Reform from Within; Employers Take Control - 3

Saturday, July 19, 2003 | 0

Reform From Within: Placing Control of Work Comp in the Hands of the Employers - Where it Belongs - Part 3

This is part 3 of a 5 part series for employers on taking charge of workers' compensation reform. In Part 1 we identified the many problems contributing to the national workers' compensation crisis: who is taking responsibility, and who is suffering most. In Part 2 , we explore some of the ways employers can, and should, take charge of their own workers' compensation cases and enact reform from within. In this installment, we examine some of the causes that contribute to escalating work comp fees and what employers can to take back control.

The Problem - The Wrong People Become Adversaries

When an injured worker feels frustrated or threatened or helpless, he or she will most likely turn to an attorney. At that moment, the cost of the case goes through the roof. Medical costs double, lost time increases unbelievably, loss reserves hit maximum - if they weren't there already. The case will usually go on for at least a couple of years. The high reserves will effect subsequent premium calculations and seriously impact your experience mod.

Employers, you often believe - and understandably so - that because you pay an astronomical amount of money for workers' compensation insurance, that the carrier is your friend. Forget that notion right now. You hire them to do a job and they have very wide parameters within which to perform that service for you. It is up to you to keep a close eye on them and to take as much control of your own workers' compensation cases as is practical. It is in your best interest to have an advocate within your company who has expertise in workers' compensation and a system in place for handling each and every injury that occurs within your company.

There have been many instances where large loss reserves have inadvertently been kept open for years after relatively small claims were paid and closed because of overworked, incompetent, frequently changing or inadequately trained adjusters - as is so very often the case - allow reserves to languish still open, costing employers tens of thousands of dollars or more in inflated premiums and unnecessary surcharges. I was a work comp executive for a large retail chain some years ago and when I decided to start auditing the reserves; I found several cases of open reserves on cases that had long since closed. You can bet that when the next quarter rolled around, and it was time for my visit, there were no such problems.

This is just one area where a qualified work comp coordinator can be of significant benefit to your operation and save you many times what you will pay them.

Article series by employer's workers'compensation consultant Linda Benoit. Linda has been in the Work Comp field for 20 years as a paralegal, in medical administration and as a Work Comp Coordinator and has worked as a consultant since 1989. Contact Linda at lindaraeb@earthlink.net, or by phone at (530)432-4397.