If You Can Not Get Workers Comp Coverage, Look to the State Fund

There is an alternative to commercial insurance companies or self-insurance for your workers compensation needs.  In about 20 states, including the three largest states, California, Texas and New York, there is a state sponsored insurance company that competes with the private insurance market for workers compensation policies and premiums.  They are often referred to as the State Fund.

 

 

In some of these states, the state government takes an active role in the operation of the state insurance companies and the insurance company is a quasi-governmental agency.  In other states, the state created and funded the insurance company, but no longer operates or manages it.  (WCxKit)

 

 

Each of these state operated insurance companies is domiciled in the state where they operate and they do not issue policies outside of the state boundaries.

 

 

The State Funds have come about because of the difficulty employers can have in securing workers compensation coverage, especially if they are in a high risk line of business.  Employers who have excellent safety programs are coveted by the commercial insurance companies.  The modification factor used to establish premiums reflects the lower than average loss experience of these companies.

 

 

The opposite holds true for companies who have higher than average loss histories.  The standard insurance companies are not interested in obtaining the business, resulting in it being difficult for those employers to obtain workers compensation insurance.

 

 

A poor loss history is not the only reason employers will end up in the State Fund.  The state legislators in every state are often tinkering with the workers compensation laws.  Changes in the laws such as increases in the maximum weekly indemnity benefit rate, or the number of weeks an employee can collect benefits, makes for great vote buying strategy for state legislators, but results in increased cost to the workers compensation insurance companies.  When the insurance companies are not allowed to raise the premiums proportionally to the additional claims cost, they become selective in whom they will insure.  With cost increasing faster than premiums, very few insurance companies will write policies.  When they do write policies, they are very selective.  This results in employers with decent loss histories being pushed into the State Funds.

 

 

State Funds, like standard insurance companies, strive to assist the policyholders in reducing the number of insurance claims they have.  The State Funds often offer various services to the policyholders.

 

Guidance in establishing a Return-to-Work program

Offering comprehensive loss control programs including on-site inspections

Ergonomic evaluations

Educational materials including posters, pamphlets, safety manuals

OSHA compliance assistance

Anti-fraud programs

Wellness programs

In about a dozen states the State Fund is the insurance company of last resort.  The State Fund offers insurance coverage to all employers, often at a price that is slightly higher to much higher than what the insurance policy would cost from a standard insurance company.

 

 

When an employer cannot obtain workers compensation insurance from any other source, the department of insurance will mandate the employer be provided insurance by the State Fund.  Of course, the State Fund charges an appropriate premium to reflect the higher exposure to claims when they insure these employers.

 

 

The single state coverage of the State Funds often makes them a poor choice for employers who have operations in multiple states. For instance an employer who has operations in both California and Nevada can insure his California operations through the State Compensation Insurance Fund, but will have to locate another insurer for the workers compensation policy to cover the Nevada operations. (WCxKit)

 

 

State Funds are occasionally a smart choice for the employer.  The premium charged can be lower if the charter does not mandate the making of a profit.  The added services listed above – provide the policyholders with more value than the employer can purchase separately.  Check with your state Department of Insurance to see if there is a State Fund available in your state.

 

 

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 author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact: RShafer@ReduceYourWorkersComp.com.

 

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

 

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

California Roofing Contractor Gets Year in Jail, Must Pay Restitution

A California roofing contractor was sentenced recently to one year in jail and was ordered to pay $510,000 in restitution for failing to provide workers compensation insurance for an injured employee and failing to pay insurance premiums for unclaimed employees, who were paid in cash.

 
 
According to the Orange County District Attorney’s office, Michael Amzie Holley, 43, Murrieta, pleaded guilty to a court offer to two felony counts of perjury by declaration, two felony counts of recording false and forged instruments, one felony count of misrepresenting facts to the State Compensation Insurance Fund (SCIF), seven felony counts of making a fraudulent statement, one felony count of presenting a fraudulent material statement to obtain compensation, one felony count of making a false statement to discourage an injured worker from claiming benefits, one felony count of willfully failing to pay taxes, one felony count of failing to file a return with the intent to evade taxes, and a sentencing enhancement for aggravated white collar crime over $500,000. [WCx]
 
 

At the time
of the crime, Holley was a roofing contractor and owner of So Cal Roofing. The defendant purchased a minimum workers compensation policy from SCIF and failed to state that he employed subcontractors, paid workers in cash, hired unlicensed employees, and leased employees from other companies. Holley paid his employees in cash to hide the fact that So Cal Roofing had workers. He received insurance based on his false declaration and entered into a contract requiring SCIF to cover all workers employed by Holley, even those employees unknown to the insurance company. Holley submitted inaccurate payroll reports to SCIF, resulting in underpayment of insurance premiums. To hide the fraud, Holley failed to file an accurate tax return to avoid paying taxes to the State on the cash payments made to his employees.
 
 
One of Holley’s employees was injured when he fell off a roof, and subsequently filed a workers comp insurance claim. Holley denied that the injured employee worked for him, thus denying the injured employee his workers comp insurance benefits. Subsequently, Holley fraudulently signed under penalty of perjury that he had no employees at So Cal Roofing and filed these documents with the California State Contractor’s Licensing Board to make him exempt from securing workers comp insurance.
 
 
California law requires that all employers maintain workers comp insurance for their employees. Payroll records showing the number of employees and their income must be submitted to both the workers comp insurance company and EDD, who oversee the collection of payroll taxes. [WCx]
 
 
Workers comp insurance rates are determined by a formula, which takes into consideration the number and type of employees and the company’s history of injury claims.
 
 

Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He is an editor and contributor to Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: Info@ReduceYourWorkersComp.com.

 

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Workers Compensation Rountable Roundup For July 2-10

This week at the Workers Compensation Roundtable discussion group on Linkedin there are several new discussions, including this one from Deborah Pfeifle: What is the average life span of a WC claim from first report of injury through closure, nationally? What is the #1 issue that precludes claim closure?
 
Charlie Larson of South Dakota responds with, “We are allowed to file written discovery and conduct depositions. After the petition is filed, we have 30 days to answer, each side has 30 days to answer discovery, and after obtaining a medical authorization, it takes forever to get medical records. After that is done, the depositions begin. I've had some cases drag out for years, but that typically is the result of a claimant attorney not moving the case forward.”
 
He encourages participants from other states to write their comments.
 
Mike Benishek writes that, while he knows of no national figures for claim closure, his “med-onlys usually close out in 60 days. Lost time varies by claim.” He adds, “As for what precludes claim closure, #1 is Attorneys (both claimant & defense attorneys) and the ever popular Medicare Set Aside (MSA) requirements.”
 
And Karen Rutledge writes, “I am not certain about national standards, but in TX if we could obtain claim closure on an indemnity case within 105 weeks it was a success as there is lifetime medical treatment option. In OK and CO, an indemnity case with litigation could be up to 2 years. I agree with Mike medical only was usually 60 days as you had to wait for medical providers to submit all the bills.”
 
Though an older discussion, the topic asking which state has the worst WC laws is still drawing comments. This week David Sheck, a WC and PEO broker for 20 years, writes, “I would say it is a tie between Ca and NY. Generally states in the Northeast are close runner ups.” And participant Mark Walls directs readers to a document showing the Oregon WC premium ranking summary.(WCxKit)
 
John Winkler says, “NC should be in the running as well — No cap on TT and the requirement to return injured workers to ‘suitable employment’ can be a bear with an Avg. cost per claim 34% higher than the median of 46 other states and medical costs increasing in cost per visit.”
 
And Greg Krohm adds, “I am really surprised by the near consensus on CA, IL and NY. The next interesting question is: What specific system features are the most disliked by employers (payers)? I suspect the reasons would be diverse and different in each of the above states, e.g., IL fee schedule is being racked over but the CA fee schedule is not bad relatively speaking. Hearing delays may be a big problem in one state but not in another. IL has no treatment guidelines and NY and CA guidelines have been the focus of a lot of discussion. Another interesting question: would organized labor pick a different list of states?”
 
And lastly, a new discussion was brought up by Thomas, who asks, “Does anyone have experience with the use of EBT cards for scheduled indemnity benefit transfers? Vendor recommendations?”
 
Join us at Linkedin's Workers Compensation Roundtable right now and right here! Better yet, invite your friends so they too can become informed on hot topics in the Workers Compensation industry.(WCxKit)
 
Workers Compensation Roundtable is jointly managed by people dedicated to the concept that workers compensation is a manageable line on your expense ledger, and that informed professionals are empowered achievers. Workers' compensation is not simply a cost of doing business, it is a cost that can be controlled. Beginning with an assessment of cost drivers, benchmarking data, and integrating the solutions, employers can reduce workers' comp costs 20 to 50 percent. With proper information, professionals managing compensation claims can reduce costs and improve outcomes for all stakeholders in the process. This group is for employers, business owners, risk managers, HR managers, insurance executives, and brokers to discuss the obstacles and strategies to overcome them.

Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Using Cheat Sheets to Learn New State Laws

One of the scariest parts of expanding a business into a new state for the self-insured employer is learning the workers compensation laws and state mandates in the way of forms, filings, hearings, etc. While an employer can hire a third party administrator (TPA) to handle claims, or a law firm to guide you through all the steps of workers comp claims handling, it is in your best interest to learn the basics of the workers comp system in the new state quickly. Or, get a good resource that has such information. Ask your TPA what resources they use. Even though they have professional resources, similar resources can be very helpful for the self-insured company.
 
 
Self-insured employers have two choices: spend weeks/months learning the new workers comp system or, to borrow a video game phrase, get “cheat sheets” to speed up the learning process. (WCxKit)
 
 
Many law firms specializing in insurance defense work sometimes offer “cheat sheets” to new adjusters and potential new clients as a way of building business. Instead of the employer spending “forever” learning the basics of the new state’s workers comp law, the cheat sheets give a synopsis of important information the self-insured employer needs to know.
If you want a jump of learning this information and don't want to rely on free cheat sheets, excellent information – in easy to use tables — is available from www.workcompresearch.com
 
Common cheat sheets/reference tools include:
1.      A list or a table of state forms and when each is to be filed.
2.      Explanations of state forms and rules associated with each form.
3.      Table of temporary total indemnity benefits by calendar or fiscal year.
4.      Table of temporary partial indemnity benefits by calendar or fiscal year.
5.      Table of permanent partial disability benefits.
6.      Table of scheduled injuries.
7.      Charts for combining two or more impairment ratings.
8.      Death benefit tables.
9.      Table on statutes of limitations on filing claim, appealing claims, etc
10. Calculation of indemnity benefit guidelines.
11. Checklist of defenses to claims.
12. Charts or tables on how the judicial system works.
13. Claim settlement guidelines.
14. Guidelines on the selection of medical providers.
15. Guidelines on posting a panel of physicians
16. Forms for:
·        New employees/transferred employees to sign acknowledging the selection of a physician.
·        Injured employees to acknowledge the attending physician requirement(s).
·        Requesting a new physician.
·        Employee to decline medical treatment.
17. Samples of required state notices for posting.
18. Recent changes in the state law.
 
 
In addition to the cheat sheets, get a glossary of workers compensation jargon and terms as used in a particular state. This type of glossary also assists you in understanding the abbreviations often used within the state, for example – DOAH (Florida Division of Administrative Hearings), BRC – Benefits Review Conference, or IW – injured worker. (WCxKit)
 
Summary
A new employer in a state can spend time learning the workers comp system, contact some of the law firms specializing in insurance defense work or consider www.WorkCompResearch.com as eventually learning the system in the new state definitely has it benefits, but quickly learning the basics summarized by experts speeds up the learning curve and assists in understanding the workers comp system.
 
 
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Virgina Workers Compensation Basics 101

 ThisTh Workers Compensation Laws change frequently. This is only a summary; a complete copy of the most up-to-date version can be found at: www.WorkCompResearch.com an excellent service.  http://workcompresearch.com/  
 
 
In Virginia, every employer who has three or more employees, whether full-time or part-time, is required to carry workers compensation insurance. Virginia's Workers' Compensation Act includes family members working for the employer, apprentices, minors and illegal immigrants as employees. There are some exceptions – worker compensation coverage is elective for partners, sole providers, and corporate officers. Workers compensation coverage does not apply to independent contractors (including real estate agents), casual workers, domestic workers, and farm workers (unless the employer regularly has three or more employees). Employers with one or two employees may voluntarily obtain workers compensation insurance.
 
 
Obtaining Coverage:
To obtain workers compensation coverage in Virginia, the employer has four options which are:
 
1.      Purchasing a workers compensation insurance policy from an insurance company licensed to do business in Virginia.
 
2.      Obtaining approval from the Virginia's Workers' Compensation Commission to act as an independent self-insurer.
 
3.      Joining a group self-insurance association licensed by the Virginia State Corporation Commission.
 
4.      Having an agreement with a professional employer organization as provided by Virginia statute. (WCxKit)
 
Workers compensation insurance can be purchased at: http://www.workerscompensation.com/insurance/ins_info.php
 
 
Claim Reporting:
The employee must report the injury to the employer in writing within 30 days of the injury and the employee must report the injury to the Virginia Workers Compensation Commission within two years of the occurrence. The employer upon learning of the accident is required to report the workers compensation claim to the insurer within ten days using the Employer's Accident Report (VWC Form No. 3). The insurer then must send in the report of the accident to the Virginia Workers Compensation Commission.
 
 
Medical Benefits:
The employer must provide a panel of at least 3 doctors, who are not affiliated with each other, for the employee to select from. If the employer fails to post a panel of doctor's for the employee to chose from, the employee is allowed to select his own doctor. In an emergency situation, the employee may be treated at any emergency care facility or the emergency room of a hospital. After the initial emergency care, the employee is must select from the employer's panel of medical providers. Once the employee has chosen a doctor from the panel, the doctor can not be changed without the insurance company's approval, unless the Workers' Compensation Commission orders a change of medical providers.
 
 
All medical expenses are covered under Virginia's workers compensation statutes for as long as the employee needs medical care, provided the claim was filed timely. There is no medical fee schedule in Virginia. The initial panel doctor can refer the employee to other medical providers. If the employee does not cooperate with the medical care, indemnity benefits can be suspended.
 
 
Temporary Total Disability Benefits:
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage. The maximum amount of TTD benefits that can be paid weekly is changed each July 1. There is an automatic cost of living increase on Oct. 1 each year, if the accident occurred prior to July 1of the same year. The maximum TTD benefits per week for injuries is $895 per week. The state minimum weekly benefit is $223.75.
 
The first 7 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 21 days. TTD benefits can be paid for a maximum of 500 weeks.
 
Temporary Partial Disability Benefits:
In Virginia, if the employee is able to return to any type of work, but at a lesser rate of pay then the amount the employee was earning prior to the injury, the employee is entitled to temporary partial disability (TPD) benefits. The TPD benefits are paid at two-thirds of the difference between the pre-injury wage and the post-injury wage. The TPD benefits are paid for up to 500 weeks from the date of injury. The TPD benefits plus the post-injury pay rate can not exceed the state's maximum indemnity benefits rate for TTD.
 
Permanent Partial Disability Benefits:
Virginia employees are paid permanent partial disability (PPD) benefits for any permanent disability suffered as the result of an on-the-job injury. Once the employee has reached maximum medical improvement, the employee can be paid PPD, even if back at work.
 
Virginia uses a schedule of injuries for arms, legs, hands, feet, fingers, toes, vision, hearing and severely marked disfigurement of the body. The loss of an arm is worth 200 weeks of indemnity benefits (with a week calculated the same as TTD). For example, if the treating doctor gives the employee a 10 percent disability rating to the arm, and the employee's TTD rate was $600 per week, the employee will receive $12,000 ($600 X 200 X 10%).
 
Injuries to the back and internal organs are not scheduled injuries. When a Virginia employee has a back injury, he or she will continue to collect TTD benefits, up to 500 weeks or until he or she is able to return to work.
 
Permanent Total Disability Benefits:
Virginia permits the employee to collect a maximum of 500 weeks of indemnity benefits for all types of indemnity combined, unless the employee is classified as being permanent and total disabled which is defined as:
 
1.      Paralyzed.
 
2.      Loss of both arms, hands, legs, feet, eyes or any two in the same accident.
 
3.      Severe brain injury that is so severe as to render the employee permanently unemployable.
 
4.      If the employee's injury is designated as a permanent and total disability, the employee can draw indemnity benefits for life.
 
Death Benefits:
The burial expenses in Virginia are covered for a work-related death up to $10,000. The death benefits for a dependent spouse and children follow the same guidelines as TTD benefits – two-thirds of the average weekly wage – currently a maximum of $895 per week, up to a maximum of 500 weeks. The minimum death benefit is 25 percent of the state maximum benefit or the actual wage if less. Spouses who have not been voluntarily deserted or abandoned at the time of the accident, children under the age of 18, children under the age of 23 enrolled full time in an accredited educational institution, any child regardless of age if physically or mentally incapacitated, and parents who are in destitute circumstances, can receive the death benefits.
 
 
Vocational Benefits:
Virginia workers compensation law also includes vocational rehabilitation. If the employee cannot return to the prior employment / job, the insurance company is required to pay all reasonable expenses incurred by the employee in his vocational retraining. If the employee is released to light duty work, the employee must prove that he or she is actively looking for a new job within their limitations, or benefits can be suspended. The employee is required to accept any suitable position offered. (WCxKit)
 
 
NOTE:  State laws change frequently. Nothing in this article is meant as legal guidance. For legal advice on a particular state's most current law, please consult with you legal advisor. To purchase the most up-to-date laws, go to: http://workcompresearch.com/


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

 
WORK COMP CALCULATOR:   http://www.LowerWC.com/calculator.php
 
WC GROUP:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/
SUBSCRIBE: 
Workers Comp Resource Center Newsletter

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Info@ReduceYourWorkersComp.com.

North Dakota Work Comp Agency Seeks Insurance Rate Hike But May Distribute Dividends

North Dakota's workers’ compensation agency is seeking a 3.3% average rate hike that would raise companies' annual insurance bills by nearly $5 million.    In a down economy, that's not what companies need.                     
 
Industry group spokespersons report employers hope the Workforce Safety and Insurance agency will use dividend rate credits to soften the increase in their costs. A round of credits is likely to accompany the new rates, which are expected to go into effect July 1.
 
Dividends are offered when the agency's investment reserves hit specific levels. They were eliminated in 2009, a consequence of the stock market drop. During the prior four years, the agency's investment surplus was used to cut employers' annual insurance bills between 40% and 62%.
 
North Dakota law mandates WSI distribute dividends if its surplus is at least 40% greater than its required financial reserves.
 
In December, the agency's surplus was close to 45% higher than its required reserves, according to its most recent operating report.
 
The majority of the proposed rate rise is linked to an increase in the state's average wages. Workers’ compensation insurance rates are presently applied to each worker's first $23,700 of annual wages; the agency's proposal would dictate the initial $24,700 of annual wages would be taxed beginning July 1. (workersxzcompxzkit)
 

The WSI advisory board is slated to meet April 15 to decide if it will recommend the rate plan to Gov. John Hoeven.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.

Podcast/Webcast: Occupational Health Strategies
Click Here:

WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

Oklahoma House Committee Decreases Number of Work Comp Judges

 Legislation to reform Oklahoma’s workers’ compensation court and system passed a House committee.  Senate Bill 1973, by Rep. Dan Sullivan, decreases the number of judges in the Oklahoma Workers’ Compensation Court from ten to eight and requires five of the judges to be permanently assigned to the court in Oklahoma City and three to the court in Tulsa.  

 
The bill also increases workers’ comp judges’ terms from six to eight years, and puts in place a single-term limit on any new judges. Senate confirmation is necessary to fill any new vacancies on the workers’ comp court. Finally, judges are required to have at least five years of workers’ comp experience before gaining appointment, among other reforms. 
 
The legislation also addresses issues with how cases are handled and how to provide a reduction in the cost of the system all while maintaining the top medical care for workers. (workersxzcompxzkit)
 
The bill passed the House Economic Development and Financial Services Committee the week of April 5 with a vote of 9-5 and moves onto the full House.

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.

 Podcast/Webcast: Occupational Health Strategies
Click Here:

WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

Workers Compensation Laws Vary Everywhere

If you think it is difficult to know all the workers' compensation laws in your state, pity the workers' compensation manager at the large corporation where he/she may need to know the work comp laws of 20 or 30 states, or all 50 states, plus the District of Columbia, Puerto Rico, the Virgin Islands and Guam. While every jurisdiction provides for workers' compensation coverage, no two jurisdictions go about it in the same way. 
 
A national workers'  compensation claims auditor was recently contacted and asked, “What is the maximum weekly benefit in Kansas?” All the professional auditor could do was answer “I will be glad to research it for you and let you know.” Why couldn't the expert on workers’ comp claims answer the question? The reason is because every state addresses the various aspects of the workers’ comp laws in their own way.
 
Compulsory Coverage
The point where the jurisdictions are most alike is in the requirement that all employers (with certain minor exceptions for very small businesses) carry workers' compensation coverage for their employees. Two states, New Jersey and Texas, do not describe their workers' compensation as compulsory, but as elective. 
In New Jersey while work comp coverage is described as elective, in actuality it is compulsory as the employer can be subject to both fines and a misdemeanor criminal offense for not carrying work comp coverage. 
Texas is the only state where workers' compensation is truly elective, but if the employer is not insured, “going bare,” the employer is liable to suit without defenses.
 
Self Insurance
Most of states allow employers to self insure. Single employer self insurance for workers’ comp is a viable option only for very large employers. Groups of employers joining together to self-insure, for example several hospitals in the same state, is allowed in most states. The monopolistic states/jurisdictions where only the state itself can sell work comp coverage to employers do not allow self insurance for work comp. The monopolistic jurisdictions include Guam, North Dakota, Ohio, Puerto Rico, Virgin Islands, Washington state and Wyoming.
 
Exceptions
While there is workers’ compensation insurance in every jurisdiction, each jurisdiction carves out its own exceptions to the work comp coverage requirement.
 
The most common exceptions, allowed by most of the states, to having work comp coverage are the exclusion of work comp coverage for employees who are volunteer workers, seasonal farm workers and domestic servants. Other types of employees who can be excluded from work comp coverage in some of the states includes real estate agents, over the road truckers, charity workers, sales people paid by commission only, casual laborers, ministers, barbers and professional athletes. 
 
Then some states have exceptions for work comp coverage unique to that state alone. For example, in Louisiana “crews of crop spraying aircraft engaged in agriculture” can be excluded from work comp coverage. If you think an employee might not covered or if you are unsure if there is work comp coverage, please consult with a workers’ compensation lawyer for the jurisdiction in question.
 
Major Benefits
In all the jurisdictions, the work comp laws provide for income benefits, medical benefits and rehabilitation benefits — including both vocational rehab and medical rehab.
 
Income benefits can be broken down into four categories: temporary total disability benefits (TTD), permanent total disability benefits (PTD), temporary partial disability benefits (TPD) and permanent partial disability benefits (PPD). There are several different methods used by the various jurisdictions on how to compute the income benefits. 
 
Let's look at some of ways the most common income benefit, TTD is calculated. In most states the employee is paid two thirds of his gross average weekly wage, with maximum and minimum caps. However, some states compute the benefits differently. In a few states, the TTD is based on 80% of spendable income or 75% of after tax income or 70% of gross average weekly wage. 
 
There is more variance in the ways PPD benefits and PTD benefits are calculated. In some states the weekly amount paid for PPD or PTD is the same as the weekly amount paid for TTD. In other states, the weekly amount paid for PPD and PTD will be significantly less than the TTD rate. Some states have caps on the maximum amount the employee can receive for PPD or PTD, other states have no caps.
 
Medical Benefits are fairly consistent across all the jurisdictions. The biggest area of difference is in who selects the medical providers. In about half of the jurisdictions the employee can select their own medical provider, while in the other half of the jurisdictions the employer or insurer will determine who the medical providers will be.
 
Rehabilitation benefits for both vocational rehabilitation and medical rehabilitation vary greatly. All jurisdictions require medical rehab but not all states require vocational rehab. The limitations placed on vocational rehab depend upon the state.
 
IMEs and Ratings
In all of the jurisdictions if the employer or employee is unhappy with the medical diagnosis or impairment rating given by the medical provider chosen by the other party, they can question it. The means to do so varies from jurisdiction to jurisdiction. In some states the party not in control of the medical selection can have an independent medical examination of the employee by requesting it from the other side of the claim. In other states the employee or employer must petition the Workers’ compensation Board for the Board to provide an independent medical evaluator. Then there are a few states where the claims adjuster for the employer can request a peer review—where a doctor evaluates the medical diagnosis provided.
 
Most of the jurisdictions use the American Medical Association Guidelines to calculate impairment ratings. But then each jurisdiction applies them differently. Some jurisdiction will multiple the impairment rating by a set number of weeks and then multiply that number against the TTD rate or the PTD rate. Other jurisdiction will increase the impairment rating by half or double or some other local variance.
 
Death Benefits
Death benefits also vary considerably by jurisdiction. In some states the death benefit will be equal to a certain number of weeks of the TTD benefit or the PPD benefit, for examples 400 weeks of TTD. In other states the death benefit will be capped at a dollar amount, like in Kansas where the death benefit payable to the employee's spouse and dependent children is $250,000.
 
Other Differences
There are many other areas where the workers’ comp laws will differ from jurisdiction to jurisdiction. For instance, some jurisdictions allow subrogation or workers’ comp payments, other jurisdictions do not allow subrogation. Most jurisdictions do not cover independent contractors for workers’ comp, but a few do. Some jurisdictions allow the insurance company to settle future medical cost with the employee, while some jurisdictions require the employee to have life time medical care made available. (workersxzcompxzkit)
 
Summary
Neither the multi-state workers’ compensation claims manager or the professional claims auditor will know all the work comps laws in the entire jurisdiction. Please feel free to contact us with any of your work comp questions. We won't know the law in every jurisdiction, but we will be glad to assist you in learning the answer to your question.
 
So, feel free to use our State Laws Resource, which is updated periodically, but still laws may change more frequently than any printed service. www.ReduceYourWorkersComp.com/  http://www.reduceyourworkerscomp.com/workers-compensation-state-laws-and-regulations.php

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.

Podcast/Webcast: Claim Handling Strategies
Click Here:

http://www.workerscompkit.com/gallagher/podcast/  Claim_Handling_Strategies/index.php 
 


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

For Fourth Straight Year Vermont Workers Comp Rates Drop

Rates for workers’ compensation insurance decreased for the fourth straight year according to Governor Jim Douglas of Vermont. New rates, effective April 1, 2010, were approved the Department of Banking, Insurance, Securities and Health Care Administration (BISHCA).
 “I am pleased to announce another year of decreased workers’ compensation rates. This is excellent news, especially for the many Vermont small businesses that will benefit from this decrease,” said Gov. Douglas. “Four consecutive years of decreased rates would not be possible without employers’ continued attention to the issue of workplace safety, and the work of state regulators who successfully maintain a positive business environment for insurers.”

In the voluntary market – the competitive market offering the most favorable rates – loss costs will decrease by an average of 4.1%. Loss costs are the primary component of workers’ comp rates. Nearly 94% of Vermont employers receive voluntary market coverage.

In the assigned risk market – the market for employers unable to obtain coverage in the voluntary market – rates will also decrease by an average of 2.9%.

BISHCA Commissioner Paulette Thabault echoed the Governor’s comments. “The health of Vermont's workers' compensation market has clearly improved over the past several years, as reflected in these lower rates and the declining number of employers in the assigned risk market," said Thabault. “It is also important to recognize that businesses across Vermont have worked hard to create a culture of safety at their workplaces, and the reduced costs that many employers will experience with this rate decrease are a direct result of their efforts,” Thabault commented.(workersxzcompxzkit)
Rate changes vary by industry and classification. Of particular note among 2010 rates are significant reductions for two iconic Vermont industries: dairy farms (-18.9%) and ski areas (-12.9%).

 Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.


Podcast/Webcast: Claim Handling Strategies
Click Here:

http://www.workerscompkit.com/gallagher/podcast/  Claim_Handling_Strategies/index.php 
 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

The Fascinating Foibles of Purchasing Workers Compensation for Small Business

Do I Have to Have Workers’ Comp Insurance?
Well, like death and taxes, workers’ comp insurance is usually “required.” This is refered to as "carrying" workers compensation coverage. Even if you employ only one person most states require employers to provide workers’ comp insurance. The regulations do vary from state to state. Right now, Texas is the  only state allowing voluntary participation and may be considering a change, even as we write. And, even in Texas, it’s strongly recommended employers cover their employees with WC insurance.
 
State Laws Differ
WC benefits, in general, are awarded on a “no fault” basis, meaning no one is blamed unless the injured worker was under the influence of drugs or alcohol when the injury occurred.

Employee work
status categories vary from state to state; some require part-timer employees to be covered and some don’t.  

Coverage varies
from state to state.  In some states, injured employees get lost wages in addition to coverage for medical expenses. 

If you are
the sole owner and proprietor of your business, you can choose whether or not you want workers comp coverage for yourself.
 
Senior executives are eligible if they fit the definition of an employee.   You must consult the Workers’ Compensation Commission in your state to determine how the rules apply to the states where you do business.
 
Nearly “everything” about workers’ comp insurance must follow state law in every state an employer does business. We encourage you to review “ State Laws and Regulations” before your begin.  (http://www.reduceyourworkerscomp.com/workers-compensation-state-laws-and-regulations.php)

What About My Insurance Premium?
Premiums are determined by the workers; compensation board of each state.   The base rates may vary but the process for determining premiums is the same. Every state assigns each job category a code tied to the risk level of the job. Job risk is determined by the frequency of on-the-job injuries and their severity. Severity is measured by medical and indemnity payments. Indemnity payments are paid directly to the injured employee for losses suffered.  Jobs with very high risk (coal mining) carry higher work comp premiums. Conversely, jobs with low risk (secretary) carry lower premiums.
 
Other factors considered when determining your workers’ comp insurance premium includes the total number of people covered; how these individuals breakdown: owners, full-time/part-time workers, subcontractors, consultants, job functions, type of coverage (full, one time, seasonal event), years in business, gross payroll.

How Do I Buy Workers’ Comp Insurance?
Workers’ comp insurance is purchased through an agency or company licensed to write policies.   If you are unable to obtain workers’ compensation insurance privately, your state is required to provide coverage. Your state’s workers’ comp commission can help you determine how to apply for coverage. 
 
Self insurance is an option for companies with a hefty net worth. Each state, with a different net work requirement, must approve your application. Until recently,  self-insurance   an option for big companies. However,  smaller companies with similar attributes, are banding together to acquire group self insurance. Group self insurance also needs state approval, but is a great option for smaller companies wanting and needing big company benefits.
 
Don’t be surprised, but worker’ comp insurance is a cost of doing business employers must pay out of their own pockets. Premium costs may not be passed to the employee, like health insurance. Neither may you deduct the cost from employee wages. Payments are made through the claims administrator not directly from the employer to the treating physician. 

Must I Tell My Employees About My Work Comp Policy?
Oh yes! An employer is required to post a notice to employees.” Failure to do so results in a fine.  Signs contain information on your workers’ comp program. You get your signs from your insurer and you must post them conspicuously in hallways or cafeterias and any other places where everyone can see them during the work day. 

In states allowing
the employer to choose the treating physician, the signs tell employees where to go for medical treatment. 

In states where
employees choose treating physicians, you post signage outlining the procedure for handling the workability form. Post workability cycle procedures in the same place the workers’ compensation signs are posted. 
Combine all information together with your post injury response requirements signs, so when a work-related injury occurs, all employees will not only know they have coverage, but also know their post-injury rights and responsibilities. Employee signs include notice of posting, workability form process procedures, and post injury response procedures. 

What Do I Do When an Injury Occurs?
The onset of the claim, is the time when your workers’ comp management practices kick in – at once.  Get claim forms from your insurer or (if self-insured) your third party administrator including:
workability form cycle, witness report form, supervisor and employee statements, first day phone call and
flowers/cards, and development of modified duty job description. (workersxzcompxzkit)
Keep in mind when an employee is out for more than four days, weekly open ended conversations, and additional workability forms accompanying the injured employee each time the person visits to the doctor, must be documented and filed. The goal s to get the employee back to work as soon as medically possible, even in a restricted or modified duty capacity.

 

Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers' Compensation costs, including airlines, health care, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. He can be contacted at: Robert_Elliott@ReduceYourWorkersComp.com or 860-553-6604.


Podcast/Webcast: Claim Handling Strategies
Click Here:

http://www.workerscompkit.com/gallagher/podcast/  Claim_Handling_Strategies/index.php 
 


Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
 
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ ReduceYourWorkersComp.com.

Professional Development Resource

Learn How to Reduce Workers Comp Costs 20% to 50%"Workers Compensation Management Program: Reduce Costs 20% to 50%"
Lower your workers compensation expense by using the
guidebook from Advisen and the Workers Comp Resource Center.
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