Workers Comp Kit Blog » Collateral Source Benefits http://blog.reduceyourworkerscomp.com Reduce Your Workers Comp Costs www.ReduceYourWorkersComp.com Mon, 06 Sep 2010 19:17:45 +0000 en hourly 1 http://wordpress.org/?v=3.0.1 How Average Weekly Wages and Work Comp Indemnity Payments Work http://blog.reduceyourworkerscomp.com/2010/03/ow-it-works-average-weekly-wage-and-work-comp-indemnity-payments/ http://blog.reduceyourworkerscomp.com/2010/03/ow-it-works-average-weekly-wage-and-work-comp-indemnity-payments/#comments Wed, 10 Mar 2010 23:21:54 +0000 Robert Elliott, J.D. http://blog.reduceyourworkerscomp.com/?p=2769 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.
]]> 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.
]]> http://blog.reduceyourworkerscomp.com/2010/03/ow-it-works-average-weekly-wage-and-work-comp-indemnity-payments/feed/ 0 Know Why Your Company Disability Pay May Sabotage Your Return To Work Program http://blog.reduceyourworkerscomp.com/2009/12/why-does-disability-pay-keeps-employees-home/ http://blog.reduceyourworkerscomp.com/2009/12/why-does-disability-pay-keeps-employees-home/#comments Thu, 03 Dec 2009 21:17:36 +0000 Robert Elliott, J.D. http://blog.reduceyourworkerscomp.com/?p=897 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 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
 

]]> http://blog.reduceyourworkerscomp.com/2009/12/why-does-disability-pay-keeps-employees-home/feed/ 0 Return to Work Coordinator Job Duties to Control Comp Costs http://blog.reduceyourworkerscomp.com/2009/02/return-to-work-coordinator-job-duties-to-control-comp-costs/ http://blog.reduceyourworkerscomp.com/2009/02/return-to-work-coordinator-job-duties-to-control-comp-costs/#comments Thu, 05 Feb 2009 00:54:32 +0000 Robert Elliott, J.D. http://blog.reduceyourworkerscomp.com/?p=183 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

]]> 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

]]> http://blog.reduceyourworkerscomp.com/2009/02/return-to-work-coordinator-job-duties-to-control-comp-costs/feed/ 0 Offsetting Workers Compensation in NY against Long Term Disability Payments http://blog.reduceyourworkerscomp.com/2009/01/offsetting-workers-compensation-in-ny-against-long-term-disability-payments/ http://blog.reduceyourworkerscomp.com/2009/01/offsetting-workers-compensation-in-ny-against-long-term-disability-payments/#comments Thu, 15 Jan 2009 19:28:22 +0000 Attorney Theodore Ronca http://blog.reduceyourworkerscomp.com/?p=153 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

]]> 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

]]> http://blog.reduceyourworkerscomp.com/2009/01/offsetting-workers-compensation-in-ny-against-long-term-disability-payments/feed/ 0 Considerations for Return to Work Programs that Include Non-Occupational Illnesses and Injuries http://blog.reduceyourworkerscomp.com/2009/01/how-do-social-security-disability-benefits-interact-with-workers-compensation/ http://blog.reduceyourworkerscomp.com/2009/01/how-do-social-security-disability-benefits-interact-with-workers-compensation/#comments Tue, 13 Jan 2009 23:37:04 +0000 Attorney Theodore Ronca http://blog.reduceyourworkerscomp.com/?p=152

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

]]>

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

]]> http://blog.reduceyourworkerscomp.com/2009/01/how-do-social-security-disability-benefits-interact-with-workers-compensation/feed/ 0 7 Ways Employees May Make More When Not Working http://blog.reduceyourworkerscomp.com/2008/12/7-ways-employees-may-make-more-when-not-working/ http://blog.reduceyourworkerscomp.com/2008/12/7-ways-employees-may-make-more-when-not-working/#comments Thu, 01 Jan 2009 00:12:11 +0000 Robert Elliott, J.D. http://blog.reduceyourworkerscomp.com/?p=103 When executives at a major publishing company were pondering their skyrocketing workers' compensation costs last year, they found a convincing explanation. Employees who were receiving workers' compensation were effectively receiving one hundred ten percent of their salaries. That company is not alone.

Consider the following sources of income and why they might be a disincentive to return to work:

Double Dipping. Like many other employers, a national construction company had a group disability insurance policy provided by the company. One employee was receiving workers' compensation following back surgery and, after 26 weeks, began receiving disability payments too. This can happen with personal insurance policies. This double income meant the worker's at-home pay exceeded his at-work pay. When the company offered him a job with lighter duties at his full salary during his recuperation, he turned it down.

Unemployment - In some states, employees on workers' compensation qualify for unemployment benefits under certain circumstances. To prevent this, 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 likely not be deemed unemployed.

Lawsuits - While workers' compensation statutes prevent workers injured on the job from suing their employers, they can still sue others. Someone hurt while emptying garbage into a dumpster, for example, can sue the dumpster owner and manufacturer.

If such a worker receives a court award or settlement, he gets paid twice for the same injury. Most states allow insurers or employers to seek reimbursement for sums spent on workers' compensation but I have seen many cases where this is not done. I have also seen many situations where the insurance company waives the company's liens – often without their consent.

Pension Pay - Older workers who receive workers' compensation benefits may retire during their convalescence and can continue to receive workers' compensation benefits. The remedy is to revise pension plans that do not offset workers' compensation by retirement pay.

Grossing Up – Some employers offer "occupational injury supplements," which can raise workers' compensation benefits from two thirds of salary to full salary But, 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.

Motor Vehicle Accidents - In some 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, where permitted by state law.

Additional Collateral Sources – Employers have many other policies that dampen the enthusiasm of those on workers' compensation to return to work. Open-ended transitional duty jobs and allowing employees on workers' compensation to accrue sick time can deter their desire to return to work.

The Solution - Eliminate double dipping where possible. This requires advance planning so company-paid policies are structured to allow offsets. Have all departments (HR, WC, Labor, Safety) review benefits to make sure these perks and policies do not discourage employees from returning to work as soon as they are able.

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

]]> When executives at a major publishing company were pondering their skyrocketing workers' compensation costs last year, they found a convincing explanation. Employees who were receiving workers' compensation were effectively receiving one hundred ten percent of their salaries. That company is not alone.

Consider the following sources of income and why they might be a disincentive to return to work:

Double Dipping. Like many other employers, a national construction company had a group disability insurance policy provided by the company. One employee was receiving workers' compensation following back surgery and, after 26 weeks, began receiving disability payments too. This can happen with personal insurance policies. This double income meant the worker's at-home pay exceeded his at-work pay. When the company offered him a job with lighter duties at his full salary during his recuperation, he turned it down.

Unemployment - In some states, employees on workers' compensation qualify for unemployment benefits under certain circumstances. To prevent this, 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 likely not be deemed unemployed.

Lawsuits - While workers' compensation statutes prevent workers injured on the job from suing their employers, they can still sue others. Someone hurt while emptying garbage into a dumpster, for example, can sue the dumpster owner and manufacturer.

If such a worker receives a court award or settlement, he gets paid twice for the same injury. Most states allow insurers or employers to seek reimbursement for sums spent on workers' compensation but I have seen many cases where this is not done. I have also seen many situations where the insurance company waives the company's liens – often without their consent.

Pension Pay - Older workers who receive workers' compensation benefits may retire during their convalescence and can continue to receive workers' compensation benefits. The remedy is to revise pension plans that do not offset workers' compensation by retirement pay.

Grossing Up – Some employers offer "occupational injury supplements," which can raise workers' compensation benefits from two thirds of salary to full salary But, 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.

Motor Vehicle Accidents - In some 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, where permitted by state law.

Additional Collateral Sources – Employers have many other policies that dampen the enthusiasm of those on workers' compensation to return to work. Open-ended transitional duty jobs and allowing employees on workers' compensation to accrue sick time can deter their desire to return to work.

The Solution - Eliminate double dipping where possible. This requires advance planning so company-paid policies are structured to allow offsets. Have all departments (HR, WC, Labor, Safety) review benefits to make sure these perks and policies do not discourage employees from returning to work as soon as they are able.

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

]]> http://blog.reduceyourworkerscomp.com/2008/12/7-ways-employees-may-make-more-when-not-working/feed/ 0 Only 74% of Companies say Senior Management Fully Supports Transitional Duty Program http://blog.reduceyourworkerscomp.com/2008/11/only-74-of-companies-say-senior-management-fully-supports-transitional-duty-program/ http://blog.reduceyourworkerscomp.com/2008/11/only-74-of-companies-say-senior-management-fully-supports-transitional-duty-program/#comments Sun, 09 Nov 2008 18:55:24 +0000 Director http://blog.reduceyourworkerscomp.com/?p=83 Our informal online poll found that only 74% of companies say “Senior Management Supports Their Transitional Duty Program.”

There are ways to bring senior management on board. Usually they are not on board because they think a transitional duty program will be a problem in the workplace, be unproductive or will cost too much. This opinion usually comes from lack of understanding. That is, senior management does not know how a well-structured program is run. Explain that there are guidelines, policies and procedures to ensure that all employees are treated fairly and policies and guidelines are clearly communicated to employees and supervisors. More information about Sample Procedures.

The goal is to have injured employees return to work as quickly as possibly – when they are medically able – after an injury. Show the REAL cost of workers comp translated into sales — a management “hot spot” — with the Real Cost Calculator.

Whether you have guaranteed cost insurance or loss-sensitive program, having an effective return to work program will save you money.

Most people do better when they have a destination to go to each day. People feel isolated when they are no longer involved in their workplace’ however, after a couple weeks of not working they substitute their normal work routine with other activities which often are not productive and become adjusted to not working.This is particularly true if your return to work program pay structure provides more than when an employee is working. Check out the post on Collateral Source Benefits to find out more about this topic.

For more cost savings tips go to WC Cost Reduction Tips.

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

]]> Our informal online poll found that only 74% of companies say “Senior Management Supports Their Transitional Duty Program.”

There are ways to bring senior management on board. Usually they are not on board because they think a transitional duty program will be a problem in the workplace, be unproductive or will cost too much. This opinion usually comes from lack of understanding. That is, senior management does not know how a well-structured program is run. Explain that there are guidelines, policies and procedures to ensure that all employees are treated fairly and policies and guidelines are clearly communicated to employees and supervisors. More information about Sample Procedures.

The goal is to have injured employees return to work as quickly as possibly – when they are medically able – after an injury. Show the REAL cost of workers comp translated into sales — a management “hot spot” — with the Real Cost Calculator.

Whether you have guaranteed cost insurance or loss-sensitive program, having an effective return to work program will save you money.

Most people do better when they have a destination to go to each day. People feel isolated when they are no longer involved in their workplace’ however, after a couple weeks of not working they substitute their normal work routine with other activities which often are not productive and become adjusted to not working.This is particularly true if your return to work program pay structure provides more than when an employee is working. Check out the post on Collateral Source Benefits to find out more about this topic.

For more cost savings tips go to WC Cost Reduction Tips.

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

]]> http://blog.reduceyourworkerscomp.com/2008/11/only-74-of-companies-say-senior-management-fully-supports-transitional-duty-program/feed/ 0 10 Things Guaranteed to Drive Your Workers Comp Costs Up! http://blog.reduceyourworkerscomp.com/2008/10/10-reasons-employees-fail-to-return-to-work-collateral-source-benefits/ http://blog.reduceyourworkerscomp.com/2008/10/10-reasons-employees-fail-to-return-to-work-collateral-source-benefits/#comments Sat, 25 Oct 2008 00:57:22 +0000 Director http://blog.reduceyourworkerscomp.com/?p=73 When employees can make more when NOT working than when working, there’s very little incentive to return to work, right? It’s time to examine all the possible sources of “collateral source benefits” (a term I invented almost 20 years ago), to make sure you are not inadvertently making your problem worse than it needs to be.

I saw one example recently where an employee stayed out of work receiving workers’ compensation, used a travel pass to travel for free, and continued to accrue seniority while collecting a generous combination of benefits. Heck of a good deal, if you asked me. Where do I sign up… So, consider the impact on your workers’ comp costs when providing certain benefits.

1. Salary and Wage Continuation: Some companies pay 100 percent 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, 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 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.

While these things are great perks and can entice employees to stay on the job with service to your company for many productive years, in the wrong situation that benefit can be offset if you do not combine the benefits with a complete injury management program — with excellent employee communication. Fail to communicate with your employees and I guarantee your costs will go up.

Involve all departments. In a large company, human resources, labor/industrial relations, workers’ comp and employee benefits and compensation departments 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 are not rewarded by staying out of work. For more cost savings tips go to WC Cost Reduction Tips.

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.

]]> When employees can make more when NOT working than when working, there’s very little incentive to return to work, right? It’s time to examine all the possible sources of “collateral source benefits” (a term I invented almost 20 years ago), to make sure you are not inadvertently making your problem worse than it needs to be.

I saw one example recently where an employee stayed out of work receiving workers’ compensation, used a travel pass to travel for free, and continued to accrue seniority while collecting a generous combination of benefits. Heck of a good deal, if you asked me. Where do I sign up… So, consider the impact on your workers’ comp costs when providing certain benefits.

1. Salary and Wage Continuation: Some companies pay 100 percent 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, 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 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.

While these things are great perks and can entice employees to stay on the job with service to your company for many productive years, in the wrong situation that benefit can be offset if you do not combine the benefits with a complete injury management program — with excellent employee communication. Fail to communicate with your employees and I guarantee your costs will go up.

Involve all departments. In a large company, human resources, labor/industrial relations, workers’ comp and employee benefits and compensation departments 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 are not rewarded by staying out of work. For more cost savings tips go to WC Cost Reduction Tips.

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.

]]> http://blog.reduceyourworkerscomp.com/2008/10/10-reasons-employees-fail-to-return-to-work-collateral-source-benefits/feed/ 0