Back to Basics Why the First Report of Injury Is So Important in a Workers Comp Claim

The U.S. Labor Department reported on Thursday continuing unemployment claims surged 172,000 to a record 6.02 million. Initial jobless claims were recorded at 610,000 for the week ending April 11. The four-week moving average was 659,500.

Employers continue to search for ways to cut costs and have targeted employee benefit plans putting many medical plans in jeopardy.

For the employed, the prospect of losing one's job almost seems imminent which may lead to an increase number of fraudulent workers' compensation claims.

Employers must emphasize a "back-to-basics" approach to their workers' compensation claims. One area to focus on is understanding the difference between an illness and an injury. An injury is defined as damage or harm caused to the structure or function of the body caused by an outside agent or force. An illness is defined as a state of poor health.

Employers should review the process used by their claim administrator to register first notice of loss. Does the administrator make a successful (workersxzcompxzkit) attempt to identify the injury as occupationally-related? If there is doubt, what is the procedure to review the first notice to controvert the claim?

Remember, workers' compensation provides wage replacement (subject to state law) where medical plans do not typically afford this coverage unless a disability occurs.

With a growing number of people unemployed and prospects that the jobless number will continue to increase, employers must rely on the diligence of their claim administrators to verify the accuracy of a reported injury. If the injury is found to be employment-related (as defined by state law or regulation) then the claim should be handled in a judicious manner. If there is doubt or suspicion, than immediate action is required not to make payment on a claim that is not work related.

Michael Ferreira is the President of Safegate Risk Consulting, LLC. He has been in the insurance industry for many years and has expertise in brokerage, underwriting and claims. While in the brokerage industry, he was the client account executive for Walmart. He can be reached at: 917-767-9123.

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.