Four Do's and Don'ts When Settling a Claim - Employer Role in Managing a Workers Compensation Claim

The Claim Settlement

Normally, it is up to the adjuster to negotiate the settlement of the workers compensation claim. However, there will be occasions when the employer needs to be involved in the settlement discussions. In one situation, a large retail corporation, the risk manager attended and had settlement authority to settle all the claims. In another, the CFO had settlement authority and the adjusters had to contact him for EVERY settlement (and there were a LOT of claims so this was a big task.) The employer will have set parameters in the account instructions to spell out how they want their claims handled. This would include:

Do This:

1. Attend depositions and hearings.

2. Attend the settlement conference (with settlement authority if you are self-insured).

3. Work with the vocational rehabilitation specialist to accommodate the employee's return to work if there are any ADA concerns. (WCxKit)

4. Provide rehabilitation training if necessary.

Occasionally employers go overboard in their efforts to control the cost of workers compensation claims. Going without workers compensation insurance. This is a criminal offense in most states possibly resulting in your paying fines, paying the claim out of company funds and ending up paying your own costs to defend a lawsuit from the injured employee.

Don’t Do This:

1. You cannot terminate the employee for filing a workers compensation claim.

2. You cannot refuse to hire an employee solely because of prior workers compensation claim history (unless the prior injury(s) makes it impossible for the employee to perform the job under consideration with accomodations. CHECK WITH LEGAL COUNSEL ABOUT THIS.

3. You cannot charge an employee with any part of the workers compensation premium.

4. You cannot pay the small claims out of company funds and not report them to the workers compensation insurer.(WCxKit) There is still a lot of debate about this one, but it's against the terms of most insurance policies to do this.

By staying involved in the workers compensation claim from before the claim happens to the time the claim is concluded, you will have a strong, positive impact on the cost of your workers compensation insurance and enjoy the prospect of effectively reducing your WC costs. Not a bad bargain for implementing a few rules and policies.

Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing.
Contact: RShafer@ReduceYourWorkersComp.com or 860-553-6604.

WORK COMP CALCULATOR: http://www.LowerWC.com/calculator.php

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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.