Financial 101 for Workers Comp Reserves

 

Reserves are the money set aside by the insurer/self-insured to pay the cost of a workers compensation claim.  The cost of a workers comp claim is an obligation of the insurer or self-insured, so it is good financial management to have the money available to meet that obligation. It is also the law in every jurisdiction that the money to pay the claim is set aside and held separately from the insurer or self-insured’s other funds.
 
 
Reserves are normally broken down into indemnity cost, medical cost, and expenses. In recent years, due to the cost of litigation, some insurers and even some self-insureds have added a fourth category, legal, with all litigation expense in the legal category and all other claim handling expenses in the proper expense category.[WCx]
 
 
To establish what the reserves should be, the workers compensation adjuster considers each category independently. The estimated amount of indemnity expense, medical cost, legal expense and general expense is broken down into parts to arrive at the estimated reserves (dollars) needed to pay the claim. The normal breakdown is:
 
 
  • Indemnity
  • Temporary total disability  (weekly rate multiplied by number of weeks the employee is expected to be off work)
  • Temporary partial disability  (weekly rate multiplied by number of weeks the employee is expected to be on modified duty at a reduced rate of pay)
  • Permanent partial disability  (Disability rating multiplied by appropriate number of weeks of compensation)
  • Permanent total disability (weekly rate multiplied by maximum number of weeks the employee can receive)
  • Rehabilitation or Vocational Training  (estimated cost of training)
  • Funeral benefits  (cost of burial up to state maximum amount)
  • Death benefits to dependents  (weekly indemnity rate multiplied by number of weeks provided by statute, payable to spouse and/or children and/or other relatives financially dependent on the employee)
  • Medical
  • Doctors
  • Hospitals
  • Diagnostic testing
  • Ambulances
  • Specialists
  • Prescriptions
  • Medical transportation
  • Attendant care
  • Drug screen
  • Physical therapy
  • Legal
  • Attorney fees
  • Court reporters
  • Court cost
  • Expert witnesses
  • Expense
  • Medical reports
  • Peer review
  • Independent medical examinations/evaluations
  • Surveillance
  • ISO report
  • All other expenses
 
 
The initial reserves are set at creation of a case based on the adjuster’s understanding of the nature and extent of the injury. The original reserves will often change as the adjuster learns more about the claim. The initial reserves are based on the average cost for similar claims. When the injury is more or less severe than originally anticipated, the reserves should be adjusted up or down as appropriate.
 
 
As the claim progresses the adjuster should review each medical report to determine the claimant’s (employee’s) medical status and work status. Based on the information provided in the medical report, the adjuster will know whether or not it is necessary to add additional medical reserves (for example to cover additional diagnostic testing that has been requested), or change the indemnity reserve (for example the employee is released back to full duty earlier than expected).
 
 
With complex workers compensation claims, the adjuster may change the reserves several times as additional medical information becomes available. Normally those changes in reserves are increases in the amount of money set aside due to the medical treatment being greater than originally expected, indemnity cost being higher due to a longer time off work than originally anticipated, a permanent partial or total disability.[WCx]
 
 
Reserving is not an exact science, but the adjuster should try to be as accurate as possible with the reserves. With proper reserving, the insurer or self-insured will be able to meet the financial obligation to pay the claim.
 
See also our WC 101 section from our website Lowerwc.com. 


 

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.

 

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Employers Think Insurance Boards Funding Fairness Report is Unfair

 

The Ontario Workplace Safety and Insurance Board’s recently released review of the province’s workers compensation system has raised several questions and indicated challenges still lie ahead, according to the Ontario Trucking Association.
 
The nearly-200-page “Funding Fairness” report, conducted by law professor, Dr. Harry Arthurs, was designed to give direction to the WSIB for the next 15-20 years and restore the system to financial health. But the report looks only at funding issues, not expenditures – a concern the Ontario Trucking Association and other employer groups raised during the consultations with Dr. Arthurs last year. The report did contain a chapter on the subject; however, due to the mandate, no recommendations were given.(WCx)
 
 
In response to the report, and issues related to unfunded liability, Ontario Minister of Labour Linda Jeffrey announced the provincial government would introduce a new regulation under the Workplace Safety and Insurance Act to require the WSIB's insurance fund to reach sufficiency of 60% funding in 2017, 80% funding in 2022 and 100% funding by 2027.
 
 
However, the OTA notes: “What she didn’t say, but which is implicit in the report, is the way the WSIB is going to reach these targets is by increasing premiums, which are paid solely by employers.”
 
One of Dr. Arthur’s recommendations is that WSIB premiums should be based on actual costs, not whether rates are affordable. He says there should be no government interference with rate setting unless the province is experiencing a severe economic crisis. He also recommends each rate group should pay the full current and future costs of new claims, which the WSIB must accurately price.
 
It goes on to say that the current rate groups should be replaced with sectorial groups. This would take place over the next several years with appropriate transitional measures to avoid sudden premium rate increases, according to the report.
 
Additionally, the report raises questions over the future of experience rating programs. Dr. Arthurs’ recommends, for example, that experience rating should be maintained only if the board declares the purpose is injury reduction and return to work; it achieves these purposes; and is resourced to prevent abuses. He calls for a time-limited experience-rating experiment to be conducted in one industry.
 
Other recommendations include the reestablishment of medical/scientific panel to identify occupational disease and the full indexing of all benefits.
 
It will be imperative that meaningful consultation with employers takes place,” says OTA president David Bradley. “If the WSIB administration has already made up its mind what it is going to implement from the Arthurs report and how it is going to do it, then the process will be doomed to failure. These are enormously important issues. Employers want a better system too, but we cannot afford to sign a blank check.
 
Gutting experience rating programs is not the answer,” Bradley continued. “We’ve got to make sure that all employers are paying their fair share and I don’t see how anyone can talk about the future sustainability of the WSIB without dealing with the expenditure side of things.”(WCx)
 
 
The release of the report has prompted OTA to form a WSIB issues committee to help guide the association’s analysis and positioning on these issues over the next couple of years. 

 

 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

  
WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com
MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Why Every Business Needs to Have Commercial Insurance

Every new business and every small business needs to have commercial insurance, even if your business only has a few employees. Commercial insurance covers the business against the risk of loss by providing protection from fire, weather events, lawsuits, employee injuries, and many other types of insurance losses. The insurance premium is often a small price to pay to protect the business from an event that could wipe out a business without insurance.

 
 
Commercial insurance is broken down into three categories: property, liability and workers compensation. The small business needs coverage in all three areas.  Each of the three categories can have variable types of insurance that can be tailored to the needs of the business. See our Buyer's Guide to WC Insurance Coverage. [WCx]
 
 
Property
Many new business owners think of property insurance as protection from fire and flood, but property insurance can be much more than that. There are two basic areas of property insurance.  The first area is real estate insurance to cover a business’ buildings. The second area is personal property insurance to cover non-real estate property. Non-real estate property insurance can provide coverage for equipment, inventory, cargo and other owned property. 
 
 
The property insurance can be tailored to provide protection from business interruption, crime, equipment breakdown, glass breakage, debris removal and any other type of property loss specific to your business. Property insurance will also include fidelity and surety bonds.
 
 
Liability
Liability insurance will protect the small business from claims brought against it by others.  Liability insurance provides protection from customers who bring claims and from other non-business related third parties. The liability insurance on a small business building can provide it from customers who are injured on the property, for instance a customer who slips and falls while in a store. Liability insurance can provide protection for the small business if one of its products causes an injury due to a defect in the product. Liability insurance also includes vehicle insurance in case a delivery truck is involved in an accident due to the carelessness of the driver.
 
 
There are various types of specialty liability insurance. Lawyers, appraisers, consultants, or anyone whose business is to provide advice and guidance will need Errors and Omissions insurance.  Doctors, druggists and all other types of medical providers need Medical Malpractice insurance. If the business is formed as a corporation, the directors and officers will need Directors and Officers liability coverage to protect them from lawsuits over the decisions they make.
 
 
Workers Compensation
Almost every employer needs workers compensation insurance to protect the business from the cost of injuries incurred by employees while on the job. Only the very smallest of businesses (1 up to 5 employees which varies by state) are exempt from the requirement to have workers compensation insurance. Even if a very small business is exempt from carrying workers comp coverage, it is still a good idea to have workers compensation insurance. See our WC 101 for more information. 
 
 
The workers compensation insurance pays for all the medical care of the injured employee, and replaces a portion of the employee’s lost income if the employee is unable to work due to his/her injury. If a small business does not have workers’ compensation coverage, the business and in some cases the individual business owner, is liable for all cost of an employee’s injury and can be sued for those costs.
 
 
The Commercial Insurance Policy
The commercial insurance policy normally contains four parts: 1) identification of the exposures or items insured, 2) the premium cost, 3) the conditions and exclusions of the policy, and 4) how claims will be paid. Upon receipt of the insurance policy, the business owner should carefully review the policy, imagine every possible thing that can go wrong and verify there are provisions in the commercial insurance policy to cover those events. If the commercial insurance policy does not cover an exposure to loss that the business owner is aware of, the insurance broker should be contacted and those concerns addressed by the broker.
 
 
Prior to purchasing the commercial insurance policy, the new business owner should contact an insurance broker or agent to review the nature and type of the business. By reviewing your insurance needs, this professional will be able to provide an insurance policy that meets all your needs. [WCx]
 
 
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.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Bands of the RMS Titanic – A Workers Comp Tragedy

Today, as this is being written, is the 100th anniversary of the sinking of RMS Titanic, an event which was a catalogue of small failures leading to giant consequences. All but forgotten today is one of the most frustrating episodes of that event– the exclusion from survivor benefits of the families of the eight members of Titanic’s two bands.

 
 
Normally, bands aboard passenger ships in 1912 were hired by the shipping line, in the case of the Titanic the White Star Line, a British corporation with its operational headquarters in lower Manhattan. Once hired, the bandsmen became non-seamen members of the crew. In hiring bands for the much-celebrated maiden voyage, the White Star Line was unwilling to pay union scale. [WCx]
 
 
The musicians’ union would not allow members to play as crew members for less than union scale. However, a compromise was reached with the White Star line to permit the band members to be listed as second class passengers and be paid as “independent contractors,” even though they were berthed in crew quarters. Today, that transparent end-run around the obvious would not be allowed to stand, but things were different in 1912.
 
 
After the collision, the band members were requested to remain on deck playing light dance music to calm those aboard. They continued to play until the ship’s list prohibited them from further performance. None attempted to get into a lifeboat and none survived. (There is no solid evidence that “Nearer My God to Thee” was ever played, but one of the last two tunes was said to be a rag-time piece, perhaps by Scott Joplin.)
 
 
All other family members of the deceased crew received some form of survivor benefits but the band members, alone, received, officially, nothing. As “independent contractors,” the band members were not covered by the British Workers Compensation Act, a result upheld by a British court.
 
 
The families might have received a better result in New York, but the state was in the short period between the court invalidation of its first comp law and the official passage of its second. Everything on the Titanic, it seemed, was dogged by evil timing.
 
 
However, the plight of the families of the bandsmen received great publicity in the US and the UK. Edward Elgar (of “Pomp and Circumstance” fame) presided over a memorial concert, as did John Philip Sousa. The fraternity of professional musicians rallied and, eventually, a charitable trust was established for the benefit of the families, who received about what the families of other crew members had received. (The band members were paid about $40 per month and benefits which was hardly sufficient.)
 
 
In some ways, the lessons of the Titanic were on the same order as the Triangle Shirtwaist tragedy two years earlier. The complicity of the musicians’ union in the inexcusable fiction that the band members were independent contractors led to much unneeded pain. The failure of a court to apply an equitable reformation of the relationship was also out of line with the growing opinions present even in 1912 .[WCx]
 
 
To the crew and passengers of RMS Titanic – “Requiescat in Pace.” 

 

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. medsearch7@optonline.net

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Ohio Company Ordered – Provide Workers Comp Coverage or Stop Operations

A Cuyahoga County, Ohio judge has ordered Gray Container, a 55-gallon drum manufacturer, to discontinue its operations for repeatedly refusing to maintain workers compensation coverage. See Ohio's Guidelines here in our WC resource center. 

 
 
The injunction against Gray Container, requested by the Ohio Bureau of Workers Compensation (BWC), was filed to protect employees. This injunction is believed to be the first action of its kind by BWC. The Attorney General’s Office represented BWC during this action. [WCx]
 
 
This case is ultimately about fairness to the employees who deserve protection in the case of workplace injury and fairness to the 250,000 other Ohio businesses that have to pick up the tab when a worker for an uninsured company is injured," said BWC Administrator/CEO Steve Buehrer. "In this instance, Gray Container ignored repeated efforts by our staff to find a workable solution, even as multiple claims were filed by its workers."
 
 
Gray Container allowed its policy to lapse in September, 2006 and despite repeated attempts by BWC to assist the company to maintain coverage, it failed to protect its employees.
 
 
During that time, 22 claims, one of which was a death claim, were filed and Gray Container now owes almost $700,000. Ohio law ensures benefits for the injured workers even if the employer is without coverage. When an employer fails to pay premiums, other Ohio employers are forced to carry the burden. [WCx]
 
 
The company's owner already pled guilty in May to felony failure to comply with workers comp laws.
 
 
At a hearing in June of last year, Gray agreed to make a lump sum payment, make monthly payments, and continue to report payroll and pay premium in a timely manner. In all instances, Gray failed to meet any of these agreements.

 


Author Robert Elliott
, executive vice president, Amaxx Risk 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. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Understanding Key Differences Between Insurance Agents and Insurance Brokers

Employers often wonder does the workers compensation agent or broker work for them or does the agent/broker work for the insurance company?  If an issue develops with the workers compensation insurance company, will the agent/broker be there to assist you, the employer in resolving the issue, or will the agent/broker repeat what the insurance company says?

 
 
As both insurance agents and insurance brokers sell insurance to the public, many people use the terms “agent” and “broker” interchangeably.  They think of them as one and the same. There are some subtle, but important differences between an agent and a broker. [WCx]
 
 
The insurance broker is an independent business that sells insurance products for various companies. The insurance agent can be either an independent agent or a company agent.  The independent agent, like the broker, will sell insurance policies for multiple companies. While the company agent, also referred to as a captive agent, sells insurance policies for a single insurance company. 
 
 
Both the agent and the broker act as intermediaries between the client (the employer) and the insurance company.  They are both responsible for the proper processing of the application for insurance, the various forms and collecting, and submitting the premium to the insurance company. Large domestic and multi-national companies use insurance brokers to handle their insurance needs which are complex, with multiple types of insurance.
 
 
The difference between an independent agent and a broker is a matter of degree.  A pure agent will sell the insurance policy and perform the administrative functions.  The broker in some states will have a different license than the insurance agent, representing more experience, more education or both.  Brokers often offer a wider variety of insurance products.  Brokers will often have the expertise to analyze employer business needs and make recommendations on how to provide the coverage needed.  Brokers cover the cost of the higher level of expertise by adding an administrative fee to the workers compensation policy in the form of a higher premium. If they place sufficient volume with an insurance company, the commission they receive is higher from the insurance company. In all states, insurance agents and brokers need to be licensed.
 
 
A good agent or a good broker will educate the client ( the employer) any time there is a question or a concern about what  insurance coverage is needed. By providing you with information, they will guide in making the best decision for your company. The good agent or broker will never make the decisions for you, but give the information to make the best decision for your company.
 
 
The independent agent and the broker will place your insurance business with the insurance company(s) that can best provide your company the workers compensation or other insurance products that are right for the company. The insurance contract is arranged by the agent or broker or between your company and the insurance company.  The agent or broker is not a party to the contract.
 
 
Often the greatest difference between an agent and a broker can be seen when a dispute arises between the employer and the insurance company.  The captive agent is an employee or agent of the insurance company and will toe the company line.  The independent agent and the broker represent the client, the employer. In all situations the insurance policy language will prevail.  When the insurance policy is ambiguous and does not clearly address the situation between the employer and the insurer, the independent agent and the broker have the responsibility and the obligation to represent the interest of the employer. 
 
 
Brokers and independent agents run into trouble when they allow loyalties to shift to the insurance company because of concern for maintaining business relationships with the insurer.  Brokers and agents should work in the best interest of the client, the employer, even when it could be to their own detriment.
 
 
Whether a captive agent, independent agent or broker, they each have a duty of due diligence and attention to the suitability of the insurance policy they are arranging for you.  Each should be looking out for the employer interest and using their expertise to provide your company with the workers compensation insurance coverage that is right.

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% to 50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.
 

Our WORKERS COMP BOOK:  www.WCManual.com
WORK COMP CALCULATOR:  www.LowerWC.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.
 
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact info@reduceyourworkerscomp.com.
 

Excess Workers Compensation Insurance 101

Self-insured employers purchase excess insurance coverage to limit the risk of exposure to catastrophic injuries. This is often accomplished by having a workers compensation policy with a high deductible. Common deductibles for excess insurance are $250,000, $500,000 and $1,000,000.  The self-insured employer needs to carefully analyze the amount of risk that is financially feasible before deciding on the deductible for the excess insurance.

 
 
The excess insurer has a strong interest in knowing about the workers compensation claims that have the potential to exceed the self-insured employer’s deductible. The insurance contract will normally state the self-insured employer must report to the excess insurer any time the reserve amount on a self-insured employer’s workers comp claim equals half of the deductible amount. .[WCx] 
 
 
The excess insurance contract will call for the self-insured employer to report all “catastrophic” claims, regardless of the dollar amount of the claim.  This could include
 
  • Fatalities
  • Amputation of a major extremity
  • Spinal cord – quadriplegic, hemiplegic and paraplegic injuries
  • Brain and brain stem injuries
  • Comas
  • Burns over more than 25% of the body
  • Severe disfigurement and scarring, where applicable
  • Loss of eyesight
  • Loss of hearing
  • Heart attacks
  • Strokes
  • Multiple surgical interventions
  • Rape and sexual assault
  • Post-Traumatic Stress Disorder
  • Occupational disease claims
  • Non-union of bone fractures
  • Damage to organs – lungs, liver, heart, stomach, etc.
 
 
This list is not all inclusive.  Any injury that has the potential to exceed the self-insured employer’s deductible should be reported to the excess insurer. The report to the excess insurer should be completed by the third party claims administrator adjuster or the self-insured employer’s internal claims adjuster as soon as the information becomes available that there is the potential for the claim to exceed the self-insured employer’s deductible.  The failure to report the claim timely (within the requirements of the excess insurance policy) could create a situation where the excess insurer denies coverage, or accepts the claim under a reservation of rights which allows them to deny coverage after  thoroughly investigating the matter. .[WCx]
 
 
The report to the excess insurer should include the basic information about the workers compensation claim. This includes
 
  • The facts surrounding the injury
  • Compensability
  • The nature and extent of the injury
  • The medical management of the claim
  • The amount already spent on the claim
  • The reserves for the future cost of the claim
  • Subrogation potential
  • Any other offsets of cost
  • Any Medicare or Medicaid issues
  • The action plan to bring the claim to a conclusion
  • The litigation management plan, if applicable
 
 
The self-insured employer at the start of the excess insurance policy should review with the excess insurer the specific reporting requirements of the excess insurer. A diligent effort by the self-insured employer to comply with the requirements of the excess insurer must be made.
 

 

 

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.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

California Roofing Contractor Gets Year in Jail, Must Pay Restitution

A California roofing contractor was sentenced recently to one year in jail and was ordered to pay $510,000 in restitution for failing to provide workers compensation insurance for an injured employee and failing to pay insurance premiums for unclaimed employees, who were paid in cash.

 
 
According to the Orange County District Attorney’s office, Michael Amzie Holley, 43, Murrieta, pleaded guilty to a court offer to two felony counts of perjury by declaration, two felony counts of recording false and forged instruments, one felony count of misrepresenting facts to the State Compensation Insurance Fund (SCIF), seven felony counts of making a fraudulent statement, one felony count of presenting a fraudulent material statement to obtain compensation, one felony count of making a false statement to discourage an injured worker from claiming benefits, one felony count of willfully failing to pay taxes, one felony count of failing to file a return with the intent to evade taxes, and a sentencing enhancement for aggravated white collar crime over $500,000. [WCx]
 
 

At the time
of the crime, Holley was a roofing contractor and owner of So Cal Roofing. The defendant purchased a minimum workers compensation policy from SCIF and failed to state that he employed subcontractors, paid workers in cash, hired unlicensed employees, and leased employees from other companies. Holley paid his employees in cash to hide the fact that So Cal Roofing had workers. He received insurance based on his false declaration and entered into a contract requiring SCIF to cover all workers employed by Holley, even those employees unknown to the insurance company. Holley submitted inaccurate payroll reports to SCIF, resulting in underpayment of insurance premiums. To hide the fraud, Holley failed to file an accurate tax return to avoid paying taxes to the State on the cash payments made to his employees.
 
 
One of Holley’s employees was injured when he fell off a roof, and subsequently filed a workers comp insurance claim. Holley denied that the injured employee worked for him, thus denying the injured employee his workers comp insurance benefits. Subsequently, Holley fraudulently signed under penalty of perjury that he had no employees at So Cal Roofing and filed these documents with the California State Contractor’s Licensing Board to make him exempt from securing workers comp insurance.
 
 
California law requires that all employers maintain workers comp insurance for their employees. Payroll records showing the number of employees and their income must be submitted to both the workers comp insurance company and EDD, who oversee the collection of payroll taxes. [WCx]
 
 
Workers comp insurance rates are determined by a formula, which takes into consideration the number and type of employees and the company’s history of injury claims.
 
 

Author Robert Elliott, executive vice president, Amaxx Risk 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. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 

WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

Workers Compensation News in Brief for February 2012

How Can You Find Quality Providers?
According to a recent MedMetrics blog, finding quality providers in your data has never been easier. See the complete blog here.
 
 
Author Karen Wolfe explains in the blog there are several steps, including:
1. Identify and avoid the poorly performing doctors
2. Having good data.
3. Keeping a historic perspective.
4. Provider performance evaluation is essential.
5. Defining good data.
 
6 Record proliferation.
7. Data entry procedures.
8. Provider performance suite.
 
 
To learn more, visit MedMetrics and to learn how, contact KarenWolfe@MedMetrics.org
 

The Texas Department of Insurance Offers New Rulebook
Texas Department of Insurance, Division of Workers’ Compensation just supplemented its Rulebook for 2012-02. It is now available online for amendments and new rules to 28 TAC chapter 180 regarding the monitoring and enforcement authority of the division of workers’ compensation.
 
 
The supplement can be printed from the TDI website here.
 
16th Annual Texas Safety Summit for Employers and Employees April 10-12 in Austin
The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) will host the 16th Annual Workplace Safety Conference, the Texas Safety Summit, on April 10-12, 2012 in Austin at the Doubletree Hotel Austin, 6505 IH-35 North. The TDI-DWC is hosting the conference to help all employers reduce injuries and their associated costs through workplace safety and return-to-work programs, whether or not they subscribe to workers’ compensation insurance.
A pre-conference session entitled Workers' Compensation 101 and Return to Work will be offered from 1 p.m. to 4 p.m. on April 10.
 
 
Conference general sessions include Technology in Collision Reconstruction presented by Clifford McCarter of Rimkus Consulting Group; Occupational Safety and Health Administration (OSHA) Region VI Update presented by John Hermanson, Regional Administrator of OSHA, Region VI; Generational Issues in the Workplace presented by Dr. Richard Lewis of Round Top Consulting Associates; and Personal Fitness for Work presented by Petti Redding of the Redding Group.
 
 
In addition, over 20 breakout sessions are planned to address pertinent issues facing Texas workplaces, including:
Accident/Incident Investigation;
Asbestos Awareness;
Combustible Dust/Respirable Dust;
Components of Effective Safety Programs;
Drug and Alcohol Awareness for Employees;
Effective Safety Committees;
Fatal Driving Distractions;
Federal and State Reporting Requirements;
Fire Safety in the Wild and Urban Interface;
Hazard Communication and Material Safety Data Sheets for Small Employers;
Heat Illness Prevention and Response;
ICS402 Incident Command System (Disaster Planning);
Job Safety Analysis;
Lockout/Tagout;
Management’s Role in Slips, Trips and Falls;
Material Handling;
Office of Injured Employee Counsel;
Personal Protective Equipment: Employer Responsibilities;
Tips for Safety Trainers;
Top Ten New Traffic Laws;
Uses of Injury/Illness Data Requested by OSHA and the Bureau of Labor Statistics (BLS);
Traffic Work Zone Safety; and
Workplace Violence Prevention
 
 
Conference rates for hotel reservations are available at the Doubletree Hotel until March 19 or until the conference block of rooms is full. To make hotel reservations, call the hotel at 512-454-3737 and reference “Texas Safety Summit” or register online using the Doubletree Hotel website here.
 

Texas Supreme Court Grants Rehearing in Ruttiger Case
Feb. 22, the Texas Supreme Court issued its long-anticipated option in Texas Mutual Insurance Co. v. Ruttiger. A divided Court held that some, but not all, “bad faith” claims based upon alleged violations of the Insurance Code are “at odds with” the works’ compensation system and, thus, may not be presented to, or considered by, the district courts. To read more on this case, click here.
 

Study Provides Baseline to Measure Impact of Reforms on Illinois Workers' Compensation System
A new study, CompScope™ Benchmarks for Illinois, 12th Edition, by the Workers Compensation Research Institute (WCRI) shows baseline data to measure the future impact of 2011 reforms in Illinois, which are designed to ensure that the state’s workers’ compensation costs are reasonable and competitive.
 
 
According to a WCRI release, “The reform legislation addressed key cost drivers in the workers’ compensation system, especially medical prices, by reducing fee schedule rates by 30 percent, introducing preferred provider networks for selecting treating physicians, implementing American Medical Association (AMA) guides for evaluating impairment, and requiring clinical reports by physicians.”
 
 
For more information about WCRI or to purchase this study, visit: http://www.wcrinet.org.
 

The Texas Department of Insurance Shows Proposed Revisions
The Texas Department of Insurance, Division of Workers’ Compensation (TDI-DWC) is accepting comments on proposed revisions to the following employer and self-insured political subdivision forms:
 
 
1. DWC Form-005, Employer Notice of No Coverage or Termination of Coverage;
2. DWC Form-007, Employer’s Report of Non-covered Employee’s Occupational Injury or Disease;
3. DWC Form-020SI, Self-Insured Governmental Entity Coverage Information.
 
 
These proposed form revisions are not a formal proposal and comments received will not be responded to in accordance with the Texas Administrative Procedure Act. The proposed draft form is available from the TDI-DWC website here.
 
 
Informal comments may be submitted to the TDI-DWC by e-mailing
informalrulecomments@tdi.state.tx.us.
 

The Texas Department of Insurance Seeks Comments
The Texas Department of Insurance Division of Workers’ Compensation formally proposed in February new Rules Relating to Notice and Reporting Requirements for Subscribing and Non-Subscribing Employers; and Rules Relating to Notice of a Texas Labor Code §504.053(b)(2) Election by a Self-Insured Political Subdivision.
 
 
TDI-DWC is accepting public comment on the proposals to add new 28 Texas Administrative Code (TAC) §§110.7, 110.103, 110.105, and 160.1, and to amend 28 TAC §§110.1, 110.101, 160.2, and 160.3.
 
 
The proposal relates to various notice and reporting requirements imposed upon subscribing and non-subscribing employers, specifically requirements for notifying the TDI-DWC of non-coverage status, termination of coverage, and occupational injuries, illnesses and fatalities; and requirements for notifying employees of the employer’s coverage status.
 
 
The primary purpose of the proposal is to update and clarify these notice and reporting requirements. The proposal also contains a new rule that would require a self-insured political subdivision that elects to provide medical benefits in accordance with the manner described by Texas Labor Code §504.053(b)(2) to notify the TDI-DWC of its election to provide medical benefits in that manner. [WCx]
 
 
The proposal will be published in the February 24, 2012, issue of the Texas Register and may be viewed on the Secretary of State website at http://www.sos.state.tx.us/texreg/index.shtml once published. Public comments may be submitted by e-mailing rulecomments@tdi.state.tx.us.

 

 

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.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

CANADA Alberta 58 Percent of Employers to See No Change or Reduction in 2012 Premiums

Fifty-eight percent of Alberta (Canada) employers will see no change or a reduction on their 2012 WCB premiums, according to a report from Alberta’s WCB.
 
 
Good performance means that top employers and their workers have developed suitable strategies to help those injured on the job recover at work, in a more positive environment than alone at home.
 
 
On the flip side, WCB-Alberta’s poor performance program aims to galvanize 1,600 poor performing employers to take immediate action to improve return-to-work planning and injury prevention practices. The strategy is working.
 
 
In 2012, 592 employers joined the PPS program, while 710 employers have improved their performance significantly enough to leave the program behind.
 
 
We all share responsibility for getting better at managing workplace injuries,” said Guy Kerr, president and CEO of WCB-Alberta. “Modified work, investments in safety and prevention, safety associations, occupational injury clinics, and many more of our joint initiatives are making a difference.”
 
 
Key 2011/2012 Trends
 
The number of workers with lost-time claims is expected to increase to approximately 27,400 (7.5 per cent) for this year and 3.7 per cent next year.
 
 
Average claim duration is expected to increase somewhat to 37.2 days in 2011 and 38 days in 2012.
 
 
Fully-funded claim costs are also on the rise as WCB forecasts year-end costs of $748.1 million, with another increase of 6.5 per cent expected for 2012.
 
 
Worker wage protection will also increase in 2012. WCB has raised the maximum insurable income (MIE) level to $86,700.
 
 
Alberta employers mitigated these inflationary trends through long-term investments in safety and return-to-work programs so that overall injury trends remained stable, leading to positive expectations for 2012. (WCxKit)
 
 
The lost-time claim rate should remain stable at 1.5 lost-time claims per 100 covered workers for the third year in a row.
 
 The disabling injury rate is expected to remain steady at 2.8 per 100 covered workers.

 

Author Robert Elliott, executive vice president, Amaxx Risk 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. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 

WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-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.

 

©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.

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