How To Make Unions An Asset To Workers Comp Cost Savings

Workers' comp with unionsMany employers may be suspicious of working with unions, thinking that they support the filing of questionable workers’ comp claims. However, in some cases working with labor unions may lead to decreases in workers’ comp costs. Unions are usually strong supporters of improved safety policies, like following OSHA guidelines, use of safety gear like hard hats and protected eyewear and improved ergonomics. Unions can track workplace accidents and make suggestions over ways to improve safety.

 

 

Workers’ Compensation Policy Planning

 

Bring labor unions into your workers’ compensation policy planning. After all, a good company cares for its employees and wants them to be treated fairly. Leaving unions out of the process creates an “us vs. them” mentality that can drive up long-term costs. Including union input builds buy-in to the company’s workers’ comp process.

 

Here are some suggestions for working with labor unions:

 

  • Talk to union representatives early in the planning process.
  • Ask for the union’s perspective on issues such as how seniority affects injury management and their policies on things such as supplemental pay for the injured worker. Does the union have “collateral source benefits” that are a disincentive to returning to work?
  • Listen to the union’s input on issues such as safety planning and how to return employees to work post-injury.

 

 

Drug Testing

 

One area where unions and employers have disagreed is over the use of drug testing. Unions may object to drug testing as infringing on its members’ privacy rights or question the science behind drug testing. If employers work with the unions to explain how drug testing protects the safety of members, everybody wins. Unions may respond to the employer’s rationale of keeping intoxicated, unsafe workers from endangering the safety of the workforce, provided that the drug testing policy promotes employee treatment rather than termination. Having a written drug testing policy that is fair and equitable can go a long way towards convincing a union that your concern is for safety, not punishment.

 

 

Union Representatives Can Guide Injured Workers through the Workers’ Compensation Process

 

Union stewards or representatives can help guide injured employees through the workers’ compensation process, starting with arranging immediate medical care. This can help reduce costs as the sooner the injured employee is treated, the higher the probability of a quicker recovery. Make sure that communication with the union remains positive and proactive so that a disgruntled union representative does not urge the employee to stay off work longer because the union has some non-related dispute with management. Also, keeping communication positive and flowing can keep the employee from hiring a lawyer out of frustration over miscommunication or unreturned phone calls.

 

 

Complying with Labor Relations’ Laws

 

Make sure that your company complies with all required federal and state labor laws. Employees have the right to join together with co-workers to address issues at work, with or without a union. Most employers are required to post notices advising employees of their rights under the National Labor Relations Act (NLRA). You do not want to give unions ammunition to attack your company by forgetting to do a simple thing such as hanging a poster in the workplace. You can find out more about employers’ obligations under the NLRA at http://www.nlrb.gov/rights-we-protect/whats-law/employers.

 

 

 

Rebecca ShaferAuthor 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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

6 Ways Insurance Companies Control Workers’ Comp Claim Leakage

workers comp claim leakageWhen you review your broker’s or insurer’s website, there is one subject in workers compensation that most brokers and insurers never mention – leakage. Leakage in an insurance claim is any payment that is more than the payment should be. Leakage is defined as the difference between what the claims office spent and what they should have spent. Leakage is also been defined as lost opportunities to save money.

 

 

Workers’ Comp Claim Leakage Becomes Employer Expense

 

As workers compensation premiums are directly tied to the frequency and severity of employers’ claims, you will never hear the workers comp insurer say, “We did a poor job controlling the cost of your claims.” Their leakage becomes the employer’s expense through higher insurance premiums.

 

 

5 main causes of workers comp claim leakage:

 

  1. Inadequate claims handling.
  2. Judgmental mistakes.
  3. Poor claim processes.
  4. Overpayments.
  5. Bad customer service.

 

While leakage can be caused by any one of these areas, it is often a combination of them that results in leakage.

 

There are about as many forms of leakage in workers compensation as there are workers comp subjects to be discussed.

 

 

10 examples of workers’ comp claim leakage:

 

  1. Payment of medical bills without adjustment to the fee schedule.
  2. The failure to properly investigate compensability and payment of claims that are not covered.
  3. The failure to pursue subrogation.
  4. The failure to utilize the early return-to-work program of the employer.
  5. The failure to properly manage utilization review opportunities.
  6. The failure to control the selection of the medical provider in those states where the employer controls the medical provider selection.
  7. The selection of inadequate defense counsel.
  8. The failure to pay medical benefits or indemnity benefits timely resulting in fines and/or penalties.
  9. The lack of automation and/or technology in the process where it could be utilized.
  10. The additional management and administration time due to any mistake in the claims handling.

 

The list could go on and on. Any failure to control the insurance claim can result in leakage.

 

 

Leverage Technology to Identify Leakage?

 

Some consultants and insurance brokers who attempt to identify leakage by the use of computer outcome modeling or algorithms. These provide a detailed report reflecting payment areas in which the employer’s claim cost exceed the average for their industry or the employer’s prior lost history. When the employer has thousands of claims, automated methods can identify some possible areas where there is leakage, but will miss many others. When the employer does not have thousands of claims, the cost averages can be influenced by a few outlier claims making the identification of leakage by computer averages less reliable.

 

 

An example of how computers and algorithms fail to identify leakage: A computer average for indemnity paid will not show the failure to contest small claims that should been investigated and denied. Because it is easier for the adjusters to pay numerous small claims rather than contesting them, the behavior looks like superior performance on a computer average, though, in fact, every small claim that was paid but should not have been, is leakage.

 

 

A better way to control leakage is the utilization of these 6 time-proven methods:

 

  1. Having an established set of best practices for workers compensation claims.
  2. Proper education and training of the workers’ comp adjuster including state statutes, customer service, and claims-handling practices.
  3. Excellent education and training of all support staff.
  4. Linking salaries and pay raises to compliance with best practices.
  5. Having an established work-flow process.
  6. Incorporating automation and technology into the claims process.

 

An integrated approach incorporating all of the methods will eliminate most leakage.

 

If you feel like there is leakage in handling your workers compensation claims, there probably is. Identification of various forms of leakage on your claims can be done through a claims audit. An experienced quality assurance auditor will be able to point out where leakage has already occurred and identify situations where mistakes have already been made, but can be corrected before additional money is paid. If you would like to discuss a leakage audit of your insurance claims, please contact us.

 

 

 

Rebecca ShaferAuthor 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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

10 Steps Every Adjuster Should Perform In a Workers Comp Claim Investigation

TEN Steps Every Adjuster Should Perform In a Workers Comp Claim InvestigationWhen you go online and read your adjuster’s file notes about your claims, do you know what to look for to be sure the adjuster is performing a quality claim’s investigation on your claim files? If not, read on and learn what the adjuster should be doing to be sure you are being protected from unnecessary workers compensation cost.

 

 

ONE:

The first thing the adjuster should do in the claim investigation is to verify coverage. Before the adjuster accepts the claim, the adjuster should check to be sure there is coverage. The verification of coverage should be the first adjuster’s note in the claim file notes.

 

This would include:

 

 

  1. The policy number.
  2. The policy dates to verify the policy is in enforce for the date of the accident.
  3. The state(s) covered under the given policy number and policy period.
  4. Any endorsements to the policy that would change the coverage.
  5. Any exclusions to the policy that would change the coverage (for example – a particular location of the employer is excluded from the coverage).

 

 

TWO:

Once the adjuster has confirmed there is coverage, the next step in the investigation is to begin the contacts. With workers compensation, the first contact attempt should not be the employee; it should be the employer. The reason for this is the employee will only provide information the employee considers beneficial to himself. The employer will often provide information that will assist the adjuster in the direction of the claim. The employer might advise that no one saw the accident and the claim is highly questionable, or the employer might advise that seven fellow employees saw the injury occur.

 

 

THREE:

The initial contact with the employer should be the same day the accident is reported, or at least within 24 hours of the report of the claim. The adjuster’s file notes should reflect more than “called the employer.” The contact details that should be included in the file notes include:

 

 

  1. The facts of the accident.
  2. The identification of any witnesses.
  3. A discussion of any subrogation issues.
  4. Any knowledge the employer has of a prior claim.
  5. Verification of the information on the Employer’s First Report of Injury.
  6. The disability status of the employee.
  7. A description of the employee’s job duties.
  8. The length of time the employee has worked for the employer.
  9. Confirmation of lost time if the injury was reported after the initial waiting period for indemnity benefits.
  10. The availability of modified duty for the employee.
  11. If applicable, a request by the adjuster to the employer to provide the necessary documentation of the employee’s wage history.

 

 

FOUR:

The initial contact with the employee should immediately follow the initial contact with the employer. The employee contact should also be the same day the accident is reported, or at least within 24 hours of the report of the claim. The file notes should reflect the initial contact with the employee covered:

 

 

  1. The facts of the accident.
  2. The identification of any witnesses.
  3. A discussion of any subrogation issues.
  4. Any prior injury claims of the employee (both workers comp and any other injury claims).
  5. Verification of the information on the Employer’s First Report of Injury.
  6. Any additional information not on the Employer’s First Report of Injury that would be needed to file the ISO index on the employee.
  7. The disability status of the employee including information on the nature of the injury, the treatment and the prognosis.
  8. The employee’s attitude toward the employer and returning to work.
  9. A summary of the explanation of benefits and the future course of action the adjuster will take.

 

 

FIVE:

The investigation should also include the contact of any witnesses. The initial contact with the witness(es) should be the same day the accident is reported, or at least within 24 hours of the report of the claim. The file notes on the contact with the witnesses should reflect the facts of the accident as told by the witness(es). All witnesses should be asked to identify any other witnesses.

 

 

SIX:

The first contacts part of the investigation should also include contact with the office of the medical provider. This allows the adjuster to verify the nature and scope of the injury, the diagnosis, and the prognosis, plus the adjuster can make arrangements for all medical bill and medical reports to be sent to the adjuster. This information on this part of the adjuster’s investigation should also be reflected in the file notes.

 

 

SEVEN:

If the adjuster has any reason to question the compensability of the claim, or if there is the potential for subrogation, or if the employee’s injuries are severe, the adjuster as a part of the, should obtain a recorded statement from the employee during the initial contact. The file notes should reflect a summary of this part of the investigation.

 

 

EIGHT:

The claim investigation encompasses much more than just the initial contacts with the employer, employee, medical provider, and any witnesses. The work comp claim investigation should also include:

 

 

  1. A medical authorization in those states that require one for workers comp.
  2. Obtaining the current medical records.
  3. Obtaining past medical records if the employee has a history of prior injury claims.
  4. A wage statement for the calculation of indemnity benefits.
  5. The filing of the ISO index.
  6. A police report, OSHA report of any other governmental record related to the injury.
  7. A recorded statement from the employee’s supervisor if there is a compensability question.
  8. Engineering report or other documentation to support subrogation when applicable.
  9. Information on any responsible third parties when subrogation is possible.
  10. Any other information that will have an impact on the outcome of the claim.

 

 

NINE:

If the only file notes on the investigation read something like “called employer, no questions about the claim,” the adjuster is not doing a proper investigation. Even if the injury was witnessed by a dozen co-workers, the adjuster who is doing a proper investigation would still cover all the key points noted above. Even in the most valid of claims, the adjuster should still learn the employee’s diagnosis and prognosis, and when the employee will be back on the job. If the adjuster is not asking when the employee can return to work full duty or on modified duty, the claim investigation is incomplete.

 

 

TEN:

All the information obtained during the claim investigation should be summarized in the file notes for your review. If the adjuster is not doing so, ask that the file notes are properly documented. After all, with workers compensation, you will eventually pay the cost of the employee’s claim through your insurance premiums. You should know if you are getting the proper claim investigation that you are paying for.

 

 

 

Rebecca ShaferAuthor 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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

5 Considerations For Effective Safety Program Incentives

Safety Program IncentivesSafety program incentives are a popular tactic as all good risk managers understand the importance of preventing injuries. From the employers perspective, the buy-in of the employees into the safety program should be a given, as the employer sees the safety program as protecting the employees from injury. However, the employees, especially the ones who have never been hurt on the job, may view the safety program requirements as hindrances in their performance of their work.

 

 

Unintended Consequences of Safety Program Incentives

 

To encourage employee participation in their safety programs, employers often add what they see as incentives for the employee’s to participate. For example, the employer may offer gift cards to local businesses with the size of the gift cards tied to the number of days the employer has gone without a report of a work comp claim. While some employees will view the gift cards as bonus compensation, it may have the unintended consequence of causing an employee with an injury to not report the injury due to peer pressure. If the injury develops complications due to the lack of timely medical care, the injury gets reported late and the cost of the medical benefits is higher than it would have otherwise been.

 

 

Safety program incentives can be used to create employee interest in the safety program and motivate employees (and managers and supervisors) to act and work in a safe manner. But, if the incentives become the focus of the safety program and actual safety is not the focus, then the incentives become interference in obtaining a true safe working environment.

 

 

Train Employees to Work Safely

 

Instead of the emphasis of the safety program being on the incentives, the emphasis should be on training the employee how to work safely. Educating the employee in the proper performance of their job will have a bigger impact on the overall safety record of the employer than an incentive program. If the employees do not know how to work safely, the incentive program will fail.

 

 

A tactic taken by some employers is to tie performance bonuses for managers and supervisors to the number of injuries reported at a work site. If the managers and supervisors are more interested in the bonus then they are their actual safety performance, they can go outside the lines of propriety by pressuring employees to not report claims or by delaying the reporting of claims until their bonus is paid. Any incentive program from managers and supervisors must have built-in safeguards to be sure all claims, big and small, are reported timely.

 

 

The safety program needs to be constructed where the employees are motivated to act in a safe manner and to promote safety with their fellow employees without anyone feeling there will be retribution for reporting an injury. If the employees feel there is retribution or retaliation for reporting an injury, the number of reported injuries may declined slightly, but the actual number of injuries does not decline.

 

 

When safety programs are tied to return to work programs, with only lost time claims being counted by the employer in awarding safety incentives or bonuses, there can be an abuse of the return to work program. There are situations where the employee following an injury is unable to perform any meaningful work for the employer. If the employee is returned to work anyway and sets in the cafeteria or break room all day doing nothing, it will have the unintended consequence of demoralizing other employees who see the injured employee as receiving preferential treatment.

 

 

Progressive Discipline Can Create Morale Problem

 

Some employers have tried tying safety programs to progressive discipline where injured workers are reprimanded for unsafe acts that result in an injury to themselves or others.   The problem of using progressive discipline is it usually has three or four steps including a written warning, probation, suspension and termination. Only the most careless of employees will have three or four safety violations or at-fault injury claims where they can be terminated for repeated violations of the safety program. While the progressive discipline approach can reduce safety violations, it can also create a morale problem, especially if the employee does not feel he/she acted in an unsafe manner.

 

 

For safety programs to be effective there needs to be:

 

  1. A screening program to prevent the hiring of people who are prone to accidents or who have a lax attitude toward safety
  2. A drug testing program that includes pre-hire testing, post-accident testing, random testing and for just-cause testing
  3. A culture of safety before profits or production within the company
  4. An integration of the safety program into the company’s quality control program
  5. A way to quantify risk and measure the results of changes with the work process

 

To prevent problems within the safety program, employers need to keep the focus of the safety program on training the employees, not on incentives for either the employees or the supervisors/managers. Safety program incentives should be used only as a way of obtaining the employee’s interest in the safety program. Properly educating the employees on how to work safely will have a much greater impact on worker safety than any incentive program.

 

 

 

Rebecca Shafer

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

 

 

The Dangers of Under-Reserving

The Dangers of Under ReservingUnder-reserving in workers’ compensation is a dangerous practice.

 

A basic principle of business solvency is to have an asset to offset each liability. A workers’ compensation claim is a legal obligation – a liability for the company, whether it is a contractually assumed liability through an insurance policy for an insurance company, or a retained liability through self-insurance. A claim reserve is an estimate of what the workers’ compensation claim will cost. When the adjuster handling the work comp claim establishes a reserve on the claim file, it is a definite amount of dollars that are being set aside to pay the future cost of the work comp claim.

 

 

 

Under-Funded Liability Will Eventually Experience Shortfall

 

 

From an accounting standpoint, a claim is an incurred liability, even though it will be paid in the future. When the reserve is established by the adjuster, the company loses the ability to use the amount of money that has been set aside to pay the work comp claim.   Inaccurate reserving, whether the reserves are excessive or inadequate, distorts the company’s financial condition. When the reserves are too high, money the company could use in other aspects of the business is no longer available for use by the company. When the reserves are too low, the company has an underfunded liability. This creates a situation where the company will eventually experience a shortfall.

 

 

While both over-reserving and under-reserving present an inaccurate picture of the company’s financial health, most financial people will argue that under-reserving is worse for the company. The reason for this is simple – the self-insured employer or the insurance company must have adequate reserves to meet their obligations. If the reserves are inadequate, the self-insured employer or the insurance company runs the risk of insolvency.

 

 

When the self-insured employer or insurance company has understated their reserves, they have overstated their assets and have understated their liabilities.   The difference between the amount of assets an insurance company has and the amount of liabilities an insurance company has is referred to as the insurance company’s surplus. An insurance company’s ability to pay claims is evaluated by measuring its surplus in comparison to their outstanding obligations.

 

 

 

Evaluated By Ability To Pay Claims

 

 

Insurance rating firms like A.M. Best measure the financial stability of an insurance company by evaluating their ability to pay their claims. If the insurance company has understated their reserves, they may temporarily increase their financial stability rating, but when the claims come due (are paid) and the available surplus drops, the financial stability rating of the company will be downgraded. A downgrade in an insurance company’s financial stability rating results in fewer potential buyers of their insurance products because doing business with the downgraded insurance company is considered riskier.

 

 

An example of how under-reserving of work comp claims can impact the surplus is as follows (to simplify, the insurer has no other liabilities except claims).

 

 

Total assets               Total Claim Reserves                                   Total surplus

$10,000,000              $8,000,000 (under reserved)                       $2,000,000

$10,000,000              $9,500,000 (properly reserved)                   $500,000

 

 

In this example, when the reserves are understated, it appears the insurance company has a surplus of 20% of assets, but in actuality, the surplus is only 5% of assets.

 

 

 

Reserving Practices Subject to Audits

 

 

All jurisdictions regulate the financial stability of self-insured employers and insurance companies. The reserving practices of the self-insured employers and insurance companies are subject to periodical audits by the state insurance department or other state regulatory agencies. When the self-insurer or the insurance company is audited, if the reserves are inadequate to pay all open claims (and technically, all claims that have been incurred but not yet reported), the state insurance department will require the self-insured employer or insurance company to increase the reserves to cover their obligations on their claims. If the self-insured employer or insurance company does not have the assets available to place in reserve for those claims, the state insurance department will shut the company down.

 

 

Another aspect of under-reserving is the impact on the calculation of future premiums. The reserves on the open claims are a part of the calculations in establishing the loss experience of the company. If the loss experience is understated because the reserves are understated, the insurance company will be charging inadequate premiums, resulting in lower profits for the company, or even pushing the company quicker to insolvency.

 

 

 

Proper Reserving Is Essential

 

To accurately reflect the self-insured employer’s financial position or the insurers financial position, proper reserving for the claims is essential. Under-reserving impacts the financial stability of the company, as the shortfall in reserving will eventually be corrected by taking the shortfall from the company’s surplus. If you have any doubts about the adequacy of the reserves on your workers’ compensation claims, please contact us as we can recommend claim auditors that will verify the adequacy of your claim file reserves.

 

 

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Six Things that Drive Workers Compensation Adjusters Crazy

workers compensation adjusterBeing a workers’ compensation adjuster has a lot of demands. Every day you have to juggle multiple demands on many files, sometimes within several jurisdictions. A typical caseload for the lost-time adjuster is 150 active files. The adjuster tries to handle the demands of those files in addition to the phone calls, emails, and medical records, usually without any support staff.

 

 

Every workers’ compensation adjuster appreciates anything that helps make their job easier. Below we discuss six small items that can make a big difference to Joe (or Josephine) Claims Adjuster.

 

 

1. Please complete all fields on the injury form.

 

When an workers’ compensation adjuster first gets a new assignment, nothing makes them more frustrated than to see many fields missing information. This can include social security numbers, birth dates, the type of injury, the date the injury was reported to the supervisor, etc. All of these fields are equally important, and when any are empty it means another phone call to the contact at the insured to gather this information. Take the time to complete all fields, so the adjuster has the information needed to get started on the file investigation without delay.

 

NOTE TO EMPLOYERS: IF YOU LEAVE BLANK FIELDS, SOMEONE ELSE MAY FILL THEM IN – WITH ANSWERS THAT YOU WON’T LIKE. Attach information if there isn’t enough room for the complete answer. Staple it and mail a copy to the adjuster.

 

 

2. Report All Claims in a Timely Manner.

 

The next thing that annoys workers’ compensation adjusters are late claims. Depending on the jurisdiction, this can put the adjuster in a time crunch to gather as much claims information to complete the investigation, and the fact they are rushing can lead to errors, or even worse, leakage. The last thing anyone wants is money and time wasted on a claim that is not compensable. One of the best things you can do is to report a claim right away. Do not let it sit on your desk until the injured worker goes in for surgery the next day. The sooner you can get that injury report to your adjuster, the better chance they will have to do a proper, thorough investigation. This leads to correct, ethical decisions on your claims without delays, penalties, or leakage.

 

 

3. Let the adjuster know if there is lost time on a claim.

 

Claims that include lost wages carry a certain priority with the workers’ compensation adjuster, since every day that clicks by means another day of potential wage loss due to the employee. As mentioned above, injuries should be reported right away. This gives the adjuster time to gather medical records to see if the claim is compensable. It also gives the adjuster a chance to get work restrictions on your employee so they can be placed in your light-duty work program. This eliminates the need for lost wages paid to the employee and keeps your claim costs down. When injuries are reported right away, everyone wins. The employee gets prompt contact by the adjuster, the adjuster gets a jump on the claim, and the employer gets to keep their costs down as low as possible.

 

 

4. Don’t tell the adjuster if a claim is compensable or not. It bugs them.

 

As much as you think a claim is legit or not, the employer typically cannot make a decision on a claim’s compensability. This is the adjuster’s job — what they get paid to do. This is why they are licensed to be claims adjusters in your state. They have the training and certification to make the decision on compensability. It is really important to voice your opinion on the claim, and to be able to back up your assumptions with facts. This will greatly help the adjuster with their investigation, but the overall decision on if the claim is accepted or not should be left up to the adjuster. Plus some jurisdictions have steep fines if claims are denied in error, so why put yourself in that position? Leave it up to the claims professionals.

 

IF IT IS NOT A LEGITIMATE CLAIM – TELL THEM YOU SUSPECT FRAUD. PUSH IT- so you are taken seriously. I don’t always live by my own advise here, and I almost always give my opinion about what I think is compensable, or not…

 

 

5. Make yourself accessible to the adjuster and return calls as soon as possible.

 

Workers’ Compensation adjusters have to make many phone calls every day. They are constantly on the phone. If they are calling you to get facts on an injury, and they leave you a message to call them, please call them back as soon as you can. Employer input on claims is important. Bear in mind you see your employees every day. You know a lot about them that the claim adjusters do not. Your investigation is just as important to the adjuster as is theirs. They rely on you heavily to know about the injury, what happened, why it happened, and what happened after the worker left. Send them any medical information you have, as this also will give them the provider’s name, address, contact info, and initial diagnosis. If you get bills for the treatment from the provider send them to the adjuster so they can be processed for payment if the claim is compensable. Anything you get that involves the claim should be sent to the adjuster, no matter what it is. The adjuster would always rather have more information than not enough.

 

 

6. Know the details of the injury soon after it happened.

 

The first question the workers’ compensation adjuster will ask you when they call is, “What happened?” Adjusters hate to hear the answer, “I do not know.” Obviously, this does not help the adjuster. You should be heavily involved in any claim that occurs at your workplace, whether it is a work comp injury, a liability injury, or a property damage claim. Gather facts and witness statements to send to the adjuster. Comments the witnesses have can impact a claim because the adjuster will compare that to the history given to them by the injured worker, and what history the injured worker gave the doctor when they were first examined in a medical facility. Any facts that do not add up will raise the red flag that there may be something more to this claim than what is on the surface, and it could prevent a claim from being falsely accepted. This again will keep your costs down, since you will not incur the leakage associated with paying a claim in error.

 

 

Conclusion

 

In conclusion, these are 6 items that can greatly help the workers’ compensation adjuster, even though you as the employer may find them quite trivial. You would be surprised if you saw the amount of information adjusters have to process on their 150-200 claims each day. Every little bit of information to the adjuster helps them out and makes their job easier. It all leads to the same goal that we have in claims, which is to properly investigate every one so the appropriate decision can be made on the compensability.

 

 

 

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Over-Reserving and Your Bottom Line

Over-Reserving and Your Bottom LineOver-reserving of workers’ compensation claims can have a major financial impact.

 

To pay the cost of workers compensation claims, the insurer or the self-insured employer sets aside the amount of money the company anticipates as necessary to cover the cost of the claim. The process of placing money in a reserve – reserving – sounds simple, but it’s not. While most financial obligations of a company have a set price, workers comp claims do not come with a predetermined cost. The amount of money needed to pay the claim is an estimate based on the experience of the adjuster with previous similar injury claims. Even though the reserve is an estimate, it is a legal obligation and appears on the insurer’s balance sheet.

 

 

 

Under-Reserving & Over-Reserving Creates Issues

 

If the workers’ comp adjuster for the insurer underestimates the amount of money necessary to pay the claim, the claim is under-reserved. If the adjuster overestimates the amount of money needed for the claim, the claim is over-reserved. Both under-reserving and over reserving creates issues for the insurer.

 

 

When a claim file is over-reserved, the extra money placed in the insurance reserve to pay the claim is not available to the insurer for any other purpose. The growth of the business is reduced because the insurer has less money available for its financial operations – investing, supplies, salaries, etc. While the impact of one claim being over reserved may not be felt, the impact of many claims being over reserved significantly curtails the growth of the insurance company and can even strangle the potential of the insurance company by reducing the funds it has available for its business.

 

 

 

Over-Reserving Causes Side-Effects

 

Over-reserving also causes a serious side effect for the workers’ comp insurer because of the way the premiums are calculated. The two components of workers comp claims affecting insurance premiums are frequency and severity. Workers comp claims are often referred to as “long-tail” claims because they often remain open for years. Therefore, when the underwriter at the insurance company computes the insurance premium, both the closed claims – where the reserves reflect what was actually paid – and the open claims, are used to calculate the future premium.

 

 

When the claim files are over-reserved, the severity of the claims is overstated in the calculation of the insurance premiums. This has a detrimental impact on the cost of workers comp insurance. The extra money in the over reserved open claims results in the premium calculation being higher than it should be. The employer is penalized for over reserves by having to pay higher insurance premiums than should be charged. If the employer can obtain the same workers’ compensation insurance at another company, at a lower price, the insurer loses the employer’s business. If the over reserving is severe enough, it can cause the financial collapse of the workers’ comp insurer because the insurer is unable to sell any new business as the insurance premiums it charges employers are too high.

 

 

 

Adjuster May Over-Reserve Out of Caution

 

The workers comp adjuster may over reserve the claim out of an abundance of caution, or more often, because it is easier to put a high reserve on the file than it is to spend the necessary time evaluating the medical information, the extent of the impairment/disability, and the applicable workers comp statutes to determine the correct reserve amount. As claims management understands the impact of over-reserving, when they see a pattern of over-reserving, the usual conclusion is the adjuster is either inexperienced or incompetent. The insurer or self-insured employer needs to work with the adjuster who is over reserving to improve the adjuster’s reserving skills. When over reserving is corrected, the excess money being held in reserves is released and goes straight to the bottom line of the insurer’s financial report.

 

 

The financial security and well-being of the insurer or the self-insured employer is dependent upon the adequacy of the workers’ comp claim reserved. If the reserved is overstated, it will diminish the monetary funds the company has available for its other financial obligations and opportunities. It will also cause the necessary premiums to be overstated, resulting in a loss of business for the insurer.

 

 

If you are a self-insured employer and believe your workers’ comp claim reserves are set too high, please contact us and we will be glad to set you up with an independent claims auditor to verify the accuracy of your claim file reserves.

 

 

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2019 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Record and Document Even Minor Work Injuries

The majority of workers at some point in a career sustain a minor injury at work. Sometimes it does not need to be treated and the worker prefers to deal with it privately at home. Or maybe the employee takes a few sick days to rest and then returns with no other issues.

 

 

Why Document Minor Injuries

 

No matter how minor the injury, it should always be documented. Adjusters receive countless workers comp claims, where a new claim is received in one month but the injury date is 6 to 8 months earlier. Why was this claim not reported back when the injury occurred? The answer from the employer is usually “Since the employee said it was not a major injury, and did not want to go to the clinic, I did not call a claim in at that time. No time was lost from work, so we did not think it was important .”

 

True, it may not have been important at the time. But if the injury details are not documented, then the adjuster has too little information. The employee may report telling the supervisor after the injury happened. And maybe the supervisor failed to make the necessary injury report, so no supporting documents exists. In addition, the supervisor does not remember any details of the injury. However minor the incident, it is important to have floor supervisors and managers document every incident. And the decision to call or not call in the “incident-only” claim to the carrier can be left up to whoever is responsible for calling in claims.

 

 

Put A Copy in Personnel File

 

The important thing is to document everything and put a copy in the worker’s personnel file. Then when a worker comes back about this injury a year later, there is documentation to support that an incident did actually occur and someone in management was informed. This helps the adjuster legitimize the claim and continue on with an investigation. If an employer chooses not to document an injury, then no supporting documentation is available for defense of a potential law suit.

 

A workers comp claim may seem “bad” to some, but it’s not as bad as a liability suit against the owner. A minor injury can morph into a bigger issue at any time. It is better to be on the safe side by documenting every seemingly insignificant little thing, as there is no way of knowing when  a little injury or issue may turn into a nightmare.

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

 

Ten Light Duty Work Ideas

Ten Light Duty Work IdeasSo you have decided to provide some light duty or transitional work for injured workers to decrease wage loss expense.  First of all, congratulations! This is the first step in decreasing claims costs. The wage expense in a comp claim is most usually the biggest cost, and any chance you have of decreasing that cost should be taken.  But what should the workers do?  What if they do not follow the rules and get hurt again? What if this light duty work hinders the rehab and recovery?

 

 

These are all common issues and concerns. But there are ways to work around them with jobs that already in the workplace for these workers to do.  Jobs that are no more or less strenuous than anything else they do on a daily basis while out of work.  If stumped for ideas as to where to start, use this information, and then further customize your jobs based on the building blocks we list below.  These will not apply to all areas of every employer, but at least it offers possible job ideas.

 

 

  1. Janitorial tasks

 

Although not glamorous, janitorial tasks are a much-needed function of the workplace. A broom is not heavy so sweeping the floor and back storage areas are not only sanitary but can also reduce risks for slips and falls due to debris. Maybe wiping down machines and making sure they are in proper working order is a job the injured party can do based on their level of experience.  With winter looming, salting entryways and making sure rugs and mats are in good shape and in good working order is a must to prevent falls.  Mopping could also be done, but it can involve lifting and twisting with a wet, heavy mop, so make sure your worker is capable of that before you assign that task to them. The goal is to have them working with light materials and prevent exertion that can cause further injury.

 

 

  1. Maintenance tasks

 

There may be a lot of jobs around the shop that are not done on a regular basis. Oiling machinery will increase the performance of the machine, as will changing belts, cleaning guards, checking saw blades, or cutting surfaces.

 

 

The tasks are not limited to only machinery.  Light painting can freshen and improve the look of the work floor. Replacing broken faucets, light bulbs, cracked mirrors, or repairing/caulking windows that may be not closing properly can also help. Checking outlets for proper power wattage is another one.  Go out on the floor and ask workers what needs to be done or what is not working properly and make the injured worker a “to-do” list.  There may not be enough work for them to last weeks, but at least it gets them back to work and doing something while in recovery mode.

 

 

  1. Office tasks

 

These jobs can include answering the phone, taking sales orders from clients, copying materials for files, or scanning paperwork for example.  Ask the office staff about any upcoming projects and what needs to be done they have been putting off for a while.  Chances are there are some sedentary work tasks available and needed, and this is a perfect task for your injured worker to do.  That way a fully functional worker without work restrictions can focus on more important tasks, or jobs that are more strenuous in nature.

 

 

  1. Inventory

 

A lot of employers carry a certain level of inventory for workplace needs. Obviously, the amount of inventory being carried depends on the type of workplace. But if you have the need, this is another light task the injured worker can do. Taking proper inventory and ordering more supplies is also another task to cross off your own to-do list.  Have the injured worker tally up what is currently in stock, what needs to be ordered, and when it should arrive before supply runs low. This is also a good time to have the worker shop and price supplies.  You might be able to find another vendor that can provide a better supply for a lower price.  This way not only gets the injured worker back to work, but the employee is also saving you money in the long-term.

 

 

  1. Job supervision and reporting

 

If the injured worker is unable to do the normal job, maybe the employee can still go out on job sites and help the other workers.  Not only supervise the overall job, but the worker could also assist in gathering light materials needed for the job.  If the work involves ladders and scaffolding, have someone on the ground to help the other workers, so they do not have to go up and down the ladders repeatedly to fetch materials or tools.

 

 

The injured worker also can report back like how the job is going so far, and recommend any changes or needed materials for the job site.  This will keep the job running on time for completion, and it is just another task that nobody thinks of until the issue arises.  You stay on top of the job status, and if certain recommendations are suggested and implemented, maybe that job is completed sooner than expected, resulting in a happier client.

 

 

  1. Performance reviews

 

If there is a management member out of work due to a claim, maybe now is a good time to bring them in to do annual performance reviews.  This way they can pull all the personnel files on the workforce, review them, get updated feedback from other supervisors on what the current performance is like, and then sit down with the employee to conduct a review and suggest improvements.  Again this may not supply the injured workers with weeks and weeks of work, but at least it is something that needed to be done. And if you have the right candidate to do it then it makes sense to have that person complete the task.

 

 

  1. Security

 

A lot of larger employers, such as grocery stores and retail businesses, have in-house surveillance cameras. The injured worker can monitor the day to day surveillance, clean up messes or spills, rotate product, place shelf signs, or any other light task that may need to be done.  Theft prevention can also be addressed; however, you do not want the injured worker trying to apprehend anyone and get injured again.

 

 

  1. Accounts payable/receivable

 

Another sedentary job is shifting the injured worker over to helping with accounts receivable/payable.  Your business probably has vendors to pay, and you also may have clients that have outstanding invoices.  Have the worker take over the books, and see if they can collect payment on some of the invoices that have not been paid.  Sometimes a faxed invoice to a client followed up by a phone call is all it takes to get the invoice paid.  This task will clean the books up, and make the company current with payments that are coming in and going out all the time.

 

 

  1. Assign a helper

 

If the injured party has restrictions but can still do most of the job, assign an entry-level helper to go along and do the tasks that they cannot do.  This provides the newer employee  a chance to learn more about the business and job duties, and it allows the injured worker to keep doing the normal job, now with the assistance of a helper

 

 

  1. Reach out to the injured party for ideas

 

When you just cannot think of anything for the injured worker to do, reach out to them and see what ideas the employee has.  The incentive for the worker is the chance to return to work, and maybe make the normal pay instead of collecting reduced wages on workers comp.  Sometimes great ideas are suggested. So keep an open mind, solicit some ideas from them, and try to do what you can to implement those job ideas.

 

 

Summary

 

Trying to create jobs for injured workers can be a difficult task.  But with an open mind and some creativity, get injured workers back to work.  Not only does this cut down on the workers’ comp expense but it also can complete some overdue tasks.  Put some thought into it, and ask others around the workplace for ideas.  Together you should be able to come up with a list of tasks that need to be done.  Every dollar saved on wage loss will count in the end.  Keep track of the cost of having these workers come back to light duty work, and weigh it against the cost of keeping them out of work, only returning at full duty.  You will be surprised at the cost savings of implementing a light duty work program.

 

 

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

Create an Effective Wellness Program with 6 Milestones

Create an Effective Wellness Program with 6 Milestones Many small and medium-size companies wish to create an effective wellness program like their larger competitors, but due to budget concerns and lack of personnel in the Human Resources Department, have not started their own wellness program. It is not as difficult as one might think.

 

Here are some guidelines on how to create an effective wellness program:

 

 

Management Support of Wellness is Step One 

 

Gaining management support for the implementation of a wellness program is the first step. As senior management is all about the financial success of the company, explaining how the wellness program will improve the company’s financial picture is a good place to start. Read the study on wellness programs completed by the Wellness Council of America. Explain how for every $1 spent on wellness programs, there was a $3 reduction in the cost of the health insurance program. If management is still not sold after learning the wellness program has an ROI of 3 for 1, an article published in Forbes states “According to the Centers for Disease Control, more than 75% of the employers’ health care costs and productivity losses are related to employee lifestyle choices.”
 

There is a similar correlation in workers compensation cost as healthier employees have fewer accidents, and when they do have an accident, they return to work sooner. This was supported by a combined 56 studies on worksite wellness programs. Per the American Journal of Health Promotion, there was a 32% reduction in workers compensation.
 

 

Form a Wellness Committee

 

After gaining the support and participation of senior management in the creation of a wellness program, form a wellness committee. Whether electing to utilize an outside company that has a wellness program already structured that can be implemented quickly or deciding to build your own company wellness program, the involvement of additional personnel from various departments will expand the ideas and ensures the success of the wellness program. Broad representation of the wellness committee will be drawn from human resources, finance, risk management, safety, union, senior management, and production. You can also invite volunteers from any department within the company. The wider the variety of specialties the better.
 

 

Establish Wellness Benchmarks

 

The goals and objectives of the wellness program should be the first order of business for the wellness committee. By establishing benchmarks, you will be able to measure the success of the wellness program. The primary reason companies abandon wellness programs is the failure to have benchmarks showing the success of the wellness program. Some benchmarks that can be considered include:

 

  1. absenteeism
  2. health care cost
  3. employee retention rate
  4. employee participation (percentage) in the wellness program
  5. reduction in the number of workers compensation claims
  6. reduction in overall workers compensation cost

 

 

Employee Involvement Is Essential

 

The wellness program should not be based solely on the ideas of the wellness committee. Employee interest and involvement are essential to the success of the wellness program. Obtain the input of the employees themselves in what they want to see in the wellness program. An anonymous survey, whether online or on paper, can be used to obtain employee input. Some categories that can be considered for inclusion in the survey for the wellness program include:

 

  1. diet and nutrition
  2. weight loss solo and weight loss groups
  3. exercise equipment
  4. walking solo /walking groups
  5. muscle toning
  6. reduction in blood pressure
  7. reduction in cholesterol level
  8. reduction in body mass index (BMI)
  9. cessation of smoking
  10. cessation of illicit drugs
  11. cessation of alcohol abuse
  12. healthier food options in company cafeteria/snack machines
  13. on-site flu shots
  14. hand sanitizers and other sanitizing items in a public area
  15. ergonomics at work and home
  16. seat belt use
  17. safe driving
  18. pamphlets and posters reminding employees of health topics ( pamphlets on cancer screenings)
  19. vision screenings provided on-site (mandatory for all employees who drive on duty)
  20. yoga classes before/after work hours

 

In addition to these topics, leave three or four blank lines on your survey for the employees to suggest their own wellness topics and concerns they would like to know more about or to have assistance with.
 

 

Implement and Promote Wellness Quickly

 

Once you have established the employees’ wellness program interest, implement and promote quickly to increase your odds of creating a successful wellness program. This can be done in a variety of ways including:

 

  1. provide non-smokers with a $5 per week credit on their health insurance program
  2. provide employees with a BMI under 30 with a $3 per week credit on their health insurance program
  3. a $6 per week credit for the employees with a BMI under 26
  4. provide pamphlets on wellness topics
  5. have posters on wellness issues
  6. offer “lunch and learn” on wellness topics
  7. organize group walks before work/after work/lunch time
  8. have wellness calendars
  9. schedule on-site flu clinic (ask a nearby medical clinic for a group rate discount or inquire if the health insurance carrier will pay for it)

 

 

Give Enough Time to Realize Impact

 

After implementation of the wellness program, it is important to give the program enough time to have an impact. The above-mentioned benchmarks should be established on the first day of the wellness program, and the results measured after one, two and, three years. Evaluate what has worked and what has not. A repeat survey asking the employees who participated their impression of the wellness program is a good way to get additional feedback. Also, a survey for the employees who have not participated in the wellness program asking why they do not participate can provide insights on ways to improve the wellness program.
 

By establishing and creating a successful wellness program, you will improve the financial picture of your company, reduce absenteeism, reduce work comp claims, reduce health insurance claims and improve employee morale. It will also reduce your workload if you deal with human resources issues or workers compensation.

 

 

 

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 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. She is the co-author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:.

Contact: RShafer@ReduceYourWorkersComp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.

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