Is a Bundle of Joy Increasing Your Workers Comp Costs

There Can Be Many Secondary Benefits to Being Off Work

I was reading a parenting magazine the other day about how parents sometimes tell little lies to their kids in order to get what they want. These aren’t major lies, but little ones that have a common goal of getting your younger child to leave a playgroup, or to eat something they really don’t want to eat. I thought about how in the claims world it is often the claimant that tells fibs about their injury or pain in order to get what they want, which is often the goal of stretching their time off away from work. So why would some people lie about their injury? Isn’t the goal about getting better so you can return to work?

The answer here is yes–most people are honest and just want to get their injury over with. But there are others that will stretch the truth a bit in order to remain out of work. We call this “Secondary Gain.” This can be a very important part of the claim, whether it is in litigation or not. So what are some red flags to look for that could indicate a person has secondary gain issues? [WCx]

The claimant has an infant or young child.

Daycare is very expensive! For many people, daycare costs are more than their house payment. It is not uncommon to pay over $2,000 a month to have 2 children in daycare during the workweek

It is easy to understand how claimants that have kids are more likely to attempt to stretch their time out away from work. In addition to their wage loss checks, they have other savings that include decreased daycare costs. This is an unforeseen cost to the claim overall. If my injured worker, who is already receiving wage loss benefits, is also able to save $2,000 a month by being able to watch their own kids while off of work, they really have little incentive to rush back to work. They are making more money by not working than by actually working.

For example, I had a claimant that was off work with an ankle injury while his wife gave birth to their first son. Soon after, his employer mentioned to me that this person was not dropping off his medical slips at their HR office, and he was not as quick to return my calls to check up on how he was doing and how he was feeling. It seemed like whenever the employer had a light duty job open up, he was a lot harder to get a hold of. Then I noticed in the medical records that he seemed to be moving backwards, complaining about increased pain and how his treatment was no longer helping him, when just before the birth he had mentioned how he was feeling better and was excited to return to work. He did not tell me about the birth of his son, and as soon as I found out I was able to piece the puzzle together as to why his claim was suddenly at a standstill. Be vigilant about this issue, and use an IME or surveillance to your advantage in this scenario so you can keep the claim moving forward.

The claim is in litigation

Plaintiff attorneys know that the longer a person is off of work, the more wage loss benefits they accrue. This increases the value of their claim, resulting in larger settlement exposure. If a claim becomes litigated over any issue, you can guarantee that the worker will try to stay off work or totally disabled as long as possible. Again use the IME and surveillance to your advantage. Call the employer and try to create a light duty job if none was previously available. This will decrease your wage loss exposure, and if an injured worker refuses a light duty job that was offered to them within their medical restrictions, you can end that wage exposure and keep a strong defense throughout the course of the litigation.

The employer had planned layoffs coming in the near future

Sometimes when an employer makes an announcement about cutbacks in the future, this will increase claim activity. This is because the worker feels their job may be eliminated, and they want to try and guarantee some sort of income in the form of worker’s comp wage payments. Employers need to know that termination of the employment of workers that have comp claims and medical restrictions can lead to increased exposure, and can cost more in the long run than if you keep them working or offer them light duty alternatives. The adjuster and employer need to work together when cutbacks are imminent, so a plan can be made about if a person should be terminated, laid off, or kept on the actual employment roster. Communication between employer and carrier is always important, and it is crucial in this scenario.

The injured worker is close to retirement

If a worker sustains a work injury the same year that they were supposed to retire, they really have little incentive to return to work. They are going to retire soon anyway, so why should they be proactive in doing what they can to get back to work? We view this as an “early retirement,” since the worker is going to try and milk some time and wage loss benefits before they finally remove themselves from the workplace. It is important to note that I have had experiences where employers will be quick to terminate these employees, since they are headed to retirement anyway. This creates a problem, since the carrier is usually forced to continue to pay wage loss benefits until the worker get cleared of their medical restrictions. The employer views this issue different than the adjuster. Communication is key, so the proper steps can be taken to lessen the exposure to both the carrier and the employer. Just because a worker is going to retire in the near future doesn’t mean that it is OK to terminate their employment should an injury occur. [WCx]

Overall decreased costs to the employee

A typical employee will spend $50- $60 to fill up their car with gas. In addition to this there is commuting time, as well as time away from family. Lots of people put in tons of work hours, which can cost them in tangible and intangible ways. When a worker gets injured and has a claim, a lot of these expenses go away. Gas costs decrease, commuting time goes away, and people can spend more time with their families, whether they are actually injured or not. When a claim has been progressing fairly uneventfully, then all of the sudden the claim comes to a sudden halt, I take a step back to see what could be going on. Summertime, deer hunting season, kids sporting seasons, prime vacation times, all of these are times where it is convenient to be off of work. Sometimes the answer can be right in front of you, the adjuster. It is the time school starts, and it is a lot easier for parents to get their kids out the door and off to school without having to deal with going to work themselves. So when you find yourself dealing with a claim that is at a dead end, take a step back and review their profile. Do they have kids? Are they avid outdoorsman? Do they coach little league or soccer? Can these things have an effect on their comp claims? You bet they can.

Summary

Secondary Gain is always an issue that will be front and center in claims. It is not only the medical issues than contribute to a person being off of work; there are always a lot of other costs that contribute to the overall claim. So when you are first interviewing your claimant, take the extra time to find out what they do outside of work. Document if they have kids, or if they are involved in any other social or sporting activities outside of work. It is this kind of information than can help you down the road when you are trying to put the pieces of the claim puzzle together.

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: [email protected].

WORKERS COMP MANAGEMENT MANUAL: 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.