Workers Compensation Laws Vary Everywhere

If you think it is difficult to know all the workers' compensation laws in your state, pity the workers' compensation manager at the large corporation where he/she may need to know the work comp laws of 20 or 30 states, or all 50 states, plus the District of Columbia, Puerto Rico, the Virgin Islands and Guam. While every jurisdiction provides for workers' compensation coverage, no two jurisdictions go about it in the same way. 
 
A national workers'  compensation claims auditor was recently contacted and asked, “What is the maximum weekly benefit in Kansas?” All the professional auditor could do was answer “I will be glad to research it for you and let you know.” Why couldn't the expert on workers’ comp claims answer the question? The reason is because every state addresses the various aspects of the workers’ comp laws in their own way.
 
Compulsory Coverage
The point where the jurisdictions are most alike is in the requirement that all employers (with certain minor exceptions for very small businesses) carry workers' compensation coverage for their employees. Two states, New Jersey and Texas, do not describe their workers' compensation as compulsory, but as elective. 
In New Jersey while work comp coverage is described as elective, in actuality it is compulsory as the employer can be subject to both fines and a misdemeanor criminal offense for not carrying work comp coverage. 
Texas is the only state where workers' compensation is truly elective, but if the employer is not insured, “going bare,” the employer is liable to suit without defenses.
 
Self Insurance
Most of states allow employers to self insure. Single employer self insurance for workers’ comp is a viable option only for very large employers. Groups of employers joining together to self-insure, for example several hospitals in the same state, is allowed in most states. The monopolistic states/jurisdictions where only the state itself can sell work comp coverage to employers do not allow self insurance for work comp. The monopolistic jurisdictions include Guam, North Dakota, Ohio, Puerto Rico, Virgin Islands, Washington state and Wyoming.
 
Exceptions
While there is workers’ compensation insurance in every jurisdiction, each jurisdiction carves out its own exceptions to the work comp coverage requirement.
 
The most common exceptions, allowed by most of the states, to having work comp coverage are the exclusion of work comp coverage for employees who are volunteer workers, seasonal farm workers and domestic servants. Other types of employees who can be excluded from work comp coverage in some of the states includes real estate agents, over the road truckers, charity workers, sales people paid by commission only, casual laborers, ministers, barbers and professional athletes. 
 
Then some states have exceptions for work comp coverage unique to that state alone. For example, in Louisiana “crews of crop spraying aircraft engaged in agriculture” can be excluded from work comp coverage. If you think an employee might not covered or if you are unsure if there is work comp coverage, please consult with a workers’ compensation lawyer for the jurisdiction in question.
 
Major Benefits
In all the jurisdictions, the work comp laws provide for income benefits, medical benefits and rehabilitation benefits — including both vocational rehab and medical rehab.
 
Income benefits can be broken down into four categories: temporary total disability benefits (TTD), permanent total disability benefits (PTD), temporary partial disability benefits (TPD) and permanent partial disability benefits (PPD). There are several different methods used by the various jurisdictions on how to compute the income benefits. 
 
Let's look at some of ways the most common income benefit, TTD is calculated. In most states the employee is paid two thirds of his gross average weekly wage, with maximum and minimum caps. However, some states compute the benefits differently. In a few states, the TTD is based on 80% of spendable income or 75% of after tax income or 70% of gross average weekly wage. 
 
There is more variance in the ways PPD benefits and PTD benefits are calculated. In some states the weekly amount paid for PPD or PTD is the same as the weekly amount paid for TTD. In other states, the weekly amount paid for PPD and PTD will be significantly less than the TTD rate. Some states have caps on the maximum amount the employee can receive for PPD or PTD, other states have no caps.
 
Medical Benefits are fairly consistent across all the jurisdictions. The biggest area of difference is in who selects the medical providers. In about half of the jurisdictions the employee can select their own medical provider, while in the other half of the jurisdictions the employer or insurer will determine who the medical providers will be.
 
Rehabilitation benefits for both vocational rehabilitation and medical rehabilitation vary greatly. All jurisdictions require medical rehab but not all states require vocational rehab. The limitations placed on vocational rehab depend upon the state.
 
IMEs and Ratings
In all of the jurisdictions if the employer or employee is unhappy with the medical diagnosis or impairment rating given by the medical provider chosen by the other party, they can question it. The means to do so varies from jurisdiction to jurisdiction. In some states the party not in control of the medical selection can have an independent medical examination of the employee by requesting it from the other side of the claim. In other states the employee or employer must petition the Workers’ compensation Board for the Board to provide an independent medical evaluator. Then there are a few states where the claims adjuster for the employer can request a peer review—where a doctor evaluates the medical diagnosis provided.
 
Most of the jurisdictions use the American Medical Association Guidelines to calculate impairment ratings. But then each jurisdiction applies them differently. Some jurisdiction will multiple the impairment rating by a set number of weeks and then multiply that number against the TTD rate or the PTD rate. Other jurisdiction will increase the impairment rating by half or double or some other local variance.
 
Death Benefits
Death benefits also vary considerably by jurisdiction. In some states the death benefit will be equal to a certain number of weeks of the TTD benefit or the PPD benefit, for examples 400 weeks of TTD. In other states the death benefit will be capped at a dollar amount, like in Kansas where the death benefit payable to the employee's spouse and dependent children is $250,000.
 
Other Differences
There are many other areas where the workers’ comp laws will differ from jurisdiction to jurisdiction. For instance, some jurisdictions allow subrogation or workers’ comp payments, other jurisdictions do not allow subrogation. Most jurisdictions do not cover independent contractors for workers’ comp, but a few do. Some jurisdictions allow the insurance company to settle future medical cost with the employee, while some jurisdictions require the employee to have life time medical care made available. (workersxzcompxzkit)
 
Summary
Neither the multi-state workers’ compensation claims manager or the professional claims auditor will know all the work comps laws in the entire jurisdiction. Please feel free to contact us with any of your work comp questions. We won't know the law in every jurisdiction, but we will be glad to assist you in learning the answer to your question.
 
So, feel free to use our State Laws Resource, which is updated periodically, but still laws may change more frequently than any printed service. www.ReduceYourWorkersComp.com/  http://www.reduceyourworkerscomp.com/workers-compensation-state-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.

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