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Worker Compensation
- 1. Worker Compensation – It’sa Partnership Provider Employer Employee Insurance
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- 3. Worker Compensation – It’sa Partnership Upton Sinclair, socialist author of The Jungle, a novel detailing the horrors experienced by a Lithuanian immigrant working in the Chicago slaughterhouses and the Triangle Shirtwaist Factory Fire. WC is a form of insurance with stipulation – compensation for wages and medical treatment who are injured during the course of employment in exchange for mandatory relinquishment of employee’s right to sue the company for the tort of negligence Worker Compensation is paid for by the employer, either self funded or by purchasing WC insurance.
- 4. Worker Compensation – It’sa Partnership Before WC, if an employee was injured and off work – it was “too bad for you” The employer could be faced with a lawsuit It was the injured who had the burden of proof of negligence on the part of the employer – tough job
- 5. Worker Compensation – It’sa Partnership The cost of Worker Compensation Insurance is determined by two basic things – What is your risk and exposure (determined by the classification of employees) and by your history of claims
- 6. Worker Compensation – It’sa Partnership What you can control - The basic formula for WC Insurance cost is: 1.Determine the classification code for your employees 2.Determine the rate for each classification code 3.Calculate the total annual payroll for each class code 4.Divide the total annual payroll for each class by 100 5.Multiply the new number by the class code rate 6.Add the premiums for all codes together, this is your base rate 7.Multiply by your experience or mod rate
- 7. Worker Compensation – It’sa Partnership Determine the classification code for your employees 5 secretaries at $12.75/hr 25 house builders at $22.90/hr 5 carpenters at $24.70/hr 2 debris removal at $14.50/hr
- 8. Worker Compensation – It’sa Partnership Divide the total annual payroll for each class by 100 5 secretaries = $127,500 / 100 = $1,275 25 builders = $1,096,250 / 100 = $10,962 5 carpenters = $265,525 / 100 = $2,655 2 debris pickup = $58,000 / 100 = $580 Multiply the new number by the class code rate $1,275 X Add the premiums for all codes together, this is your base rate Multiply by your experience or mod rate
- 9. Worker Compensation – It’sa Partnership Multiply the new number by the class code rate secretaries $1,275 X (class 8810 rate).850 = $1,083.75 builders = $10,962 X (class 5645 rate) 3.10 = $33,982.20 carpenters = $2,655 X (class 5651 rate) 1.98 = $5,256.90 debris pickup = $580 X (class 5650 rate) 2.25 = $1,305 Add the premiums for all codes together, this is your base rate $41,627.85
- 10. Worker Compensation – It’sa Partnership Add the premiums for all codes together, this is your base rate $41,627.85 Now multiply by your experience or mod rate: Base rate X mod rate = amount paid for WC insurance $41,627.85 X 1.00 = $41,627.85 $41,627.85 X 1.20 = $49,953.42 (+ $8,325.57) $41,627.85 X .80 = $33,302.28 ( - $8,325.57)
- 11. Worker Compensation – It’sa Partnership Now multiply by your experience or mod rate: Experience modifier or mod rate is a term used in WC insurance. It is the adjustment of annual premium based on previous loss experience. Usually 3 years are used to determine the mod rate for a WC policy. THIS IS SOMETHING YOU CAN CONTROL/MANAGE!
- 12. I =(C*(1–A)+G)+(A*F) E+(C*(1-A)+G)+(A*C) A =Weight Factor G = Ballast I = Actual Primary Losses H = Actual Incurred Losses F = Actual Excess Losses (H-I) E = Expected Primary Losses D = Expected Incurred Losses C = Expected Excess Losses (D-E) Worker Compensation – It’s a Partnership
- 13. Worker Compensation – It’sa Partnership “The modern system of workers' compensation is so complex and arcane it produces considerable grief to those who must deal with it on a daily basis. Yet these often cumbersome regulations are so ultimately vital to society they appear, in one form or another, in all industrialized nations. “ Iowa Orthop J. 1999; 19: 106–110.
- 14. Worker Compensation – It’sa Partnership It’s a Partnership and everyone has their role – Employee – must report the injury, follow doctor’s orders and keep the employer informed Employer – must ensure injured employee receives medical attention as needed, report to insurance company within 7 days and keep insurance company informed Claims – must gather information, determine if claim is work related or not, pay employee benefits, settle the claim Provider – must treat patient and determine restrictions or limitations, determine if work related, release employee back to work when appropriate
- 15. Worker Compensation – It’sa Partnership 1.Injury/illness must arise out of “employment” 2.Seek medical attention as necessary 3.Employee has up to 2 years to report injury/illness (30 days) 4.HIPAA does not apply to WC cases 5.Keep a written record of all facts 6.File report with insurance company (must be filed within 7 days) 7.The insurance company will gather information from employee and any medical treatment
- 16. Worker Compensation – It’sa Partnership The insurance company will gather information from employee and any medical treatment – So what is your role??
- 17. Worker Compensation – It’sa PartnershipThings to Document • Physical symptoms, such as sharp pain, stiffness, loss of motion, etc • How long the symptoms lasted; if and when they recurred. • Names of any witnesses • The doctors seen and the date of each visit. • Money spent on doctors, exams, treatment, medicines and mileage. • Days lost from work because of the injury/illness. • Any statement made to the employer or the insurance company. • Copies of any agreement or final receipt signed for a WC claim.
- 18. Worker Compensation – It’sa Partnership The employee gains by RTW when a doctor allows 1.This is your time to be talking to the doctor, you have every right as HIPAA does not apply. 2.If you aren’t talking to the doctor, the injured employee is. 3.Why pay a top wage earner to do lesser jobs that a restricted worker could be doing? 4.Workers will return sooner rather than go from totally off work to full duties. 5.Gets you involved and gives you some control of the recovery. 6. Many workers want to come back to work.
- 19. Worker Compensation – It’sa Partnership Return To Work Convey to the doctor your concern to stay within the physical capabilities and ensure employee’s recovery Make these temporary work assignments giving you control to end them. Suggested 12 weeks max of light duty. You can give the employee any job to do as long as it does not go beyond those physical capabilities. (Think outside the box)
- 20. Worker Compensation – It’sa Partnership EARLY RETURN TO WORK ... IT WORKS FOR YOU!! The employee may be reluctant to start working again for fear of pain, re-injury or not being able to perform as well. If a different job is required because of the injury, there may also be a concern about trying something new. (and will convey this reluctance to the doctor) We may not be willing to bring workers back to work, for many of the same reasons. It is helpful if employers have some type of limited duty, or alternate work, to help workers gradually get used to being back in the workforce
- 21. Worker Compensation – It’sa Partnership If the employee is not satisfied with the first doctor, one more choice is allowed; however, the worker must notify the employer of this second choice. Only 2 choices are allowed to employee.
- 22. Worker Compensation – It’sa Partnership On written request, an employee should submit promptly to a reasonable examination by any doctor (physician, chiropractor, psychologist, dentist, physician assistant, advanced practice nurse prescriber or podiatrist) named by the employer or insurance company. IME (Independent Medical Exam)
- 23. Worker Compensation – It’sa Partnership •If a WC claim goes to court, it can be two or three years later – go back and look at your notes from a couple of years ago. Are the notes clear enough you can understand the details of the incident? Were witnesses statements taken? Photos? Doctor notes? Supervisor's notes? It’s a little late now!
- 24. Worker Compensation – It’sa Partnership When an employee has stopped receiving weekly compensation benefits for temporary or permanent disability after an accidental injury, the claim may be reopened at any time within 12 years from the date compensation was last paid. This 12-year period does not apply, however, where a compromise agreement has been made and approved by the department or where a final award has been issued after a hearing.
- 25. Worker Compensation – It’sa Partnership Lost Time expenses are calculated at 100% Restricted Day expenses are calculated at 30% BIG DIFFERENCE, BIG INCENTIVE FOR RTW
- 26. Worker Compensation – It’sa Partnership What do I do? 1. Make sure your risk classifications are correct for employees a. Build a relationship with your insurance carrier/claims 2. MANAGE claims – a. Make sure your policy requires immediate reporting of injuries b. Make sure your supervisors have training on accidents and are responsible for RTW c. Document, document, document
- 27. Worker Compensation – It’sa Partnership What do I do? a.Form a relationship with the medical providers b.Develop your company policy c.Form a relationship with injured employees d.Return to work program e.Be informed, follow up, know what is going on
- 28. Worker Compensation – It’sa Partnership THE MORE YOU KNOW – THE MORE YOU CONTROL
- 29. Worker Compensation – It’sa Partnership Provider Employer Employee Insurance