New South Wales Leaves Workers Comp Rates Unchanged

WorkCover NSW of Australia is leaving workers compensation industry classification rates unchanged for 2011-12, according to information from the Work Cover Authority of NSW.

 
 
Each year the NSW government approves rates the WorkCover Scheme will charge employers for workers compensation cover. The government recently approved rates for the 2011-12 policy year and has published them in the Insurance Premiums Order 2011-12.(WCxKit)
 
The Insurance Premiums Order includes important information on the WorkCover Industry Classification System, premium rates, dust diseases rates and the manner in which an employer’s workers compensation premium should be calculated by scheme agents for the relevant policy period.
 
 
According to WorkCover NSW CEO Lisa Hunt, 87 percent of NSW employers covered by the scheme would see no change in their premium in 2011-12 unless their wages increase or decrease – or they move industry classification.

 

 
“For the 13 percent of employers whose premium takes into account their own claims experience, their premium may be affected by their wages and claim costs relative to other employers in the same industry classification,” Hunt said. “Those with a good claims record relative to their industry will benefit from a reduction in their basic tariff premium. Those with a relatively poor claims record would pay more than their basic tariff premium.”
 

Hunt added the NSW WorkCover Scheme target premium collection rate for 2011-12 will be 1.68 percent of wages covered by the scheme. “The decision to leave workers compensation industry classification rates unchanged is a good result for NSW employers, particularly small business,” she said.(WCxKit)

 

About 85,000 claims are made each year and premiums need to cover ongoing costs and claims payments, possibly over decades.

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, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@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.

Investigating the Occupational Disease Claim Is a Complex Process

Any illness or medical condition that occurs in a group of workers at a higher rate than it does in the general population is considered an occupational disease. Some occupational diseases, for example byssinosis, also called brown lung disease, only occur in people who have worked in the cotton, flax, hemp or jute production. Byssinosis is definitely an occupational disease. Other medical conditions, for example hearing loss, may or may not be occupational related. The challenge for worker compensation is to determine what medical conditions are occupational diseases and what are not occupationally related.
 
 
The first issue the work comp adjuster must address is the age of the occupational disease. The adjuster normally deals with injuries that occurred a day ago, a week ago or even a month earlier. However, the occupational disease claim is quite different. The occupational disease may have started ten years, twenty years or even thirty years prior. Most occupational diseases are latent, meaning the employee does not know precisely when they began to suffer the affects of the disease and the disease has been progressively getting worse over a period of time. (WCxKit)
 
 
Latent injury claims often involve asbestos, silica, benzene, mold, carbon monoxide, lead paint, many chemicals, any carcinogen, and the many substances regulated by the Environmental Protection Agency. Occupational diseases cover a wide area of medical conditions but most relate to lung diseases, various types of occupational induced cancers, and hearing loss.
 
 
The age of the occupational disease is important from the standpoint of compensability. The states vary greatly on whom (which employer) is liable for the occupational disease. There are three primary approaches that are used in different states in delegating who is responsible. Responsibility for the cost of the occupational disease may be assigned to:
 
1.      The employer at the time the disease becomes known to the employee
 
2.      The employer at the time the disease started to develop
 
3.      All the employers from the time the disease started through the last employer.
 
 
Several states have migrated from the second or third approach to the first approach to diminish the amount of litigation over responsibility for an occupational disease. Establishing the moment in time an occupational disease started twenty or thirty years ago is fraught with speculation. Also, including all previous employers is often not fair. For example, if the employee with brown lung disease changed occupations and worked as a commercial fisherman for several years, they fishing company would have a valid argument that the brown lung disease is not their problem.
 
 
In the states where the original employer or all the prior employers can be held responsible for the occupational disease, the work comp adjuster must do a thorough time-line investigation. The work comp adjuster should start with questioning the employee in detail as to the names of every employer in their adult life and the dates they worked for each employer.

The adjuster loves to hear “I started at XYZ Company when I was 18, and have worked there all my life”, as it eliminates hours of work locating and contacting former employers to advise them of the occupational disease claim. Of course, that also makes the one and only employer fully responsible for all the cost of the occupational disease. On the other hand the adjuster cringes when she hears “well, I have worked for 12 different coal mining companies in the last 40 years and I don't know when my black lung disease [pneumoconiosis] started”, for many days of research lie ahead for the adjuster.

 
 
In addition to determining the dates and names for each former employer, the adjuster will need to obtain the employees job duties with each former employer, the name of each former supervisor, the substances, materials, chemicals, etc., that were used in their work, and any health issues they had while working with that employer. The adjuster also must delve into the personal habits of the employee, for instance, smoking is known to exacerbate the occupational diseases involving the lungs.
 
 
To circumvent HIPAA laws, the adjuster should obtain a medical authorization from the employee that is very broad and allows the adjuster to contact all prior medical providers. The adjuster will obtain a complete medical history of the employee. In some situations, the adjuster may review the medical history of the employee, but if the occupational disease is a complex medical condition, it is often better for the adjuster to hire a doctor, a specialist in the medical field of the occupational disease, to review the prior medical history, to see if their were previous signs or symptoms of the occupational disease known prior to date it was first diagnosed. This can often assist in the allocation of responsibility for the occupational disease.
 
 
Also, in the states where all prior employers can be held responsible or where the employee worked when the disease started, there is another obstacle for the work comp adjuster.   After locating and contacting the prior employers, the adjuster needs to know who the work comp insurers were during the time period the employee worked at the other companies.  In the industries where occupational diseases are well known, such as asbestosis, the former employers will know exactly when each work comp insurers policy started and stopped. However, in industries where occupational diseases are less common, the employer (who has a totally different staff and record keeping system than they did 3 decades ago) may have a difficult time identifying who their work comp insurer was 30 years ago. Knowing who insured who, and when, is very important for the allocation of damages in the states where damages are allocated among the various previous insurers. 
 
 
In the occupational diseases that can occur in the general population as well as the employee population, the adjuster has to have medical verification the disease is related to the occupation.   For example, occupational asthma can result from over 300 known causes including chemicals, enzymes, metals, plant substances, animal substances, smoke and gases. Distinguishing occupational asthma from asthma that develops without an occupational connection entails hiring specialist in the respiratory field to examine and diagnose the cause. (WCxKit)
 
 
To properly allocate responsibility and cost of occupational diseases, the work comp adjuster has to do a complete employment background investigation of the employee. The employer can assist the work comp adjuster with the occupational disease investigation by providing the medical history they have on the employee including the health insurance file on the employee (be sure to have the adjuster provide the medical authorization to you).  
 
 
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

The Ins and Outs of the NCCI and Classification

Often when discussing lowering workers’ comp premiums employers are advised to be sure they have correct NCCI classifications for their employees.
 
Unfortunately, classification is more than just consulting a convenient list on line. This difficult process requires the assistance of a professional in some aspect of workers’ compensation. It is doubtful employers without an insurance background would know where to start getting their classifications reassigned.
         
National Council of Compensation (NCCI) is owned by a group of insurance companies and operated by the executives of these participating insurers. They function as a U.S. insurance rating and data collection bureau that specializes in workers compensation, annually compiling data from outcomes of millions of workers’ comp claims and policies
 
NCCI and participating insurance companies have a complicated relationship with the states they operate in. Much of the heavy-duty workers’ comp statutory regulation promulgated by states is derived from their relationship with NCCI.   In theory NCCI is a not for profit. However,  everything they produce is regarded as private, copyrighted material so any information you attempt to extract from them comes with a price tag.    
 
NCCI GOVERNS (or not) AS FOLLOWS:
 
In 34 states classifications begin and end with the (NCCI). 
 
Four monopolistic states, ND, OH,WA and WY, does not govern.
 
Not considered NCCI states: (12)  CA, TX, MN, WI, IN, MI, PA, NY, MA, NJ, DE and NC.
 
Of these 12, they break out as follows:
 
States with rating bureaus:  (5)  CA, NJ, NY, DE and PA
 
TEXAS:  Is a hybrid — using NCCI but making some changes to it.
 
License NCCI/use smaller parts of it:  (6) MN, WI, IN, MI, MA, NC
 
No matter how we slice it, NCCI does not make it easy for employers to classify/reclassify.
 
Classifications by NCCI are based on overall industry type, not each specific job function therein. A few exceptions are clerical, outside sales, and often drivers. Construction is the only industry where classifications are assigned at the employee level, depending on actual work because the exposure is so much greater for workers who do roofing and high-rise construction.   
 
If you suspect your business or employees are/were misclassified, you have several ways to investigate.
 
1.     Contact your agent. Even though your agent probably did the misclassification of your business in the first place, the agent is also the first line of defense. Contact them and ask them to reassess.
2.     Contact a workers’ compensation consultant. Workers’ comp consultants are experts at navigating through the complicated infrastructure in which the NCCI, the states where you operate, and the multiplicity of insurers co-exist. 
3.     Contact the NCCI directly. They do charge a fee for their services but they are a good resource. NCCI produces several manuals each year, among them a manual called the “Scopes Manual” containing the classification codes for employment types. There is a fee to purchase the manual. (workersxzcompxzkit).
4.     Contact Your State Workers’ Compensation Bureau to request an onsite inspection and rating.
 
The process of NCCI classification is an art, not a science and there seems to be is a great deal more latitude in classifications than one might suspect.   Be an active advocate in your reclassification quest and follow up diligently.

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 and Claims NOT Covered by Workers Comp Insurance

[Read more…]

Using Job Classification Codes to Save Work Comp Costs

Employers are  confronted every day by ever-increasing workers’ compensation costs and are often at a loss as how to control these costs, believing cost control is out of their hands. However, employers must come to the realization costs can be controlled by implementing safety and workers’ comp management methods.

Many states  offer employers and insurers certain incentives to help cope with up-front costs of work comp insurance premiums. States don’t set the premiums, but some states do set a more favorable base rate if the employer has a proven record of safety and workers’ compensation management practices. And, the base rate is what insurers use to set their premium price.

The State Side
Premium calculations  are based on the rates states allocate to more than 700 jobs, known as “job classification codes.” The codes are based on the type of work done at your company. To be sure your employees are classified correctly, consult http://www.ncci.com National Council on Compensation Insurance for a complete listing

A certain level 
of risk is assigned by each state to each job classification. That means workers such as writers, secretaries, office clerks, or clergy are assigned a lower rate of risk for injury than construction workers, miners, or offshore drillers where the risk of injury is much, much higher.

When you  first apply for workers’ comp insurance, your premium is primarily determined by what portion of your payroll is allocated to each of the classifications vis-a-vis company averages. If your work force is primarily in higher risk job classifications, the base rate is higher and your premium is higher.

Cost Cutters
Once an  employer reaches a certain premium level and the company achieves a proven record of safety and workers’ comp management practices – resulting in fewer, shorter WC claims, you may be eligible for state mandated credit programs.

Companies with  strong safety and workers’ comp management programs might have premiums calculated using a lower base rate than the state average. In some states, employers can get up to a 15% credit on their premiums, aside from experience mod, for evidence of good safety and workers’ comp management programs.

Insurers also  take other factors besides experience mod into account when calculating work comp premiums. They look at things like company growth, safety, workers’ compensation management. If these factors predict good future loss control, premiums may be less. Some companies use a preferred policyholder tier system. Companies with strong track records in safety and workers’ comp management may earn a “preferred policy” holder designation.

Some insurers  give a dividend or a premium refund at year’s end if the company shows strong safety and workers’ comp management resulting in fewer, shorter claims. Of course, if your losses are high, you won’t receive a refund, so it is a strong incentive for employers to pay attention to the importance of safety and workers’ comp management. (workersxzcompxzkit)

The rewards  are employers maintaining strong safety and workers’ compensation management programs experience future lower premiums. Then, with a record of safety and workers’ comp management, they can pick and choose their insurer(s) and are eligible for many state and insurance perks not otherwise available.
 

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.

Tennessee Codifies New Workers Compensation Laws SB1909 Limiting Recovery for Some Recreational Activities

Bills covering  workers’ compensation issues recently moved through the Tennessee state legislative system with the help of The Tennessee Self-Insurers Association (TNSIA). 

Bill SB1909  addresses another Supreme Court decision and limits compensation for injuries occurring during a recreational activity.  That decision greatly expanded the scope of employment to include workers who were voluntarily engaged in recreational activity.

SB1909 puts some  very specific restrictions on the ability to successfully make a workers’ compensation claim for a person who is injured during a recreational activity.

The bill disallows employees  from recovering for injuries sustained during recreational activities, except in the following limited circumstances:

1. When the employee’s  participation was expressly or impliedly required by the employer; or

2. When the employee’s  participation produced a direct benefit to the employer beyond improvement in employee health and morale; or

3. When the employee’s  participation was during the employee’s work hours and was part of the employee’s work-related duties; or

4. When the injury  occurred due to an unsafe condition during voluntary participation using facilities designated by, furnished by or maintained by the employer on or off the employer’s premises and the employer had actual knowledge of the unsafe condition and failed to curtail the activity or program or cure the unsafe condition. (workersxzcompxzkit).

On June 1, 2009  SB1909 was sent to the Governor Phil Bredesen for his signature.

Author:  Robert Elliott, J.D.

Click on these links to try it for yourself.
WC Calculator: www.ReduceYourWorkersComp.com/calculator.php
TD Calculator: www.ReduceYourWorkersComp.com/transitional-duty-cost-calculator.php
WC 101: www.ReduceYourWorkersComp.com/workers_comp.php

Do not use this information without independent verification. All state laws are different. Consult with your corporate legal counsel before implementing any cost containment programs.

©2008 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com

Eleven Red Flags you MUST know about your Workers Comp Payroll Audits

When your workers compensation policy was issued the policy premium was based on estimated payrolls. After the policy expired an insurance auditor reviewed your records to determine the exact payrolls. That audit became the basis of your firm’s final premium. While the process is often straightforward, there are pitfalls that employers should recognize; audits are NOT as clear cut as they may seem. Errors are found in as many as 50% of all premium audits. Here are some red flags that you are paying more than necessary:

 

  • During the audit only a few questions are asked.
  • The auditor does not volunteer to leave copies of the worksheets.
  • A classification that was not on the policy is added to the audit.
  • A classification that was on the policy is omitted from the audit.
  • Employees are paid a significant amount of overtime.
  • The effective date of your policy differs from the effective date of the experience modification.
  • Your policy’s modifier is labeled as either “contingent” or “preliminary.”
  • The policy is frequently endorsed with changes to classifications, rates or payrolls.
  • The NCCI or your state’s rating bureau responded to a question or complaint with an unfavorable decision.
  • You have had a merger with another company within the last 3 years.
  • Your company has expanded into new states.

Review these Red Flags and see if any have occurred. We will have more information next week about policy premium audits. Sign up for the RSS feed so you do not miss this important information. The RSS feed is a blue icon in the upper right-hand corner of the blog. We appreciate Norm Goodman at www.zapcomp.com for providing this information. He will bring us more helpful tips next week. Find out more about ZapComp in our Resources List http://www.reduceyourworkerscomp.com/resources.php. ZapComp’s fees are contingency based — if they don’t save you money, you don’t pay a dime!

 

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