Understand Who Does What in Work Comp

Monday, September 2, 2002 | 0

The work comp equation is a complex one, and involves numerous individuals, each with a distinct job, a distinct goal, and many times these goals conflict. Understanding what everyone does in the system, what they hope to achieve, and how they do their jobs can provide the employer with some strategies for controlling the ever spiraling work comp premium.

First, let's start with you, the employer. You have more to do with work comp than just paying the premium for insurance. Your job starts with hiring employees. Let's face the grim reality that there are people that are capable, physically and mentally, of doing the job, and there are those who are not. Some are going to be prone to falling victim to the work comp system, and some are going to prove to be wonderfully productive under the most adverse conditions. In other words, controlling work comp costs starts with hiring the right people in the first place.

The employer must also be responsible for training, and providing a safe work place. Insurance companies are in the business of managing risk, and they all offer safety programs to ensure that your work place is as safe as possible - the safer the place of employment, the lower the risk of a comp claim occurring in the first place.

Employees need to know their rights about work comp. This is not only good business practice, but it is the law. Certain advisements need to be posted in certain places. A concerned empathetic employer is less likely to be "sued" for work comp, than a dictatorial, uncaring employer. Discuss work comp and safety openly with your employees. They appreciate it and you won't look like you are trying to hide something or be deceptive.

The next part of the equation is the agent/broker. Independent or carrier direct, they have the responsibility of evaluating your business to ensure that you are properly categorized in both your operations and your payroll. An improper classification can have disastrous effects on your premium. A good broker will review existing claims to ensure proper reserving and case management, and also review prior policies for errors in classifications and other elements that can affect your x-mod.

When a work injury does occur, the claims examiner is someone you will deal with on occasion. The claims examiner's job is to evaluate the claim first to determine if in fact it is covered by work comp. Your job as an employer is to ensure that all information required by law, and more, is transmitted to the claims examiner. If there is doubt about the veracity of a claim then that needs to be DOCUMENTED, not just communicated. State FACTS, not opinion. Complete the Employer's First Report of Injury immediately and fully, and fax it to the insurance claims department. Also, call the claims department to get your employee to a physician - one that is approved/preferred by the carrier.

The physician's role is two fold in workers' compensation: treatment of the injury, and reporting to the insurance company. Both are equally important to your insurance premium. If the treatment is inappropriate or is taking longer than it should, then your experience is going to increase. If the reporting is incomplete, or inaccurate, then, again, the claim is going to take longer to resolve which will increase your experience factor. Help manage the medical by ensuring that the injured worker starts off with treatment from an approved vendor.

Don't get upset when the injured worker gets an attorney. This does not mean that the injured worker is out to screw you or the insurance company. Usually an injured workers gets an attorney because he is scared and confused by the complexity of the work comp system. The injured worker's attorney's job is also two-fold: ensure that his client receives all of the benefits he is entitled to under the law and ensure that the injured worker understands the legal ramifications of his actions. The injured worker attorney many times is a benefit to a claim because he can control an otherwise volatile situation, and actually helps settle a case. Remember that the injured worker attorney doesn't get paid until the case settles, so his interests are surprisingly aligned with your and the insurance company's.

Typically, if an attorney is hired by the injured worker, your insurance company will also hire an attorney to represent its interests (and if it doesn't you should be questioning why not - a claims examiner, though specially trained in workers' compensation, is NOT an attorney and has NOT been trained in legal procedure or how to 'think like a lawyer'. Remember, however, that a defense attorney's obligation is to the insurance company, not to you, the employer. While you may hire your own attorney, the insurance company will not pay for him, and typically hiring your own attorney is not necessary unless you get sued for discrimination and such claims are excluded from policy provisions. But, it is up to you to fully cooperate with the defense attorney when he performs his investigation or requests witnesses for a trial. This is not only important relative to protecting your interests, but it is also a contractual obligation pursuant to your insurance policy.

Finally, don't forget vocational rehabilitation. Voc rehab is there to assist the injured worker return to work, be it at your shop or some other place. Sometimes they are successful, and sometimes not. But numerous recent surveys all conclude that the vast majority of injured workers simply want to return to work.

Workers' compensation is complex in law, theory and practice because of the numerous relationships required to make it work. Understanding how everyone contributes to the system will help keep your comp costs under control.