Workers Comp: Ripe For Cost-Cutting – Two Places To Check
Despite devotion to corporate cost cutting, there is one expense that still gets very little attention: workers compensation.
And the cost is very high.
According to the 2010 RIMS Benchmark Survey, the average Cost Per Full-time Equivalent Employee for all industries combined is $701 Cost Per FTE for workers compensation. The Cost Per Employee is normally lower for companies with greater than 1 Billion in revenue and higher for companies with less than 1Billion in revenue. The 2010 RIMS Benchmark Survey contains tons of useful information. It's definitely an excellent resource — either online or in print and companies that contribute their data get a huge discount, so that's something to consider. The 2011 RIMS Benchmark Survey should be published soon. I get the print version, and keep it handy, on my desk, from the past 8 years.
Both the 2009 and 2010 RIMS Benchmark Surveys contain workers compensation best practices, indicating which best practices employers have implemented. This is excellent information to compare your company's performance and build management committment for programs such as transtitional duty, employee communication, cost allocation, post injury response procedures and many more operational best practices. It's well worth spending some time reviewing this information to see what your company can do better. For example, the RTW Ratio is closely tied to the mod and how much a company pays for their workers compensation, a fact that we have been waiting years to learn.
Many signs point to larger workers compensation tabs in the future. A good cost reduction goal for companies is half national average or half industry average.
As with other outlays, employers can trim with some thought and effort.
Costs need not be this high. Insurers, unions, workers, lawyers and doctors are all contributing to the current waste and the employers who finance workers compensation must bear much of the fault, too.
Why is this?
Employers are unwittingly encouraging employees to remain on workers compensation much longer than necessary.
When executives at a large publishing company were pondering their burgeoning workers compensation costs last year for example, they found a fairly convincing explanation.
Their employees who were getting such compensation were effectively receiving 10% of their salaries.
This company is not alone.
Here are some of the main reasons why workers compensation is often needlessly expensive:
Double Dipping
Like many other employers, a national construction company had a group disability insurance policy. Thus, one employee was receiving workers compensation following back surgery and, after 26 weeks, began receiving disability payments too.
Combined with some personal insurance policies, this double income meant the worker’s at-home pay exceeded his at-work pay. Naturally, in 1993, when the company offered him a job with light duties but at his full salary during his recuperation, he turned it down
The lesson: Eliminate double dipping. While workers personal insurance is their own, employers should deduct workers compensation from other duplicative company payments. To do otherwise encourages malingering.
Idle Income
In Massachusetts and a few other states, employees on workers compensation can qualify for unemployment benefits under certain circumstances.(WCxKit)
To prevent this outrageous form of double dipping, companies should offer all injured workers transitional jobs they can perform even with their physical restrictions. Under the eligibility rules, workers who refuse such offers will not be deemed unemployed.
Double Dipping and Idle Income are two ways your out-of-work employees may be milking the system. Find out more #WorkersComp.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
When an employee is seriously injured and receives a disability rating that classifies the employee as permanently and totally disabled, the employee can be eligible to receive both workers compensation permanent total disability benefits (name of benefits vary by state) and social security disability benefits at the same time. If the injured employee was allowed to receive both workers compensation disability benefits and social security disability benefits at the same time, the employee would be receiving more compensation on a weekly or monthly basis than the compensation they would receive if they were still working. To prevent this duplication and overpayment of disability benefits, Social Security and state workers compensation statutes have offset provisions reducing the amount paid to the disabled employee.
Disabled employees can not receive more than 80% of their “average current earnings before the disability began. Average current earnings are defined by the Social Security Administration as the highest of:
1. The average monthly earnings from covered employment (social security taxes paid) during the highest five years in a row, or
2. The average monthly earnings in a single calendar year from covered employment after the disability began or any of the five calendar years before the disability began.
3. If the disabled employee is 62 years old or older, the primary insurance amount upon which the disabled employee can receive disability benefits (the average earnings over the employee entire life time of paying social security taxes).
Disabled employees who have second jobs where they receive payments “under the table” – with no Federal Insurance Contribution Act (FICA) taxes paid, will learn the downside of not paying taxes is they can not collect social security disability (or for that matter workers compensation disability) on the undeclared / untaxed income. (WCxKit)
Interestingly, the Social Security Administration defers to the laws of each state as to whether the workers compensation payment or the social security disability payment will be offset. In most states, the social security disability payment is reduced to the amount that will equal 80% of the average current earnings when added to the workers compensation disability payment. In a few states, the state law requires the social security disability payment to be primary, and the state work comp disability payment is reduced to make up the difference between what the social security disability payment would be and the 80% of the average current earnings.
An example of how this works: The employee is under the age of 62 at the time of the combined social security disability and workers compensation disability payments began. The employee was earning $900 per week prior to the injury and is receiving from the workers compensation insurer a permanent total disability payment of $600 per week. Based on the employees earning records with the Social Security Administration, the employee is entitled to $250 per week after being accepted as permanently disabled by the Social Security Administration. Instead of the employee collecting $850 per week ($600 from work comp and $250 from Social Security) the employee will collect a total of $720 per week (80% of the $900 per week earnings – assuming the employees earnings immediately prior to the injury were the highest “average current earnings” the employee had). {Note: Social Security does not pay their disability benefits weekly. Their portion of the total disability benefits will be paid monthly.}
In the above example, in most states the employee would still collect the $600 per week from the workers compensation insurer and the equivalent of $120 per week from the Social Security Administration, for a total of $720 per week. In the states where the state law puts the Social Security Disability payment as primary, the employee still gets the $720 per week, but the workers compensation insurance company pays $470 per week ($720 minus the $250) for their permanent disability payment, and the Social Security Administration pays their $250 per week equivalent on a monthly basis.
Another oddity of the reduction in social security disability benefits and workers compensation disability benefits is there is no offset or reduction for the employee receiving other types of disability benefits or other income including:
4. Private disability insurance benefits
5. Federal, state and local government disability benefits
6. Veteran's Administration disability benefits
7. Railroad Unemployment Insurance Act sickness benefits
8. Black Lung Part B benefits
9. Proceeds from a third party liability settlement
10. Jones Act Payments
11. Payments from a tort lawsuit
12. Unemployment benefits
13. Private pension or private insurance benefits(WCxKit)
If the disabled employee elects to take a lump sum settlement instead of their weekly payments for their permanent total disability benefits owed by the workers compensation insurance carrier, the Social Security Administration will consider it as an offset. When this happens, the Social Security Administration will prorate the lump sum settlement over the period that weekly benefits would have been paid and reduce their social security disability payment accordingly. If the lump sum settlement indicates a portion of it for future medical expense, that portion will be excluded from their calculations.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
As with other outlays, employers can trim workers compensation costs with thought and effort.
Costs need not be so high. Insurers, unions, workers, lawyers and doctors are all contributing to the current waste and the employers who finance workers compensation must bear much of the fault, too.(WCxKit)
Why is this?
Employers are unwittingly encouraging employees to remain on workers compensation much longer than necessary.
Lucrative Lawsuits
While workers compensation statutes prevent workers injured on the job from suing their employers, they can still sue others. Someone hurt while using a lathe, for example, can sue the lathe maker.
Better that the employer files a subrogation action against the equipment manufacturer to offset their payment of workers compensation benefits.
If such a worker receives a court award or settlement, he gets paid twice for the same injury.
In such cases, most states allow employers to seek reimbursement for sums already spent on workers compensation.
But, companies must pursue this payment during the court case; afterward is usually too late.
Pension Pay
Older workers who receive workers compensation benefits may retire during their convalescence.
The crafty among them will collect their pensions and continue to receive workers compensation
A Sweetened Pot
Some employers offer “occupational injury supplements,” which can raise workers compensation benefits from two-thirds to full salary.
Given that workers compensation is tax fee and employees at home save on commuting and other work-related costs, a full salary is more lucrative for workers on leave than for workers at work.
Thus, companies must carefully design any programs for supplemental pay to avoid any disincentives to working.
Accidental Profits
In New York, Hawaii and other states, employees who are injured when driving a car on company business may receive both workers compensation and medical benefits from their no-fault auto insurance policies.
To prevent this redundancy, no-fault benefits should be deducted from workers compensation benefits, if permitted by state law.
Employers follow many other policies that dampen the enthusiasm of those on workers compensation to return to work. Many companies keep jobs open indefinitely, for example. And others allow employees on workers compensation to accrue sick time. How can workers who are sick accumulate sick days?
Keep these benefits in mind when reducing your WC costs – when they overlap, they encourage our of work employees (OOW) employees not to come back.(WCxKit)
And coming back to work is good for the company and the employee.
Check where your pension, lawsuit and injury benefits overlap – you could be bleeding money. Find out more #WorkersComp.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
You have implemented a corporate return-to-work program but your projected workers compensation savings haven’t yet materialized. Supervisors are telling you they can’t get employees back to work, and even if they could they don't WANT them to return to work. We've all heard it.
It may be time to examine the impact of collateral resources, often resulting in employees out on workers compensation receiving more income and benefits than they would have if they were working.
Here are some common disincentives for the injured not returning to work:
1. Salary and Wage Continuation: Some companies pay 100% of salary in lieu of having an employee collect workers compensation for injuries of short duration. (WCxKit)
2. Occupational Injury Pay Supplements: Many firms pay supplemental benefits to make up the difference between workers compensation benefits and regular earnings.
3. Open-Ended Job Return: Instead of holding jobs open indefinitely, employers should hold jobs open for a specific time period, such as six or nine months.
4. Vacation and Sick Time: Companies frequently allow vacation and sick time to accrue for employees on workers compensation. Some even allow employees to “borrow” more sick time if they need to stay out of work longer.
5. Short-Term Disability: In some companies, disabled employees receive STD benefits in lieu of salary after six weeks. But the standard definition for disability may differ from workers comp, allowing an employee to collect both.
6. Perk Continuation: Employers often maintain ancillary benefits and privileges such as car allowances, club and professional dues, company store privileges and periodical subscriptions for employees on disability.
7. Loan Protection Policies: Individual insurance policies are available to pay mortgages and consumer loans such as car loans and credit card debts in the case of a disability.
8. Unemployment Compensation: In a few states, an employee receiving workers comp also can qualify for state unemployment benefits.
9. Pension and Retirement Plans: If these plans do not allow for offset of workers comp benefits, an employee can receive workers compensation benefits and a full pension.
10. Product Liability Actions: An employee can file and action against the manufacturer of a product that injured him to collect damages. The employer should seek reimbursement for workers comp payment from any such settlement.
If you ask these three following questions, you can eliminate all ten of the above disincentives.
1. What Benefits are Injured Workers Getting By Not Working?
Many companies fail to look closely enough at their internal wage and benefits structure before embarking on programs to reduce workers compensation costs. There are numerous collateral income benefits and sources providing built-in disincentives to remaining injury-free or returning to work as soon as possible.
For example, a major newspaper was considering an expensive incentive program to motivate employees to return to work, but a careful examination of the company’s situation revealed the reason employees were not returning to work was because they earned the equivalent of 115% of their pre-injury earnings when the stayed out of work.
In another case, an injured construction company employee received long-term disability (LTD) payments after 26 weeks of disability, in addition to workers compensation benefits. The total of these benefits exceeded his pre-injury earnings.
And, his childcare and commuting expenses also were greatly reduced while he was home.
2. Examine Extra Insurance your Employee May Have.
If an employee has purchased credit disability insurance, he or she may have eliminated house and car payments while being unable to work.
As such, he refused his employer’s offer of a transitional duty job at full salary because his LTD and credit disability policies would have terminated the benefits.
3. Get your Departments to Work Together to Design WC Policies.
In a large company, the directors of human resources, industrial relations, workers comp and employee benefits and compensation must all be involved in designing, administering and maintaining policies.
Incentives to remain at and return to work must be built into the management systems. Disincentives must be removed from all direct and indirect sources.
Substantial savings can be achieved when a company coordinates its salary, benefits and compensation programs so employees dont earn more by staying out of work.(WCxKit)
If not properly coordinated, a company’s employee benefit and compensation programs may inadvertently serve to extend workers compensation absences.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
Background: Several years ago, I worked with a heavy-duty shipping facility and gained union cooperation, much to management's surprise. The union was really driving the workers compensation cost containment process, with full union leadership commitment. Losses were reduced approximately 50%. This is true story with identity changed. It illustrates several points. 1) that unions can be your friends and 2) you must review the situation, looking for collateral soure benefits.
I recalled there were some "collateral source benefits." A collateral source benefit, a term which I invented, is a benefit which acts as a "collateral source" of income or perks that create a situation whereby an employee has an incentive NOT to work. I couldn't remember the exact situation at this shipping facility, and recently asked them to refresh my recollection about how the welfare and pension funds worked as a disincentive for employees to return to work. I did recall there were vacation credits – when workers were off work due to an injury, they accrued seniority faster than when they did work because they were presumed to be putting in a certain number of hours, which was an overestimate because with the poor economy most jobs were part-time assignment, yet they were accruing as if it were full-time.
My Question: Was it the pension fund or welfare fund that was a disincentive to return to work?
Former Union Leader's Answer: Actually it was both a pension fund and welfare fund. But the main concern was the welfare fund. The welfare fund was set up by the union in 1965 and part of it protected the benefits of a worker who got hurt. They would get credited hours towards full medical and vacation and holiday pay. I started here in 1977 and the breed of workers here were honest hard working men (mostly second and third generation) who wanted to be protected if a real injury occurred. When work was slow they went out and banged nails, mowed lawns or painted, well you get the drift.
The union leader explained that in the early 90's the type of worker in the blue collar field changed. There were very few second and third generation workers. When work got slow, mysteriously injuries increased and it seemed like the desire to get other jobs was replaced by collecting workers comp. In addition to that, guys were earning more "credited hours" than the guys who were actually working. As you can probably guess, this just about bankrupt the welfare fund and that perk was no longer available. Also because the change in that perk took so long to happen many of the union benefits were lost.
Physical Examinations as Baseline: The union leader went on to explain there was another unrelated situation I might be interested in: The Longshore and Harbor Workers Act was set up based on facilities in large cities like New York or Los Angeles where a person could work for many employers in a short period of time. So in order to determine which employer was actually responsible for the claim it was set up that it would be the last employer. In 1994 when the company changed hands, we set up medical exams/physicals so that we did not inherit claims from the old company. Unfortunately, all this happened so quickly the union resisted the timing of the physicals. Some say this was so that some guys could have the chance to get drugs out of their system. Since the facility couldn't wait, many of our guys worked a day or two before they took their physical. One part of the physical was hearing loss. Many guys showed some hearing loss. One of our guys was very friendly with an attorney at a local firm. All of a sudden there were hearing loss claims coming in from about 75% of our guys if not more. We inherited all of these claims despite the fact we only employed the workers for a day or two and they had worked for the prior operation for 10-20-30 years.
Well, I hope this helps. I ask that you not use my name but you can mention that your source was a union leader at one time.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing.
Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com.
The term “average weekly wage” is often used in the discussion of workers' compensation claims. As it is the foundation on which almost all workers' compensation indemnity payments are based, let's discuss it in detail.
The average weekly wage (AWW) is the amount of income the employee earned per week at the time of the workers’ compensation injury or work related illness. [In some states it is referred to as the “state average weekly wage” (SAWW). In this discussion we will use AWW throughout].
Determination of the AWW:
The amount of income an employee averages per week seems simple enough, but when state governments get involved in the determination of how AWW is calculated, it becomes more complex.
Most states calculate the average weekly wage over the last 12 months, but in a few states the average weekly wage is based on the last 90 days. Let's look at some of the ways AWW can be calculated (with the caveat that with 50 states, the U.S. Territories and the District of Columbia each doing their own thing, there can be an exception to almost all of the following points):
1. If the employee's weekly income does not change, for instance the employee is on a weekly salary, the amount of the AWW is easy to determine.
2. For workers paid a monthly salary, the monthly salary is multiplied by 12 and then divided by 52 to determine the AWW.
3. For hourly workers, the number of hours per week is multiplied by the hourly wage to get the AWW.
4. For workers paid by the number of pieces of production, or paid commission or paid mileage (truck drivers paid by the mile), the total income earned over the last 12 months is divided by 52 to determine the weekly income.
5. For workers paid a daily rate or on a per diem basis, the daily amount is multiplied by the number of days worked in the last 12 months and then divided by 52 to determine the AWW.
General Add-Ons:
Just when you think you understand the calculation of the AWW, several states, territories, and District of Columbia have their own ways of adding to the AWW calculation. Depending on the jurisdiction, the AWW has been expanded to include:
1. Overtime pay
2. Bonuses
3. Health insurance and dental insurance if the employer does not continue to provide it while the employee is off work due to the work comp claim.
4. Rent, housing, lodging if the employer was providing it before the work comp injury but does not provide it after the work comp injury.
5. Tips over and above the hourly rate paid to waiters and waitresses.
6. Per diem amounts paid over and above salary or commissions, if they are reported as income for income tax purposes
Cringe Factor Add-Ons:
Now that you think you understand the AWW is the employee's income plus any other employer provided compensation, we get some more add-ons causing employers to cringe when they hear about them . . . such as:
1. The double dippers: Your employee John Doe started working for your company two years ago. Doe's regular hours are 8 a.m. to 4 p.m. Two weeks ago Doe took a second job working 4:30 p.m. to 12:30 a.m. Today he hurts his back at your company (really questionable injury, but he will be out of work a couple of months before the adjuster and/or nurse case manager can convince the doctor to get him back to work).
Guess what . . . . in most states your company does not pay John Doe the AWW based only on your company's job if he is also unable to work his second job. The employee is paid the AWW plus add-ons from both jobs by your work comp insurance! [In an effort to be fair to employees who work two jobs, the states who require this add-on have inadvertently created a situation sure to invite employee fraud].
2. The gone but not forgotten worker: Employee Jane Doe (sister of the double dipper John Doe) also worked for your company. After returning to work after her own work comp injury, she leaves your company's employment for a much higher paying job at her new employer. After working for her new employer for over a year, Jane Doe's medical condition worsens from her work comp injury sustained when she worked for your company and now she is unable to continue to work per the work comp treating doctor.
Guess what . . . . in some states you reopen her work claim, but you do not pay her the AWW from her work at your company — you pay the AWW for the work at her new employer!
Calculation of Benefits Using the AWW:
Each of the states, territories and DC use a percentage of the AWW to calculate the amount of benefits to be paid. One hundred percent of the AWW is not used because the employee does not “take home” his total income. The employee has to pay out of the AWW his federal income tax, state income tax, city income tax, social security, Medicare, benefit contributions, union dues, etc.
While most states used sixty-six and two/thirds percent (66.66%) of the amount of the AWW to calculate indemnity benefits, a couple of states use seventy percent (70%) and a few states use eighty percent (80%) of “spendable income” or “after tax” income. All jurisdictions impose a cap, a maximum amount of benefits the employee can receive each week, regardless of the AWW. The states vary tremendously in this aspect, with state caps on weekly indemnity benefits at the top of the range being more than twice what the state cap amounts are on at the bottom of the range.
While two-thirds of the AWW seems reasonable, in most work comp claims the employee is receiving less than he would have if he was not injured and continuing to work. This encourages the employees to return to work when they are physically able to do so. However, in some states that have high state income taxes and the state weekly indemnity benefits cap is high, the employee is receiving more per week on work comp then he would take home after paying taxes, benefits, union dues, etc. This situation makes it difficult for the workers’ comp adjuster to get some procrastinating employees back to work.
Some states require the work comp adjuster to submit to the Industrial Commission a state form outlining how the AWW was calculated and how the indemnity benefits are calculated. Other states do not get involved in the calculation of the AWW and the resulting indemnity benefits unless a dispute arises between the employee and the employer over what is the correct amount of the AWW. (workersxzcompxzkit)
Summary:
As the indemnity benefits are based on the AWW, it is in the employer's best interest to be sure the employee's AWW information reported to the work comp claims office and/or the work comp insurer is correct. If there is any doubt on what to include in the AWW for your state, use your state's form for reporting the AWW information, if your state uses one. If not, consult with your work comp adjuster on any questions on how to calculate the AWW for your particular state. Also, you may contact us for assistance. See: 50 State Laws and Regulations at
http://reduceyourworkerscomp.com/laws_and_regulations.php
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.
Podcast/Webcast: Claim Handling Strategies
Click Here:
http://www.workerscompkit.com/gallagher/podcast/ Claim_Handling_Strategies/index.php
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.
If not properly coordinated, a company's employee benefit and compensation programs may inadvertently serve to extend workers' compensation absences. That happens because there is no incentive to return to work when someone is able to make as much OR MORE when NOT WORKING. When designing your integrated disability managment programs, keep this in mind.
If your projected workers' compensation savings have yet to materialize even though your company has implemented a corporate return-to-work program, multiple employees could be following this pattern: an injured employee receives long-term disability (LTD) in addition to workers' compensation benefits and the total exceeds his pre-injury earnings.
If the employee also had credit disability insurance, his house and car payments would be eliminated as long as he was unable to work. Child care and commuting expenses would also be reduced while your employee stays home. As such, he refuses your offer of a transitional duty job at full salary.
It may be time to examine the impact of collateral resources, often resulting in employees out on workers' compensation receiving more income and benefits than they would have if they were working.
Some disincentives for returning to work:
1. Salary and Wage Continuation: Some companies pay 100% of salary in lieu of having an employee collect workers' compensation for injuries of short duration.
2. Occupational Injury Pay Supplements: Many firms pay supplemental benefits to make up the difference between workers' compensation benefits and regular earnings.
3. Open-Ended Job Return: Instead of holding jobs open indefinitely, employers should hold jobs open for a specific time period.
4. Vacation and Sick Time: Companies frequently allow vacation and sick time to accrue for employees on workers' compensation. Some even allow employees to "borrow" more sick time.
5. Short-Term Disability: In some companies, disabled employees receive STD benefits in lieu of salary after six weeks. But the standard definition for disability may differ from workers' comp, allowing an employee to collect both.
6. Perk Continuation: Employers often maintain ancillary benefits and privileges such as car allowances, club and professional dues, and periodical subscriptions for employees on disability.
7. Loan Protection Policies: Individual insurance policies are available to pay mortgages and consumer loans such as car loans and credit card debts in the case of a disability.
8. Unemployment Compensation: In a few states, an employee receiving workers' comp also can qualify for state unemployment benefits.
9. Pension and Retirement Plans: If these plans do not allow for offset of workers' comp benefits, an employee can receive workers' compensation benefits and a full pension. (workersxzcompxzkit)
10. Product Liability Actions: An employee can file an action against the manufacturer of a product that injured him to collect damages. The employer should seek reimbursement for workers' comp payment from any such settlement.
FREE "FRAUD PREVENTION" AUDIO PODCAST click here: http://www.workerscompkit.com/gallagher/mp3 By: Anthony Van Gorp, private investigator with 25 years experience.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker about workers' comp issues. ©2009 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
If your company has a large, decentralized workforce, you may need a dedicated person responsible for coordinating injured employees return to work efforts. It's probably not enough to have a Transitional Duty Policy, you may need personnel to coach employees, support local management and and follow through with other actions in your workers' compensation program. The RTW Coordinator or WC Coordinator can play the central role of coordination. Here are 8 things a WC Coordinator or RTW Coordinator can do: 1-Contact Local Management or HR to help them bring every injured employee back to work. 2-Assist the General Manager (GM) determine suitable transitional duty jobs for every injured employee. 3-Make sure the TPA or claims administrator has all the documentation needed for claim processing and return to work placement. 4-Make sure the TPA or claims administrator know about your workers' compensation cost containment process. 5-Inform the payroll department when an employee is receiving indemnity payments (lost wages) so regular pay can be discontinued. Make sure the employee has not filed for unemployment. 6-Assist the GM with maintaining frequent contact with the injured employee, including attend weekly meeting with the employee and GM. 7-Familiarize local management with the new WC Cost Control Process. 8-Follow up on each step of the claim until the employee is back to work full duty in their original job by removing EVERY obstacles that gets in the way of a complete return to work. Try the WC Cost Calculator to show the REAL COST of work comp. Look at WC 101 for the basics about workers comp. Workers' Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch. Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs. ©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
There is a little known provision in NY workers’ compensation laws that provides for offsets of long term disability (LTD) payments against workers’ compensation benefits. Attorney Theodore Ronca from Aquebogue, NY tells us that this law can be quite useful but is underutilized as are many “coordination of benefits” remedies. He practices in the areas of workers’ compensation, disability and benefits. Here is a summary of the WC and LTD offset provision.
Statute: NY Work Comp Law, Sect 25(4)(“c) provides that a private disability plan (other than statutory STD under Sect 206(2) of the WCL) which contains language calling for reduction of benefits for workers’ compensation payments may assert a lien against as yet unawarded compensation payments provided a written request for a lien is made to the WCB together with proof of plan terms, prior to an award of benefits being made for the period for which disability payments were made.
Forms: No specific form at present. In 1947 a form was prescribed but was declared obsolete in 1986. Written request with proof of payments and plan terms will suffice.
Procedure: Request for lien will be considered at a scheduled hearing before an administrative law judge of the Workers’ Comp Board (WCB). Disability plan may be present at hearing and represented by counsel. Parties objecting to decision may file an appeal to the WCB no later than thirty (30) days after decision of the Administrative Law Judge (ALJ) is filed. (Parties will receive written notification of decision with date of filing stated.)
Practice Advice: Few work comp claims examiners are familiar with LTD liens. It is best to call the comp carrier, explain the situation, and mail copies of documents to carrier. Same should apply to claimant and claimant’s attorney. Failure to do so will almost certainly result in requests for an adjournment. Following that, documents must be mailed to the WCB.
Tips:
1- It is advisable to attend hearings with full documentation of details.
2- Appeals must be on prescribed forms, available on-line at WCB website. (See Resources for website)
3- Unless a plan has extensive prior experience with WCB hearings, representation by an attorney with work comp skills is advisable.
Advantages: The lien is the surest way to avoid difficult collection or future offset of overpayments. Although the lien was granted by law in 1947 it was all but unknown and underutilized until the last ten years. It remains a little known feature of workers’ compensation and group disability law.
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.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Whether the cause of disability is work-related or not, maintain a strong RTW policy. Employees will soon call a lawyer if it looks like they will have to file for SSDB*. Those lawyers are good at spotting unfiled comp claims, as well as ADA or discrimination claims.
Key Communication Concepts:
1- Always maintain frequent (1 per week) and regular (Same time, same day) communications with employee. Breaking off communication means that whatever they think or believe may be a picture painted by someone you don’t know (a lawyer) and you will be that last to find out what the consequences will be.
2- Always hold out possibility of return to work.
3- Always offer to be the center of communications (with worker, doctor, carrier, workers’ comp board, group health, LTD, Soc Sec). Sounds difficult (it’s not) but prevents big problems from ever arising.
Workers’ comp and SSDB overlap: You can collect both. However, if comp and SSDB (monthly) exceed 80% of your Social Security “monthly wage” (incredibly difficult to compute) the excess is deducted from SSDB in some states, or from the work comp in others. There are cost of living benefit raises, if awarded by Congress in later years.
In work comp, total disability (with certain exceptions for the blind) means no work whatsoever can be performed. In SSDB, you can earn up to $300/month and still collect SSDB. (That is to encourage a return to a workplace. You can also return for a 9-month trial period at any higher salary.)
An example of non-occupational RTW in modified position: a young woman with totally disabling colitis was a brilliant young worker. No workers’ comp claim was filed in this example as it was a non-occupational illness. Her employer allowed her to work from home for six months before saying it was no longer an option.
Her manager no longer worked with employer, but our firm located him. He wrote the judge a full letter detailing the work from home situation because on the books it looked as though she was working normally. This letter resulted in $20,000 additional benefits and immediate Medicare coverage for a worker who was otherwise unable to work. Employer and manager never realized the significance of their participation although employer was a major city in southern CA.
Potential Benefits to the employer are:
(1) establishing objective evidence of wage earning capacity (sometimes this is in favor of the employer),
(2) compliance with ADA,
(3) employer assistance on a trial return to work period, can be used to defend against ADA claims since they document employer’s efforts to return disabled to work,
(4) engaging in a “work-hardening” effort which is most advantageous for rehab,
(5) less disruption of work flow (this worker was a highly specialized engineer involved in ongoing projects for which she could not easily be replaced),
(6) lower “demoralization downside”, resulting from lack of compassion for seriously injured member of workplace team.
Since she was a municipal employee there might have been benefits to the employer in her contract but these never surfaced. Had her condition improved slightly she would have returned to work. However, without the work from home all hope of any recovery would have been lost one year sooner. Instead she had a series of surgeries which ruled that out. With home work stations, many clerical positions can be done, part time at least, from home and this can make a big difference in returning these workers.
*Abbreviations:
SSDI means Social Security Disability Insurance.
SSDB means Social Security Disability Benefits.
SSI is Supplementary Security Income which are disability benefits for people w/o an earnings record. Low benefits and lawyers hardly ever get involved.
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.
Try the WC Cost Calculator to show the REAL COST of work comp.
Look at WC 101 for the basics about workers comp.
Workers’ Comp Kit® is a web-based online Assessment, Benchmarking and Cost Containment system for employers. It provides all the materials needed to reduce your costs significantly in 85% less time than if you designed a program from scratch.
Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.
©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@WorkersCompKit.com
Posted in
Benchmarking & FTE & Operational Comparison, Collateral Source Benefits, Lowering Premiums & Experience Mod, WC 101, Workers Comp Kit |
