Avoid Being Surprised By A Workers Comp Settlement

In general, the more risk an employer has retained, the more control the insurer will relinquish. In a high deductible program (e.g. $500,000) most employers can negotiate for a very high level of control comparable to if they were self-insured.

 

Continuing from my prior article on items to negotiate in your account handling instructions is the element of settlement authority. It can be very frustrating if a claim you are working on is settled without your consent.

 

 

More Employer Input = Lower Settlement Threshold

 

Prior to settlement of claims, the carrier should contact the employer for settlement authority on all claims over a certain threshold of, for example, $5,000 or $10,000. The employer should be involved before any lump sum settlement is offered. The more input the employer wants, the lower the settlement threshold should be. For example, an employer that wants to be actively involved in decision making can state “the employer retains settlement authority for all workers’ compensation claims over $5,000 and all products liability claims over $1.”

 

 

World of Difference Between “Consult” and “Consent”

 

There is a world of difference between an insurer having to “consult” its insured and having to obtain its “consent” prior to settling a claim. If the insurer agrees to “consult” its client prior to settlement, the client may not have the power to alter the course of the claim. A very rude awakening is in store for the employer with a $500,000 deductible when a claim is settled against the wishes of the litigation manager, particularly when the settlement amount is within the client’s retention level.

 

In one large auto case, a plaintiff who had been a meat cutter for 20 years alleged his carpel tunnel syndrome was from the impact of the auto accident. The defendant company’s in-house attorney hired a medical expert to review medical causality. Yet, even though it knew of the company’s involvement and interest in the case, the insurer settled the case without the consent of its insured client. This occurred because the company had previously given the insurance carrier $100,000 of “field authority’,” even though the company had a S250,000 deductible on auto claims and the settlement was, essentially, all the company’s money.

 

From an employer’s perspective, a settlement decision can impact well beyond bottom-line considerations. Injudicious settlements can affect a company’s labor policy, its workers’ compensation practices, the reputation of its products and its susceptibility to future claims.

 

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Ringler Rings In Their New Brand

Companies from time to time rebrand their look and messaging to connect better with audiences. We’re excited to tell you about our own rebranding at Ringler that’s being launched today! It’s the first real change that you can see since Ringler was founded in 1975. Ringler is still the largest settlement planning company in the nation with the experienced and trusted advisors creating the most objective settlement plans for all parties. Listen as Ringler Radio host Larry Cohen along with Geoffrey E. Hunt, Ringler’s President and CEO and Mark Vogel, head of the Ringler Leadership Team talk about what’s new and what it means for claimants, attorneys and our partners.

 

Page URL

http://ringlerradio.com/podcasts/ringler-radio/2016/09/ringler-rings-in-their-new-brand/

 

MP3

http://ringlerradio.ringlerradio.netdna-cdn.com/wp-content/uploads/2016/09/RR_080816_Rebrand.mp3

What Is The Identity Of Your Work Comp Management Program?

Your identity. How you tell your story. How your clients, as well as how your own employees view your organization. More specifically, your worker’s compensation management program. I’m Michael Stack with Amaxx, and today I’m going to be talking about branding. The importance of it, as well as how you apply that concept to your work comp management program as one of the first steps of implementation.

 

 

Two Words Create Immediate Understanding & Expectation

 

Now, one of the longest standing and most respected organizations in our industry, this week is launching a re-branding campaign. The company I’m referring to is Ringler. I want you to take a look at what they’ve done, because when I saw the new brand, I was both inspired and impressed. If you look at this new brand, you’ll see two words: “Everybody wins.” To give you a little bit of context here, Ringler provides creative and objective settlement solutions that protect the injured worker and really create a better outcome for them, as well as significantly reduced worker’s compensations costs for the payer side.

 

Two simple words. Clients, injured workers, plaintiff and defense attorneys, all members of the claims management team can simply and immediately understand how the interaction is going to go with their organization. They could not have done a better job to set that expectation and create that identity for their company.

 

 

What Is The Identity Of Your Work Comp Management Program?

 

I ask you, what is the identity of your organization? What is the identity of your work comp management program? What is the expectation for how that interaction is going to go? Do you have one? When you’re starting to implement a work comp management program, one of the first steps of implementation is creating this brand, creating this identity, creating this logo. One of the examples that I like to give, if you work for the Acme company, is you get around, you get your employees involved, you get your supervisors involved, you get your senior management involved. It should be the first step in really getting this process involved, getting people on board with what you’re doing.

 

You sit around a table, and you come up, and you brainstorm some ideas, and you come up with the Acme IPAR program. The Acme Injury Prevention and Recovery Program. Obviously, this is going to be tailored to your organization, for what makes sense, for what fits, for what really has some meaning for your company. It should be the first time you get together, you come up with this acronym, you come up with this logo, you come up with this identity, and you come up with this expectation for how things are going to go at your organization.

 

 

First Step In Building A Successful Work Comp Management Program

 

When you’re talking to your employees, when you’re explaining it to vendors, when you’re having these interactions, you can say, “Well, this is how we do it here at Acme. This is our Acme IPAR program. This is the expectation for how things are going to go.” It’s the first step in building a successful work comp management program, so sit down, brainstorm, have some ideas, create that expectation, and create that identity for your organization.

 

Congratulations to Ringler on a very successful and a very good job on creating your brand and your identity. It’s something that we can all learn from. Remember, your success in worker’s compensation is defined by your integrity, so be great.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Getting to Yes: Using Mediation in Work Comp

Alternative dispute resolution (ADR) tools such as mediation is gaining acceptance in workers’ compensation.  This is due to the many benefits it provides and allows all interested stakeholders to have an active role in the process.  It is also an important tool to reduce exposure in cases and allow the claims management team to concentrate their workload.

 

 

What is Alternative Dispute Resolution?

 

ADR is a non-judicial settlement process popularized in civil litigation claims that uses third parties to assist litigants to discuss the merits of their cases, evaluate the strengths and weaknesses and reach a resolution without going to hearing or trial.  Attorneys have found the practice useful and brought this concept to workers’ compensation to resolve cases.

 

 

How Does It Work?

 

There are a number of different ADR processes in workers’ compensation.  One of the most popular forms is mediation.  In this undertaking, a neutral third party meets with each party either individually or together to discuss the merits of a claim.  Other discussions revolve around the strength of an employee’s claim for benefits and the validity of defenses.  Dialogue can also occur around the proper calculation of the employee’s average weekly wage, indemnity benefit exposure and need for future medical care and treatment, or other vocational rehabilitation services.  Part of these discussions can include the closure of various future benefits, the payment of attorney’s fees and issues concerning Medicare Secondary Payer compliance.

 

The goal is to reach a settlement where everyone has a “win.”

 

 

 

Preparing for a Successful Mediation

 

A successful mediation starts with the selection of a mediator.  Once this takes place, an agreeable time/location for the mediation needs to occur.  There should also be an agreement on how long the mediation should take place.

 

All attorneys, members of the claim management team and the employee play an important role for a successful mediation.

 

  • Defense attorneys: It is important to evaluate the dollar value of a workers’ compensation claim prior to mediation.  This information should be communicated to the claims handler.  It is important to discuss mediation expectations and receive settlement authority prior to the mediation.

 

  • Claims handler: Attendance at the mediation is never required, but may be recommended in most instances.  If the claim handler cannot attend, it is important to be available to discuss the case progress with the defense attorney and extend additional authority as needed.

 

  • Petitioner Attorney: This attorney must also set realistic settlement expectations prior to mediation.  The strength and weaknesses of the claim should be discussed and memorialized in a letter to the injured party.  The submission of an initial settlement demand should occur at least one week before mediation.

 

  • Injured Worker: Attendance at the mediation by this party is compulsory.  This will allow the employee to be involved in the process.  In most instances, the neutral mediator may also have questions for the employee while in the presence of their attorney.

 

 

Other Important Mediation Practice Pointers

 

Prior to any mediation, it is also important that both sides submit a cover letter to the mediator.  This letter should be marked as confidential and outline several important points about the claim:

 

  • Relevant background information on the claimant, the claims for workers’ compensation benefits and other legal issues;

 

  • A brief statement concerning the actual work injury, treatment history and current medical status of the employee. Pertinent vocational rehabilitation information should be included depending on the nature of the claim.  Medical and rehabilitation records can also be attached as part of the initial cover letter; and

 

  • Information regarding prior settlement discussions, case valuations and settlement expectations.

 

Conclusions

 

ADR techniques such as mediation play an important role in settling workers’ compensation claims.  While it requires preparing by all parties, it can be used to resolve all types of cases and reach cost-saving results.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Ringler Associates Announces New Chief Strategy and Business Development Officer: Melissa Evola Price

melissa RinglerAliso Viejo, California, July 5, 2016 – Ringler Associates Incorporated, the largest company of structured settlement advisors in the United States, is proud to announce that Melissa Evola Price, President of Structured Financial Associates (SFA), will be joining Ringler as Chief Strategy and Business Development Officer effective immediately.

 

Melissa Price, from the Greater Detroit area, has a longstanding reputation as a leader in the profession. She joined SFA in 1999 as a Structured Settlement Consultant/Corporate Marketing Consultant, expanding her role to National Account management, marketing/communications, IT infrastructure, corporate business development planning. Prior to that, she worked for eleven years in the Electronic Commerce (EC) industry, where she specialized in strategic planning, product management and sales management  focusing on emerging product markets. She    has

Life, Health and Accident Insurance licenses in multiple states and is a member of the National Structured Settlement Trade Association (NSSTA). She also holds the Certified Structured Settlement Consultant (CSSC) certification.

 

Ringler President and CEO Geoffrey E. Hunt commented, “We are absolutely delighted to have Melissa join our executive team.  Melissa has long been known as one of the distinguished thought leaders in our industry now dedicated to assuring Ringler reaches new levels of innovation and growth. I could not be more excited to have Melissa as my partner as we write the next chapters of Ringler as the continued leader in settlement advisory. Melissa has the intelligence, energy and creativity to make outstanding contributions to our future.”

 

Upon accepting the position Price says “I have admired Ringler as a company and I am very pleased to be able to become part of the leading firm in our industry. Joining Ringler provides an opportunity to work with Geoff, the leadership team and Ringler board to execute on our strategic plan that delivers the advances so necessary for us to continue advising our clients as well as injured parties and their families for the best possible outcomes.”

 

Hunt also notes that James M. Early, Executive Vice President and National Sales Director at Ringler has decided to retire at the end of the year, notifying the Ringler leadership several months ago.  Early will

 

continue working on the executive team to assist in the transition through 2016 and he will continue in an advisory role as he takes the reins as President of NSSTA in 2017.

 

And Ringler Chairman of the Board, W. Ross Duncan adds that, “Melissa is well respected across our profession and all of us at Ringler look forward to working with her in this important position as we look toward the future. We welcome Melissa, her husband Chris and his son, Harry, to the Ringler family.”

 

 

About Ringler

Ringler is the largest structured settlement company in the United States with over 120 Consultant in 61 offices since it was established in 1975. The Ringler team consists of over 250 experienced professionals who have earned the trust of all parties involved in the settlement process. Every Ringler Consultant takes an individualized, customer-focused approach to each case, backed by the strength and resources of a national brand to collaborate with injured people, attorneys and insurance professionals providing the best settlement solutions for claimants and their families. Ringler continues to expand its expertise in financial markets with a steadfast mantra of innovation and leadership in the profession.

Structured Settlements Protect Injured Workers & Save Work Comp Costs


Michael Stack:   Hello, Michael Stack here. Principal of Amaxx, founder of COMPClub, and co-author of “Your Ultimate Guide to Mastering Worker’s Comp Costs”. One of the core philosophies that I believe is that a better outcome for your injured worker will lead to lower worker’s compensation costs for your organization. Again, a better outcome for your injured worker will lead to lower worker’s compensation costs for your organization. And structured settlements certainly fall under that criteria and that philosophy. I have a special guest joining me today, the Senior Vice President of National Marketing at Ringler Associates, Duke Wolpert. Duke, thanks for joining me. I’d love for you to share with me what is a structured settlement, a little bit of context there.

 

 

What is a Structured Settlement?

 

Duke Wolpert:   Sure Mike, my pleasure. Thanks for having me today on the program. A structure settlement, essentially, is a cost-effective alternative to a lump sum settlement, a cash settlement. The series of tax-free future periodic payments, established between an insurer or self-insurer, and an injured party, a claimant or plaintiff, as part of either a worker’s compensation settlement, or a personal injury settlement.

 

They’re designed to protect and offer security to injured parties, so that they can meet their financial obligations in the future. Essentially, they bridge the gap to settlement, and any way parties can move closer to settlement by simply a change in the way the settlement is funded certainly is a step in the right direction.

 

Michael Stack: Absolutely. I agree with that, and I think these points you made are very good ones. Alternative to cash, really that lump sum settlement as an alternative to that, this point I think the tax free periodic payments in really a strong benefit to this, and then not to really be understated is that protection and security issue that really those structures offer throughout that settlement process, so thanks for sharing those point, Duke. Now, tell me, really how are these used then in the worker’s compensation space, really to leverage these benefits that you mentioned?

 

 

How Are Structured Settlements Used in Workers’ Compensation?

 

Duke Wolpert:   Yeah, what we’re seeing in the worker’s compensation space is a growing use of structured settlements, when it comes to the funding of Medicare set aside allocations. In addition to the MSA, the Medicare set aside allocation, oftentimes there are non-Medicare allowable expenses that aren’t part of the Medicare set aside allocation cost projection, that need to be quantified, and many times, we actually structure those non-Medicare allowable expenses as well as the MSA’s that we see.

 

On the indemnity side of the cases, we oftentimes are pulled into permanent and total claim scenarios, widow benefits, minors, in catastrophic claims, burns, amputations, traumatic brain injuries, for instance, are certainly cases that we’re asked to get involved in, to customize proposals that assist in meeting the financial needs of the injured parties in the future.

 

On occasion, we see situations involving injured parties with drug dependency, or competency issues, folks that for one reason or another cannot manage their own money, and there is certainly a value, the funding of those settlements with periodic payments and structured settlements.

 

Finally, the use of the structured settlement is growing in conjunction with the growth of Medicaid entitlement and the Medicaid programs in the states. In order to protect entitlements for Medicaid recipients, oftentimes the funding of the settlement has a direct correlation with their eligibility status, so the funding of a settlement would be using periodic payments, a structured settlement, certainly provides some protection to injured parties when it comes to ongoing incontinuity of Medicaid entitlement.

 

Michael Stack:   I think a couple of things that you said there … this competency issue, and we talked about it in regards to drug dependency, but I think we hear these stories so often of the lottery winners who get this huge sum of money, and a couple of years later, the people go bankrupt, and it’s just a very common story, and I think the value here is really in that protection, which we talked about in those benefits initially, and these catastrophic cases that Duke mentioned  … I think very valuable when you really put that in a context of leveraging this for those better outcomes for those injured workers, so let’s talk about that now, Duke. How do we now leverage these tools? How do we leverage this tool then in the context of really creating those better outcomes, both for the injured worker, and then creating those lower worker’s compensation costs?

 

 

How Do Structured Settlements Reduce Workers’ Compensation Costs?

 

Duke Wolpert: Absolutely. When we look at outcomes on the insurance, self-insured side, the primary payer side, oftentimes the use of structured settlements offers a reduction in the pay loss dollars in the claim, the lost dollars associated with a claim file. That oftentimes leads to improved cycle times or closing ratios for claims professionals, and what we find is that it at times avoids unnecessary expenses, especially in cases in litigation, either litigation costs or ancillary expenses related to the litigation, so clearly there’s value from a cost containment and cycle time claim inventory perspective, when it comes to the use of structured settlements.

 

Michael Stack:   I agree. Now, let’s talk about those injured workers, so we’re saving money through the use of these tools in loss dollars and the comparison of using an annuity versus a lump sum payment, and really leveraging the interest that leads to those savings. Now, let’s talk about those injured workers on that perspective and some of those benefits in creating a better outcome for them as well.

 

 

How Do Structured Settlements Lead to a Better Outcome For Injured Workers?

 

Duke Wolpert: Yeah, understanding that the plans that we develop are individually customized, they’re done that way to meet the needs of the injured parties, and every plan is a little different. In conjunction with the structuring and work up for the pricing of the Medicare set aside, there are oftentimes non-Medicare allowable expenses and other needs on the [inaudible 00:06:18] side that we need to address with the injured parties, as well as their own financial needs that will lead to the establishment of the creative design, the structured settlement proposal, and by doing that, it bridges the gap of the settlement. It gets the parties closer to resolving the claim in hand.

 

Michael Stack:   I think that really summarizes it nicely in the sense of really customizing those needs. I think when we talk about objections that injured workers might have, that would be a fear of mine certainly if I was offered a settlement, that I want to make sure that my needs are protected. As you said … I think one of the things you said there was I think was key, was it’s really individual to that individual person. Do they need some money up front to pay for certain things? How much money do they need over time? … And really customizing it to meet those needs, and as we said, at the same time saving those worker’s compensation costs for the payer organizations.

 

Duke, thanks for joining me. I’d love to just ask to share some final thoughts as we wrap up here.

 

 

A Structured Settlement Could Be the Last Check an Injured Party Ever Receives

 

Duke Wolpert: My final thought would be that we need to remember that an injured party who’s been disabled for a period of time, that receives a settlement, may not be going back to work. This could be the last check, the last payment that they receive for the rest of their lifetime, so protecting their financial future certainly is something that we want to be part of, and structured settlements absolutely do just that.

 

Michael Stack:   Yeah, I couldn’t agree more, and I think that point of really thinking that this is a last check that individual can receive is a very powerful point, and really leveraging this tool to create those better outcomes for that individual person, and as we mentioned, at the same time, lowering those worker’s compensation costs for the payer organizations. Thanks again, Duke for joining me today, and remember, your success in worker’s compensation is defined by your integrity, so be great!

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2016 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Maximize Settlement Value And Solve Complex Problems With Structured Settlements

Structured settlements offer all parties in workers’ compensation cases an opportunity to maximize the settlement value of the case and have creative solutions to solve complex problems.  Before using a structured settlement in your case, it is important to understand key terms and how they work.

 

 

Key Structured Settlement Terminology

 

The use of structured settlements include a complicated vernacular.  Using terms incorrectly can result in delay or having a settlement fall apart.  Consultation with a structured settlement representative is key.

 

  • Annuitant: A person who receives the benefits of an annuity.
  • Annuity: A specified income payable at stated intervals for a fixed or a contingent period, often for the injured employee’s life.
  • Beneficiary: The injured employee who receives the payments from the structured settlement.
  • Deferred Lump-sum Payments: These are payments to the injured employee, which are larger than the regular periodic payments, and are given at pre-determined dates in the future to cover the cost of a college education, car replacement, home remodeling, etc.
  • Flexible Settlement Plan: A structured settlement that takes into consideration the needs of the injured employee, both financially and medically, while also addressing the cost of the structured settlement.   A flexible settlement plan includes the planning necessary to achieve the goals of the injured employee while maintaining control of the cost of the structured settlement for the employer/insurer.
  • Period Certain Annuity: When the injured employee knows that in the future there will be additional income from Social Security, a pension, IRAs, 401Ks, etc., the injured employee may elect to get larger payments from the structured settlement annuity by shortening the time period the annuity will be paid to age 65 or some other cut-off point.
  • Periodic Payments: Settlement payments that the injured employee receives based on an agreed payment schedule, whether it bi-weekly payments, or monthly payments, or quarterly payments or annual payments.
  • Qualified Assignment: A qualified assignment is the transfer from the workers’ compensation insurer to the life insurance company, the obligation to pay the future periodic payments of a structured settlement.  The obligation to pay qualifies for favorable income tax treatment as the obligation arises out of an injury.

 

 

Correctly Using a Structured Settlement

 

The use of structured settlements is made possible by special provisions within the Internal Review Code.  When done properly, they can provide a claimant with a consistent flow of money that is not taxable under the Code.

 

When using a structured settlement, it is important to be aware of the special tax rules that apply.  A structured settlement must be established by:

 

  • An agreement for a party to accept periodic payments for personal damages that are excludable from gross income as set forth in 26 U.S.C. §104 (a) (2); or
  • An agreement for a party to accept periodic payments for applicable workers’ compensation benefits that are not considered income per 26 U.S.C. § 104 (a) (1); and
  • The payments are also those as described in subparagraphs (A) and (B) of Internal Revenue Code Section 130(c) (2), or 26 U.S.C. § 130(c) (2).

 

These periodic payments must also be paid as follows:

 

  • A party to personal injury type lawsuit or workers’ compensation claim; or
  • A party who has assumed liability for the periodic payments under a qualified assignment per 26 U.S.C. § 130.

 

Conclusions

 

Structured settlements remain an important tool in settling workers’ compensation cases.  It is important to understand key terminology and how they work before using one in your settlement.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a monthly basis working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2015 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Settling the Difficult Cases with Structured Settlements

Complex workers’ compensation cases require creative thinking.  One tool that can help resolve these cases in an innovative manner is a structured settlement.

 

 

What is a Structured Settlement?

 

A structured settlement is a financial tool purchased through a structured settlement broker.  When the structured settlement is purchased as part of a workers’ compensation settlement, the injured employee will receive periodic payments under an agreed schedule rather than a lump sum payment.

 

These periodic payments can come in various forms.

 

  • Deferred Lump-sum Payments: Payments are made to the employee, which are larger than the regular periodic payments.  This agreement is structured under a schedule consisting of pre-determined dates.
  • Flexible Settlement Plan: Payments under this arrangement take into consideration the needs of the injured employee by addressing the cost of the structured settlement.   A flexible settlement plan includes the planning necessary to achieve the goals of the injured employee while maintaining control of the cost of the structured settlement for the employer/insurer.
  • Period Certain Annuity: In this type of structured settlement, the injured employee may elect to get larger payments by shortening the time period the annuity will be paid to age 65 or some other cut-off point.

 

 

Using a Structured in Your Settlement

 

Imagine you have a troublesome case with high exposure and the settlement negotiations between the plaintiff attorney and insurance company reach an impasse.  The solution is a structured settlement.

 

The parties agree to a settlement amount of $500,000, which will be settled via a structured settlement.  By working with a broker, the insurance carrier was able to purchase an annuity through a life insurance company.  The broker was also able to secure a rated age for the injured party that further drove down the actual cost of the annuity due to co-morbid conditions of heart disease and diabetes.  The final terms are as follows:

 

  • Agreed upon settlement amount: $500,000
  • Savings via rated age: $98,000
  • Savings via annuity payments versus the lump sum: $126,000

 

  • Total savings: $224,000
  • Total payments to the Employee: $500,000

 

Everyone Wins with a Structured Settlement

 

How does the employee win?  In this case, the employee receives the full value of the settlement.  By receiving periodic payments, they will have better management of their settlement funds via guaranteed cash flow over their life expectancy.  The settlement money also remains tax-free.

 

How does the employee’s attorney win?  They were able to be a zealous advocate for their client while at the same time being creative.  Not only do they have a satisfied client, but they also helped their client have financial stability.

 

How does the insurance carrier win?  The carrier wins because they are able to free up funds that would otherwise be used for a settlement paying a lump sum.  The claims management team can now concentrate on other troublesome files.  They will also receive recognition for being efficient and creative by settling an annoying claim.

 

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a monthly basis working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2015 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Medical – Legal Conference Strengthens Defense In Complex Cases

 

Medical care for an injured employee can be complicated.  When the injured employee is represented by an attorney, the plaintiff’s attorney often tries to make the seriousness of the injury to appear to be greater than it actually is.  Defense attorneys who have handled many similar claims often have a fairly good understanding of the medical terminology and what is meant by various medical reports and are not fooled by the plaintiff attorney overstating the nature and extent of the injury.

 

 

Defense Attorney & Doctor Need Conference in Complex Cases

 

However, there are situations where the injury to the employee is unique, and the seriousness and/or complexity of the injury is not fully understood by either the work comp claims adjuster or by the defense attorney.  It is in situations of this nature that the need for a conference between the defense attorney and the doctor is needed.  These medical-legal conferences are normally held during the discovery phase of a work comp claim in litigation, but can be held at any time.

 

Med-legal conferences can occur by telephone, but more often the defense attorney will reserve an appointment with the medical provider to review and discuss the medical treatment an injured employee is incurring.  The med-legal conference allows the defense attorney to better understand the injured employee’s medical care.  The defense attorney will have the opportunity to ask questions about the medical reports and will hence be able to decipher and understand the medical reports better.

 

 

Understand Issues, Make Negotiation Easier

 

The med-legal conference puts the nature of the injury, the extent of the injury and the future medical treatment needed into plain English that the defense attorney will be able to understand and to convey, if necessary, at a Board hearing or in a full-blown trial.  This makes the negotiation of any settlement on the work comp claim more accurate and feasible.

 

The med-legal conference also will assist the defense attorney to understand the chronological sequence of the injury, the medical treatment and the recovery.  The defense attorney will also better understand the reasonableness of the previously provided care and the reasonableness of the proposed future medical care.

 

 

Real Claim Example

 

To better understand the use of a med-legal conference, consider the following real claim.

 

The employee was removing a motor from a dump truck.  The employee fastened a chain around it and lifted it with a fork of the forklift (no safety program at this employer!).  When the forklift moved, the motor dangling on a chain, swung around and struck the employee in the top of the back, breaking the right clavicle with a compound fracture.

 

After four months of treatment, the medical provider placed the employee at MMI.  The work comp adjuster paid the PPD rating and thought the claim was done.  Two months later the claimant calls the doctor and is in severe pain. The doctor does an x-ray and the clavicle, which had been healed in the prior x-ray before the employee was placed at MMI had developed a non-union along the fracture lines. The plaintiff attorney filed for a “worsening of condition” with a request for additional medical treatment, additional temporary total disability and was pursuing a higher PPD rating.

 

The defense attorney met with the doctor following the resumption of medical care to discuss the cause of the non-union and how it could have developed after the employee was released from care.  The doctor explained that within a reasonable degree of medical certainty the failure of the previous union of the bones had to be caused by the employee suffering an aggravation at his new employer.  The doctor explained there was diagnostic evidence of an aggravation.  The aggravation broke the chain of causation resulting in the employer at the time of the initial injury no longer being responsible for the claimant’s medical condition.

 

 

Cost of Savings Can Far Outweigh Cost of Conference

 

The cost of a med-legal conference is the cost of the doctor’s time and the cost of the defense attorney’s time.  The med-legal conference will often answer the questions the defense attorney has in regards to the medical treatment and the status of the injured employee, eliminating the need for a formal deposition and the associated cost.

 

It is often worthwhile to pay for the time the doctor and the defense lawyer spend reviewing the medical care, the causes of medical issues and the proper resolution of the medical issues.  Med-legal conferences should be considered any time the medical issues are complex and the understanding of the employee’s medical condition is not clear.

 

 

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a monthly basis working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

 

 

©2015 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

I Love Seasoned Workers

To clarify, I am talking about workers over age 60.  I do not mean anything more or anything less.  These are the “seasoned” workers of today.  The workers who lost tons in their 401k, lost real estate value, and had a few other kicks in the shin along life’s journey.

 

These are the workers that also had grand dreams.  Dreams of retiring in their early 60s, if not sooner.  Dreams of a daily tee time, a warm climate, and comfortable living.  But alas, for some the dream did not work out.  For whatever the reason, the bills remain.  The 401k and pension portfolio was disappointing.  The 2nd youngest moved in to with their 2 kids.  So on and so on.

 

 

 

It Is Only One Facet To Study An Injury On Merits Alone

 

From a work comp standpoint, it is only one facet to study an injury on its’ merits alone.  Good claims professionals also study the socioeconomic and cultural factors driving the older worker to remain in the workforce.  These are not white-collar type soft jobs.  I am talking about the 62 year old welders, the 64 year old truck driver, and the 60 year old warehouse supervisor that still spends most of their day driving a forklift and yelling at people.

 

Those are the workers I love.  I would love a whole payroll of these workers.  They earned everything they have ever spent $1 on.  Earned through hard work, overtime, and long summer days working until dark.  Missing BBQs, tee times, and TV sitcoms.

 

So what happens when they finally get injured?  When that shoulder or back finally gives out after years of abuse?  Plenty of studies have been completed; you can google hundreds of these articles. However, below is what I have seen and reviewed over the years.  Some of it coincides with the many reports and some aspects do not.  Let’s face it—as we know every file is different, and every person is different.  To make a macro opinion is fantastic, but you cannot settle files based on macro-based broad-spectrum views.  To settle that one bad file, you have to break it down to the simple core of whatever is driving the claimant to continue to fight.

 

  1. These workers can efficiently get the job done. In a warehouse or manufacturing facility, these are the workers that you count on.  The workers that show up every day rain or shine.  These people put in the overtime that makes your business successful.  As seasoned veterans, they know the job inside and out.  They have seen it all, made it all, manufactured it all, and know their job inside and out.

 

  1. These workers are training your floor leaders of tomorrow. When a new hire comes on board, you want these workers training your new staff.  They know how to get the job done, and do it the right way.  Every now and then there are some that cut safety corners and teach some bad habits, and that is not OK.  However, they know how to get the job done.  As long as it is not something blatantly dangerous, let them teach.  It takes years to learn the real tricks of the trade.  To have a long term employee in your ranks that can mold the new generation is a genuine asset.

 

  1. When your veteran worker gets injured, it is going to be a bad one. This goes back to the point that these workers fight for every dollar and every benefit then get. The majority of that generation is not going to file a claim over a minor strain, unless they have a history of this behavior.  If they do have this history, when you run an ISO see this evidence and you’ll know the type of person you have on your hands. Most of these workers are going full speed until their back or shoulder finally succumbs to the years of blue collar labor.  So the injuries typically are bad, and so bad that it may have limited surgical success.  In fact, this injury may be what finally takes them out of the workplace for good due to permanent restrictions or a marginal prognosis.

 

  1. They accept honestly and reality. To the point above, as claims professionals we need to be honest with them.  The more the claims person plays games, the quicker they will run to obtain Counsel.  They also may not run to Counsel and may just mediate representing themselves.  Those are the wild card cases, and in front of a Magistrate of Judge this seasoned worker may come off as the perfect witness.  The last thing the carrier wants is to be backed in to a corner by playing the big business insurance company card.  Be honest with them, present them with their options, and handle the case fairly.

 

  1. The best result will be to settle and move on. Chances are it will be difficult to vocationally rehab a worker in their 60s.  They carry a high wage, they have a specific set of skills, and some just flat out do not want to work at the local hardware store as a greeter.  So don’t waste your time–just cut to the chase.  If the injury is bad enough to remove them from their workplace home, if you can settle a case on a full/final basis just plan on it and move it  to that point as quickly as you can.  You will save time, legal cost, vocational costs, and costs on everything else.

 

At the end of the day, this worker gave the majority of their lives to said employer.  Thousands of hours of manual labor, through thick and thin.  So take this long term worker, and help them learn and accept the fact that this is the proverbial end of the road.

 

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