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.

 
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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.

©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.

The Basics of Workers Compensation Impairment Ratings

We often hear the phrase “impairment rating” when there is a discussion of an employee's workers compensation claim. Most people understand impairment means the employee was hurt and unable to work, but do not fully understand how impairment impacts a workers compensation claim.
 
 

Impairment
is a problem in the function of a body part. It can be either temporary or permanent. When it is temporary, the employee is unable to work while recovering from the injury. When the impairment is permanent, the employee retains a residual of the injury after the medical treatment has ended. (WcxKit) A permanent impairment's impact on the employee's life can range from a very mild impact to a life altering impact.
 
 
In a workers compensation claim impairment can be defined as:
1.     An inability of the employee to use his musculoskeletal system – his limbs, joints, muscles, bones, tendons and ligaments – at the level of use the employee had prior to the injury, or
2.     An inability of the employee to control his/her neurological functions – the brain, spinal cord, and peripheral nerves – at the level of use the employee had prior to the injury.
 
A medical provider treating an injured employee will utilize various medical approaches and treatments until the medical provider believes the employee's medical condition will not improve further. Either the employee has fully recovered from the injury, or the employee's medical improvement has stopped and the employee has reached his/her maximum medical improvement. When the medical provider believes there is nothing more that can be done medically for the employee, the medical provider will assess whether or not the employee has lost any functional ability.
 
 

If the employee
has any decrease in functional ability, the medical provider will assign an impairment rating, also known as a disability rating. In 42 states the medical providers will use one of the various editions of the American Medical Association Guides to the Evaluation of Permanent Impairment to establish the level of impairment. In 8 states – Florida, Illinois, Minnesota, New York, North Carolina, Oregon, Utah, and Wisconsin – the medical providers use a state specific guide for the establishment of an impairment rating.
 
 

In workers compensation
there are two types of benefits, medical and indemnity. The indemnity benefit is divided into four categories (in most states). While the terminology for the types of disability will vary by state, the four categories are:
 
1.     temporary total disability (TTD),
2.     temporary partial disability (TPD),
3.     permanent partial disability (PPD), and
4.     permanent total disability (PTD).
 

Impairment is normally not associated with TTD. If the employee fully recovers from the injury and has no impairment, the employee returns to work and TTD ends.

 
 

In some situations,
the impairment will prevent the employee from returning to full duty, but the employee is able to work either reduced hours or at a less demanding job. If either occurs and causes the employee to earn less than the employee was earning before the injury, the employee will receive TPD indemnity benefits to make up for a portion of the lost income caused by the impairment.
 
 

When the employee
has a permanent impairment, but is able to return to work, the employee is compensated for the permanent impairment by the payment of a PPD reward. The statutes of each state establish how much the employee will be compensated for the permanent impairment. In 36 states, there is a table (also referred to as a schedule) that list how much an employee will be paid in PPD indemnity benefits for the impairment of an arm, hand, thumb, finger, leg, foot, toe, vision or hearing. In the other 14 states – Alaska, Florida, Maine, Maryland, Massachusetts, Minnesota, Montana, Nevada, New Mexico, North Dakota, Rhode Island, Texas, Vermont and Wyoming – there are statutes that outline how the employee will be compensated for an impairment.
 
 

When an employee
is injured to the point that the employee can never return to work, the employee is paid PTD indemnity benefits for the severe or total impairment. Impairment this severe will drastically alter the course of the employee's life. (WcxKitz)
 
 

The employer
needs to take time to understand the employee's level of impairment and work with the employee to return the employee to work within the restrictions caused by the impairment.

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.

 
 
 

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.

Understanding Indemnity Benefits (Lost Wages) in Workers Compensation

Approximately half of all the dollars spent on workers compensation claims are used to pay indemnity benefits. These are the benefits paid to an injured worker to replace part of the worker’s lost income. The indemnity benefits vary in name among the various workers compensation jurisdictions, but can be separated into two basic types — temporary benefits and permanent benefits
 
Temporary Benefits
Temporary benefits are further divided into two types — temporary total disability (TTD) and temporary partial disability (TPD) [with different names for the temporary indemnity benefits in different states]. TTD is paid to the injured employee when the employee is unable to return to work of any type while recovering from the injury. WCxKit When the employee is partially recovered from an injury, but not fully recovered, the medical provider may allow the employee to return to work part time. The employee is paid regular wages for the hours does worked and TPD is paid to the employee to cover the hours each day the employee is unable to work. 
 
Permanent Benefits
Permanent benefits are also divided into two types — permanent total disability (PTD) and permanent partial disability (PPD) [with different names for the permanent indemnity benefits in different states]. When the employee reaches maximum medical improvement, the medical provider evaluates the employee's ability to return to work. If the medical providers (the treating physician and an independent medical evaluator) both agree that the employee is unable to return to any type of employment, the employee is consider PTD and paid PTD benefits per the limitations in the state workers comp statutes. If the medical providers agree the employee has recovered enough to return to some type of employment but will always be partially disabled, the employee is classified as PPD and is paid PPD benefits per the state statutes.
 
Indemnity Benefits Calculation
The amount of the employee's indemnity benefit is based on the employee's prior pay history and the average weekly wage (AWW) earned by the employee. Most jurisdictions use two-thirds (66.67%) of the gross AWW as the amount to pay in indemnity benefits, but a few jurisdictions use 70% of the gross AWW. Also, a few jurisdictions use 75% or 80% of the employee's net wages after taxes to calculate indemnity benefits. WCxKit
 
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 includes overtime pay, bonuses, commissions or any other form of compensation in determining the AWW.   Also, some jurisdictions 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. WCxKit
 
When Paid
The states vary in their requirements as to when indemnity benefits are paid. Some states require the payment of weekly indemnity benefits while other states require the indemnity benefits to be paid every two weeks. Some states require the first indemnity check to be issued on the 15th day after the injury (if the compensability of the claim is not being disputed) and subsequent checks to be issued on the same day of each of the following weeks as long as the employee is unable to work. Other states allow the insurer to determine what day the initial indemnity benefit check will be issued, with subsequent checks following weekly or every other week.
 
Issuance of the Indemnity Check
At most insurance companies and third party administrators, after the adjuster determines the amount of the weekly or bi-weekly indemnity check, the actual issuance of the check becomes a clerical function. The clerical person enters the information into the company computer for the first indemnity check to be issued. Most claim management systems are now automated to the point that the computer system takes over issuing and printing the subsequent indemnity checks until the computer is told to stop.
 
Delivery of the Indemnity Check
The two primary ways the indemnity checks reach the employee is the U.S. Mail or through direct deposit into the employee's checking account.   Some insurance companies have started the practice of putting a fraud notice on the back of indemnity check which states the check is for the payment of disability benefits and anyone cashing the check who is not disable is committing an act of fraud. This is of value only if the indemnity benefits check is mailed to the employee, requiring their endorsement. It is of no value if the check is being direct deposited into the employee's checking account. WCxKit
 
In a recent audit of a large self-insured Midwestern university, a third way of delivering the indemnity check to the employee was used. Unless the employee was hospitalized, the employee was required to come to the claims office each week to pick up the check. This allowed the workers comp adjuster to make personal contact with the employee weekly and allowed the claims department to visually evaluate the employee's physical condition.  
 
Account Instructions
The client instructions for most self-insured programs are silent on the requirements for the TPA when it comes to issuing indemnity payments. If the employer has had any issues with the TPA over the payment of indemnity benefits, the client instructions should be amended to include directions on when and how indemnity benefits will be paid. (WCxKit)
 
For More Information
This brief synopsis does not cover all the information you may need to know about indemnity benefits. The websites of most state bureaus of workers compensation or industrial commissions will often have a discussion of indemnity benefits for their state. Another excellent source of information is the annual Analysis of Workers Compensation Laws guide published by the U.S. Chamber of Commerce. Of course, we are always glad to answer your questions about workers compensation. Please contact us for more information.
  \
Author Rebecca Shafer,
J.D. President, Amaxx Risks 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.  Contact: Info@ReduceYourWorkersComp.com 
  
 
WC Calculator:  http://www.LowerWC.com/calculator.php
TD Calculator:  http://www.LowerWC.com/transitional-duty-cost-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 

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