In a recent claims audit, one of the claims was about a morbidly obese woman who when getting up from her desk, tripped and fell through the sheet-rock wall next to her desk. Granted most obese employees would not be heavy enough to fall through a wall, but
obesity is reaching the same epidemic level in the workplace as obesity in the general population.
Duke University Medical Center Study
A study published in April 2007 in the Archives of Internal Medicine is often cited in discussions of the relationship between obesity and workers' compensation. The reason the Duke University study is used so much in the discussion of obesity and workers' compensation is:
1. the large scale scope of the study [the equivalent of 11,728 health care and university employees] which eliminated most of the variances in data reliability, and
2. the long time frame of the study – eight years – January 1, 1997 through December 31, 2004, and
3. the astonishing impact of obesity on the cost of workers' compensation claims
The Data
The obese class III employees, defined in the study as the employees with a body mass index (BMI) of 40 or greater, were compared to employees who were at the recommended weight – BMI of 25 or lower. The following numbers came out of the study:
· For each 100 full time obese employees, they had 11.65 claims per year, while for each 100 full time employees with the recommended weight had 5.8 work comp claims per year.
- The obese employees had work comp claims at twice the rate of non-obese employees.
· For each 100 full time employees, the obese employees had 183.63 lost workdays while the non-obese employees had 14.19 lost workdays.
- The obese employees lost 13 times as many days from work as the non-obese employees.
· For each 100 full time employees, the medical cost for obese employees was $51,091 while the medical cost for the non-obese employees was $7,503.
- The obese employees medical cost was nearly seven times higher than the medical cost of the non-obese employees.
· For each 100 full time employees, the indemnity claim cost for the obese employees was $59,178 while the indemnity claim cost for the non-obese employees was $5,396.
- The obese employees work comp indemnity cost was eleven times higher than the indemnity cost of the non-obese employees.
What Can the Employer Do?
Short of firing all of your obese class III employees, and other employees with a BMI index greater than 25 but less than 40, there are several steps you can take as an employer to lower the cost of your workers' compensation program (also, the following ideas will have a positive impact on your health insurance program and/or wellness program).
1. A weight reduction program can be offered through your human resources office. The program participation should be voluntary and the participation in the program should be a private matter. If you encourage the employees to be active in the design of the weight reduction program,
2.
A healthy workplace food culture is a subtle but effective way of encouraging weight reduction. You can replace the soda and candy vending machines with water bottles and healthy snacks. If you have a company cafeteria, the meal options can be limited to healthy foods lower in calories, fats, sugars, and salt.
3. Encouraging physical activity at work can be as simple as making the stairways appealing to the employees by a new coat of paint, new carpeting, motivational signs and slowing the speed of the elevators. You can ban car parking near the office building to have the employees walk a greater distance. You can encourage bicycling to work by allowing the bicyclists to park the bikes close to the office building. Also, encourage employees to take a walk during their lunch break.
4. A fitness program that includes healthy meals information, health improvement seminars, company-sponsored softball or volleyball team, health assessments, smoking cessation and exercise classes will encourage obese employees to obtain a healthier weight.
5. A web-based program for tracking individual progress has been shown to motivate employees to stay on their weight reduction program. You can set up a simple program that the employees can download to track their weight loss.
6. The company intranet can be used to post motivational posters, weight loss guides, cooking light and meal preparation guides, exercise programs, discount to local gyms and health clubs and any other materials you can think of that will assist the obese employees in their efforts to lose weight.
7. Weight loss companies like Jenny Craig and Weight Watchers jump at the opportunity to provide free seminars on their programs to a group of employees. You can take it a step further by offering to subsidize part of the cost of their programs or arrange for the weight loss company to give a group discount to your employees.
8. Health club memberships can also be arranged for your employees with a group discount. Your company can take it even a step further by offering to cover part or the entire discounted price.
9. Health insurance premium discounts when offered as an incentive for weight loss have been shown to have a significant motivational impact on employees to lose weight. Talk to your health insurance company about how they can price employee coverage to reward those employees who have a healthy lifestyle.
10. On-site or off-site fitness centers can be added to your wellness program. If you have the space available add a few treadmills, stair steppers and other exercise equipment. If the space is not available, contract with a local YMCA or local gym for your employees to use their equipment. (workersxzcompxzkit)
Summary
To keep your walls safe from obese employees who might fall through them and to lower your cost for workers' compensation, help your overweight employees battle their weight problem. The cost to assist your employees to obtain a healthy weight is significantly less than the cost of not doing so. Not only will your company save money on your workers compensation cost, you will also save money on your health insurance program.
Author Rebecca Shafer J.D., President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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 captive insurance company is an insurance company owned by the parent company or a group of businesses (hereafter referred to as the parent company) for the purpose of insuring its own risk. The primary business of the parent company is normally outside of the insurance field. By the parent company setting up its own insurance company, the parent company utilizes the captive insurance company as a risk management technique to better manage the associated cost of insurance, whether it is for workers' compensation, liability, property or other loss exposure of the parent company.
Captive Structure:
By definition, a captive insurance company writes insurance coverage exclusively for the parent company. As the insurance company is owned by the parent company/policyholder, the insurance company is “captive” to the policyholder.
While the parent company is often a large corporation, the parent company can be a group of businesses in the same business, for example several home builders within a state, or several owners within a professional sports league. When the parent of the captive is one company, the captive is called a pure captive. When the parent of the captive is a group like the professional sports league, the captive is referred to as a group captive.
Captives can be either domestic or offshore. The first captives were offshore, primarily in Bermuda, as the capitalization requirements to start an insurance company were lower than the capital requirements in the United States. This allowed the parent company to create the captive insurance company with a lower initial investment and lower reserves. About 20 countries have captive insurance laws with Bermuda and the Cayman Islands having the greatest concentrations of offshore captive insurance companies.
A few states recognizing the potential to bring additional financial business into their states have revised their insurance laws to permit and encourage captive insurance companies. States with statutes providing for domestic captive insurance companies include Vermont, Hawaii, Nevada, Utah, New York, Arizona and South Carolina.
Financial Benefits:
Risk transfer is the primary benefit of the captive insurance company. The parent company transfers the risk of loss to the captive insurance company. While this could be accomplished by the purchase of insurance from a conventional insurance company, the parent company reaps other benefits as well.
The parent company pays the insurance premium to the captive insurance company. The amount of the premium has to be reflective of the anticipated losses. The Generally Accepted Accounting Principles (GAAP) used in the United States do not allow non-insurance companies to accrue or expense anticipated losses until they are measurable and owed. The one exception to the GAAP is for insurance companies to accrue for incurred but not reported losses. This is a major financial advantage to the parent company who has a captive insurance company.
Insurance premiums charged by the conventional insurance company include not only the anticipated cost of claims, but also include the cost of operations (rent, salaries, benefits, etc.) and their profit. Through the use of a captive insurance company, the parent company can reduce the amount paid for the cost of operations and eliminates the amount paid that becomes the profit for the conventional insurance company.
When the loss experience of the captive is lower than expected, the premium paid over and above the amount of the combined losses is kept by the captive insurance company. In essence, as the captive insurance company is owned by the parent company, the parent company benefits from the lower cost of loss.
Claims control is also greater with a captive insurance company. The parent company can dictate what the claims procedures will be, who will handle the claims and exercise some control over the claim payments (this varies by jurisdiction). The delays and hassles often associated in dealing with the claims department of the conventional insurance company are reduced or eliminated.
The use of a captive insurance company also permits the parent company some control over outside market conditions. When the number of claims and associated losses are lower than normal, the captive insurance company will increase its reserves. When the number of claims and associated cost are higher than normal, the captive insurance company will normally only increase its premium cost to the parent company by the amount necessary to cover the losses. If the parent company were using a conventional insurance company, the premium cost would be greater as the conventional insurance company's increased premium would also reflect the increase necessary to maintain their profit margin. (workersxzcompxzkit)
Summary:
Captive Insurance Companies create a financial advantage to the parent company by allowing the parent company greater control of their insurance cost. As more businesses understand the financial advantages of captives, the number of captive insurance companies will continue to grow.
Author Rebecca Shafer, J.D. Risk Consultant, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
In a pregnancy discrimination lawsuit filed in late April, the U.S. Equal Employment Opportunity Commission (EEOC) charged that Dreamz ATL, a large nightclub in Atlanta, violated federal law when its manager fired a waitress after learning that she was pregnant.
According to the EEOC’s lawsuit, when the waitress informed a manager of her pregnancy, he told her she should not be working because of her condition. The manager then immediately removed the woman from the work schedule.
Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act, prohibits employers from discriminating against employees on the basis of sex or pregnancy.
The EEOC filed suit (Civil Action No., 110-CV-1261) in U.S. District Court for the Northern District of Georgia after first attempting to reach a voluntary settlement. The EEOC is seeking back pay, compensatory and punitive damages for the employee as well as injunctive relief designed to stop pregnancy discrimination and prevent it from recurring in the future. (workersxzcompxzkit)
“An employee should never be stripped of her employment simply because she is pregnant,” said Robert Dawkins, regional attorney for the EEOC’s Atlanta District Office. “Further, it is grossly unfair and unreasonable to deprive an employee of her means of support at the very moment she and her upcoming family need it most.”
Author Rebecca, J.D. Consultant, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
When there are severe injuries one of the best ways to control workers' compensation claim cost is through medical case management. While the role varies from insurer to insurer (or third party administrator), the primary focus of medical case management is the coordinating and planning of the medical care to expedite the return of the employee to work or to reach the employee's maximum medical improvement.
Role of the Nurse Case Manager
The person providing the medical case management is the nurse case manager (NCM). The nurse case manager's role in the workers' compensation claim often includes
1. Facilitating the medical rehabilitation of the injured employee
2. In consultation with the treating physician, evaluate the options for the best treatment plan for the injured employee
3. Coordinating the medical care to achieve the best possible medical results in a cost-effective manner
4. Insuring the proper utilization of medical treatment
5. Providing guidance to the adjuster about the medical care needed
6. Monitoring the employee's medical progress
7. Acting as a liaison between the physicians, the employee and the insurer
8. Facilitating the communications between the employee, employer and physicians
9. Keeping the adjuster informed of the employee's medical status and progress
10.Meeting with the employee and the employer to complete a detailed job evaluation
11.Assisting the employer in identifying the return to work options
12.Coordinating the employee's return to work (either modified duty or full duty) with the employer, employee and physician
NCM Works for the Insurer
Regardless of whether you are in a state where the employee selects the treating physician or in a state where the employer selects the treating physician, the insurer selects the nurse case manager. Selecting the NCM allows the insurer the ability to monitor the medical care and to be knowledgeable of the on-going medical status of the employee. Since the insurer hires and pays the NCM, the NCM is considered an agent of the insurer.
Mandatory States
Medical case management is required by some state work comp laws and is optional or voluntary in other states. In the states mandating medical case management, the insurer (or employer if self-insured) provides medical case management as a medical benefit. It is considered a required benefit necessary to return the injured worker to productive employment. In the states where medical case management is mandatory, the employee does not have the right to refuse the involvement of the NCM.
Voluntary States
In the states where medical case management is optional, it is usually in the insurer's best interest to provide medical case management. The proper utilization of the nurse case manger can eliminate delays in the employee's return to work and positively impact the cost of the claim. If the employee declines the involvement of the NCM, the work comp adjuster should consider this a red flag development and seek out the reason the employee is reluctant to have medical case management.
It should be noted in the states where medical case management is not required by statute, the employee can accept the NCM's involvement in the medical care but still limit the scope and extent of the NCM involvement. This is often true when the employee has retained an attorney to represent his/her interest. The attorney's role is to maximize the recovery for the employee and can result in keeping the employee off work as long as possible. The professional NCM faced with this situation always strives to insure the employee receives the necessary medical care and is released to return to work as soon as medically capable.
NCM Training
Usually the medical case manager is a registered nurse; but in some states insurers and third party administrators use licensed practical nurses and/or nurse practitioners. In order to be effective as a medical case manager, the NCM must have an in-depth medical knowledge plus have relevant experience working in the medical rehabilitation field (knowledge of workers’ compensation is a plus)..
What the NCM Cannot Do
The NCM cannot deny the employee any medical care requested. If the NCM feels a line of medical care is unnecessary, the NCM can discuss with the physician why the physician is requesting the treatment in question. The NCM can provide recommendations to the adjuster about the necessity of requested medical care. If the adjuster agrees the medical treatment is not needed, it is the adjuster's responsibility to deny the care. (workersxzcompxzkit)
Summary
Medical case management benefits the employee by insuring the best medical care and it benefits the employer by returning the employee to work more quickly. NCMs are trained medical professionals who provide a valuable service to the employee, employer, and insurer while reducing the overall cost of the severe work comp claim.
Author Rebecca Shafer, J.D. Consultant, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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 Los Angeles-based insurance company servicing policyholders in 12 states will pay $30,000 and furnish other relief to settle an unlawful retaliation lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).
According to the EEOC lawsuit, the Charlotte, N.C., facility of Golden State Mutual Life Insurance Company demoted an employee from associate sales manager to the position of sales associate in retaliation for reporting a complaint of sexual harassment he received from an employee he supervised.
The complaint report was made to a vice president and agency director of the company. The EEOC also charged the employee was demoted in retaliation after he informed the alleged harasser, who was his supervisor, that he had reported the complaint.
Such retaliation violates Title VII of the Civil Rights Act of 1964. The EEOC filed suit on March 16, 2009 (Equal Employment Opportunity Commission v. Golden State Mutual Life Insurance Company, Civil Action No. 3:09-cv-105, filed in U.S. District Court for the Western District of North Carolina) after first attempting to reach a voluntary settlement.
In addition to requiring Golden State to pay $30,000 to the worker, a one-year consent decree resolving the case enjoins Golden State from engaging in any further retaliation against employees based on their opposition to unlawful employment practices or employment practices which the employee reasonably believes to be unlawful under the federal EEO statutes enforced by the EEOC.
The company will also provide a positive letter of reference to the employee, redistribute a copy of its written anti-discrimination policy to each of its employees, and make periodic reports to the EEOC. (workersxzcompxzkit)
“Employees should be confident they can make their employers aware of violations of federal anti-discrimination laws without fear of reprisal,” said Lynette Barnes, regional attorney of EEOC’s Charlotte District Office. “The anti-retaliation provisions of Title VII are indispensable to the attainment of a workplace free of discrimination.”
Author Rebecca Shafer, J.D. Consultant, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
The American workforce is getting older. The post World War II baby boomers are now 46 to 64 years old. In 1992 the percentage of the workforce 55 years old and older was 11.8%. In 2012 it is projected that 19.1% of the workforce will be 55 years old and older and will be more than 31 million workers.
In some instances the older employee is working longer and delaying retirement simply because they want to. In other cases the older employee is delaying retirement because of financial concerns. For more information http www.ReduceYour WorkersComp.com
Work Comp Cost
The employee’s ages are not a factor in setting the initial workers’ compensation premium for an employer. The basic premium is determined by the number of employees and the employees’ job classifications.
The age factor comes into play with the experience modification rate (EMR). If you have more older employees than average and have not taken steps to reduce the number of work comp injuries among your older employees, your EMR is higher than average and your work comp premium is higher than average.
Lower Frequency
Various studies show older employees incur fewer on the job injuries than younger employees do. The experienced older employees make better work related decisions reducing their exposure to injury. Older employees are also less likely to take chances and are more likely to follow safety procedures and to heed safety warnings.
Higher Severity
Older employees have overall lower physical abilities than younger employees making them more susceptible to injuries. Older employees are more brittle, have less elasticity, and will have more degenerative type injuries. Older employees take longer to heal then younger employees with the same type of injury. All these factors add up to higher cost per work comp claim for the older employee.
Overall Cost is the Same
Younger employees are less experienced at their jobs and have more work related injuries than older employees. While the average cost of the work comp claims of younger employees is lower than the average cost of the claims for older employees, the higher frequency of claims for the younger employees makes the overall work comp approximately the same for older employees and younger employees.
The WC Claims of Older Employees
Older employees have a greater propensity for knee problems, rotator cuff conditions, and carpal tunnel. Cervical and lumbar problems are common in both older and younger employees. The nature of these injuries makes them more costly both in terms of medical care and time lost from work. The recovery time is longer in the older employee and the percentage of permanent disability these injuries cause in older employees is greater.
Safety for the Older Employee
The smart employer will already have in place a comprehensive safety program to protect all employees. However, there are specific steps the employer can take to improve safety and reduce the likelihood of injuries to older employees.
1. Older employees have decreased depth perception. To prevent falls make sure aisles, walkways and steps are well lit. Use color edge strips on steps to assist employees in distinguishing one step from the next.
2. Older employee’s reaction time is slower resulting in more falls than younger employee’s experience. Make sure all flooring is in good condition and all steps have handrails.
3. Older employees, especially those over 60, have a difficult time with transitioning from dark areas to light areas. Lighting should be arranged to allow for a gradual transition from light to dark areas or the reverse.
4. Older employees are more vulnerable to noise. Controlling and reducing the noise level reduces the number of hearing loss claims, plus will allow for better concentration, resulting in fewer accidents.
These safety changes benefit all employees but provide greater reduction in work comp cost from the older employees.
Ergonomics for the Older Employee
There are also ergonomic changes that can be implemented to reduce the likelihood of injuries that aggravate naturally occurring conditions such as degenerative disc disease, arthritis, cardiopulmonary decline, and degenerative changes in the shoulders, wrists, and knees.
1. Eliminate or reduce, as much as possible, work positions requiring kneeling and squatting. This reduces the number of injuries to the knees.
2. Eliminate or reduce, as much as possible, work positions requiring lifting above the shoulders to reduce the number of injuries to the rotator cuffs, shoulder muscles and tendons.
3. Arrange for lifting assistance or for a reduction in the amount of weight older employees must lift as they have less muscle mass and more degenerative changes.
4. Provide training or equipment to prevent awkward positioning of body parts as the excessive stress on the body increases the risk of injury. Ergonomically correct furniture and equipment prevents strains due to excessive stress or pressure on body parts.
5. Position work tasks at a comfortable height to prevent the employee from having to bend over to perform the task. This will reduce the number of stress injuries to the back.
These ergonomic suggestions benefit all employees but provide a greater cost savings among older employees. (workersxzcompxzkit)
Summary
Older employees have more experience, take less risk and have fewer work comp accidents then younger employees. When older employees do have accidents, the work comp cost is higher due to the physical changes we all experience as we grow older. Employers can protect themselves from higher work comp cost by providing a safe and ergonomically sound working environment.
Author Rebecca Shafer, J.D. Risk Consultant, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: Becki@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
Workers’ compensation coverage is required in all jurisdictions, but the methods to provide the coverage vary from self-insurance to workmans’ compensation insurance companies to state assigned risk pools to monopolistic states. Companies who do not have operations in a monopolistic state may wonder how does workers' compensation operate in a monopolistic state.
In a true monopolistic state, the state government insures all employers through a compulsory state fund and is the exclusive provider of coverage. Instead of purchasing the workers' compensation insurance coverage from an insurance company, the workers' compensation coverage is provided by the state government. Open markets with competition from private workers' compensation insurance companies is not permitted.
Over the last several decades the number of states classified as monopolistic states has dwindled from about twenty states 50 years ago to now just 4 states and two territories. The remaining jurisdictions in the monopolistic category are North Dakota, Ohio, Washington state, Wyoming, Puerto Rico and the Virgin Islands. In the last ten years three monopolistic jurisdictions, Nevada, West Virginia and Guam have switched from a monopolistic state program to a free market system of workers compensation insurance.
The states of Ohio and Washington have loosen their monopolistic state grip on the workers' compensation market in their states. While they do not permit workers' compensation insurance companies to compete in their states, they do permit employers to set-up a self insurance program to handle their own work comp claims. However, the restrictions and strict requirements for self-insurance bar all companies except the financially strong large companies.
Wyoming is a monopolistic jurisdiction for hazardous operations and for other specific categories and for defined operations. If the employer does not fit into one of categories requiring the purchasing of workers compensation coverage from the state, then the employer has the option of using the state fund or purchasing coverage from a workers’ compensation insurance company.
North Dakota is the only state that meets the pure definition of a monopolistic state for workers compensation. There are no options for self insurance or to purchase workers compensation coverage from the private market. While there are a limited number of employers excluded (real estate agents, independent contractors, farm and ranch workers, domestic employees, newspaper delivery employees) from the workers' compensation requirement, all other employers are required to have workers' compensation insurance and are required to buy it from the State of North Dakota.
Ohio is the largest of the monopolistic jurisdictions. In 2009 the Ohio state fund had 132,549 work comp claims filed (down sharply from 159,611 in 2008 and 171,692 in 2007). Of the 132,549 claims filed, it approved 118,955 claims. Ohio had 257,012 employers covered by the state fund and 1,188 employers who were self-insured. The ratio of employers in the state fund to the employers who are self-insured is 216 to 1, reflective of the restrictions and requirements for a company to self-insured in Ohio.
Monopolistic jurisdictions provide risk managers or workers' compensation managers of multi-state companies with challenges that are not faced in the other states and territories including:
1. Making a separate purchase of coverage to provide workers' compensation in each of the monopolistic jurisdictions where they have employees.
2. Conflict of interest between the state work comp agency that handles the work comp claims and the state board or agency that handle claim dispute resolution.
3. Providing work comp coverage for employees of a monopolistic state who perform work in other states.
4. Providing work comp coverage for employees from other states who perform work in a monopolistic state.
5. The monopolistic state agency does not provide employers' liability coverage.
6. Employee classification for premium rating is unique to each monopolistic state.
Basically, the risk manager or work comp manager has to learn a completely different system when they have work comp exposure in a monopolistic state.
The monopolistic jurisdictions due to their structure and the way the operate have their own issues to deal with. Some of the problems include:
1. Political interest in the setting of work comp premium rates. The state agency is not in business to make a profit like a workers’ compensation insurance company. Hence, if the premiums are set too low, the state (make that the taxpayers of the state) get to subsidize the premium deficiency.
2. With no competition, the quality of customer service and the quality of claim service can be lacking.
3. The state agency is required to take all employers who apply. They cannot deny a policy to a poor risk like a workers' compensation insurance company would do.
4. Claim fraud is prevalent. Depending on whose stats you are looking at, work comp claim fraud is involved in an estimated 5% to 10% of all work comp claims. Remember the 118,855 approved work comp claims in Ohio in 2009? Ohio prosecuted only 222 cases of work comp fraud or less than two-tenths of one% of the claims filed. (workersxzcompxzkit)
How long the remaining monopolistic jurisdictions will continue is unknown. Politics in each of the monopolistic jurisdictions will determine whether or not the employers within their states will continue to purchase coverage from the state or if the market will be opened up to competition. The free-market system of insurance companies competing for business has shown itself to be the better approach by creating better customer service and less red-tape for the employers.
Author Rebecca Shafer, J.D. Consultant, President, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
Maintaining your company’s profit margin can oftentimes be complicated. However, removing obstacles to employee productivity helps lower workers' comp costs, increases productivity, and profits, thus making your work place a safe and efficient environment.
Spending money to make your workflow more efficient and safe for your employees pays the company back in dividends, saves money on injury claims and workers’ compensation costs in general, and raises productivity. The main goal in any business is to maximize profits while lowering operating costs. Therefore, when your workforce experiences high injury rates, or reduced productivity, it is wise to thoroughly examine your company's workflow, and eliminate issues causing both injury and limiting productivity.
Identifying and correcting areas within your business with productivity and safety concerns helps make your employees’ jobs easier and safer. Companies engaged in high volume production make the workflow as ergonomic as possible by restructuring workflow or assembly lines, upgrading equipment, and reducing steps in product handling and transition. This not only benefit company production schedules and quotas, but also employees are naturally encouraged with the new ease of operation and become more efficient at doing their specific jobs.
Part of correcting productivity and safety issues includes employee safety and specific job task guidelines and training. Highly visible warning and safety signs must be posted in all parts of the workplace to help reinforce best practices and requirements. The employee break or lunch room and by the time clock are great places to post safety information. Also, post reminders to always wear and use all required company safety equipment, such as eye and ear protection.
OSHA and State regulations require the posting of workers' comp information for reporting accidents and making claims in common areas where this information can be accessed and read, and it is a good idea to place company safety rules, guidelines, and procedures next to them. Not only do employers satisfy state and federal regulations but it helps reinforce the company position on workforce safety requirements.
Implement monthly training and safety meetings to help reinforce these safety standards, to review safety and accident event procedures, and current employee issues. On-going training helps new employees remember company safety requirements, as well as helping existing employees become more safety conscience while making safety meetings accessible to employee concerns. (workersxzcompxzkit)
Accountability is also important in both safety awareness and productivity. Company administration should be firm on safety procedure violations and how disciplinary actions apply to employees. Employees with prior histories of injury, or who may disregard safety guidelines and procedures are potential threats to company safety and productivity, and as distasteful as it may be, failure to impose disciplinary sanctions on willful or constant misconduct places other employees, and the company in danger.
These seemingly simple steps have proven, over time, to reduce the cost of workers’ compensation (20% to 50%), increase profits, and keep employees happy and productive workers.
Author Rebecca Shafer, J.D. risk managment consultant, 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.
One of the country’s largest Third Party Administrators (TPA) got into an embarrassing situation about a decade ago on the self-insured program of a Fortune 500 company. The embarrassing situation? The TPA did not know the difference between a medical only claim and a lost time claim when it came to billing.
The risk management of the self-insured company noticed its allocated loss adjustment expenses (various claim related expenses including the cost of claims handling) was much higher than anticipated. The cause was an increase in the number of lost time claims and a decrease in the number of medical only claims. Claims the self-insured company thought should have been billed as medical only claims were being billed as lost time claims. The claims servicing agreement between the TPA and the self-insured company called for medical only claims to be billed at $125.00 each and the lost time claims to be billed at $950.00 each. The extra billing of $825.00 per claim was making a major difference in the allocated loss adjustment expenses of the self-insured.
The resulting fall-out from this embarrassing situation was the TPA had to re-think its billing structure for workers' compensation claims. Historically TPAs bill a flat rate per file on self-insured programs, with one rate for medical only claims and a second rate for lost time claims. This allows the self-insured programs to estimate their allocated loss adjustment expense. This approach worked well when the injured employee went to the doctor, was treated and released to return to work with no time lost from work. This approach also worked well when the employee was off work for an extended period of time, eventually recovered and returned to work. What got the TPA into trouble were the work comp claims not fitting neatly into either category.
What do you call the claim where the employee is dedicated to his employment, works through his injury, never misses a day from work, but receives a 5% permanent disability rating? What do you call the claim where the employee is off work less time than the state mandatory waiting period, but due to a burn or severe laceration has a scar and is entitled to disfigurement compensation? What do you call the claim when the employee never misses any time from work for her injury, but continues to treat weekly with her chiropractor for years?
Claim category definitions now used for billing purposes normally include Incident Reports, Medical Only Claims, Enhanced Medical Only Claims, Other than Medical Only Claims, and Occupational Disease Claims. Each claim category definition has a flat rate dollar amount billed for handling a claim. The following is how some TPAs are now defining claim categories.
Incident Reports
An incident report (also called Record Only) would be appropriate when no payment is contemplated. The incident is reported in order for the TPA to make a record of it by inputting the data into the risk management information system being used. An incident report would be entered into the system without a reserve as no payment would be made.
Incident reports examples include an employee receiving a paper cut and a band-aid but no medical treatment off the premise, or a book falling off a bookshelf and hitting the employee, but the employee continuing to work without medical treatment.
Medical Only
A medical only claim is any claim involving medical attention, but no time lost from work beyond the state mandated waiting period, and does not include any permanency of injury. Any treatment at a medical facility or treatment by medical personnel off the premise of the employer qualifies the claim for medical only status, regardless of whether or not a bill is generated and regardless of who pays for the medical care.
The medical only claim includes the receipt of the claim by the TPA and data input into the risk management information system about the claim, plus the reserves set to pay the claim. If no medical bill is provided to the TPA, the TPA can closed the claim without payment, but the TPA will still be paid for the handling of the medical only claim.
Enhanced Medical Only
This is the claim definition category most TPAs adopted in recent years to deal with the medical only claims entailing more work than the typical medical only claim. An enhanced medical only claim will be any medical only claims where the medical treatment of the employee continues for six months or longer, or the cost of all medical care exceeds $1,500.00. The enhanced medical only claim also includes the receipt and data input into the risk management information system about the claim, plus the reserves to pay the claim.
Other Than Medical Only
Notice the title for this claim definition…….it does not say Lost Time claims. This claim category definition would include any claim not fitting the definition of incident report, medical only claim or enhanced medical only claim. This includes all lost time claims beyond the state mandatory waiting period, any claims with permanency and any claims with disfigurement (in the states requiring monetary compensation for disfigurement).
Claims requiring investigation are included in the “Other Than Medical Only” category. This could be the investigation of compensability, or subrogation, or the degree of permanent injury or any matter in dispute. Also, the handling of claims with light duty restrictions where there is a loss of wage earning capacity are classified as “Other Than Medical Only.”
Occupational Disease Claims
This claim definition category includes medical only, enhanced medical only and other than medical only claims which are obvious occupational diseases like asbestosis and black lung. This category would also include those states classifying repetitive trauma as an occupational disease claim. (workersxzcompxzkit)
Summary
The claim servicing agreement between the self-insured company and the TPA should have definitions of claim categories to eliminate the potential for the embarrassing situation discussed above. Please note no two TPAs define claim categories exactly the same.
Author Rebecca Shafer, Risk Consultant/Attorney, 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. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.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.
Your company has taken the self-insurance plunge and hired a Third Party Administrator (TPA) to handle your workers' compensation claims. As part of the servicing agreement with your TPA, the TPA agreed to complete a written report within 14 days of assignment on new workers' compensation claim s with reserves over $10,000. Here are some guidelines as to what the reports should contain.
All reports should be laid out in a consistent format for ease of reading. The reports should provide you with all essential information without you having to go on-line to read the entire claim file. The better adjusters will always use the same format, but if the adjuster does not, feel free to provide the following reporting sample outline for captions and sub-captions to the adjuster. This is the minimum you should expect to see in the initial claims' reports.
Coverage
Some adjusters will want to skip the coverage caption figuring your company would not have reported the claim if it was not covered. That can be a big mistake if your deductible, self-insured retention or other terms of coverage change at renewal or any other time).
1. Policy number (if one is assigned) and policy dates
2. Applicable deductible, self insured retention , endorsements
3. Alternative or duel coverage
Description of Accident
1. Date and time of day
2. Place (Where the accident occurred on the premises, or other location if off the premises)
3. What was the employee doing when the injury occurred
4. Regular job for the employee or outside the norm for the employee
5. Date the accident was reported to supervisor or manager
6. Date the accident was reported to the claims coordinator for your company
Insured
1. Name of Unit/Division/Branch
2. Location (Street address, City & State), also the location code number (if one is assigned)
3. The nature of the business/work performed at this location
Employee
1. Full name
2. Age/Date of Birth
3. Number and relationship of dependents ( in states where dependents affect indemnity benefits)
4. Detailed job description/occupation
5. Length of employment, length of time in current job description
6. Prior injuries, both work com and liability claims reported to the index bureau
7. Summary of recorded statement or interview
8. Social security (edited for confidentiality if required by state law)
9. Education level of employee
10.(If represented) Attorney for employee—name, address, expertise
Jurisdiction
1. Statutory state benefits
2. Federal (Longshore & Harborworkers Act, Federal Employment Liability Act, Jones Act)
3. Potential Employers Liability exposure
Compensability
1. Why the claim is compensable
or
2. Why the claim is being controverted
Reserves
1. Amounts for indemnity, medical, legal, rehabilitation and other expenses should be individually stated
2. Adequacy for life of claim should be discussed
Indemnity Benefits
1. Average weekly wage amount and how documented
2. Compensation rate and how calculated
3. Specific benefits due to permanent impairment, scarring (where allowed), etc.
Injury
1. Nature of injury
2. Attending physician(s) and specialists identified
3. Hospitalization, discharged date or anticipated discharge date
4. Type of future medical care and projected length of care
5. Estimated length of temporary total disability
6. Estimated Return To Work date, modified duty and/or regular duty
7. Independent Medical Evaluation (if the jurisdiction allows more than one, if not the IME should be saved until the employee is at maximum medical improvement)
8. Permanent impairment rating (expected or assigned)
Rehabilitation
1. Vocational
2. Physical
3. Length of rehabilitation
4. Facility or provider
5. Reasons/justification for rehabilitation
Second Injury Fund (in those states where it still exist)
1. Nature of employee's prior injury, disability or medical condition
2. Statutory requirements to access the Second Injury Fund
3. Self insurers' rights of recovery
Subrogation
1. Identification of responsible third party
2. Negligence theory
3. Expert testimony (if needed)
4. Preservation of evidence
5. Issues affecting pursuit of subrogation such as hold harmless agreements, contracts, business relationships, possibility of a cross-claim against your company
6. Recovery amount
7. Employee's right of recovery
Litigation/Legal Expense
If the claim is being contested before a workers’ compensation board or in a court, the following information is needed:
1. Defense attorney's name, firm's name, address
2. Issue(s) in contention
3. Probable outcome
4. Legal budget
Action Plan
1. Steps to be taken to move the file forward
2. Barriers to resolving the claims
Diary for Future Reports
1. Date an updated status report will be provided
Attachments
1. List of attachments or documentation being provided, if any
Summary
The adjuster's report should provide you with all the information needed to keep you totally informed about the claim in question. If after reading the adjuster's report you still have questions, add a caption or category to reporting format to answer your question on all future work comp claims.
The adjuster should provide status reports on a regular basis of 30 days to 90 days depending upon the developments on the claim. Status reports should not repeat the information provided in the initial reports, but only cover the categories where there has been a change or a new development that impacts the claim. (workersxzcompxzkit)
Proper reporting by the work comp adjuster will make your life easier in the management of your self-insured program.
Rebecca Shafer, Risk Consultant/Attorney 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. She can be contacted at: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Occupational Health Strategies
Click Here:
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.
Posted in
Insurance Issues, Rates, Premiums, Medical Issues, Wellness Programs and WC |
