer information on the employee's ability to do the work. The vocational rehabilitation counselor in conjunction with the therapist can make recommendations on modifying the employee job and work environment to accommodate the employee's limitations.
An ergonomic assessment is used to prevent the employee from re-injury by improper lifting techniques or improper placed equipment. The vocational rehabilitation counselor inspects the work site and makes recommendations to protect the employee from re-injury. For example, the vocational rehabilitation counselor may recommend objects the employee might lift to be placed on a table rather than on the floor at the employee work site. Another recommendation might be for the employee to be accommodated with a stool to sit on while working rather than standing all day.
Other Vocational Rehabilitation Services
If the employee's injury is such that regardless of the efforts of the vocational rehabilitation counselor, the employee cannot return to the prior employment, then other vocational rehabilitation services may be needed. Other services that can be provided include: (workersxzcompxzkit)
1. Counseling the employee in selecting a job suitable for them.
2. Labor market surveys and job search assistance.
3. Instructions in job-search techniques.
4. Vocational assessments to evaluate the employee's aptitudes, skills, interest and physical capabilities.
5. Job training in a new vocation.
6. American with Disabilities Act accommodation assistance.
Summary
Some employers take the position that vocational rehabilitation for the employee is expensive. It is. However, vocational rehabilitation is far less expensive than paying life time disability benefits to the injured worker who never returns to work. Properly utilized vocational rehabilitation can significantly reduce the cost of the larger work comp indemnity claims by returning the injured worker to a productive role.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
Employees Need to Think Twice About How They Use Social Networking
A recent lawsuit may give employees pause to think about how they use social networking in their workplace.
Three former employees of are accused of violating noncompete and non-solicit agreements by TEKsystems Inc., according to the Minneapolis/St. Paul Business Journal.
In a suit filed in Minneapolis’ U.S. District Court, the employer said one of the employees wrongfully contacted former clients and coworkers — and more unusually, said her LinkedIn page allegedly proves it. The suit also names the woman's new employer as a defendant.
While working as a technical recruiter for TEKsystems, the employee reportedly signed contracts prohibiting her from contacting clients and colleagues if she left the company’s employ, which she did in November. TEKsystems provides information-technology staffing and services.
In January, the woman joined another firm where she is now the business development manager. TEKsystems said the former employee, in her new position, used social networking sites to communicate with more than a dozen of TEKsystems contract employees. It notes LinkedIn connections with at least 16 TEKsystems employees as evidence. The complaint further alleges the woman messaged an invitation to a TEKsystems employee to come to her new workplace. (workersxzcompxzkit)
TEKsystems didn’t say how it got the message or saw her connections, but LinkedIn users can view the contacts they share with the woman.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
Monitoring and managing workers’ comp transportation expenses can drastically improve the claim expense cost, especially on larger work comp claims. Unfortunately, claims adjusters and/or nurse case managers often overlook this important expense, thinking to save money by not using a transportation service. Skimping is not an option and here’s why.
Transportation
Controlling transportation expense is more than calling for a taxicab for the employee to get to the doctor or writing the employee a check for personal automobile mileage.
When the employee is physically unable to travel unassisted or does not have access to transportation and will have multiple visits to the treating physician or other medical providers, a transportation company specializing in workers’ compensation claims is needed. Services of a transportation company are arranged by the adjuster or nurse case manager, not by the employee. The selection of a transportation company is based on the company's ability to provide safe and reliable transport service whenever needed.
A full service transportation company saves the claims office a lot time, since the adjuster or the nurse case manager can spend a tremendous amount of time coordinating employee transportation needs. Often employees reschedule doctor appointments for their own convenience and the transportation must be scheduled all over again. Or worse, employees “forget” their medical appointment and are not ready to go when the transportation arrives, knowing the doctor will not see them if they are very late arriving.
Experienced work comp adjusters know the more subjective the employee's injuries are the higher probability they will miss their medical appointments, cancel medical appointments or reschedule them without advising the adjuster.
The professional transportation company will:
1. Schedule the transportation with the employee as soon as they are notified of the medical appointment.
2. Contact the employee the day before the medical appointment to confirm the pick-up time and the return home time.
3. Contact the employee the day of the appointment before they leave their business location to confirm the appointment is still the same.
4. Notify the claims office if there are any changes in the scheduled medical appointment, or if the medical appointment is missed by the employee.
5. Provide the adjuster or nurse case manager with a documented trip history as to their departure time from their business location, the time they picked up the employee, the time the employee arrived at the medical location, and the time they delivered the employee back to the employee's residence.
While automobiles are the most common mode of transportation for injured employees, other modes of transportation are occasionally needed for the severely injured. The full service transportation company specializing in workers’ compensation claims is able to provide the work comp adjuster or the nurse case manager with other alternatives including ambulances, wheelchairs and stretchers. (workersxzcompxzkit)
In addition to saving the claims office considerable amounts of time, the professional transportation company also saves the claims office money. The employee has no incentive to locate the best price for transportation, as the employee is not paying for it. Also, the employee is not concerned about the cost for missed appointments. By the claims office controlling the transportation needs of the employee, the transportation cost is properly managed.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
A great deal of information can, and is, obtained about businesses, by businesses, in order to plan strategies for competing or cooperating. Credit reports and finances are obvious places to start, but few employers are aware that vital pieces of business information are available through workers’ comp data mining.
A workers’ comp insurance term called the “x-mod” (experience modifier) is publically available for every business in New York with a premium greater than $5,000. The data can be obtained by subscribing to services which lawfully collect the data.
The x-mod is the ratio of comp costs, per hundred dollars of payroll, of a business measured against other businesses with the same industry classification. If the x-mod is less than 1 the business is doing better than competing businesses in reducing comp costs; if greater than 1 it is performing below average. Ranges of the number can go from .15 for exceptionally safe workplaces with outstanding management to higher than 7. The number is an accurate measure of the life expectancy of a business.
At a certain point a business becomes unable to compete against like businesses with lower x-mods. This is due to the fact that when comp costs are out of control management of the company has been out of control for several years. The x-mod measures more than payments to a carrier; it measures safety, morale and management skills.
Low employee morale is especially deadly for an x-mod. Trivial injuries lead to significant lost time when workers are angry. (workersxzcompxzkit)
Employers should be aware that data-mining is an essential activity for competitive businesses and there is available data about work comp.
Author: 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.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
Choosing a good insurance agent or broker is like choosing a good hairdresser or barber. You have to shop around for one who really listens to you and gives you want you want. You may have to look around, and I suggest calling at least five insurance agencies. Go to their websites to see what they offer, although often having a good phone conversation is the quickest way to get information. When you talk to the agent, you get a feel for responsiveness, willingness to listen and meet your demands.
Check into the backgrounds of the agency and the agents who staff it. Better Business Bureau can tell you if there are outstanding or unresolved litigious matters pending. Google your agents. You will want an agent who is highly knowledgeable not only about workers comp laws in the states you operate in – but a savvy consumer who knows the best pools to get you in, if that’s an option, and who will get you the best deal price wise.
In addition to backgrounds and licensure issues, you should visit the offices of potential agents. How organized is their work space? How amenable is it to open communication among agents? If you see piles of files, it’s not a good sign. If you see agents buried in high walled cubicles, communication is less easy than an open environment where workers can turn to each other to solicit advice.
Request an A.M. Best rating. A.M. Best is an established trusted monitoring company that looks at how insurance carriers conduct business. If your carrier gets a rating of an A or an A++, this means your carrier is reputable and financially viable.
And finally, it comes down to personalities. How responsive is your agency? Do you talk to the same agent all the time? You should not be passed from one agent to another, because this prevents continuity as you are always starting over with a new agent. When you call your agency, do they get right back to you? Your agent should return your call on the same business day, tomorrow at the latest.
Does your agent speak your language, or insurance-ese? You should not have to struggle to understand complicated insurance jargon, and a good agent can communicate to you in such a way that you have a working knowledge of your insurance arrangements. (workersxzcompxzkit)
So to sum it up – a good agency will have proper licensure and credentials, have no outstanding issues, have good standing in the industry, and ensure that you have one agent who knows your needs and can deliver them – just like your hairdresser or barber.
Many insurance companies provide on-line quotes. One site is particularly good and easy to use is FreeCompQuotes.com at http://www.workerscompkit.com/gallagher/QuoteCenter/workers-compensation-insurance.php. Cut and paste into your browser.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
A bill (LB780), providing added protection for emergency first-responders, received initial approval from Nebraska lawmakers. State senators voted 37-0 first-round approval to the bill designed to provide workers' compensation coverage for post-traumatic stress disorder for police, firefighters, and emergency medical technicians, both volunteer and paid.
Supporters noted the deep trauma first-responders such as volunteer firefighters and police experience from working grisly accident or suicide scenes. Senator Steve Lathrop of Omaha unveiled the bill and estimated just two claims a year costing a total of less than $8,000 would be paid out. (workersxzcompxzkit)
The bill will sunset in approximately three years unless re-enacted.
Author Robert Elliott, executive 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 and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
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