supervisor training - understanding workers' …...2019/02/02 · 2/12/2019 1 supervisor...

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Supervisor Training –

Understanding Workers’

Compensation Costs

Session Objectives

►Cost to the injured worker and the employer

►Understanding how insurance premiums are affected by claims

►Importance of a strong return-to-work program

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Costs to Employee & Employer

►Employee Injury Costs►Mental/Physical►Days away from work

►Disability/Lost Wages

https://www.osha.gov/dcsp/smallbusiness/safetypays/estimator.html

► Injury Costs for the Employer

► OSHA’s $afety Pays Program

► Impact of Occupational Injuries & Illnesses

► Direct Costs

► Injury Type

► WC Costs

► Profit Margin (%)

► Number of Injuries

► Indirect Costs


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►Injury Costs for the Employer

►From a Workers’ Compensation standpoint…

►You are expected to have losses► Employee Classification x Payroll = WC Insurance Premium


Workers’ Compensation Overview

►Options to provide coverage (state laws differ):►Commercial insurance.►State funded.►Risk pools.►Self-insurance (for larger employers).

From SHRM - Worker’s Compensation

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Workers’ Compensation Overview

►Small employers usually buy workers' compensation insurance.

►Large employers may self-fund and/or self-administer.

►The employee gets the same benefits; the difference is in the administration and cost.


Eligibility for Benefits

►For workers who suffer injury or illness, the injury or illness must be work-related “in and out of the course of employment,” regardless of whose fault it was. This means the employee cannot sue his or her employer for pain and suffering for work-related injuries and illnesses.►Usually, the employee’s exclusive remedy against the employer is wage-loss benefits and necessary medical or rehabilitation treatment.


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Workers’ Compensation Benefits

►Wage loss: A percentage of the wages that the employee lost for time out of work.

►States have formulas that calculate wage-loss benefits based on recent average earnings.

►Example: Last 13 weeks of actual earnings (including overtime) multiplied by 70 percent, up to a specified maximum.

►In many states, the wage-loss benefit depends on the type of disability:►Permanent total disability (PTD) (can never do any job).►Permanent partial disability (PPD) (can never do some jobs).►Temporary total disability (TTD) (for now, can’t do any jobs).►Temporary partial disability (TPD) (for now, can’t do some jobs).



►Benefits include all reasonably necessary medical treatment.►Employers can challenge the “reasonableness” of

treatment.►Employers can challenge medical bills for errors or

charges in excess of state guidelines.►Rehabilitation (therapy, education).►Death benefits for survivors.


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►Employer pays entire cost.

►Factors affecting employer costs:►Risk-based ratings:

►Percentage of payroll by job classification. ►Experience rating:

►Based on prior claim experience.►Other adjustments:

►Volume discounts.


Experience Rating Period

►Three years of past experience, not including the current policy period.

► - Experience Mod effective 1-1-19

► 1-1-18/19 – not included in calculation, policy year not fully developed

► 1-1-17/18 – included in calculation



► 1-1-14/15 – loss experience dropping off

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WC Experience Period – 3 years

WC Experience Period – 3 years

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Understanding the Experience Mod

Each Mod Point is valued at $1,000 premium dollars

Controllable?

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RTW Impact on Experience

Modification Factor

Top Injured Body Parts

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Nature of Injury

Impacting Workers’

Compensation Costs

►Accident Investigation

►Safety Inspections & Safety Training

►Loss Trending

►Hiring Practices

►Managing Claim Costs & the Injured Worker

►Timely Reporting

►Understanding WC Pricing

►Experience Mod Analysis

►Transitional RTW

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Compensation Costs

►Timely Reporting►Faster treatment►Prevents injury exacerbation►Future accident prevention►Lower costs


Compensation Costs

►Timely Reporting (cont)► 7 days/24 hours► $50/$150/$300► 2nd week – 18% increase► 3rd – 4th week – 30% increase►>1 month – 45% increase►Back injuries – 1 week delay = 40% increase

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Loss Reduction

►Assume that workers do get hurt; you can reduce the cost of their injuries.

►The goal is to manage claims to reduce overall costs.


Loss Reduction

►Types of Claims:►Medical only:

►No time lost from work.►Wage loss:

►Employee misses some time from work.►Some companies supplement wage-loss benefits.

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Loss Reduction

►Types of Claims, con’t:►Rehabilitation:

►To help workers recover their capacity to work.►Death:

►From job-related causes.►Specific loss:

►Eye, finger, leg, etc.


Loss Reduction

►Claims can vary in cost; depends on the amount of payments for:

►Medical expenses.►All reasonably necessary medical expenses must be

paid for.►However, there are ways to reduce these costs.

►Wage loss.►Get the employee back to work sooner.


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Loss Reduction

►Company doctor.

►Independent medical exams.

►Issues: ►For some types of injuries/illnesses (such as back pain,

headaches, soft tissue), it’s more difficult to prove or disprove disability or work relatedness.►The key questions:

►Is the worker unable to work?►Is the injury or illness work-related?►Is expensive medical treatment necessary?


Loss Reduction

►Develop rapport with doctors:►Requires honest concern for employee welfare.►Provide a detailed job description to the doctor:

►Paper (physical requirements: weight, motion, frequency).

►Video.►On-site visits.

►Employers are entitled to receive medical records related to WC claims, but they should be kept confidential.

►Focus on rehabilitation.


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Loss Reduction

►Light duty, favored, supervised or transitional work:►Avoid secondary gain. Secondary gain is the extent to

which having an injury serves some additional purpose (e.g., staying away from work).

►Rehabilitate worker.►Diary files.►Good to be consistent with work-related and non-work-

related assignments (i.e., don’t make work-related more onerous).

►Do not retaliate!


Loss Reduction

►Challenge the claim:►Activity evidence: What activities was the employee

involved in away from work?►Private detectives: Hired to gather evidence refuting the

claim of a disability.


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Loss Reduction

►Coordinate benefits:►Investigate who else could be paying:

►An automobile insurance policy from another driver?►The product liability insurance policy of the

manufacturer of the defective product that injured the worker?

►Second injury funds:►Some states have funds that will reimburse employers

who have hired an employee who was injured at a previous employer’s workplace.


Loss Reduction

►Offsets from unemployment insurance.►Question: Could there be an overlap between workers'

compensation and unemployment insurance?►Answer: Usually not.

►To get WC benefits, you have to be unable to work.►To get UI benefits, you have to be available for work.►Usually, both of these can’t happen at the same time.


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Loss Reduction

►Propose lump-sum settlements.►Requires legal oversight.►May terminate benefits.►Employers should get:

►A resignation.►Waiver of any and all other claims.


Other Relevant Laws

►Family and Medical Leave Act:►Gives qualified workers the right to time off from work

without losing their jobs for serious medical conditions.►Applies even for work-related injuries.►Up to 12 weeks.

►Some employers require employees to use up their entitlement to FMLA leave.

►After 12 weeks is up, if there is no reasonable accommodation, the worker may be terminated.►Check with your own legal counsel.


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Other Relevant Laws

►Americans with Disabilities Act:►Requires a reasonable accommodation for disabilities (even if work-

related).

►The accommodation must be provided if the:►Disability is a major life function (e.g., seeing, walking, hearing); and►Accommodation is reasonable (i.e., not an undue hardship on the

employer)►Not too expensive but larger employers need to spend more

►Employee would otherwise be able to perform the essential functions of their job; and

►Accommodation will not cause undue risk of harm to the employee or others.


Summary

►The costs of injuries are variable based on many factors, but can be reduced by the employer.

►Return-to-work programs are a must

►Employees should be treated with respect and dignity, and without retaliation.

supervisor training - understanding workers' …...2019/02/02 · 2/12/2019 1 supervisor...

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