Best Practices to Reduce Comp In Layoffs

Monday, February 18, 2002 | 0

In the past 2 articles of this series we examined the reasons why workers compensation claims increase in a downsizing and dishonest claim reporting. Now we'll take a look at some 'best practices' to minimize claims and their impact in a downsizing.

The Workers' Compensation Task Force for the Coalition Against Insurance Fraud (Washington, D.C.; 202-393-7330) makes these recommendations to employers in layoff mode:

* Put your workers' compensation insurer or claims administrator on notice to review post-termination claims for potential problems.

* Identify individuals (since they may have changed due to terminations) who can describe the job requirements and functions of each job.

* Explore outplacement options for laid-off employees.

* Consider severance arrangements where possible. The more generous the severance, the less financial incentive laid-off workers will have to file bogus claims.

* Consider bringing someone from the unemployment office to the facility so workers can file for benefits before they leave. This is convenient for the workers and reduces your vulnerability to "cappers," who often solicit clients outside unemployment offices.

* During exit interviews, ask about possible work-related injuries or illnesses. Having terminated employees sign a workers' compensation release form can reduce potential illegitimate claims (though in most states this will not protect the employer against a claim and in fact may be illegal in your state).

* Where allowed by law, consider exit "independent medical examinations" as part of the layoff process. These follow the same medical protocols as examinations following injury claims, and take a comparative inventory of the workers' physical capabilities. This can also make a later claim tougher for the laid-off employee to win.

* Escort employees to a physician immediately following any claim that they've suffered an injury.

* Remind workers what constitutes fraud and what the consequences are. Put up fraud posters or use a paycheck stuffer.

This article sponsored by HealthCareProducers.com, where one stop health and workers' compensation insurance is just a click away.