As the risk manager for your mid-size company, you want to consider self-insurance in the jurisdictions where you are allowed to do so. But your company is mid-size, not a Fortune 500 company. While you have the resources to handle most workers’ compensation claims, you are concerned a catastrophic work comp claim could do serious damage to your company’s current and long-term financial outlook. The solution is the excess workers’ compensation insurance carrier.

What is Excess Workers’ Compensation Insurance?

A workers’ compensation excess insurance policy is written to indemnify the self-insured employer for workers’ compensation claims (and Employers’ Liability claims) exceeding a designated dollar amount. The excess work comp insurance covers all work comp losses up to a specified cap, or it can be unlimited.

For example, you decide your company can afford the cost of paying almost all work comp claims but do not want to be on the hook to pay claims where the total cost exceeds the company’s set $500,000 limit. The way to handle the rare catastrophic work comp claim is to buy excess workers’ compensation insurance. The excess workers’ compensation insurer indemnifies your company only on those claims exceeding $500,000 in total cost.  

Layers of Coverage

The excess workers’ compensation insurance carrier may be willing to insure some risk but does not want to have unlimited medical exposure on your work comp claims. They may put a cap on their exposure, for example, $1,000,000 is the most they are willing to pay over and above the $500,000 your company pays on a catastrophic injury claim. You will then need another excess policy over and above the “second layer of coverage” (the self-insurance being the first layer of coverage). The second excess workers’ comp carrier only reimburses your company for claims exceeding $1,500,000 (and is the third layer of coverage).

The first excess workers’ comp insurance carrier may be willing to write all your coverage over and above your cap. If they do agree to take on the unlimited medical exposure on your catastrophic injury claims, the excess workers’ compensation insurer will, in turn, most likely have a policy of reinsurance in with another insurance company.

That is, they will buy another insurance policy from another insurer to cover all their losses over and above a set dollar limit, say $1,500,000 per claim. Or they may cede the other insurance company, i.e., give the other insurance company part of your premium in exchange for the other insurance company’s promise to pay any claims over and above the agreed upon dollar amount.

Benefits of Excess Workers’ Compensation Insurance

Besides the obvious benefit of being reimbursed for catastrophic work comp claims exceeding your self-insurance cap, excess workers’ compensation insurance provides additional benefits to your company.

Most self-insurers are not able to be self-insured without the excess workers’ compensation policy. Self-insurance allows the risk manager more control over the cost of the insurance program, more control over the claims handling, and improves the cash flow by lowering the cost of workers’ comp insurance (by eliminating the profit portion of the premium paid to a first dollar insurance carrier).

Often the excess workers’ compensation insurer offers the self-insured employer additional services and works as a partner with the self-insured. Some of the services offered by the excess work comp insurer may include:

1. Underwriting guidance
2. Guidance in meeting the regulatory requirements
3. Industry-specific loss control services to assist in managing workplace hazards
4. On-site safety assessments
5. Best practices for managing work comp claims
6. Emergency planning and preparation
7. Catastrophic claim management

What to Look For in Selecting an Excess Workers’ Compensation Insurer

In addition to the services noted above, look for an excess insurer which includes the allocated loss adjustment expenses (the cost of handling the claims) in the definition of loss per claim, not just what is paid to the employee in benefits.

Also, if your company is exposed to longshore and harbor workers claims, Jones Act claims, railroad work comp, coal mine, or migrant and seasonal workers, be sure your excess workers’ comp insurer covers these types of claims. (Some excess policies exclude some or all of them).

You want an excess workers’ comp carrier whose is flexible in their underwriting, that is they will allow your company to set your self-insurance retention cap, and are willing to endorse their policy to eliminate exclusions that might affect your coverage.

Correctly managed, a self-insurance program in conjunction with an excess workers’ comp insurance policy can provide your company with the work comp coverage you need while saving your company part of the cost of workers’ compensation.

Author 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.

Note: The following article is for people new to the workers’ compensation field or as a refresher for those in the field.

Indemnity benefits paid to employees for work related disabilities are generally divided into two types—temporary benefits and permanent benefits. Each of the two types, temporary and permanent, are then divided into two additional categories, total and partial. This gives us four categories—temporary total disability (TTD), temporary partial disability (TPD), permanent total disability (PTD) and permanent partial disability (PPD). A fifth category of indemnity benefits is death benefits which some jurisdictions combine with PTD.

Temporary Total Disability (TTD)

The most common indemnity benefit is TTD. In most jurisdictions the amount paid for TTD is based on the formula of two-thirds multiplied by the average weekly wage (AWW) of the employee. A few jurisdictions will use seventy-five percent or eighty percent of the employee’s net pay after income taxes to compute the AWW.

A waiting period for indemnity benefits exist in all jurisdictions. Most jurisdictions have a four to seven-day waiting period before indemnity benefits will start, but a few states have a three-day waiting period. If the employee is able to return to work without any limitations within the waiting period, no indemnity benefits are paid. If the disability continues beyond the waiting period for a set number of days or weeks, almost all jurisdictions will require the insurer to pay indemnity benefits retroactively to the first lost day (or partial lost day) the injured employee was not paid his normal wage.

A lost day due to a work comp injury can be either a full day lost from work or it can be a partial day missed from work. Most employers find it much easier for payroll purposes to pay the employee for the remainder of the day of the accident. For example—the employee works 8 hours per day and normally gets off work at 4:00 p.m., but gets injured at 2:00 p.m. the employer will go ahead and pay the employee through 4:00 p.m. Therefore, the first lost day from work is the day after the accident.   However, if the employer elects to pay the employee only through 2:00 p.m., the work comp adjuster calculates the indemnity benefits due from 2:00 p.m. The employee will have a partial lost day on the day of the accident and a full lost day the following day.

Example of Waiting Period & Lost Days

Examples of the waiting period and lost days are: The injured employee is off work two days due to the work comp injury and returns to work without limitations on the third day—no TTD is paid. The injured employee is off work nine days and returns to work without limitations, with a seven day waiting period, two days of TTD would be paid.   The employee is off work 20 days with TTD retroactive to the first day after two weeks off work, the employee is paid 20 days of TTD.

Average Weekly Wage (AWW)

The AWW is determined by the employee’s prior pay history. The jurisdictions vary in the time frame used to calculate the AWW. Most jurisdictions use the previous 52 weeks as a time frame, but some states use the prior 13 weeks or the prior 26 weeks as the time frame. An example using the AWW to calculate the TTD: The employee made $52,000 in the 52 weeks prior to the injury causing the disability. The AWW would be $1,000 with the TTD rate being $666.67 (two-thirds X $1,000).

An employee’s AWW in most jurisdictions includes all compensation, not just the wage or salary. The adjuster should include overtime pay, bonuses, commissions or any other form compensation in determining the AWW.   Also, some jurisdictions will include the value of benefits if the employer suspends paying for those benefits during the time the employee is off work.

The amount of TTD has an upper limit cap and a minimum amount. The jurisdictions vary in the dollar amount for the upper limit and the lower limit. A jurisdiction might by statute state the maximum amount of TTD is $800.00 per week and the minimum amount of TTD is    $100. 00 per week. An executive making $2,000.00 per week would not receive two thirds of his AWW of $2,000.00, or $1,333.34. The executive’s TTD would be capped at $800.00 per week. A part-time fast food worker making $120.00 would not be limited two-thirds of his AWW, or $80.00. His TTD rate would be the state minimum rate of $100.00.

Temporary Partial Disability (TPD)

During the course of the medical treatment of the injury, the treating physician may determine the employee can return to work but only for a limited amount of time per day.   This is when the TPD benefit would come into play on a work comp claim. For example, the injured employee is allowed to return to work for four hours per day and before the injury was working 8 hours per day.   The TPD amount would then be calculated by multiplying the AWW by the amount allowed within the jurisdiction by the fraction of the day the employee is unable to work (4 hours divided by 8 hours = one-half). Let’s say the AWW was $900.00 per week prior to the injury. The state statute allows the employee to collect two-thirds of his AWW. The TPD rate would then be $900 X 2/3 X 1/2 = $300. This injured employee on TPD would be collecting half his normal wage or $450 plus his TPD of $300 for a total of $750 per week.

Temporary partial disability is paid until the employee reaches maximum medical improvement (MMI) or is able to return to work full time, whichever occurs first.   Some jurisdictions place limits on the number of weeks (or years) an employee can draw TPD.

Permanent Partial Disability (PPD)

When the treating physician determines the employee has reached MMI, the physician will determine the amount of permanent disability, if any, the employee may have suffered due to the injury. The amount of PPD indemnity benefit maybe either a set scheduled amount or it may be percentage of a body part or it can be a percentage of the whole body.

A schedule of injury values is used for the complete lost of a body part in about 40 jurisdictions. Examples of scheduled injuries would be the complete loss of eyesight in one eye or the amputation of one hand. In some jurisdictions the PPD benefit is paid to the employee as a set dollar amount for the complete loss of the body part. For example—the complete loss of the eye is worth $85,000. In other jurisdictions the body part is worth a set number of weeks, for instances, an arm is worth 200 weeks of the TTD rate of $600 per week or $120,000 (200 X $600).

Some jurisdictions will use the schedule for the partial loss of a body part or a partial lost to the body as a whole. The treating physician determines the amount of disability. In many jurisdictions the physician rates the loss of body function using the American Medical Association Guide to the Evaluation of Permanent Impairment. For example—the physician following the AMA Guidelines determines the employee lost 20% of the use of his arm. The employee would receive 20% of the scheduled amount for the value of the total arm. Using the $600 TTD rate, the employee would be paid PPD of $24,000 (200 weeks X 20% = 40 weeks; 40 weeks X $600 = $24,000).

Permanent Total Disability (PTD)

When the treating physician (often in consultation with specialists) determines the employee will never be able to return to work, the employee becomes eligible for PTD benefits. In cases where the employee is rated as 100% disabled to the whole body, PTD is almost automatic.

Determining PTD is less clear cut when it comes to an employee who has suffered severe injuries and is unable to return to work for your company, but who is not classified as 100% disabled. A number of issues will then come into play in determining PTD. The nature and degrees of physical impairment, the educational level of the employee, the age of the employee, and the ability of the employee to be retrained for other suitable work, plus the availability of the other suitable work, are all factors in the determination of PTD.

The amount of PTD varies among the jurisdictions.   In some jurisdictions the PTD rate is the same as the TTD rate. In other jurisdictions the PTD rate is lower than the TTD rate and is a percentage of the TTD rate.

PTD benefits are paid until the employee is able to assume work in another field, or until the jurisdiction’s maximum number of benefit weeks is met (in most jurisdictions), or until death (in a few jurisdictions), or until the employee reaches his full social security age (in a few jurisdictions).

Death Benefits

Fortunately, the least common type of indemnity benefit is the death benefit. All jurisdictions provide for the cost of burial, up to a maximum amount. The burial amount varies tremendously among jurisdictions.

A death benefit will be paid to the spouse or to the spouse and dependent children. If there are no dependents, a death benefit in some jurisdictions will be paid to siblings or parents. The maximum amount per week and the minimum amount per week are set by statute in each of the jurisdictions. Most jurisdictions will pay the death benefits to the spouse until she remarries or for a set period of time, with 400 weeks of benefits or 500 weeks of benefits, being the most common time frames.

Author Michael Stack, CEO Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

There are some things in life that you discover for the first time that you realize you’ve known all along. Hello, my name is Michael Stack. I’m the principal of Amaxx and founder of the Amaxx Workers’ Comp Training Center.

Nutrition Is Surprisingly Complex

A little personal anecdote, that that little message, discovering what you’ve known all along, is very true for myself and for my family. We’ve been doing all this research on nutrition, and we watched the movie Forks Over Knives. We watched the movie What the Health. We watched Fed Up. We also watched Food, Inc., and we bought The China Study book, which is a 400-page book. Very complex. There’s a lot to this idea of nutrition, the type of diet we should be eating, and what it does for our health.

We’re moving towards this whole foods, plant-based diet. We’ve been on it for about a week. I’ll let you know how it goes, but so far, so good. It got me thinking about this complexity, this idea of nutrition, this idea of why is it so hard for us to realize what is the right answer and what is the most healthy option for us for our long-term health. It’s baffling to me. When I think about workers’ compensation, it’s the same thing. The system is extraordinarily complex and baffling as to why it’s so hard to get that proper outcome. Why is it so complex?

Basic Fundamental Truths Will Lead to Success

In nutrition, there’s many layers to it, and in workers’ compensation, there are many layers to that, too, and I don’t see either one of them changing any time soon. When you break it all down, when you look at the fundamental truths of what makes you successful in nutrition, processed artificial chemicals, all that different kind of stuff, we know that that stuff is not good for us. We know the convenience and going through McDonald’s isn’t good for us. You don’t have to read a book or watch a movie to know that truth. Not caring for your injured workers or processing them like a robotic system is not good for their outcome either. You don’t have to go to a lot of national conferences and a lot of trainings to understand that fundamental truth either.

I want to encourage you to get back to basics in understanding in your work comp program what are those elements that you already know will lead you to success, and that fundamental truth that will take you there. Looking at our claims as just a claims number versus an individual person … Jeffrey Thomas, who has two kids and lives in Arizona and likes to fish … will lead you in a better direction. Sure, the complexity is going to always be there, but if you can get back to these basics of what we know makes us successful, we will be well on our way to mastering workers’ compensation, and workers’ compensation costs and outcomes.

Again, I’m Michael Stack with Amaxx. If you’re watching this video and you like the message, I encourage you to go to reduceyourworkerscomp.com and sign up for my free newsletter for a lot more information. Remember, your success in workers’ compensation is defined by your integrity, so be great.

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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/

©2017 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.

Being in the insurance or risk management field we often forget that the workers that get injured do not know nearly as much as we know about claims.  At times, adjusters forget to take the time needed to properly explain what rights injured workers have when these claims occur, and that can lead to a disconnect between the adjuster and the injured worker.  This disconnect can make the claim travel down a bumpy road rather than a nice, smooth, streamlined one.

Here are some common questions claimants have when filing a work comp claim.  Please note the answers to these questions can vary by jurisdiction, be sure to consult your adjuster or local legal counsel if you have questions.

1. How do I get paid?

If your case is deemed compensable, you will receive a workers compensation check, probably in the mail or direct deposit, every week or two after the waiting period has subsided.  This check is meant to replace your lost wages from work.  It will not be 100% of the pay you are accustomed to receiving but rather a percentage of your gross wages based on whatever formula the state of jurisdiction uses.

2. When will I get paid?

Generally wages are paid after your case has been deemed compensable by the adjuster handling the file.  Usually this can range from a period of a week or two to maybe a month or so.  Other factors can delay payment, including the investigation of the claim and the gathering of the pertinent medical records.

3. How much will my work comp check be?

This will depend on your jurisdiction.  Typically you will receive anywhere from 66% of your net pay to up to 80%, maybe even more. Fringe benefits that you receive from your employer can also affect the amount of your work comp check.  Anything that you are responsible for regarding your personal medical insurance or 401k may still have to be paid by you, the injured worker.  Work comp pay is not taxable income, and you will not receive a W2 for work comp wages paid out for whatever year you received benefits.

4. Can I go to my primary care physician?

This will vary by the jurisdiction, but generally the answer is yes. After a certain period of time, you can go to an appointment with your primary care doc, and usually the first one will be paid for by the insurance carrier that is handling the work comp claim.  Whether or not you can continue to treat with your personal doctor is up to your adjuster, and if your personal doctor accepts work comp patients and does proper work comp billing.

5. Do I have to go to “your” doctor all the time?

Maybe, depending on the jurisdiction and if your adjuster authorizes you to treat with your physician instead of the occupational medicine doctor.

6. Why is the work comp doctor’s opinion more important or more crediblethan my doctor?

This will depend on what each doctor is saying in their medical reports. Sometimes personal physicians will say one thing with you in the exam room, and meanwhile when they dictate their notes they may mention diagnoses and findings not essentially shared with you personally.  The same is true for the occupational doctor.  The best way to stay the most informed is to request a copy of your medical records from both doctors, this way you can see all of the information that the adjuster is seeing, in regards to the medical chart.

7. What if I have two jobs? Do I receive lost wages for both jobs?

Usually yes, but again this will depend on the jurisdiction. You will have to provide your adjuster with a copy of your personnel file and wage records from your second employer, and be sure to tell this other employer than you sustained a work comp injury at your other job and that you may not be able to work your job during your healing period until you are fully released from medical care with no more restrictions.

8. The light duty job assigned to me pays less than my normal job. Is this legal?

Yes it is legal, but the insurance carrier will be obligated to pay you a “partial” wage.  This means that they take the reduced wages you will earn and issue you a supplemental check for the difference.  The amount of this check will depend on the jurisdiction the claim is in.  If you have questions about how this supplemental check is determined, contact your adjuster and have them walk you through the process.

9. Why isn’t my adjuster returning my calls?

Adjusters can handle and be responsible for hundreds of files, of which you are one of.  These files are all in different stages, and are of varying complexity.

Give your adjuster a day or so to have a chance to return your call.  One thing an adjuster hates is someone that calls them every hour. Sadly, the squeaky wheel rarely gets the grease.  Be patient, and allow your adjuster the professional courtesy to get to your claim.  But, you also have to be persistent.  If you have left a few messages and 3-4 days go by without a callback, you can call and ask for their supervisor.  Every adjuster has an obligation to return calls to their claimants, no matter how insignificant the question may be.  Failure to return calls can be considered “bad faith” on the part of the adjuster, and they or their company can incur penalties or fines if they do indeed fail to return your call within a reasonable timeframe.

10. Should I consult an attorney?

There is no right or wrong answer to this question.  The only person that can answer this question is you.  If you will feel more at ease by talking to a legal professional, then by all means do so.  Having a phone consultation with an attorney doesn’t mean that you are filing a lawsuit against your employer. If it makes you sleep better at night knowing you talked to an attorney, then by all means do so. Better yet, talk to a few attorneys if you have to.

Summary

These questions are normal questions every claimant will have with their work comp claim.  Some people know more about the work comp system than others, but don’t take your fellow coworkers advice about what to do with your claim.  Many coworkers that have a vast experience in dealing with work comp situations will not always give you credible or correct advice.  Your adjuster is the one handling your claim, and they will be there to walk you through the process.

If you feel that the adjuster did not answer your question good enough, feel free to consult an attorney.  You want to make sure you are very involved in how your claim is handled.  After all, being injured doesn’t mean that you do not need to know anything about how the process works and what rights you have as an injured worker.

For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices.

Contact: mstack@reduceyourworkerscomp.com.

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

Live Stream WC Training: http://workerscompclub.com/livestreamtraining

©2017 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.

Companies with exorbitant workers’ compensation costs are doing several things wrong, however, the most common error is not properly managing their programs. Too many companies sit back, assume nothing more can be done and wait for the legislature to introduce problem-solving laws. There certainly are some laws that could be changed, but most companies don’t take advantage of the options already available to them.

Common Workers Compensation Errors

Employer Directed Care

For instance, some states allow the employer to select the doctor who will treat employees injured on the job. These are “employer directed” states. In these states employers enjoy a special opportunity to use physicians experienced in industrial/occupational medicine and also familiar with the employer’s workers’ compensation program. Despite the opportunity, only about 20 percent of employers in these states are using this tool.

Failure To Follow Up With Injured Work

Another common error is failure of companies to follow up on injured workers after they become disabled. The employer assumes the worker’s doctor will give the word when the employee is ready to come back to work. These employers neglect to consider the doctor probably doesn’t know about the employer’s modified duty program or an employee’s job might be changed to accommodate the applicable medical restrictions.

These employers typically neglect to contact the employee, a grave mistake. Without contact, the employee may lose the incentive to return to work and become “psychologically disemployed.” (As typically happens to all of us after a few weeks on vacation). The proper focus, to return the employee to work, is lost.

Lack of Workers’ Comp Understanding

Employers that make the most common errors often don’t know enough about the workers’ compensation system and the options that are available to control their programs.  The lack of understanding makes it relatively easy for employees so inclined to abuse the system.

Example: A company has operations in 15 states with “fee schedules” (a special lower rate physicians must charge for treating employees injured on the job.) for industrial accidents. No one was assigned to make sure medical bills were audited for compliance with the fee schedules in the various states. Result: The company paid out hundreds of thousands of dollars in excess medical fees.

The First Step

Companies need to establish an orderly process beginning in the first moments after an injury. The process must ask and answer such questions as where the employee received treatment, how the employee gets to the doctor, who contacts the employee to make sure medical care is appropriate, when the employee is expected to return to work, and so forth.

For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment.

Contact: mstack@reduceyourworkerscomp.com.

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

©2016 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.

Being new to workers’ compensation can often seem like you are trying to navigate a foreign land. It helps to know what to expect getting started.  Here are five additional items it helps to know about the job.

1. Sometimes it is time to babysit.

Injuries do happen. The employee needs to know the company still cares after the worker is no longer able to work. If there is a workers compensation coordinator, you can delegate to her the job of keeping in touch with all the injured workers until they are back to work doing transitional duty. The best policy is to contact the injured employee after each medical appointment to learn of any issues with their medical treatment, their return to work status and any concerns they have about their job or their work comp claim. By showing the injured employees the employer cares, it will have an overall effect of lowering cost of workers compensation.

2. Know the adjuster(s).

The adjuster is now a new best friend. A competent adjuster who does the job well will make the WC manager’s job easier. The better the working relationship with the adjuster, the fewer snags encountered on workers compensation claims. (The fewer adjusters to work with, the easier it is to learn their strong points and weak points. If the claims are not already consolidated with the minimum number of adjusters possible to cover the claims, work toward consolidating claims with the best adjusters available.

3. Know your insurance broker.

The broker is now a second new best friend. A mistake a lot of new workers comp managers make is thinking the broker works for or is an employee of the insurance company. The broker is a knowledgeable business person who works for the employer as an advisor. The broker’s main job is to keep the employer (insured) happy.  Discuss with the broker what benefits are provided. Hold the broker to this, and the new job will get easier. Expect more than simply an annual stewardship report. Ask the broker to be proactive and make suggestions about your workers compensation program. 

4. Know the return to work program.

The better the company’s transitional duty program, also known as modified duty or light duty, the quicker and faster the workers compensation claims will come to an end. The company is going to be paying the cost of the indemnity benefits through higher workers comp premiums. To reduce the cost of those benefits, return the employee to modified duty. While the injured employee may not be as productive as an uninjured employee, all the productivity of the injured employee on light duty is benefiting the company to some extent while reducing the cost of the claim.

5. Review the claim files.

If asked, most third party administrators or insurance companies will arrange online access to the claim file notes where the adjuster records the activities and events of the claim. While the file notes are helpful, they do not tell the whole story. Go to the claims office and read everything in the claim files. The claims office will probably try to talk you into doing an on-line review, but an in-person review with the adjuster(s) about the claims will provide the most information. There are also claim consultants who do claim file audits, if that is preferable.

Good luck in the new role as the work comp manager. Use the ideas and consult our website often for advice on workers compensation.  For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

While more colleges are now offering majors in risk management and insurance than there were available just ten or twenty years ago, many of the people who come in to the field of risk management and the even more specialized field of Workers Compensation Manager, do not have previous experience or backgrounds in workers compensation. It is nothing unusual in this day of tight hiring practices and double duty jobs for the new workers comp manager to also be working in another department such as finance or human resources. It becomes a learn-as-you-go-experience.

The new workers comp manager, even the one who has been a workers comp adjuster, often needs a guide on what to anticipate in the new role. Therefore, we have put together a list of 5 things it helps to know about the job. Here is our list of five things the new workers compensation manager knows, but no one will tell.

1. The Safety Manager is your new best friend. 

The better the safety manager does the job, the easier the new WC manager’s job will be, as fewer accidents means fewer workers compensation claims to be made.  Ask the safety manager what can be done to eliminate accidents and injuries.

2. Learn how to read the loss run. 

The loss run provides tons of useful information on the nature and the extent of the injuries. Learn about the types of injuries that occur most often and discuss with the Safety Manager what can be done to eliminate the frequent reoccurrences. Review the loss run to see how much money is being spent on medical and how much money is paid out in indemnity benefits. Look for areas where costs can be reduced. Customize the loss run; ask friends about the most helpful stats they have on their loss run, and include those on yours.

3. Know your insurer.

The insurance company that writes the workers compensation insurance is the insurer. The term “insurance carrier” will also be used. This does not mean they carry premiums to the bank. It is an old fashion term for carrying the burden of insurance loss. (Not to be confused with “insured” which is the employer). Learn about the insurer. Are they a mammoth insurance company who writes workers compensation as one of many types of insurance, or are they a smaller regional or local company that specializes in workers compensation. What services do they offer as part of you program or at low cost. Ask them to explain ALL of their services, not just those they pre-select.

4. Know the cost of workers compensation.

Learn what is paid for workers compensation insurance each year, and if the premium is paid monthly, quarterly, or annually. Learn policy dates and which way the premium has been trending in recent years. (Declining premiums are a good sign the safety manager is doing his job well, while increasing premiums indicates a need to team with the Safety Manager to reduce the number of claims and the severity of the claims that do occur. Know how to translate this into total dollars spent on workers compensation.

5. Timing is everything.

The most successful workers compensation managers are the ones that learn time is of the essence in almost everything done as a work comp manager. New injury? Report it immediately to the claims office and immediately advise the medical provider’s office of the transitional duty program. New disability slip? Coordinate with the injured employee’s supervisor on how to accommodate the light duty work slip. New information on an older claim? Call the adjuster and share it with her so she can act on the information while it is still beneficial.

Good luck in the new role as the work comp manager. Use the ideas and consult our website often for advice on workers compensation.  For additional information on workers’ compensation cost containment best practices, register as a guest for our next live stream training.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

We all like to be in control, right? Or at least feel like we’re in control anyway, but we know that there are times, and there are situations when the chickens are actually ruling the roost.

The Chickens Are Ruling The Roost

I’m going to show you a little clip. This is a YouTube clip from the show Super Nanny to really show and explain my point a little bit further. Let’s take a look at this together.

Donuts! Donut, donut. Please mommy! Please mommy! I’ll be extra good if you give me a donut!

Now anyone who has children probably knows that scene maybe all too well. My wife and I have four kids ourselves, so it’s something that we’re working on regularly.

If that parent gives in to the child and gives her the donut, who’s in control of that situation? If you get a note like this from Joe Martin, that says no work until seen by this office again, and you accept that note, who’s in control of that situation?

It’s going to create a worse outcome for that child long term if you give her that short term fix instead of working on the attitude and the behavioral challenges to create a better human being in the long term. The same is true for your work comp management program. If you accept a note like this from Joe without getting the needed information and plug him into your system, you’re creating long-term challenges and you’re creating a very expensive work comp system for your organization.

Information Needed At Time Of Injury To Take Control

Here’s the information that you need in order to take control of an injury at the start of that claim. You need to know the information about the injury itself, the diagnosis, the prognosis, the treatment plan. You also need to know some important information with regards to return to work. You need to know the estimated return to work date, as well as the medical restrictions from that treating physician for what that individual can and cannot do.

Finally you need to know some pertinent scheduling type information. Things like the next appointment date as well as that doctor’s contact phone number. If you get that information that puts you in control. If you deny that child the donut at that time, you start to get in control of that situation, creating a better long term outcome in both scenarios.

I’m Michael Stack with AMAXX, and remember your success in worker’s compensation is defined by your integrity, so be great.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

This Is Part 2 in a 3 Part Mini Series.

The Tipping Point in Workers Compensation

1. Paul Revere, Workers Compensation, and the Tipping Point
2. Make Your Work Comp Message Stick Like Gorilla Glue
3. How Work Comp Can Be Just Like Prison

I’m Michael Stack with Amaxx and welcome back to The Tipping Point mini series where we’re reviewing the elements discussed by Malcolm Gladwell in the book The Tipping Point: How Little Things Can Make a Big Difference. When you’re trying to implement change, when you’re starting to try to implement an epidemic of proper work comp management to reduce your work comp costs and really create a better outcome for your injured workers.

In the first series, I talked about the law of the few and really that’s very relevant when you’re trying to get buy in to your program. The CEO and senior management are onboard, but don’t forget about those employees that have an influence over others. They have those innate skills that connectors, the mavens, and the sales people.

Stickiness Is Message Into Memory

In this session, I want to talk about the stickiness factor and how memorable your message is. Maybe you’ve created a brochure, maybe you’ve done some training, maybe you’ve had safety meetings in regards to your work comp management, but you’re not getting your claims reported timely, which is really where this is very, very important in how memorable your message is, particularly at the time of injury to get that claim reported immediately. You have a very low cooperation or a very low implementation rate in getting those claims reported. Here’s the study, Yale University 1960s, what they were trying to do is get the students to get their tetanus shot.

It was a free tetanus shot at the health clinic. They did two different types of brochures, a high fear and a low fear, and they wanted to see if it made a difference and really gory photos of what happens if you get tetanus and why you should get the shot. Then, a very less intrusive or less fearful brochure. Here’s what was interesting that a month later, only 3% of students ended up getting the shot, very, very low cooperation with what they were trying to do and it didn’t matter whether they were in the high fear or the low fear group to get those outcomes.

Not The Message, But The Package

Often times, it’s not the quality of the message and you’re beating your head against the wall with why aren’t my employees reporting their claims when I’ve told them 100 times maybe it’s the way that you’re telling them that’s going to make a difference. In this study, all they did is they put a map of the campus of where the health center is as well as the times that it was open and they saw those rates increase to 28% of their students cooperating and going to get the shot. It didn’t matter what the message was from these groups. It was both relatively equal. When you’re trying to get by them, when you’re trying to get cooperation, particularly with your claims reporting for your program, don’t forget or discount the stickiness factor of how you’re packaging the message.

Maybe you have an injury triage hotline and you need to give them a wallet card, you need to put it on your lanyard, you need to create a new sign. You need to make some changes and do some testing in how you’re displaying or packaging that message. Remember the stickiness factor in getting your claims reported.

I’m Michael Stack with Amaxx. This is the Tipping Point In Worker’s Compensation mini series. Remember, your success in worker’s compensation is defined by your integrity, so be great!

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.

Self-insured employers purchase excess insurance coverage to limit the risk of exposure to catastrophic injuries. This is often accomplished by having a workers compensation policy with a high deductible. Common deductibles for excess insurance are $250,000, $500,000 and $1,000,000.  The self-insured employer needs to carefully analyze the amount of risk that is financially feasible before deciding on the deductible for the excess insurance.

The excess insurer has a strong interest in knowing about the workers compensation claims that have the potential to exceed the self-insured employer’s deductible. The insurance contract will normally state the self-insured employer must report to the excess insurer any time the reserve amount on a self-insured employer’s workers comp claim equals half of the deductible amount.

Any Injury With Potential To Exceed Deductible Should Be Reported

The excess insurance contract will call for the self-insured employer to report all “catastrophic” claims, regardless of the dollar amount of the claim.  This could include

• Fatalities
• Amputation of a major extremity
• Spinal cord – quadriplegic, hemiplegic and paraplegic injuries
• Brain and brain stem injuries
• Comas
• Burns over more than 25% of the body
• Severe disfigurement and scarring, where applicable
• Loss of eyesight
• Loss of hearing
• Heart attacks
• Strokes
• Multiple surgical interventions
• Rape and sexual assault
• Post-Traumatic Stress Disorder
• Occupational disease claims
• Non-union of bone fractures
• Damage to organs – lungs, liver, heart, stomach, etc.

This list is not all inclusive.  Any injury that has the potential to exceed the self-insured employer’s deductible should be reported to the excess insurer. The report to the excess insurer should be completed by the third party claims administrator adjuster or the self-insured employer’s internal claims adjuster as soon as the information becomes available that there is the potential for the claim to exceed the self-insured employer’s deductible.  The failure to report the claim timely (within the requirements of the excess insurance policy) could create a situation where the excess insurer denies coverage, or accepts the claim under a reservation of rights which allows them to deny coverage after thoroughly investigating the matter.

Review Specific Reporting Requirements of Excess Insurer

The report to the excess insurer should include the basic information about the workers compensation claim. This includes:

• The facts surrounding the injury
• Compensability
• The nature and extent of the injury
• The medical management of the claim
• The amount already spent on the claim
• The reserves for the future cost of the claim
• Subrogation potential
• Any other offsets of cost
• Any Medicare or Medicaid issues
• The action plan to bring the claim to a conclusion
• The litigation management plan, if applicable

The self-insured employer at the start of the excess insurance policy should review with the excess insurer the specific reporting requirements of the excess insurer. A diligent effort by the self-insured employer to comply with the requirements of the excess insurer must be made.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is 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 of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: mstack@reduceyourworkerscomp.com.

©2016 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.