Focus OneSource and Jester Insurance
Proposed changes are coming in with the new year. Iowa Insurance Commissioner, Doug Ommen announced that he has approved the 3% average rate decrease that was proposed by the National Council on Compensation Insurance (NCCI). The new rates will be effective on January 1, 2020.
When it comes to a work-related injury, it is critical that your business is properly covered. Workers’ Compensation insurance provides injured employees with wage and medical benefits in the event of a work-related accident.
What is the big deal about workers’ compensation anyway? We talked with our business partner, Jester Insurance, and got the inside scoop. Work Comp – Am I Doing it Right? Janelle Friedman, CPCU at Jester Insurance explains below.
Work comp is a complex system, governed by Iowa statute and relevant case law. As an employer, there’s no single way to “do it right” since everyone’s circumstances are different. However, there are steps that can be taken to increase the likelihood of a good outcome on individual claims, and to improve your Work Comp program as a whole.
Before An Injury
There are four key things to do/programs to have in place before an injury occurs:
- Develop Job Descriptions. The job descriptions should include specifics regarding the physical demands of the job. For example, if the position requires an employee to lift 50 lbs. over their head repeatedly throughout the day, the job description should include that.
- Perform Pre-employment Screening. Our goal is to ensure that a prospective employee can physically perform the required job functions. We’ve seen good results when employers hire a trained physical therapist to rate the prospective employee’s ability to do the very activities spelled out on the job description.
- Identify a Designated Physician. Injured employees should be directed to a doctor or clinic chosen by the employer, not their own family physician. Occupational Medicine doctors and clinics are preferred since they are very experienced with Work Comp claims and are more likely to work with you to get employees back to work as quickly as possible.
- Develop a Light Duty/Return to Work Program. It’s important to get injured employees back to work as soon as possible – preferably within the 3-day waiting period. The most expensive of a Work Comp claim is often the lost wage payments made while an employee is off work while recovering from an injury. When these weekly benefits are paid in addition to medical expenses, the claim has a much larger impact on your experience mod. Create a list of jobs ahead of time that an injured employee could do.
I Have a Claim! Now What Do I Do?
After an injury occurs, several steps can be taken to investigate and manage the claim:
- Report an Injury ASAP.
- Utilize a “Nurse on Call” service if it’s available with your insurance carrier. The nurse will determine if the injured employee needs to seek medical attention, will direct care to your designated physician, and will complete the first report of injury on your behalf.
- Advise if you suspect drug or alcohol use so the injured employee can be tested while receiving medical attention. Based on a recent change to Iowa law, a positive drug or alcohol test can result in the denial of a Work Comp claim.
- Complete an Onsite Accident Investigation. The goal is to get to the root cause of the injury so that changes can be made to prevent a reoccurrence. It’s often easy to blame an injury on the actions or inactions of the injured employee, but sometimes employers also need to take a hard look within to determine if the injury could have been prevented if the employer had done something differently.
- Communicate With Claims Adjusters from Start to Finish.
- Let the adjuster know if you think the claim is suspicious
- Keep the adjuster advised of changes in work status and any restrictions
- Be certain the adjuster is aware of any “light duty” work that’s available
- Make sure that any light duty is offered in writing
- And, that any refusal of light duty by the injured employee is in writing
If you offer light duty and the injured employee refuses, Work Comp will no pay weekly benefits during the period of time that the employee refuses to work.
Work Comp Payments
There are three main types of payments available to an injured employee:
- Medical Expenses. These payments cover expenses like doctor visits, surgeries, physical therapy, and prescription medications used to treat a work-related injury.
- Temporary Disability Benefits. These payments cover a portion of the employee’s wages that are lost while the employee is off work due to an injury.
- Permanent Disability Benefits. At the end of the healing period, additional compensation is available if it is determined that the injured employee has a permanent disability resulting from the work-related injury.
Temporary Disability (lost time) Benefits
Temporary disability benefits are available to an injured worker while he or she is unable to work. The payments are designed to replace roughly 80% of an employee’s take home pay, so a Work Comp check will be less than the employee’s usual paycheck.
Permanent Disability Benefits
When an employee is finished treating for a work-related injury, the treating physician determines if there is any permanent disability and the extent of any such disability. This permanency rating is very important to the total cost of a claim, and another reason it’s critical to utilize a designated physician to treat injured employees.
Permanent disability benefit schedules are included within the Iowa Code and benefits are described in terms of an injured employee’s weekly wages. For example:
- 100% loss of an arm = 250 weeks of benefits
- 100% loss of an eye = 140 weeks of benefits
- 100% loss of a big toe = 40 weeks of benefits
Loss to a body part can also be expressed as a partial loss. For example, an employee who has lost 50% of the use of an arm would be entitled to 125 weeks of benefits.
Impact on Experience Mods
The three types of Work Comp benefit payments do not affect an employers Experience Mod equally. A claim involving lost time benefits or a permanent disability will have a much bigger impact on your Experience Mod than a claim involving just medical expenses.
A claim that involves just medical expenses is discounted by 70% when an Experience Mod is calculated. By contrast, a claim involving lost time is not discounted at all. For this reason, a Light Duty/Return to Work program is a critical component of an employer’s efforts to keep their Experience Mod (and resulting Work Comp premium) as low as possible.
Can I Fire an Injured Employee?
You can, but you would likely be sued for wrongful termination and/or retaliation. If you are concerned that an injured employee is another serious accident waiting to happen, you may want to consider a Global Release. This is a legal agreement in which the employer and injured employee mutually agree to part ways. It requires additional lump sum contributions from both the employer and the Work Comp carrier.
A Global Release eliminates the potential for an employment practices suit and eliminates the possibility of another serious Work Comp injury by the same employee. Discuss the possibility of a Global Release with your claim adjuster if you feel it may be appropriate.
Janelle Friedman, CPCU
Contact Focus OneSource today to learn more about workers compensation options for your business.