Even though there is an increasing number of aging U.S. workers, older employees have shown to exhibit a smaller-than-expected effect on workers compensation loss costs, according to a new report from NCCI Holdings Inc.
NCCI reported on similar average loss costs for all groups of workers ages 35 to 64. Additionally, claim frequency has fallen across the board for all age groups in the last several years as workplaces have in general become safer, according to the rating and research agency.
"These are reassuring findings, in that an aging workforce may have a less negative impact on loss costs per worker than originally thought," NCCI commented.
However, medical and indemnity claim severity for workers ages 45 to 64 was more than 50 percent greater than claim severity for the study’s youngest workers, ages 20 to 34. A large degree of that was due to additional severe injuries among older workers, including sprained rotator cuffs, torn knee cartilage and lumbar displacement.
According to NCCI, claim severity did not vary as widely among workers ages 35 and older. "There is a common belief among many that because of poorer health and longer healing times, medical severity among the oldest workers is likely much greater than among younger workers," the report goes on to say. "However, although there are some wide swings from year to year, medical severity for workers 65 and older does not seem much different from (workers over age 35)." (WCxKit)
Lastly, NCCI reported that higher wages added to higher indemnity costs among older employees in the study, who obtained 26% more in average temporary benefits per day than workers ages 20 to 34.
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.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
Two-thousand-eleven has been an interesting year in the workers compensation industry. New software has helped many administrators take better control of their costs, studies on safety have led to an increase in preventative measures and legal changes have led to unusual and sometimes controversial administration in some states.
Here at Roundup we asked one of our favorite experts, Curtis Smith, executive vice president of Medcor, Inc., a national on-site health services company, what he thought the top WC issues were for 2011. What follows are his conclusions:
Conflicts of Interest Inherent in the Industry
The very organizations employers depend on to help manage and reduce costs depend on claims for their core revenue – and this can lead to potential conflicts of interest, according to Smith. He offers these examples: contingent commissions for brokers and consultants, TPAs (third-party administrators) and MCOs (managed care organizations) who select network providers and share revenue from provider discounts. Smith also cautions against pharmacy chains that put pharmacies on-site in large worksites for convenience also employ the practitioners who write the prescriptions.
Prescription Drug Abuse
Thousands of people incur illness and injury each year from abuse of prescription medications, especially pain medications. Addictions and overdoses are increasing, as are deaths, Smith wrote. Addictions often arise from treatment after a work-related injuries but the medical community is not policing or restricting doctors who write these prescriptions. What’s more, TPAs are not excluding these unrestricted doctors from networks of approved providers for fear of litigation.
Prescription Drug Costs
The same medication can cost 10 times as much in workers compensation cases as it does in general health applications. Medications’ fee schedules have been negotiated down and controlled in group healthcare far more than in workers comp situations. Consequently, drug companies and others are moving into the comp space to take advantage of increased profitability, Smith said.
Increased Litigation in the Industry
The fundamental premise behind the workers compensation system is falling apart in many states (e.g. California and New York) where an increasing percentage of claims are contested and litigated. Huge settlements out of proportion to true economic need are forcing employers to be defensive and deny claims; denying and resisting legitimate claims forces employees to seek counsel and litigate. The comp system is turning into a battleground of plaintiff and defense attorneys working the system.
Injury Triage
Smith said he would be remiss if he did not mention injury triage. “This truly is an effective way to reduce unnecessary claims and costs, to identify serious cases, and to provide early intervention for all cases,” he wrote. Financial and health outcomes are improved with the use of triage. “It’s also innovative – wining several U.S. patents — are there any other WC methods that have been patented in the last 10 years? Or ever?” he asks. Thousands of companies are using triage and many competitors have joined the market, providing a variety of service and pricing models. Yet, many employers (even most) still don’t use it and the claims-driven industry still resists it.
Even those who offer injury triage often do so begrudgingly to satisfy their employer-clients, to block another triage provider from taking claims away, or to acquire business – but they are slow to introduce triage to an existing book of businesses, or, once introduced, often let implementation and utilization languish so claims can continue to flow.
In conclusion, look to hear more about these important topics in 2012. Though they may not be resolved in short order, they are certainly going to be on the minds of those of us in the industry in years to come.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
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.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
The Workers Compensation Research Institute (WCRI) recently released medical price index data geared toward thee specific states. Regardless of where you are based, we all can learn from them.
They are:
In the Virginia study, WCRI found the 2010 price for non-hospital services was nearly 30 percent higher than the median price in states with fee schedules. The original nine-year study, Medical Price Index for Workers’ Compensation, Third Edition (MPI-WC), showed prices grew much faster than the typical growth rate of 11 percent in states with fee schedules.
The study further showed in Wisconsin, their system had the highest prices and fastest growth in their WCRI’s Medical Price Index. “The price for non-hospital services in Wisconsin in 2010 was the highest of the 25 study states, more than twice the prices in the 25-state median, and nearly 50 percent higher than the median of the 6 states with no fee schedules,” the study says.
A WCRI press release indicated, “The prices in Wisconsin increased 42 percent, much faster compared to median growth rate of 11 percent of the states with fee schedules, also faster than the 28 percent typical growth rate of the states without fee schedules.”(WCxKit)
Lastly, the Indiana portion of the larger study indicated the 2010 price for non-hospital services in that state was the third highest of the 25 study states, more than 50 percent higher than typical prices paid in the study states with fee schedule regulation. The nearly 30 percent growth in Indiana was much faster than the typical growth rate of 11 percent in states with fee schedules, according to a WCRI press release.
ABOUT WCRI:
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization based in Cambridge, MA. Since 1983, WCRI has been a catalyst for significant improvements in workers' compensation systems around the world with its objective, credible, and high-quality research. WCRI's members include employers; insurers; governmental entities; managed care companies; health care providers; insurance regulators; state labor organizations; and state administrative agencies in the U.S., Canada, Australia and New Zealand.
Author Rebecca Shafer
, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20-50% www.WCManual.com.
Contact: RShafer@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Medical disability guidelines can assist an employer in planning for the future return of an injured worker. Medical disability guidelines are an essential planning tool because they provide an employer with a time frame as to how long an employee, on average, will be away from work. Large self-insured employers, TPAs, insurance companies as well as captives and associations that handle claims all use online medical duration guidelines.
Medical disability guidelines do not offer the medical provider or employer a precise number, but rather a range of time the guideline’s user can anticipate the employee will be off work depending by the difficulty of work. The range of time is based on a compilation of extensive data about numerous injuries. The collection of data is sorted by the nature and the extent of injury. The greater extent of data, the more accurate a disability duration prediction is. The field of occupational medicine continues to grow and expand, providing a constantly revolving and growing accumulation of data.
It should be noted that medical disability guidelines are designed to provide physicians, employers, and employees with ranges and guidance, not precise answers. Guidelines often have a minimum recovery time, a maximum recovery time, and an optimum/average recovery time. The specific employee's willingness and inclination to return to work can be measured in three ways – restrictions, limitations, and the willingness to tolerate the symptoms brought on by the injury.
The medical provider will set the restrictions on what the employee should or should not do. While the employee may be capable of doing the activity, to do so could poses a risk to the employee and possibly others. For example: an employee with an injured arm might be capable of driving a dump truck, but there is risk the injury could impair the employee's ability to do so, posing a risk to both himself and others.
The medical provider will also take into consideration limitations the employee has due to the injury. These limitations are often based on a capacity evaluation of what the employee is physically capable of doing and how long it should be before the employee should be capable. For example: an employee with an injured back will not have the physical capability to lift heavy objects. Limitations are normally in place for what would be considered the average time a person will be off work.
The restrictions closely conform to the minimum column of the medical disability guidelines while the limitations will often correlate with the optimum recovery time in the guidelines. The maximum amount of time an employee should be off work is reflected by the concept of tolerance.
The greatest variance in the medical disability guidelines arises from the willingness of the employee to tolerate the symptoms of the injury. The medical provider may look the medical disability guidelines and establish what is the normal recovery time for an injured person who has a particular nature and extent of injury. Individual factors such as fatigue and pain can impact an employees’ disability duration.
Personal factors can also play a role in the recovery and disability duration. Any comorbidities the employee has (diabetes, obesity, etc.) can distort the disability duration. The employee's motivation to return to work can influence the employee's tolerance level. The motivational factors can include income (satisfied with the tax-free income of workers compensation), job dissatisfaction, self esteem, health insurance provided by the employer, etc. These are not medical reasons for disability but impact the employee's willingness to tolerate injury symptoms, and therefore whether or not the employee disability duration falls within the medical disability guidelines. The maximum time frame is often placed at the 90 percentile where 90 percent of the people with the type of injury involved have returned to work.(WCxKit)
The medical disability guidelines are evidence based disability durations. They are multidisciplinary in scope with their findings continuously undated to reflect improvement in medical care and medical practice. They are best used to answer the question "how long will the injured employee be off work."
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Comparison Report Generator is one of the new features on WorkCompResearch
WorkCompResearch (WCR), the nation’s leading workers compensation Compliance and Regulatory Research System, has recently been enhanced with a new Custom Comparison Report Generator (CCRG), designed to allow members to create and print instant comparative reports for a variety of compliance topics for up to 53 jurisdictions. The CCRG is based on a more limited Topic Comparison service previously offered in the WCR Compliance Center.
WorkCompResearch is one of several comprehensive data services offered by WorkersCompensation.com .
The report generator is now positioned with the State Comparative Charts that the company has maintained for years, but, according to Robert Wilson, WorkersCompensation.com President & CEO, the CCRG represents the future of WCR comparative data systems. “The Comparison Report Generator is the first generation of dynamic data manipulation, and represents the future for our custom information delivery services,” Wilson says. “Eventually our 50 State Comparative Charts will be driven by similar systems, being dynamically generated for the end user in real time, and on demand.” (WCxKit)
According to Wilson, the underlying system will allow the WCR service to provide even greater flexibility for their subscribers, while easing the maintenance burden on their Compliance Department. In addition to the Comparison Report Generator, which is now available in a beta format, the WCR service is expanding its Compliance offering with the addition of comprehensive Utilization Review and Medical Billing information. Kathy Lella, Vice President of Compliance and Research for WorkersCompensation.com, says that these additional topic areas have been among the most requested from the company’s existing subscribers.
For more information, visit WorkCompResearch.com or WorkersCompensation.com.
Robert Wilson, President & CEO, WorkersCompenstion.com.
WorkCompResearch (WCR), the nation’s leading workers compensation Compliance and Regulatory Research System, has recently been enhanced with a new Custom Comparison Report Generator (CCRG), designed to allow members to create and print instant comparative reports for a variety of compliance topics for up to 53 jurisdictions. The CCRG is based on a more limited Topic Comparison service previously offered in the WCR Compliance Center.
The Texas Department of Insurance, Division of Workers Compensation (TDI-DWC), is now offering workers compensation system data online.
Interactive tools allow users to create customized graphics and download the charts and data from the on-line site.
On the site, users can find:
1. Workers compensation claims data.
2. Income and death benefit information.
3. Dispute resolution.
4. Medical fee disputes.
5. Designated doctor appointments.
6. Medical benefits.
Rod Bordelon, commissioner of workers compensation said, “We are pleased to provide information in an interactive format that allows system participants to more easily access aggregate claims information.”
The report contains information from 2006 through 2010 and eliminates the need for workers comp system participants to submit open records requests for the information.(WCxKit)
It is available for free
here.
This information was provided by attorney
Stuart Colburn, a Shareholder at Downs Stanford in Austin, Texas. Colburn has extensive experience in all phases of dispute resolution before the Texas Department of Insurance, Division of Workers Compensation and in district courts across the state. Stuart represents clients regarding workers compensation, non-subscription, subrogation, and bad faith litigation. He is the founder and the first chairman of the State Bar of Texas (SBOT) Workers Compensation Section; course coordinator for the SBOT the Advanced Workers Compensation Seminar; and course coordinator for the Texas Workers Compensation Forum. He can be reached at:
scolburn@downsstanford.com
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Safety National acquired Workers Comp Kit from Amaxx Risk Solutions. This unique online resource helps assess the client’s post-injury Workers’ Comp practices and procedures, recommends improvements, and provides materials and expertise to implement changes.
Safety National policyholders will receive free access to the Workers Comp Kit as part of their relationship with the company. For buyers of insurance, brokers and agents, and other insurance organizations, Safety National has partnered with Advisen to service and support all other parties utilizing this software to help ensure the Workers Comp Kit retains and grows its reputation for reducing workers compensation expenses.
“As the nation’s leading provider of excess workers compensation solutions, we are thrilled to add this tool to the Safety National arsenal as the Workers Comp Kit has clearly become a proven way to lower post-injury cost drivers for our clients,” said David Snodgrass, director – risk control services at Safety National. “Purchasing this program is consistent with Safety National’s philosophy of working in partnership with our policyholders to help lower claim costs.”
Ed Forer, executive vice president at Advisen, elaborated, “The Workers Comp Kit addresses a need that buyers and brokers repeatedly tell us must be met. We are excited to help risk managers develop a consistent approach to managing post-injury procedures at their various business locations, which ultimately saves them money.”
Many employers face growing workers compensation expenses and are placing greater reliance on brokers and insurers to help reverse the trend. The Workers Comp Kit enables an employer, broker and insurer to work collaboratively to improve best practices and reduce expenses. This program’s applications combine interactive tools to perform assessments, highlight areas for improvement, make recommendations, create plan implementations and monitor their post-injury performance.
Safety National is a versatile alternative market insurance provider offering a broad range of risk funding products through independent insurance agents and brokers. Founded in 1942, Safety National is the leading provider of Excess Workers Compensation coverage to self-insured employers and groups nationwide and has provided that type of coverage longer than any other company in the U.S. In addition, Safety National offers its Large Casualty Program, which includes Large Deductible Workers’ Compensation, Commercial Auto and General Liability coverage; Public Entity Multi-Line coverage; Treaty Reinsurance; Loss Portfolio Transfers (LPT); Texas non-subscriber coverage (TEXcess); Self-insurance Bonds and other alternative risk programs. The company is licensed to provide workers’ compensation insurance in all 50 states, the District of Columbia and Canada. Safety National is a wholly owned subsidiary of Delphi Financial Group Inc. (NYSE: DFG) and is rated “A” (Excellent), Financial Size Category XI, by A.M. Best.
www.safetynational.com
Advisen’s data, analytics and news offerings are game-changers for 100,000 commercial P&C professionals. Advisen integrates business information and market data for the commercial insurance industry and maintains critical risk analytics and time-saving workflow tools for over 530 industry leading firms. Advisen delivers actionable information and risk models for Underwriters, Reinsurers, Brokers and Risk Managers at a fraction of the cost to have them built internally. Designed and evolved by risk and insurance experts, Advisen combines the industry’s deepest data sets with proprietary analytics and offers insight into underwriting, marketing, broking and purchasing commercial insurance that is not available on any other system.
www.advisen.com
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
By requiring preauthorization for occupational therapy services, spinal surgery, and work hardening and conditioning services, a study showed three Texas reforms from the early 2000s lowered medical costs without hurting injured workers’ return to work.
The Workers Compensation Research Institute (WCRI) study, Impact of Preauthorization on Medical Care in Texas, found when an insurer requires preauthorization there was a seven percent reduction in the number of injured workers receiving physical medicine and occupational therapy. Further, there was a 39 percent reduction in the number of visits per worker. Preauthorization also reduced the number of patients receiving more than 15 visits for physical medicine services.
According to the study’s abstract, “Texas policymakers enacted several reforms that were intended to give payors additional tools to manage medical care, patient outcomes, and costs. One class of reforms requires preauthorization by the payor for certain types of medical treatments and services.”
Among the workers compensation rules in Texas, an injured employee is required to receive approval from the insurance carrier before receiving occupational therapy services, spinal surgery, and work hardening and conditioning services.
To complete the study, WCRI used medical billing data for two sets of claims — one prior to the effective date of the preauthorization reform and one after. The abstract says, “For each type of medical care, WCRI measured changes in utilization after the preauthorization reforms. … WCRI also studied changes in disability duration and return-to-work as measured by the days in which an injured worker received temporary disability payments.”
The abstract says the study addresses these three questions:
1. What impact does preauthorization have on reducing medical visits?
2. Does preauthorization hamper return to work?
3. Did preauthorization create a delay in spinal surgeries for injured workers?
3 Study Findings:
1. Return to work did not change significantly over the time period for injured workers who received physical medicine services.
2. There was a 21 percent reduction in the number of injured workers receiving work hardening and work conditioning services, but not significant changes in the number of visits and services per visit.
3. Time to surgery was shorter among injured workers who received spinal surgery after preauthorization was effective.
You can read more about the study
here.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
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.
©2011 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 number of serious injuries in Nova Scotia workplaces is at its lowest level in 15 years, the Workers Compensation Board of Nova Scotia announced recently in its 2010 annual report.
In 2010, 6,921 people suffered serious injury on the job – the first time that number has been below 7,000 since 1995, when time loss injuries began being calculated the way they are today. There were 10,515 time loss injuries in 1995. (WCxKit)
The report marks continued progress toward a safety culture.
Looking back a decade, in 2000, 9,061 people suffered time loss injury on the job – over 2,000 more than in 10 years later. Numbers show there has been a particularly steep and consistent decline over the past five years.
Meanwhile, assessable payroll, the WCB’s measure for the number of covered workers, has consistently increased. The injury rate – the number of people per 100 covered workers who are seriously injured on the job – is now 2.13, down from 2.26 in 2009. It was 3.0 in 2004.
Return to work has also seen improvement. The vast majority of workers – 95% – return to work making 100% of their pre-injury earnings. And in 2010, over 40,000 fewer days at work were lost due to injury. This benchmark is much better than results of U.S. companies.
Yet despite this continuous improvement, there remains much work to do. Nearly 120 people have died as a result of workplace injury or illness over the past five years.
“Since 2005, we’ve seen an average five per cent reduction in time loss injuries each year,” said Nancy MacCready-Williams, CEO of the Workers Compensation Board. “That’s good news and we are clearly heading in the right direction as a province. However, we must be clear: there is no acceptable number of workplace injuries. We want a Nova Scotia free from workplace injury.”
“Creating a safety culture in Nova Scotia is a team effort. Our team of dedicated employees at the WCB are collaborating with employers, workers, labor unions, safety and industry associations, and the Department of Labor and Advanced Education to make Nova Scotia a safer place to work and to help injured workers get back on the job sooner,” said MacCready-Williams. “We are seeing the positive impact of this collaboration in the 2010 results.”
The Workers Compensation Board continues to recoup the investment losses suffered during the global economic downturn in 2007 and 2008. Following significant market losses in 2007 and 2008, 2009 and 2010 have shown more positive results. The WCB ended 2010 a slight surplus overall of $3.5 million. (WCxKit)
The full Workers Compensation Board of Nova Scotia 2010 Annual Report is available at: www.wcb.ns.ca
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, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com or 860-553-6604.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
Workers compensation total costs per claim in Michigan increased at a slower rate than in other study states that did not have major reforms of the workers comp system during the study period, according to a report by the Workers Compensation Research Institute (WCRI).
WCRI discovered that total costs per claim in Michigan increased 28 percent between 2003 and 2008, or 5 percent per year on average. While this growth rate was only a bit more modest than the growth in the median of 16 study states, the overall growth rate in Michigan was slowest among the non-reform states. (WCxKit)
In the early years covered by this study, this result was likely due to modest growth in indemnity costs per claim. Indemnity costs in Michigan grew by 1.5 percent between 2003 and 2007, slower than the median rate of growth of 3.6 percent.
The study, CompScope™ Benchmarks for Michigan, 11th Edition, reported that the moderate growth in indemnity benefits between 2003 and 2008 was the result of small increases in the average weekly wage and slight gains in the duration of temporary disability.
The total costs per claim in Michigan were among the lowest of the study states. At close to $4,900 per case, the average cost per claim was 36 percent less than the median study state.
This result may be driven by lower medical costs per claim in Michigan. The average medical cost per claim of just under $9,200 among claims with more than seven days of lost time was one of the lowest of the study states – 28 percent lower than the 16-state median.
Indemnity costs per claim with more than seven days of lost time were 7 percent lower than in the median study state. This result was driven by shorter duration of temporary disability than the other wage-loss systems and a lower average weekly temporary total disability (TTD) benefit rate. States with a wage-loss benefit structure generally have a longer duration of temporary disability, due to the fact most indemnity benefits are paid as temporary disability benefits.
At an average of 18 weeks, duration of temporary disability in Michigan was shorter than in other wage-loss study states – 6 to 8 weeks shorter than Massachusetts and Pennsylvania, 15 weeks shorter than Louisiana.
Several system features and processes in Michigan, including processes for terminating TTD benefits, might contribute to the shorter duration.
Another factor underlying relatively lower indemnity benefits per claim in Michigan was a slightly lower average weekly TTD benefit rate. This was related to the statutory benefit structure in Michigan.
The Michigan benefit structure is different from the benefit structure in most states in two ways. First, Michigan bases weekly benefits on 80 percent of after-tax (spendable) earnings, whereas most states pay two-thirds of the worker’s pre-tax average weekly wage. Second, Michigan sets the maximum statutory weekly benefit at 90 percent of the statewide average weekly wage, while most states set the maximum benefit at 100 percent, or higher.
Under the Michigan benefit structure, 18 percent of workers (those with lower wages) received higher weekly benefits than under the typical structure, but more than one third of workers (those with higher wages) received at least 5 percent less.
The study also notes that injury reporting time in Michigan improved steadily over the study period. The percentage of claims reported to payers within 3 days of injury grew by approximately 8 percentage points from 2003 to 2008. (WCxKit)
This factor contributed to steady improvements in the speed to the first indemnity payment. However, the study notes Michigan still has potential for improvement, due to the fact injured workers obtained their first indemnity payment slower than in the typical study state.
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, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact:Info@ReduceYourWorkersComp.com or 860-553-6604.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
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