Social Security Disability Offset and Workers Compensation

ssdiSocial Security disability benefits (SSD) are paid through a government disability program for workers who have had enough earnings paid into the Social Security system, regardless of whether their injury or illness is work-related. Injured workers are only entitled to SSD if they have a long-term impairment that precludes any gainful employment. SSD is only payable to workers unable to engage in any substantial productive activity whose physical or mental impairment is expected to last at least a year or result in death.

 

 

Duplication of Benefits

 

When an employee is so seriously injured that they receive a workers’ comp rating that classifies them as permanently and totally disabled, the injured employee may be eligible to receive both workers’ comp permanent total disability benefits and SSD.

 

If they receive both workers’ comp and SSD at the same time, they may get more compensation on a weekly or monthly basis than what they would if they were still working.

 

 

Offset

 

To prevent this duplication and overpayment of disability benefits, Social Security and state workers’ compensation statutes have offset provisions reducing the amount paid to the disabled employee.

 

The offset counterbalances the amount that the injured worker would be overpaid. The intent of the offset provisions is to ensure that an injured worker does not receive excessive pay from the combined workers’ comp and SSD. However, the combined payments after the reduction will not be less than the amount of the total SSD before the offset.

 

 

Average Current Earnings

 

Disabled employees cannot receive more than 80% of what was their “average current earnings” pre-disability. The Social Security Administration (SSA) defines average current earnings as the highest of:

 

• The average monthly earnings from “covered employment and self-employment” (where Social Security taxes were paid) during the highest five consecutive years

 

• The average monthly earnings in the calendar year of highest earnings from covered employment during the five years ending with the year in which the disability began

 

• The average monthly wage on which the disabled employee’s unindexed disability primary insurance amount is based

 

Disabled employees who have second jobs where they receive payments “under the table” without paying Federal Insurance Contribution Act (FICA) taxes cannot collect SSD (or workers’ comp) on the undeclared/untaxed income.

 

 

Total Family Income

 

The maximum amount of benefits, instead of determined by average current earnings, may be determined by the total amount of SSD received by all members of the injured worker’s family in the first month that workers’ comp is received.

 

 

Who Is Affected By the Offset Provisions?

 

The offset of SSD applies to disabled workers under the age of 65 and their families. Benefits for a worker’s spouse or dependent children are offset before the offset is applied to the worker’s benefits.

 

 

Which Payment Is Offset

 

SSA defers to each state’s laws as to whether the workers’ comp or the SSD payment will be offset. In most states, the SSD is reduced to an amount that equals 80% of the average current earnings when added to the workers’ comp disability payment.

 

A few states have laws that require the SSD payment to be primary, so that the state workers’ comp disability payment is reduced to make up the difference between what the SSD payment would be and the 80% of the average current earnings. Take, for example, an employee under the age of 62 at the time the combined Social Security disability and workers’ comp disability payments began. The employee was earning $900 per week before the injury and is receiving a workers’ comp permanent total disability payment of $600 per week. Based on the employee’s SSA earning records, the employee is entitled to $250 per week after the SSA approves them as permanently disabled. Instead of collecting $850 per week ($600 from workers’ comp and $250 from SSD) the employee will collect a total of $720 per week (80% of the $900 per week earnings – assuming the employees earnings immediately prior to the injury were their highest “average current earnings”). Social Security pays their disability benefits monthly.

 

In most states, the employee in this example would still collect the $600 per week from workers’ comp and the equivalent of $120 per week from Social Security, for a total of $720 per week. In the states where the SSD payment is primary, the employee still gets $720 per week, but the workers’ comp payment is $470 per week ($720 minus the $250) for their permanent disability payment, and SSD pays their $250 per week equivalent on a monthly basis.

 

 

Other Disability Benefits

 

There is no further offset or reduction if the employee receives other types of disability benefits or other income including:

 

• Private disability insurance

 

• Federal, state or local government disability

 

• Veteran’s Administration disability

 

• Railroad Unemployment Insurance Act sickness

 

• Black Lung Part B

 

• Proceeds from a third party liability settlement

 

• Jones Act payments

 

• Payments from a tort lawsuit

 

• Unemployment

 

• Private pension or private insurance

 

 

Lump Sums

 

If the disabled employee takes a lump sum settlement instead of weekly payments for their workers’ comp permanent total disability benefits, SSA will consider it as an offset. When this happens, SSA will prorate the lump sum settlement over the period that weekly benefits would have been paid and reduce their SSD payment accordingly. If the lump sum settlement indicates that a portion of it is for future medical expenses, that portion will be excluded from their calculations.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: http://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.

 

Contractor Liability In Workers’ Compensation

contractor liability in workers compensationThe issue of contractor liability in workers’ compensation is something members of the claim management team need to be aware of when dealing with claims.  This is especially true when handling claims in the construction industry or other job classifications that rely heavily on contractors to perform work.

 

 

Contractor Liability in Workers’ Compensation: Back to the Basics

 

As a general rule, employers (with some limited exceptions) are required to purchase workers’ compensation insurance for their employees.  In the setting of a general contractor, they typically do not have employees as people who work for them are generally classified as “independent contractors,” or subcontracted labor through another person or entity.

 

Notwithstanding this exception to the general rule, contractors may want to consider obtaining the benefits of workers’ compensation coverage should a judge or industrial commission determine an injured person is an “employee.”  Situations to consider include the following:

 

  • Uninsured contractor: General contractors can be found liable in workers’ compensation matters if a subcontractor does not have required coverages for their employees.  Although there is no employer-employee relationship, courts generally will look to the main contractor, as well as other intermediate contractors, for coverage.

 

  • Employee misclassification: This can occur in serval different circumstances, which include times when the misclassification is intentional (fraud), the nature of the relationship changes during the course of business or in instances of good faith dealings a finder of fact determines an employer-employee relationship exists.  The mistake of fact, even if it is unintentional, is not a defense.

 

  • Self-coverage: In many instances, a contractor will purchase coverage for themselves, and others working under them.  This can include independent contractors working directly for the contractor, and subcontractors and their employees and the independent contractors of a subcontractor.  This can sometimes come in the form of “ghost” or “shadow” policy, which covers medical and indemnity benefits under a workers’ compensation act, and also cover expenses related to legal representation in legal proceedings.

 

 

Avoiding Contractor Liability in Workers’ Compensation

 

The policy behind contractor liability in workers’ compensation is two-fold.

 

  • Avoids situations where a contractor is avoiding liability and the payment of workers’ compensation insurance at the expense of unskilled labor; and

 

  • Provides a certainty in benefit payment and reduction in tort litigation (eg – the Grand Bargain).

 

When a person working in a subcontractor situation is injured, that party should either have workers’ compensation insurance, if self-employed or for their employees.  If the subcontractor does not have workers’ compensation insurance, a cause of action may arise against the contractor immediately above that entity.  Liability will often also extend to the next immediate contractor if there is not the presence of insurance, etc.

 

Based on this complex statutory framework, members of the claim management team need to be diligent in their investigation.  Practice pointers should include the following:

 

  • Educate all insureds about the basics of contractor liability in workers’ compensation matters. This includes making them aware of the fact they may be responsible for persons unrelated to their business when involved in projects involving contracted labor.  This is especially prevalent in the construction industry;

 

  • Determine if any contractors and/or subcontractors are present at the injury site. Things can get complicated, so drawing a diagram may assist in determining liability for a work injury; and

 

  • Careful payroll audits when determining workers’ compensation insurance premiums. While most contractors and employers are honest when reporting the number of employees, wages and injury rates, there is a temptation to “game the system.”

 

When speaking with an insured about workers’ compensation insurance in a contractor/sub-contractor setting, it is also important to provide precise and correct answers.  Failure to do so can give parties with a false sense of security.

 

 

Conclusions

 

Workers’ compensation systems become complex when dealing with contractors.  It is important to educate insureds and provide them with accurate information.  This includes resources on how to avoid unnecessary risks and do so in an ethical manner.  It can also help avoid the unnecessary payment on claims when insuring a contractor who works with other entities.

 

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@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.

 

Case Study: Helping Customers Manage Their Workers Compensation Programs

This article originally appeared as a Crawford blog post: https://www.crawco.com/blog/helping-customers-manage-their-workers-compensation-programs

 

Managing a workers compensation program from an employer’s perspective entails implementing proper health and safety protocols to create a safe work environment, and to properly handle claims should an employee sustain an injury while on the job. As employers pay into workers compensations plans supported by provincial governments they do have considerable financial responsibility.

 

 

Customer Wanted to Ensure Employee Safety

 

One of our large customers in the manufacturing sector genuinely wanted to ensure the safety of its employees and had taken the necessary steps to create a safe and healthy workplace. Tied to that was their desire to properly manage their workers’ compensation program to ensure proper allocation of finance, and proper employee support to help those injured return to work and legislative compliance. Although they were doing a good job, they thought that they could do better.

 

It was at this point that I was brought on to evaluate their program and identify opportunities for improvement. With the support of my team and the customer, we created internal processes and procedures around how to manage incidents that occur. We were able to provide accurate predictions around loss payment costs tied to workers compensation cases. These efforts resulted in everyone in the organization knowing and following these procedures. The customer experienced increased efficiency around the claims process, a decrease in organizational risk, and they saved money on insurance premiums.

 

 

Properly Run Workers’ Comp Program is Win-Win 

 

As a workers compensation consultant, I take great pride in doing my job well, as I know from experience that a properly run and managed workers compensation program can enhance lives and benefit employees just as much as the employer. It truly is a win-win situation.

 

 

Cathy Royet is a workers compensation consultant at Crawford in Canada. This story has some resemblance of real events with fictitious facts and details including the names, places, events, locales, and story specifics. Names, personal details and specifics have been removed for confidentiality. Story details have been enhanced for effect.

 

 

 

 

10 Signs of a Negative Company Culture (that drive up workers comp costs)

Negative Company CultureWhat is meant by ‘corporate culture’ and why should we care, especially in the workers’ compensation realm?

 

According to research, corporate culture can have a significant impact on an organization’s finances. Also, companies with strong, positive cultures have employees who are more engaged — in their jobs, their companies, and their own recoveries if they become injured. It all adds up to better outcomes for injured workers and stronger bottom lines for organizations.  Understanding a few facts about corporate culture can make a tremendous impact on a company as a whole, and its injury management program in particular.

 

 

The Evidence

 

The relationship between organizational culture and corporate financial performance has been the subject of research for a number of years. One of the most dramatic studies came out of Harvard in the 1990s.

 

The researchers looked at the corporate cultures of companies and the potential impact on economic performance. Their analysis led them to compare 12 companies in particular that had positive cultures and 20 that did not. Over an 11 year period they found startling differences:

 

Positive cultures          Weak cultures

Revenue growth                                682%                                    166%

Employment growth                         282%                                    36%

Stock price growth                            901%                                    74%

Net income growth                            756%                                    1%

 

While it has not been definitively determined that corporate culture alone has a significant impact on a company’s financial success, it is at least clear that it doesn’t hurt. As one of the two researchers of the study later said, “For now, my point is simply that corporate culture can contribute meaningfully to financial results, and many people do not give this fact enough attention.”

 

 

About ‘Culture’

 

There are a variety of definitions for the term ‘corporate culture.’ While basketball courts and ping pong tables in the lunchroom may come to mind, they don’t define corporate culture. Essentially, it boils down to the beliefs and behaviors that affect the way employees and management interact. It is not something tangible, but more of an attitude and way of doing things that permeates an organization.

 

While it is not something that can be seen or touched, it can be developed and intentional. It starts with the values, vision, mission and the day-to-day communications within a company. A strong, positive environment empowers employees. It makes them feel they are part of a team with a specific purpose. It motivates them to do well and go beyond simple expectations.

 

Motivated employees are contagious. Their positivity affects others around them and spurs better outcomes from the entire organization. However, the reverse is also true; a negative, weak culture results in unmotivated workers and can lead to a deterioration in productivity.

 

 

Cultural No-Nos

 

The first step in building a positive corporate culture is to assess the organization’s current culture. There are several clear indications that point to a poor corporate culture.

 

  1. High turnover. The overall average staff turnover rate for all industries is 16.7 percent, according to a study in 2015. Industries such as insurance and utilities had slightly lower turnover rates, while hospitality had a higher rate. A rate that is high indicates employees are unhappy in the environment.
  2. High-stress There are both physical and emotional symptoms of stress, but employers may not be privy to that information if employees are not forthcoming about it. One way to determine if a company has high-stress levels is to look at documents such as sick leave and workers’ comp claims information. Observing workers may indicate if there is high stress, especially high tensions among employees. Employers can encourage activities shown to reduce work-related stress, such as:
  • Create an atmosphere that makes it easy for a worker to get exercise, such as discounted gym memberships or suggesting taking walks outside during breaks.
  • Remind workers to use their vacation time, to avoid burnout and prevent stress from overwork.
  • Make employees feel valued. Recognizing even small contributions from workers shows you care about them and can help reduce their stress levels.

 

  1. Lack of trust. While many supervisors and managers don’t consider this important, more than 90 percent of employees say it is vital to have a boss they can trust — or they will seek out new employment. Indications of a lack of trust include:
  • Workers are unwilling to go the extra mile and only do the bare minimum.
  • Complaining, finger-pointing and blaming with little effort to accept responsibility.
  • High levels of competition to the extent that others’ ideas are blocked and pertinent information for good decision making is withheld.
  • Policies and procedures are based on the idea that employees cannot be trusted.

 

  1. People don’t share ideas.
  2. Silo mentality, where employees do not collaborate
  3. Low participation in activities or wellness programs. Employees who don’t feel like part of a team are less likely to engage in events with their coworkers.
  4. Failing to report injuries. A quick check of the lag times between injuries and when they are reported will indicate whether workers feel safe or even understand they need to report workplace injuries.
  5. Punishing those who report injuries. Employees who are discouraged from reporting injuries do not trust their supervisors, managers, or their entire companies.
  6. Litigating most workers’ compensation claims. While some litigation does occur, greater than 50% of claims is a red flag.
  7. Failing to return to work anyone who is not at 100 percent. Company policies that keep workers out until they have fully recovered to their pre-injury status are harmful, to injured workers as well as the companies themselves. The longer someone is out of work, the less likely he will return. It causes disability mindset for the worker and increases costs unnecessarily and dramatically for employers.

 

 

Conclusion

 

Less than one-third of employees say they are ‘actively engaged’ in their work, according to a Gallop poll. These employees have fewer workplace injuries, are more active in their recoveries and return to work sooner. The remainder of workers say they are either ‘not engaged’ or ‘actively disengaged’ in work.

 

Getting more workers into the ‘actively engaged’ category starts by understanding the culture of an organization, then taking steps to improve it.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@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.

Use Workers’ Comp Basics to Attract and Keep Millennials

Use Workers’ Comp Basics to Attract and Keep MillennialsThe workforce will change dramatically over the next 10 years. Regardless of the industry, many workers will be retiring in the next decade — if not sooner.

 

Attracting and keeping younger talent is imperative to maintain and grow an organization. Millennials, those born between the early 1980s and early 2000s are quickly overtaking the workforce. Therefore, it behooves companies to take steps that can make their organizations more attractive to these younger workers.

 

Many of the strategies that help prevent injuries and reduce workers’ compensation costs are the very same that will help companies get the best workers to position themselves well for the future.

 

 

The Culture

 

Research shows millennials are highly focused on making a difference in society, perhaps even more than on making money. They seek employers who share their ideals. Some of the ways employers can make their cultures more millennial-friendly include the following.

 

  • Offer Mentoring. Mentoring young employees is an effective way to provide support, as well as provide an open and inviting culture for new ideas and opportunities for organizational growth.
  • Soft skills — the ability to empathize and express compassion — are imperative for an effective injury management program. Employees who feel their employers are genuinely concerned about their wellbeing are more likely to engage in the recovery process. Studies show these workers heal and return to work sooner than employees who feel they are in conflict with the employer. In the same way, millennials are more likely to be attracted to, and want to stay with organizations that have a culture of caring.
  • Positive communication. Replacing negative terminology with positive messages may seem insignificant, but it can have a tremendous impact — on injured workers as well as millennials. For example, instead of telling an injured worker his claim was denied, rewording it to say the claim was not approved carries a different message — especially if the person saying it follows up with ways the worker can be treated; such as through general health insurance. Delivering ‘negative’ news to an employee should be worded in a way that still shows respect and caring for the worker.
  • Emphasis on safety. Employers want to prevent injuries; workers want to avoid getting hurt. Since the goals are the same for both, the idea of safety should be presented in a way that shows concern. Instead of dictating rules to workers and chastising them for not adhering to them, employers should communicate the reasons for safety rules with the overlying message that the company wants to protect its workers.
  • Simplify the message. If a new product or procedure is going into effect, it should be explained in as simple a manner as possible. Instead of inundating workers with pages and pages of unnecessary information, boil it down to the basics: what it is, why it is being implemented, and how and what changes it requires. Creating a simple document or brochure and holding a general meeting to explain it and allow for questions will help employees understand it better and make them feel part of the process.

 

 

Technology

 

Injured workers need the proper tools to recover and return to function. That includes access to appropriate medical care and the right information to help them engage in their own recoveries.

 

Prospective employees also need to know the right tools are available to them. Younger people have grown up with computers, smartphones, and tablets and used them throughout their educational and social lives. Companies seeking to hire and retain the best of millennials need to keep this in mind and update their systems to the extent possible.

 

But a complete overhaul of a company’s systems may not be feasible. Instead of completely revamping the company with the latest and greatest techno toys, companies should work with their employees and see where and how they can use new technologies to improve their systems — and retain younger workers.

 

Automation and artificial intelligence should not be viewed as replacements for workers. Instead, they can help with some of the more rote aspects of a person’s job, allowing the worker to spend time on more important aspects.

 

Smartphones and tablets may help get the job done better and faster. Rather than purchasing these for all employees, it might be possible to allow workers to use their own devices and providing them with specific apps, for example.

 

 

Conclusion

 

Working with, rather than against injured workers and providing them with quick and proper medical care leads to faster and better outcomes. Similarly, showing compassion for workers and providing them with the tools that best help them get their jobs done will help organizations attract and retain the best of the next generation of workers.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@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.

The Workers’ Comp Lesson To Learn From The Kavanaugh Process

Hey, there. Michael Stack here, CEO of AMAX. So very big national news over the past weekend with the confirmation of Brett Kavanaugh as the latest Supreme Court justice of the United States.

 

Now, this was obviously a very politically charged and bitter process. And whether you are in complete support of Mr. Kavanaugh or complete opposition, it’s not for me to tell you whether you were right or wrong, that’s up for you to decide. But there was one thing out of this process that struck me that I think we can all learn and apply to our work comp program and it’s the importance of this line here right in the middle.

 

 

Kavanaugh Process Had Hard Line of Separation

 

In the Kavanaugh process, this line was very clearly defined. You were either in support or you were in opposition. Now, there are some lessons in politics that we can use as examples to follow and there are some lessons that we can use as warnings, so let’s talk about this process now.

 

Don’t take this left and right now as having anything to do with politics because it doesn’t. Now in worker’s compensation, there’s really somewhat two schools of thought. There’s the advocacy model, a claims advocacy model, and more of a litigation type of model. Now on this advocacy side, you’re looking out for the employee’s best interest. You’re working together as a team. You’re looking to give them the best medical support. You’re establishing trust, you’re communicating, you’re sending a get well card. You’re going to visit them at the hospital and you’re trying to get them back to work in a timely fashion, working together as a team to lower your costs and improve those outcomes.

 

Now, some in opposition to that will say, “Well, that’s kind of maybe a little bit soft,” that you’re just skipping through the flower fields, hoping that everything is right and you’re just kind of la, la, la going around and everyone’s great and we’re just going to look out for everyone’s best interest and it’s all gonna work out.

 

So that opposition model will hold the mindset often of this litigation mindset and say, “Well, no one’s going to pull one over on me. If my employees are committing fraud, I’m going to crush them and I’m going to deny their claim,” etc. etc. etc. And on that goes.

 

 

Politics Has Positive Examples and Warnings

 

Here’s the lesson that we need to learn from this process and we’re looking at this hard line of both of the positive examples and the warnings is that in worker’s compensation, these are actually the same thing and should be the same thing and they should all be working together all at the same time. So here’s what I mean by that.

 

Is that yes, there’s a very hard line in the middle and this needs to be very clearly defined in your program just like it was in the Kavanaugh process, but at the same time, this litigation mindset also needs to be over here and here’s what I mean by that, is you start with the advocacy model. You start by looking out for your employees’ best interest. You start by setting expectations. You start by establishing trust. You start by giving them the best medical, getting them back to work, providing a transitional duty job that’s going to create a better outcome and lower your costs, but at the same time you’re also doing a thorough investigation.

 

 

Claims Advocacy & Litigation Work Together in Tandem

 

You’re establishing what actually happened in that claim. You’re establishing good information in order to make a good decision on what is actually happening and you’re setting an expectation for your employees as well that they need to come to the table. We’re going to give you all the support we can, but we also have an expectation for you to participate in the process and when you do have this line very clearly defined in the middle and when your employee is trying to pull one over you with a fraudulent claim, they’re malingering. They’re trying to get extra medical treatments included when they shouldn’t be.

 

You have that very clearly hard line defined and you’ve already done the work at the beginning of the claim to establish your position and so then you can deny that claim appropriately with a very strong and very powerful litigation aspect of your claim as well. Both of those philosophies need to be working together in tandem and only when your employee passes that hard line in the middle is when you deploy that litigation mindset.

 

Again, I’m Michael Stack, CEO of AMAX, and remember your work today in workers’ compensation can have a dramatic impact on your company’s bottom line, but it will have a dramatic impact on someone’s life. So, be great.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@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.

 

Say It In 5 Minutes to Motivate Risk Management Change and Align Resources

In the risk space, whether you are operating as a Chief Risk Officer focused on all organizational risk or a Traditional Risk Manager focused on hazard risk, you are working in or designing a risk system that is required to move people and processes to action.

 

To move people and align resources to action, the most valuable thing a risk leader can do [whether it is a global message on your Enterprise Risk Management initiative or a targeted message on your hazard risk program] is to package the message and “SAY IT IN 5 MINUTES”. Risk initiatives are complex; they involve many stakeholders and processes. For any message to be effective it must successfully negotiate through organizational obstacles, politics and silos. Risk programs will not move forward if the message is not clear and stakeholders cannot understand and connect to the why, how and expectations.

 

 

Process More Important Than The End Product

 

Risk leaders have an incredible opportunity to demonstrate value by committing to putting “the message” into a 5 minute Corporate Risk Video.

 

By making this commitment, risk leaders will soon learn that going through the process is even more important than the end product. By committing to this “5 MINUTES”, it forces them to listen to and consider the perspective of all stakeholders and it requires capturing a meaningful story that all can see and embrace, one founded in purpose and has value that will be around for many years.

 

If you can effectively capture the heartbeat and include stakeholders in the process, you will be able to begin driving passion into an organization from the backroom and owners and employees will ultimately drive the risk process.

 

This exercise will support your culture and this process of being clear & concise will translate into the on-going branding that your risk initiative requires.

 

 

5 Steps to 5 Minute Message

 

Your 5 minutes need to be more than an emotional/feel good story. You will get the most out of it by incorporating the following 5 Steps:

 

 

1) Decide what you want your message to do – What action are you looking for? Make the commitment to go past the informative story to one that motivates and drives action.

 

Put yourself in the seat of every stakeholder and be realistic.

 

  • Will they get your message?
  • Will it motivate them to action?

 

This is the first test of the value of your risk program. If your program message is built on policies and procedures you put in place and your goal is purely compliance, your audience will see this and likely tune out within the first 30 seconds.

 

 

2) Be clear on your identity – Successful companies are driven by a mission which is the reason for existence from the front room (C-Suite) of the organization. This mission describes the purpose and overall intentions. It supports the company vision and serves to communicate the purpose based on core values. Company leaders put time and resources into this because, if done properly, it will be the heartbeat that drives what everyone does.

 

The problem is that corporate heartbeats (values, vision and mission) do not naturally translate passion into risk initiatives. Before writing the script, make sure that you are clear on the risk program purpose and values and be clear in your mind what this looks like.

 

What it looks like must come out in your message. Risk Leaders have an opportunity to create a heartbeat and drive passion into an organization. Your 5 minutes will have no value if your message is not founded on values that translate into a vision and mission that gives your program passion and meaning. Safety values, vision and mission are core to your risk system design.

 

 

3) Define the why, the how and the expectation – Risk statements typically have a lot of buzz words and unrealistic goals. For example, in the hazard risk area, although “Zero Accidents” is a term many use, it often leaves stakeholders frustrated because the challenge is tossed out without valid support or a plan to meet this goal.

 

Although your 5 minutes can be packaged to look pretty, if you are not addressing the why, how and expectation in a way that is obtainable, people will not connect and your message will just be another story that does not get a second look and does not drive them to action.

 

 

4) Include stakeholders – Best practice risk programs have roles and responsibilities for all parties. This is the opportunity to define all stakeholders’ roles and responsibilities, to get their perspective and include them in the message and the final edit. Saying it in 5 minutes is something stakeholders from each of your 3 Lines of Defense can contribute to and should be able to celebrate and support when it is completed.

 

 

5) Match the Video with the Script (your people in action) – This is the risk leader’s opportunity to tell the message in a way it has never been told. Each word is important and the video shots supporting the message are extremely valuable as well as the words and phrases that you emphasize. Scripts break your message into the hook, introduction, your value and message on the why and how and provides the expectation and conclusion. The hook gets their attention and ensures the audience is listening and the conclusion is your call to action.

 

 

“Say it in 5 minutes” is all about leadership. You cannot expect to engage and move people and processes to support your plan if your passion and your message are not understood or clear. The time you spend developing your 5 minutes can be one of the most valuable things you can do to impact your program.

 

 

Author Mark Bennett, Founder of Risk Innovation Group (RIG), is dedicated to helping large employers face the complexities of risk through innovative Enterprise Risk Management (ERM) practices. ERM programs don’t just help large employers manage business risks more effectively; a well-developed ERM program can protect and create value as well as improve business performance and generate a strong competitive advantage.  Contact: m.bennett@riskinnovationgroup.com

 

 

September 11th Remembered – Tribute To Marsh And AON

Article republished from a previous post.

 

Everyone remembers where they were the when they learned the World Trade Center crumbled to the ground. I was scooping ice cream at the Mansfield Center General Store. Having recently retired from the risk management and insurance industry, I had moved back to the area, built a house in Mansfield Center and worked from my home office. I was helping my family restore and run the General Store.

 

I had an exciting career in risk management and insurance working for two of the best insurance brokers in the industry. BOTH companies had sizeable offices located in the World Trade Center. So, when Bill called and asked me if I was watching TV, did I know a plane flew into the World Trade Center, I was alarmed. Initially I thought he meant it was a small plane, but when I turned on the TV, I could see it was a huge plane and the building was on fire. And then another plane had flown into the other tower.

 

 

We Never Knew How 9/11 Could Affect An Entire Industry

 

Everyone in the risk management field “plans”… we plan for every eventuality, thinking things through. That’s what we do. We help our clients, which are large companies such as The New York Times, Universal Orlando, and USAir, etc. plan how to provide safer workplaces, safer products and safer environments. But we never planned for Sept 11. We never knew how it could affect an entire industry.

 

AON and Marsh are the two largest insurance brokers in the world and I – with a loyal team of consultants – was responsible for development of the workers’ compensation practices at those companies. Workers’ comp insurance is the largest line of insurance coverage – a huge cost to most employers – and I had found the solution to reduce those costs significantly. Helping a wide-variety of types of organizations was gratifying, and there was a new challenge every day. I had written, published, traveled, and worked hard for 25 years, so I looked forward to scaling back.

 

When a retirement opportunity presented itself, I left the workforce to enjoy being a mom. My daughter was 17 and Glastonbury High School had not gone well. Against her will, we had moved her to a private school, and she and I were getting reacquainted during the long drive to and from school in Farmington, CT. Life was good.

 

 

Many Former Employees Went Back To Work

 

It wasn’t part of the plan to go back to work, but two weeks after Sept 11, I went back to AON, filling in for Lisa Ehrlich. Lisa was an outsourced risk manager who worked on-site at a company in Stamford, CT. On 9/11, she had gone into the NY office for a meeting and was killed that day. I was honored to be able to help in some small way. Many former employees went back to work in the intervening years to help the brokers rebuilt their practices. Here is a remembrance of my colleagues.

 

In the 17 years since Sept 11, a new generation has taken over. Some hardly know our industry lost so many that day, key leaders and pioneers in the field of workers’ compensation cost containment. In the intervening years, my nephew, Michael Stack, has taken over a leadership role in my company and become an industry leader in his own right. I am very proud of him for carrying on the legacy and memory of our beloved colleagues lost on that fateful day.

 

 

 

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:RShafer@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.

 

 

 

Proven 5 Step System to Master WC Costs Plus Bonus Avoiding Litigation and Using IMEs Training

 

 

Learn More: 2018 Version – Your Ultimate Guide to Mastering Workers’ Comp Costs

 

Now there are many things in our world today that we just can’t seem to figure out. Some of the most advanced medical treatments, the greatest challenges our country is currently facing, as well as when you’re trying to have a conversation with someone. They just can’t seem to look up from their phone. I can never seem to figure that one out. But while those things are going to continue to be a challenge, there is no mystery in how to drastically reduce worker’s compensation costs and create significantly better outcomes for the injured workers, creating truly a best case scenario for the employer and the employee. In this proven five-step system, this process, these strategies, these tactics, as well as the sequence of how to implement them has been documented in detail in the 2018 version of Your Ultimate Guide to Mastering Worker’s Comp Costs.

 

 

No Mystery in How to Control Workers’ Comp Costs

 

Hello, my name is Michael Stack. I’m the CEO of Amaxx and also the co-author of this comprehensive manual. Now the system, these strategies, these tactics, the sequence was created out of my business partner and co-author’s almost 30-year career in worker’s compensation, implementing this system at some of the largest and recognizable companies in the country. Hundreds of organizations realizing those exact results of drastically reduced costs, significantly better outcomes for their injured workers. This manual was created out of my almost 10-year career in working with Becky and continuing to refine this system and improve it and create more efficiencies and making it more effective. And new just this year out of our medical advisor, Dr. Jacob Lazarovic’s almost 20-year career as Chief Medical Officer at Broadspire, one of the world’s leading third-party administrators. And I can confidently state to you that there is no better source, no more complete source, no more easy to understand source of how to create those outcomes of drastically reduced costs, significantly better outcomes for the injured workers than exists in this 2018 version.

 

What I want to do today is I want to give you an overview of those five steps, and then I’m going to teach a little lesson about the information and some of the updates that I did in this latest version. Because the last thing that you need is more information. The last thing you need is another book to sit on the shelf. Where this information becomes valuable is when you actually use it, when you learn it, when you implement it. I want to give you a little preview of that today covering two of some of the biggest pain points that employers often will face in worker’s compensation, which is how to avoid litigation and then how to best utilize the independent medical exam for controlling medical costs.

 

 

Proven 5 Step System to Reduce Workers’ Comp Costs

 

Let’s do a real quick overview of these five steps. Now again, this is a sequence. This is a process and this is a system so each one of these steps is going to build upon itself, and the better that you do at step number one is the better that you’ll do at step number four and five.

 

Step 1: Build Program Foundation

Step number one is to build your program foundation. This includes creating who are these people that are going to be responsible at the employer site? What are their rules? What are their responsibilities? What are the basics of worker’s comp? What is the experience mod? How does that all kind of come together? That’s building that program foundation.

 

Step 2: Injury Prevention

Injury prevention them. That’s safety and that’s wellness. The least expensive work comp claim is certainly the work comp claim that never happens. That’s what goes into that injury prevention chapter and section within the book.

 

Step 3: Post-Injury Systems

Post-injury systems. Now this is the bread and butter. This is the engine that’s going to drive those results. This is the area where companies get realized drastic results very quickly because this is post-injury response, this is return to work, this is communication, this is the foundation of the entire process, and if a company can get these elements correct, they’re going to realize significant results very quickly and this could create those reduced costs and create those better outcomes.

 

Step 4: Claims Management Best Practices /  Step 5: Control Medical & Pharmacy Costs

Now if this post-injury system step number three is the engine, then steps number four and five is a higher-octane gasoline that gets poured into that engine because this is leveraging your claims management partners. This is leveraging your vendors. This is leveraging the service providers, your medical providers, your pharmacy benefits management company. And how do you put that all together to help this all work in a very consistent system that runs like a top creating these better outcomes at a significantly reduced cost? That’s what we cover in detail in this comprehensive manual.

 

 

How to Avoid Litigation

 

What I want to do now is I’m going to erase this board and we can dive into some of these tactics, the avoiding litigation and using IMEs. Let’s dive into this topic of avoiding litigation. In the manual itself, we go into much greater detail referencing studies from the work comp research institute, as well as from the Liberty Mutual Research Institute. We have input from a plaintiff attorney and defense attorney in talking about this entire process. But I want you to lock in with me here because this one concept of why injured workers hire attorneys, and avoiding litigation is extraordinarily simple and it comes down to one word, which is fear. The number one reason and the main driver for why injured workers hire attorneys is fear, the fear of the unknown.

 

And if you could lock in on this concept, understand this concept, have empathy for this concept of putting yourself in the shoes of the injured worker and looking at it from their perspective, then you’re going to be well on your way to this process of mastering worker’s compensation. You’re going to be almost halfway there if you understand the why, then the how to avoid that, the how to improve upon it becomes significantly easier. And all you have to do then if follow the steps of the how that’s documented in the manual itself.

 

Let’s talk about how you alleviate this fear, and there’s a couple of different things that the injured employees really want to know, and all you have to do is communicate these couple things. One, how am I going to get paid? Two, who’s going to handle my medical and how is that all going to work? Am I going to have to pay a deductible and what doctor am I going to see and am I going to be able to recover? And the last thing, and this is probably one of the most significant, is work. Am I going to be able to continue to work? Am I going to lose my job? Does anyone even want me back at work, and does anyone even care that I got injured? If you could put yourself in these shoes, if you could answer these questions, if you could communicate the answers to these questions for your injured workers, for your employees, you are significantly far down the path to mastering worker’s compensation.

 

Worker’s comp can be very complex. There’s a lot of layers to it. There’s a lot of different stakeholders involved, but at its core, it’s extraordinarily simple of meeting these basic needs and alleviating this fear within your injured workers. It’s not all sunshine and roses. Your expectation of them is high. You’re running a high integrity program. You’re going to do your best to communicate. Do your best to get them back to work, do your best to set the expectations. Hold up your end of the bargain, and expect them to do the same. And when they don’t, there’s that hard line of integrity that you’re going to then move to potentially deny that claim, move to litigation, prove fraud, etc., etc. We cover a lot of that in the book as well.

 

 

Realize Significant Savings on IMEs

 

So the next thing I want to cover now is the IME process. Let’s talk about the IME, the independent medical exam. This is a vital tactic in medical cost containment best practices. But what we find is that it’s also a significant area of opportunity to create these lower costs and drive these better outcomes because it’s often utilized in the wrong scenarios. IME is a vital piece of medical cost containment, but it also takes a long time for it to be scheduled. It takes a long time for the doctor to generate the report and the injured employee actually has to physically go to the physician’s office. A peer review on the other hand is significantly faster. This is done by a peer review physician at your managed care company. It’s significantly less expensive and can be done often within just a couple of days versus multiple weeks for the IME. Two vital pieces of medical cost containment when they’re used at the right time, so I want to talk about when that is.

 

Peer Review vs. IME

Let’s talk about peer reviews and when we should be using these. First, if there’s a question of causation. You’re going to have a peer review physician review that information. Next is if you’re finding that you’re not sure whether or not that injured employee can get back to transitional duty, can get back to work, and there’s a little bit of a discrepancy there and you need that medical opinion, peer review is a fantastic solution for that. Along those same lines, if the duration of the injury falls outside of the injury duration guidelines in evidence-based medicine, and you need that medical opinion in order to determine what to do because the adjuster’s not a medical doctor. They’re not medically trained. The employer is not medically trained, and you can’t make that determination of what is appropriate in that scenario. Tremendous option to leverage a peer review.

 

And the final thing is if you just need a medical opinion on really any other issues within the case. Again, every claim that happens in worker’s compensation needs medical attention to some degree, whether it’s very minor or significant, and many times you need that medical expertise in order to help you make a proper decision on what to do with that claim. So all tremendous times to leverage this peer review option which again is significantly faster and significantly less expensive. Again, IME though is a very vital piece. It’s a vital tactic in medical cost containment when it’s used at the right time.

 

Let’s talk about these times when that’s needed. If there’s advanced issues in the claim that can’t be handled with a simple peer review, tremendous time for an IME to be leveraged. If you need a formal impairment rating on a case. If it’s going to settlement and you need a formal impairment rating, tremendous time to use an IME. If there’s a legal that’s going to be coming down the pipe and you need that doctor, and then sometimes it’s required by the state law, by the state worker’s compensation boards. So both tremendous tactics. It’s just a matter of deploying them in the right scenarios to drive down those costs and create those better outcomes.

 

I hope you’ve been able to learn some information on these just real quick sessions that I did in avoiding litigation and then on the IMEs. The key to this entire system, to this entire process, of all the information that’s documented in this comprehensive manual is taking it and implementing it, and when you do that, when you implement this information, when you learn it and you take it one step at a time, you will realize exceptional results.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@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.

WCRI Preview: Future Trends and How Medical Care Affects Outcomes

It’s fourth and goal from the one-yard line in the closing seconds of the first half of Superbowl 52. Without hesitation, the Philadelphia Eagles’ coach Doug Peterson sends his team back in to go for the touchdown rather than kick the conservative field goal. They direct stack the ball to the running back. He tosses an easy lob to quarterback Nick Foles, who waltzes into the end zone for the score.

 

Of course, the Eagles went on to win that very entertaining and exciting Superbowl 52, which in my opinion, was defined by that one play.

 

Hello, I’m Michael Stack, CEO of Amaxx, and while Justin Timberlake is not going to be coming to perform at any of our national conferences or daily activities, it doesn’t mean that we need to be any less prepared. One of the ways that I like to prepare when we’re creating strategies, policies, procedures, implementing systems of work comp management to create the best outcomes is by leveraging the research done by the work comp research institute.

 

 

WCRI Annual Issues Preview: Future Trends

 

What I want to do today is give you a little preview of the upcoming WCRI annual issues conference, so that we can know as individuals as well as an industry as a whole how to best be prepared for what’s coming down the pike. So, let’s talk about some of these sessions, and really, in the reviewing of the content that I’ll be covering, there’s really two major themes. The first is these future trends, and what’s next coming down the pike in workers compensation. They’re leading off the session with one that I feel is going to be very interesting, which is the future labor force trends and the impact of technology presented by Dr. Erica Groshen, who was the former head of the bureau of labor statistics.

 

Now, if you’ve ever been on the BLS website, and you’ve ever looked anything up, you know that it’s very rich in data. Personally, I often find it very valuable, but often very overwhelming at times as well. So, I’m looking forward to this session to listen to Dr. Groshen break down some of this data. Tell us some of these meanings. Have us able to understand some of these important metrics that are key for us to follow. So, that’s gonna be a tremendous session which I’m looking forward to as they start today.

 

WCRI then continues on this future theme with Dr. Rick Victor returning to the stage talking about workers compensation in 2030, and then wrapping up on the second day with “The World of Work is Changing Fast. Are You Prepared?” This will be a panel discussion from various experts within our industry talking about these future trends and their implications.

 

Again, allowing us to prepare as individuals as well as an industry, so when that opportunity arises, we can execute flawlessly.

 

 

WCRI Annual Issues Preview: Medical Care Impact on Outcomes

 

Now, the second major theme of the conference centers around medical care and its impact on outcomes. There are four sessions that will fall under this general umbrella theme. The first is on value-based care, and if we’re ready for that as an industry, completely different outlook and perspective on how we’ll go about from a system of medical management and delivery and if we can integrate that successfully into our industry.

 

Next, talking about the impact of fee schedules on the access to care and what that does to drive worker outcomes, and finally, two drug-related topics. The impact of opioids and prescription drugs on the workplace, as well as on the second day, “Does Marijuana Shift Prescription Drug Spending?” Both very critical and hot topic, particularly in today’s times. What we know is that medical management, medical costs, medical complexity only continue to increase. So, if we can be more prepared, we can understand these systems, understand these policies, understand these procedures, in order to drive better outcomes for the injured workers which, oh, by the way, cost the least amount of money. It’s truly a win-win scenario in our industry if we can get those two things right.

 

So, it’s gonna be a tremendous conference. I’m very much looking forward to it, and I look forward to seeing you there.

 

 

Additional Information WCRI Annual Issues Conference: https://conference.wcrinet.org/

 

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@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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