Every employer buying workers compensation coverage knows it is an insurance policy for the costs associated with injured employees, but few employers ever read the actual policy. The primary reason most people do not read the insurance policy is because it is written in “insurance speak” or legalese. The following in an effort to translate a generic workers compensation insurance policy into everyday English so more people can understand it.
A workers compensation insurance policy is actually divided into two parts. The first half covers what most employers think of in workers compensation. The second part is the “Employers Liability Insurance.” Part two is designed to cover instances where workers compensation insurance does not apply and an employee brings a lawsuit against the employer. Part one’s coverage and workers compensation statutes are so broad that it is rare for an employee to be able to bring a claim under Part two. For the purposes of this article, we will only be addressing what is typically found in Part one of the policy coverage.(WCxKit)
Section A – What the Insurance Covers
Workers compensation insurance will pay for injuries caused by accidents, or for illness/disease caused by being exposed to an unfavorable environment. Accidents and illnesses also include death. This section limits the coverage to the policy period. The injuries or illness has to be caused by conditions associated with the employee's employment. If the work comp claim brought by the employee is for work-related illness, the employee's last day of exposure to the conditions causing the illness must occur within the policy period.
Section B – What the Insurance Company Pays
The insurance company agrees to pay for all benefits as defined by the workers compensation statutes of the state where the employer does business. The insurance company agrees to make timely payment of these benefits.
Section C – The Right to Defend Claims
The insurance company reserves the right to determine which claims it will pay willingly and which claims it will contest. In exchange for the insurance company making this decision, the insurance company agrees to pay the cost of defending the employer from any claim brought against the employer. This allows the insurer to investigate and settle claims as it deems appropriate. It also includes the insurer's right to not to defend a claim if it is not covered by the policy.
Section D – Additional Things Paid By Insurance
The insurance company agrees to pay the cost associated with the claim in addition to benefits provided by the work comp laws. This includes such things as:
- Attorney fees and expenses.
- Surveillance and extraordinary investigative expenses.
- Medical management expenses (triage, nurse case managers, etc).
- Court cost.
- Employer's expenses incurred at the request of the insurer, excluding loss of earnings.
- Appeal bonds.
- Any other expenses incurred by the insurer.
Section E – When There Exists Other Insurance
If the employer has a self-insurance retention or large deductible, the insurer will not pay until the employer has met its financial responsibility under the policy. Also, (this rarely happens), if the employer has other workers compensation insurance that will pay for the employee's injuries, the insurance company will not pay more than its share of the benefits.
Section F – What the Employer Must Pay
The insurance policy makes the employer responsible for payments when the employer:
- Intentionally fails to comply with a safety law or regulation.
- When the employer has serious and/or willful misconduct.
- When the employer knowingly employs someone in violation of the law.
- When the employee brings a claim against the employer for discharging, coercing or discriminating against the employee for bringing a work comp claim.
Also, if the insurance company is compelled to make a payment in one of these situations, the employer agrees to reimburse the insurance company for all cost associated with the situation.
Section G – The Right of Recovery
In exchange for the insurer paying the work comp claim, the employer and the employee agree the insurer will have the right to recover the cost of the claim from a third party who is at fault for the injury (think auto accident or equipment malfunction).(WCxKit)
Section H – Legal Stuff
This section includes several miscellaneous conditions including:
- Most states consider notice to the employer of a work comp claim to be notice to the insurer.
- An employer’s bankruptcy does not relieve the insurance company from paying the work comp claims.
- The insurance company agrees it is primarily responsible for any benefits owed under the policy.
- The legal jurisdiction is the state where the employer is located.
- The insurance company agrees the policy conforms to the applicable law.
- The insurance company agrees to pay any special taxes or assessments that arise due to the issuance of the insurance policy.
- Anything in the policy that conflicts with the state law is modified to comply with the state law.
Not every workers compensation policy will follow this generic outline, but the above outline should assist you in understanding your workers' compensation insurance policy.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
For the most part, workers compensation claims are generally compensable. The general public thinks the opposite — that all insurance companies want to deny injury coverage.
In actuality, probably 80 to 90 percent of claims are accepted in the beginning. But, claims can be denied later down the road for various reasons. How does an employer properly dispute a claim when there is a compensability question?(WCxKit)
4 Strategies to Dispute a Claim
1. If a reported claim is questionable, the adjuster needs to know right away so a proper dispute for investigational purposes can be filed.
At the time a claim is reported to the carrier, employers will know more than the adjuster. Once the adjuster receives the file, he or she sets up the claim, contacts the employee and employer, reviews medical records, and only then makes an initial decision.
But if the employer calls the claim questionable, it should be marked as questionable right away so the adjuster can file a dispute that the claim’s compensability is under investigation. Most jurisdictions have a time limit on how long the claim investigation can be. If the adjuster fails to file for the extension within the time limit, the claim could be conceded as compensable — at least in the beginning.
This leads to leakage because claims dollars are being spent on a claim that may not be compensable. It takes time to take statements, get medical records, get past records, do background checks, etc. If an adjuster can file that extension right off the bat, they can take time to really investigate the claim and make the proper decision on compensability.
Generally, questionable claims receive more of the adjuster’s investigative attention. This is especially true when the employer notes on the first report of Injury that the claim is questionable; this automatically raises a red flag for the adjuster. The adjuster will review the claim’s initial parts and form questions to ask the employee when taking their statement.
An adjuster’s first call will be to you, the employer, asking why the claim is questionable. Employers can talk to witnesses, and follow up on leads made by other employees that a claim may not be 100 percent compensable and pass that information on to the adjuster in the beginning of their investigation.
All of these issues greatly help the adjuster, and after the investigation is completed, a proper decision can be made on the claim as to overall compensability.
2. What if a claim starts off as compensable then needs to be disputed later on?
A claim can start off as compensable and then change. For example, an employee strains his back while working. There was a witness and it was reported promptly. The worker was sent for treatment the same day. Usually benefits will be conceded and the claim will be accepted into initial stages.
But, a month later the claimant tells the doctor he hurt his back the weekend before the work injury doing yard work, then he made it worse while working. This should lead to a dispute in all cases. The adjuster has no way of knowing how bad the claimant had injured themselves while outside of work, and most often the injured worker will not be able to go back and say the injury/ongoing disability is 100 percent work related.
Unfortunately, these cases are hard to come by. Claimants are no dummies, and even if this did occur most do not go to an occupational clinic and tell the doctor about how they injured themselves outside of work. But it does happen, and the adjuster should catch this every time. This can be seen in emergency department records, too.
3. What if a worker is injured doing a simple task, and the diagnosis is way worse than it should be in relation to what the worker was doing at the time of injury?
For examples like this, adjusters rely on the medical records and the mechanism of injury. For example, a claimant states she sustained a lumbar strain while at work lifting a 20-pound tote of parts. Then the doctor finds all sorts of objective evidence on exam of severe, disabling back pain. Something is not right. Lifting 20 pounds should not have such excessive force that it herniates multiple lumbar discs. The adjuster should set an independent medical evaluation (IME), and let the IME physician comment on the severity of symptoms in relation to the stated work injury.
This type of scenario is a lot more common than one would think. The general public probably has never had a diagnostic workup on their spine or an MRI test. If a claimant sustains a simple injury and the resulting MRI shows all sorts of issues, it does not mean they all are related to the work injury.
An employer also has to beware of false positives. Just because someone has multiple levels of disc bulges, does not mean all of those are related to work. Research shows workers of all ages and occupations can have a varying level of degree of spinal issues. It is the adjuster’s job to determine what, if anything, is related to the work injury, treat those issues, and deny ongoing treatment for the rest of the worker’s spinal problems.
4. If you know the injury is not legit, should you file the claim anyway?
The answer is in all cases is YES. It is the adjuster’s job to determine if an injury occurred out of the course and scope of employment. A human resources professional is not an adjuster (at least not very often), and if a worker comes to you and alleges a work injury, no matter what the circumstances, it should be reported to your carrier. The adjuster has training and certification, and he or she is qualified to deny claims. Some jurisdictions can carry heavy penalties for failure to report a work injury to the carrier. You do not want to be hit with one of those penalties. The company pays a carrier’s premium to be protected in insurance matters. This is what they are there for. The employer should gather all the pertinent details and report the claim promptly. Indicate on the first report of injury that the claim is questionable, and go from there. Follow up with the adjuster, and chances are it will be denied as you suspect.(WCxKit)
In sum, there are several way to dispute a questionable claim. But the most important thing an employer can do is gather all the information on the claim before reporting it promptly to the carrier. Then, follow it up with a phone call to the adjuster. The more you work together with your carrier, the better chance the questionable claims will be denied.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
In Tennessee, every employer who has five or more full or part time employees, is required to carry workers compensation insurance. Employers in the construction or coal mining industry must provide workers compensation coverage if they have any employees. Corporate officers may decline workers compensation insurance. But they are included in the count of employees. Family members working in the business are also included in the count of employees. State and local governments are exempt from the workers compensation law, as are employers of farm laborers and domestic help. But all can elect to purchase workers comp coverage.
Obtaining Coverage
To obtain workers compensation coverage in Tennessee, the employer has 4 options
1. purchasing a workers compensation insurance policy from an insurance company licensed to do business in Tennessee
2. self-insurance for the employer who has sufficient assets to self insure
3. purchasing insurance from the state owned Tennessee Workers Compensation Insurance Plan
4. setting up a self-insurance trust (WCxKit)
Claim Reporting
The employee must report the injury to the employer within 30 days in writing. when the employee receives medical care outside of the employer's premise. If the employer does not have actual notice, the employer must report the injury to the Tennessee Department of Labor within 14 days
Medical Benefits
The employer must provide the employee a panel of three physicians. From this panel, the employee will choose a medical provider. If it is a back injury, the panel must include a chiropractor. However, chiropractic visits are limited to a maximum of 12 visits under the workers comp law. If specialized treatment is needed, the selected medical provider will make a referral. At this time, the insurer or employer is required to form another panel of three physicians that offer the specialized medical care needed.
There are neither time nor monetary limitations on medical care. The medical care will continue as long as the authorized panel physician deems it necessary. Mileage to and from medical treatment facilities is reimbursed only if exceeding 15 miles. The mileage rate is set by the state.
Temporary Total Disability Benefits
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage earned over the 52 weeks prior to the injury. The TTD weekly maximum and minimum is adjusted each year on July 1st. The weekly maximum is capped at $867.90 for injuries occurring from July 1, 2011 to June 30, 2012. The weekly minimum TTD amount is $118.35. TTD benefits are paid every two weeks and can be for a maximum of 400 weeks.
The first 7 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 14 days.
Temporary Partial Disability Benefits
In Tennessee, temporary disability (TPD) benefits are paid if an employee is able to return to any type of work but is earning less than prior to the injury or working fewer hours per week. The TPD benefits are paid at two-thirds of the difference between the pre-injury wage and the post-injury wage.
Permanent Partial Disability Benefits
Tennessee employees who incur a permanent partial disability (PPD) are entitled to two-thirds of their average weekly wage, not to exceed a maximum of $789 per week. The minimum for PPD is equal to the minimum TTD benefit. For non-scheduled injuries, the maximum period of payments is 400 weeks. For scheduled injuries, the loss of a body part has a maximum of 200 weeks of benefits for a limb. The number of weeks declines based on the body part to only ten weeks of benefits for a toe other than the great toe.
Permanent Total Disability Benefits
Permanent total disability (PTD) benefits are set identically to PPD benefits. The exception is that if the worker is 100% disabled, the PTD benefits are payable to age 65 and may be offset by social security benefits. (WCxKit)
Death Benefits
Burial expenses in Tennessee are covered for a work-related death up to $7,500. The death benefits for a surviving spouse and dependents follow the same guidelines as TTD benefits. They are two-thirds of the average weekly wage up to a maximum of 400 weeks. If the spouse remarries, the spouse loses the benefit. But the children continue to receive the death benefit. until they are 18 years old, or 22 years old if enrolled in an accredited educational institution. When the deceased employee does not have any dependents, $20,000 is paid to his or her estate.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Oklahoma Insurance Commissioner John Doak, recently reported the company, which manages the nation’s largest database of workers compensation insurance information, has filed a request with the Oklahoma Insurance Department to decrease the cost of workers comp insurance in Oklahoma.
According to Doak, the National Council on Compensation Insurance Inc. (NCCI) filed to reduce workers compensation insurance rates in Oklahoma by 1.7 percent starting Jan. 1, 2012. The Commissioner said NCCI attributed the rate drop to this year’s passage of Oklahoma Senate Bill 878. Before the passage of SB 878, rates were expected to increase again. (WCxKit)
Reforming Oklahoma workers comp law was high on Governor Mary Fallin’s agenda, and SB 878 received overwhelming support from both parties in the Legislature.
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Requirements
In Missouri, every employer, not in the construction industry, who has five or more employees, whether full time or part time, is required to carry workers compensation insurance. Employers with less than 5 employees may elect to purchase workers compensation. Employers with less than 5 employees and without workers compensation insurance are subject to tort claims from employees who are injured on the job. Employers in the construction industry must provide workers compensation coverage if they have even one employee. Certain employers are exempt from the requirement of having workers compensation insurance coverage. This includes employers of farm labor, domestic servants in a private home, occasional labor performed for a private household, qualified real estate agents and volunteers of a tax-exempt organization. Family members working in the business must be covered unless they elect to opt out.
Obtaining Coverage
To obtain workers compensation coverage in Missouri, the employer has only two options which are:
1. Purchasing a workers compensation insurance policy from an insurance company licensed to do business in Missouri.
2. Obtaining approval from the Missouri Department of Labor and Industrial Relations, Division of Workers Compensation to provide self-insurance. (WCxKit)
Claim Reporting
The employee must report the injury to the employer within 30 days in writing providing details of where, when and how the accident occurred. The employer must then report the injury to the insurance company or third party administrator within 5 days. The claims office is responsible for reporting the claim to the Missouri Division of Workers Compensation within 30 days of being notified of the injury.
Medical Benefits
The employer selects the medical provider. The employer must provide “medical, surgical, chiropractic, and hospital treatment; including nursing, custodial, ambulance and medicines”. For medical coverage to be provided, the accident must be the prevailing factor in causing the resulting medical condition.
There are no time limitations or monetary limitations on medical care. The medical care will continue as long as the physician deems it necessary. Mileage to and from medical treatment is reimbursed at the rate of $0.50 per mile.
Temporary Total Disability Benefits
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage to the injury. The TTD weekly maximum and minimum is adjusted each year on July 1st. The maximum is capped at $811.73 for injuries occurring from July 1, 2011 to June 30, 2012. The weekly minimum TTD amount is $40.00. TTD benefits can be paid for a maximum of 400 weeks.
The first 3 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 14 days.
Temporary Partial Disability Benefits
In Missouri, if the employee is able to return to work, but at a lesser rate of pay than the amount the employee was earning prior to the injury or can only work fewer hours, the employee is entitled to temporary partial disability (TPD) benefits. The TPD benefits are paid at two-thirds of the difference between the pre-injury wage and the post-injury wage, but is subject to the maximum TTD rate.
Permanent Partial Disability Benefits
Missouri employees who incur a permanent partial disability (PPD) are entitled to two-thirds of their average weekly wage, not to exceed a per week maximum. The weekly maximum is adjusted each year. The weekly maximum PPD rate for the period of 7-1-11 thru 6-30-12 is $425.19 per week. For non-scheduled injuries, known as Permanent Partial General Disability, the maximum period of payments is 400 weeks. For scheduled injuries, the loss of a body part has a maximum of 232 weeks of benefits for an arm at the shoulder, with the number of weeks declining based on the nature of the body part, down to 14 weeks of benefits for a toe other than the great toe.
Permanent Total Disability Benefits
Permanent total disability (PTD) benefits are paid weekly for life-time of the injured employee. The employee and the insurer are also allowed to negotiate a lump-sum settlement. The weekly benefits are based on two-thirds of the average weekly wage not to exceed the maximum cap set each year. (WCxKit)
Death Benefits
The burial expenses in Missouri are covered for a work-related death up to $5,000. The death benefits for a surviving spouse and dependents follow the same guidelines as TTD benefits – two-thirds of the average weekly wage – for one year. The spouse loses the death benefit if the spouse remarries, but the children continue to receive the death benefit. Children can receive the death benefit if they are under 18 years old, or 22 years old if enrolled in accredited educational institution.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
The Ohio Bureau of Workers Compensation has proposed an economic development initiative that could discount a new Ohio employer’s premium by as much as 51 percent. If approved by the BWC Board of Directors, Grow Ohio would offer eligible employers a 25 percent discount on their workers compensation premiums for two years. Or they give them immediate access to participation in the Group Experience Rating Program.
“Employers have many factors to consider when choosing a location, and the costs of conducting business, including workers compensation, are high on that list,” said BWC Administrator/CEO Stephen Buehrer. “By lowering the initial premium of new businesses, Grow Ohio is freeing up more money for those companies to invest in job growth and help restore prosperity to Ohio.” (WCxKit)
Under Grow Ohio, new employers will receive the 25 percent discount on their workers comp premiums, unless they elect to participate in another program incompatible with the Grow Ohio discount. The discount will be applied for the effective new employer’s coverage date and the four subsequent six-month payroll periods.
If new employers prefer, they may instead elect to immediately participate in the Group Experience Rating Program. This program normally is inaccessible to new employers until they have had workers comp coverage for a full year. Employers have 30 days to pursue the Group Rating option, or the 25 percent Grow Ohio discount will be automatically applied.
Participation in group rating could reduce their premiums up to the maximum allowable amount, Currently that amount is 51 percent for the July 1, 2011 policy year. (WCxKit)
If approved by the board on Sept. 29, the incentives will apply to new Ohio business entities or out-of-state businesses and report payroll in Ohio on or after July 1, 2011. Those incentives will be reflected on bills employers pay beginning in February 2012.
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Nothing in the following article should be construed as legal advice. If your company is considering opting out of workers compensation in Texas, please consult with a Texas attorney who can guide you through the jungle of not having workers compensation coverage.
Texas is the only state in which an employer can choose “to go bare” when it comes to workers compensation insurance. It does eliminate the cost of workers compensation insurance, but exposes the employer to the very real possibility of being sued and having to defend from the allegations that the negligence of the employer caused the injuries to the employee. To avoid that possibility, employers in Texas who do not have workers compensation will often offer a non-subscriber plan that provides the employee with both medical coverage and disability benefits when the injury occurs within the scope of the employment.
The non-subscriber plans are often referred to as “Voluntary Employee Injury Benefit Plans” and are normally written in both English and Spanish. The plans are written to comply with federal Employee Retirement Income Security Act of 1974 (ERISA) as the non-subscriber plans are considered an employee welfare benefit plan.
5 Things Texas Non-Subscriber Plans Usually Provide:
1. Full medical benefits for any work related injury.
2. Short-term wage replacement benefits.
3. Long-term wage replacement benefits.
4. Death benefits.
5. Dismemberment benefits.(WCxKit)
The plans usually have an introduction and specify who is eligible for coverage. It states the employer is a “non-subscriber” to the Texas Workers Compensation Act and advises employees there is no coverage for workers compensation, but the plan provides the benefits outlined above and will provide the benefits without regard to whose fault the accident was. The official address of the plan administrator will be given along with the telephone number for the plan administrator and the business hours of the plan administrator.
When the Texas employer with a non-subscriber benefits plan hires a new employee, they offer the employee the option to join the non-subscriber plan. If the new hire elects to join the plan, the employee is given an enrollment and waiver agreement wherein the employee joins the non-subscriber plan and is eligible for all benefits available under the plan. In addition to becoming eligible for the plan's benefits, the employee acknowledges he or she is giving up any right to benefits under the Texas Workers Compensation Act and is giving up any rights to sue the employer for any benefits not provided by the non-subscriber benefit plan.
The plan will spell out the conditions under which the employer will pay to the plan participant’s income benefits and how the income benefits would be calculated. Short-term disability benefits are usually capped at 52 weeks (one year) while long-term disability benefits are often for 156 weeks (three years). The amount of short-term disability benefits is usually calculated by taking the average weekly earnings for a set number of weeks prior to the injury and multiplying the average weekly earnings by a percentage (often 70 percent or 75 percent) to obtain a short-term disability payment amount. The weekly amount will be capped at $1,000 or some other amount regardless of the plan participant's pre-injury average weekly earnings. Long-term disability will be calculated in the same manner, but is often at a slightly lower percentage (60 percent or 65 percent). Short-term benefits normally start after a non-paid waiting period which is usually a week or a set number of “business days.” Long term disability benefits are only paid when the plan participant has exhausted all short-term disability benefits.
The non-subscriber plans will pay 100 percent of all necessary medical care, but will limit medical care to the physician or medical facility specified by the plan administrator. The plans also allow the plan administrator to change the designated medical facility at any time. Unapproved medical providers are only paid for when emergency medical care is needed. When a plan participant receives medical care, the plan participant can be required to submit to drug and alcohol testing at the time of the medical treatment. Medical care is provided until the plan participant reaches maximum medical improvement, dies, or is terminated for cause by the employer.
Death benefits are often based on a one-size fits all approach with a stated lump-sum amount to be paid to the beneficiary(s). The lump sum will often be broken down into a set percentage (often 10 percent) being paid immediately to the beneficiary(s) and the remainder of the lump sum being paid in monthly installments over a set number of year (often 5 years).
The non-subscriber plans also have a dismemberment chart which specifies what percentage of the death benefit will be paid in the event of the loss of limbs, hands, feet, fingers, eyesight, and hearing.(WCxKit)
If the Texas non-subscriber plan sounds a lot like workers compensation coverage, that is because it is designed to mimic workers comp. The employer is basically providing free medical coverage for on-the job injuries and disability insurance for on-the-job injuries, but maintaining more control over the benefits provided. If you feel your Texas company is large enough to self-insure for work-related injuries, a Texas non-subscriber plan might be the answer, but definitely consult with your employment law attorney before starting a non-subscriber plan.
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.
Our WC Book: http:// http://www.wcmanual.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Should we use legal expense review companies? An attorney I know posted a joke on a Facebook page that is fairly accurate these days. An adjuster hands a new file to her counsel and tells him, “I do not want to pay anything on this file, including legal expenses.” Upon hearing this, the attorney asks why he should be expected to review, handle, and get rid of a new case for free? The adjuster advises, “That is not my problem it is yours. If you want the business, do as I ask.”
This is a current trend within the insurance business. Insurance companies have long used outside Medical Bill Review (MBR) companies, or they have internal review departments, to review procedure codes in medical bills and reduce charges per jurisdiction guidelines.
Legal expense review companies have popped up and are growing rapidly. Their purpose is to do the same bill review on legal fees for cases and reduce charges accordingly. This has led to some aggravation on the part of legal firms, who feel their bills are being reduced more and more. It seems like the carriers want more services for less cost. This can be achieved properly, however, if we use a lot of common sense here. Using the most experienced and attentive attorney on files, not the least expensive, is sometimes the best way to go, because one has to take a "TOTAL cost" approach, not a "short term cost reduction" approach. Sometimes it is better to spend more now to reduce overall expenses in the longer term.
5 Ways to Reduce your Legal Costs OR Prevent Your Charges from Being Reduced
1. Firms should use paralegals or legal assistants to review medical notes and establish a file timeline from start to current.
Certain adjusters have always used dedicated counsel — specific attorneys — to handle their cases. Sometimes the dedicated attorney is advised to handle the case from start to finish. The legal firm will use this as a chance to bill the insurance companies for all activity, including file review and setup.
The hourly charge between the actual attorney doing all tasks, and what they charge for their assistant doing the same tasks, can be very large. Attorney fees can range up to $300+ an hour, whereas legal assistants doing the same work can be billed up to one quarter of that, if not less, depending on the firm and what the insurance company has negotiated for a rate. These are called "negotiated rates."
The initial legal file setup, timeline construction, and medical records review are usually the most time-consuming tasks, depending on the size of the file and how complex it is. In one million dollar claim and the medical records took up an entire side of the office. The utilization review expert was reviewing each document, finding inaccuracies and reducing the medical expenses accordingly. An RN with 20 years surgical experience was doing this review. There can be significant cost-savings by making sure the assistant does this task, and not the actual attorney. An RN can be quite helpful on these tasks, and many paralegals are excellent.
2. Paralegals can attend mediations and initial negotiations.
The first meetings between plaintiff attorney and defense counsel are usually uneventful. Both sides review the case and offer their stance on the file. They point out differences in the case and why there is a difference in opinion. Legal expense reduction companies state the actual attorney should not be present at these hearings, since nothing of significance happens. This way you do not have to pay larger travel costs, and time charges while waiting for plaintiff counsel to show up. This can be a nice savings in your legal budget.
CAVEAT: While this is the advice proffered by legal cost reductions companies, some adjusters prefer to use the more expensive upfront strategy, which is to use the MOST qualified person on the team – usually an experienced defense attorney.
3. Legal firms should not have large charges for emails and quick phone discussions.
One thing the legal expense review companies see a lot of is overcharging for simple communication with the adjuster. A quick email response or phone call does not need to cost a quarter-hour fee, even though some firms try to sneak in such charges.
Granted, if discussion is part of a conference on an action plan or overall case review, the attorney can justify charges, and if it is a detailed discussion important to the case, the adjuster should be charged for that time. But, if the question is a simple issue, there is no need to overcharge for the service. Legal firms will often say simple communication is included in their negotiated cost for the opportunity to handle the case, and if such charges are included in their bill the legal expense company will cut the charge down or eliminate it totally.
4. Travel time to court should not be billed separately.
If your attorney goes to local court to handle most of their clients’ cases, they should not be able to bill each carrier separately at maximum rate if they were going to travel there anyway on cases for other carriers. Or, if they do, you should be aware of this practice. Most legal firms will bill separately for this reason, but there are some that will isolate each case and bill accordingly at the maximum rate.
Legal expense review will often ask, if counsel was heading to court to handle a day’s worth of case negotiations for various clients, why should each carrier have to pay a large charge for this travel? Granted, if this is a special trip, or a trip to another jurisdiction especially for your case, then the charge may be justified. But it is the job of the legal firm to handle their bills accordingly for each carrier or the charge will be reduced by the legal expense firm.
5. Law firms should be able to justify ALL billing charges on each bill, and they have the obligation to keep proper records for each case and each task they do for each carrier.
There has been a lot of backlash from legal firms about the billing reductions. One attorney said he had to “fire” his client, because their legal bills were getting reduced so much the firm was losing money by handling the case. Obviously, that is counter productive and not in the best interests of the employer, so make sure to rein in the legal bill reviewers so they do not go overboard.
Due to carrier demands, and the abundance of files for firms to handle, negotiating power is in the carrier's hands. The consensus is, if a firm does not want to reduce fees to what the carrier wants, the carrier will find a firm who will do what they want. This is creating a bad environment for attorneys since most of them have longstanding relationships with certain carriers and adjusters. They do not want to lose the business, but they have no choice.
Of course there are some carriers who are trying to cut down legal expense as much as possible, sometimes unfairly. By doing this they are trying to take advantage of legal firms to get as much out of them for as little cost as possible. Larger firms can sometimes absorb this possible loss just to keep the carrier’s business. But smaller firms that cannot compete are losing a lot of business.
In most cases, the relationship between carrier and legal firm can work if they negotiate an hourly rate, and the associated tasks that go along with it. Tasks need to be clearly defined so no confusion comes when the bill arrives. The legal expense review company should also be informed of certain fees and tasks as negotiated between the carrier and firm so no issues arise. The goal should be to maintain that solid relationship between counsel and carrier, and the associated fees that go along with the handling of a litigated case to overall settlement.(WCxKit)
Legal expense review companies can be a great asset in reducing your overall legal costs when handling litigated files. But the hourly rates and the tasks that go along with it need to be clearly defined between the carrier and the legal firm. Any confusion on any of these issues can lead to a breakdown of the relationship, which benefits no one. By being proactive and establishing clear expectations at the beginning of the lawsuit, both parties can deal fairly with each other. To get good service, you have to pay a fair price.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Illinois Gov. Pat Quinn signed legislation to protect volunteer drivers from being denied auto coverage or paying extra for car insurance premiums simply because the driver is a volunteer.
According to information from Gov. Quinn’s office, House Bill 1378 also prohibits insurers from imposing a surcharge on or increasing the rate for a vehicle policy solely due to one or more of the drivers being a volunteer.
“Many seniors rely on others when they need to go to the grocery store, pick up prescriptions, or visit the doctor, and it is important their volunteer drivers have the insurance coverage they need,” Gov. Quinn said. “This legislation clears hurdles for the volunteer drivers who are helping our seniors maintain their independence.”
Illinois is home to more than two million adults ages 60 and older. Through the Department on Aging, the state administers programs to assist the most vulnerable seniors to remain independent. With more seniors relying on transportation services to remain active and independent, a number of alternative transportation programs for seniors have been established in Illinois.
One such program is the Independent Transportation Network America (ITN), a public-private partnership with 16 affiliates in 12 states. The ITN service allows seniors who are unable to or no longer wish to drive to donate their cars to ITN in exchange for rides from volunteers 24 hours a day, seven days a week. Many ITN volunteer drivers use their own vehicles to transport or run errands for seniors.
Volunteer drivers must verify they hold the proper liability insurance, but differing policies among insurers have in some cases limited the number of available drivers. HB 1378 removes an impediment to the operation of nationally-affiliated transportation networks.
This legislation will help expand the pool of volunteer drivers for organizations operating in the city of Chicago and the counties of Bureau, Henderson, Henry, Knox, LaSalle, McDonough, Mercer, Putnam, Rock Island, and Warren. While insurers in these areas may not refuse or impose a surcharge based solely upon volunteer driver status, HB 1378 does not prevent the insurer from considering factors other than volunteer status when issuing policies or setting rates for volunteer drivers.(WCxKit)
House Bill 1378, sponsored by Rep. Joseph Lyons, D-Chicago, and Sen. Martin Sandoval, D-Cicero, goes into effect immediately.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
In Florida, every employer who has four or more employees, whether full time or part time, is required to carry workers compensation insurance. Corporate officers who have elected to exempt themselves from work comp coverage do not count as an employee, however. There are a couple of exceptions to this rule.
If you are in the construction industry and have one or more employees, you are required to have work comp coverage. Florida farmers who have more than five regular employees, or twelve or more seasonal workers who are employed for 30 days or more, are required to have work comp coverage.(WCxKit)
4 Ways to Obtain Coverage:
To obtain workers compensation coverage in Florida, the employer has several options including:
1. Purchasing a workers compensation insurance policy from a state-approved insurance company.
2. Qualifying as an approved self-insured employer.
3. Contracting with a professional employer organization (employee leasing) that has a group workers compensation policy.
4. Purchasing a workers compensation insurance policy from the Joint Underwriting Association, a Florida state agency that sales workers compensation insurance coverage to employers who are unable to obtain coverage in the open market.
Claim Reporting:
The employee must report the injury to the employer within 30 days of the occurrence. If the injury is not reported in a timely manner, the insurance carrier has the option to deny the claim. The employer is under a strict time limit of seven days to report the claim to the insurance carrier. The insurance company then has three days to send an informational brochure to the employee outlining the employee's rights and responsibilities under the workers compensation statutes.
Medical Benefits:
The employer selects and authorizes the initial medical provider. All subsequent medical treatment must be at a medical provider approved and authorized by the workers compensation insurance carrier. All authorized medical care and associated expenses (prescriptions, prostheses, mileage reimbursements) are covered by workers compensation.
Temporary Total Disability Benefits:
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage over the 13 weeks prior to the injury, not counting the week the injury occurred. The maximum amount of TTD benefits that can be paid weekly changes every Jan. 1. The maximum TTD benefits per week for accidents occurring in 2010, was $772. The maximum TTD benefits per week for 2011 is $782. The state minimum weekly benefit is $20, which has not changed since 1972.
The first 7 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 21 days. TTD benefits can be paid for a maximum of 104 weeks. There is no provision in Florida law that requires the employer to hold open a job for an employee who is unable to work. (Holding the position for the employee is the smart thing for the employer to do in most cases.)
Temporary Partial Disability Benefits:
Florida work comp also provided for temporary partial disability (TPD). An employee will receive TPD if the medical provider releases the employee to work with restrictions on the number of hours the employee can work. If the employee is unable to earn 80 percent of his wages prior to the injury, the insurance carrier will pay TPD benefits on the hours the employee is unable to work per week.
This is when the employee has been released by the authorized treating physician to return to work in any capacity. The payment is then 80 percent of the difference between 80 percent of the employee's AWW and earnings. This is referred to as the 80/80 formula. If work is available within the employee's restrictions and the employee does not return to work then no benefits are payable.
Impairment Benefits:
When an employee reaches maximum medical improvement, the medical provider will determine whether or not the employee has any permanent partial disability. If the employee receives a permanent impairment rating, a scale is used to establish the number of weeks of compensation the employee is entitled to.
The employee will receive:
1. Two weeks for each percentage point of impairment from 1 percent through 10 percent
2. Three weeks for each percentage point of impairment from 11 percent through 15 percent
3. Four weeks for each percentage point of impairment from 16 percent through 20 percent
4. Six weeks for each percentage point of impairment from 21 percent and up.
If the employee is earning the pre-injury wage or higher, the benefits are reduced by 50 percent.
Permanent Total Disability Benefits:
Florida has a unique way of determining if an employee who has reached maximum medical improvement has a permanent total disability (PTD). If the employee can be placed in a sedentary job within 50 miles of his residence, the employee is not PTD, unless he has a severe injury as defined by the Florida work comp statutes.
Some of the severe injuries include spinal cord injuries that involve paralysis of an arm, leg or the trunk; amputation of a hand, arm, foot, or leg; severe brain injury; and, second or third degree burns over 25 percent of more of the body. If the employee is classified by the Division of Workers Compensation as PTD, the employee will receive PTD benefits which are the same as TTD benefits until the age of 75. If an employee is drawing social security benefits, the PTD benefits are reduced to the point where the social security benefit plus the PTD benefit equals 80 percent of the average weekly wage earned prior to the injury.
Death Benefits:
If an employee dies as a result of an on-the-job accident within one year of the date of the accident, or if the employee dies as a result of an on-the-job accident within five years with continuous disability, funeral expenses up to $7,500 is covered by workers compensation. The spouse is entitled to 50 percent of the average weekly wage, not to exceed $782.00 (for calendar year 2011).
The spouse plus one child is entitled to two-thirds of the average weekly wage, not to exceed $782 (year 2011). If the employee leaves behind one child as the only beneficiary of death benefits, the child receives one-third of the average weekly wage, not to exceed $782 (year 2011). There is no time limit on how long benefits can be paid, but the maximum amount of death benefits is $150,000 (not including funeral expenses). If the spouse remarries, the spouse receives a lump sum payment of 26 weeks as long as the $150,000 cap is not exceeded. The spouse is also eligible for tuition benefits at a vocational technical center or community college.(WCxKit)
Vocational Benefits:
If, due to the employee's on-the-job injury, the employee is unable to return to work because of permanent work restrictions, the employee is entitled to assistance from the Workers Compensation Vocational Rehabilitation Section of the Florida Department of Education. At no cost to the employee, the employee can receive vocational counseling, transferable skill analysis, training on job-seeking skills, job placement, on-the-job training, and formal retraining.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Posted in
