Workers' Compensation

1. Workers' Compensation Jeff Bush APEI

2. What Does Worker’s Compensation Cover? • Medical Costs (Unlimited) • Indemnity • Lost wages • Survivor benefits • Vocational rehabilitation

3. Liability for compensation • “Employees” determined by 8 AAC 45.890 • Relative nature of the work • Government contracts –AS 23.30.045 (d) • No award without evidence – • pay if contractor’s employee not covered • Project Owner – AS 23.30.045 (a) • If contractor does not pay – you do

4. HOW ARE WORKERS’ COMPENSATION RATES SET? • NCCI Class Codes • Higher risk positions are charged more • Accuracy in reporting is important • Loss History of the employing entity • Experience Modifiers • Look at losses in most recent 4 years • Premiums set to cover expected losses plus admin and reinsurance

5. Claim Cost Trends • Incurred Loss - anticipated total cost for medical, indemnification and legal expense • Costs for medical treatment limited by AK Dept. of Labor fee schedule • New Fee Schedule as of 10/01/2011 • Pay within 30 days • Employee selects provider • Medical costs as a percent of total claims are growing

14. HOW CAN YOU KEEP PREMIUMS UNDER CONTROL? Three Ways: • Reduce payroll; • Cheat, by changing mix of employees’ payroll to higher concentration in low risk jobs; or • Reduce losses, by having fewer claims and by reducing the cost of claims you have

15. We Preach Loss Control • Create a “Loss Control Culture” • Site Inspections • Training • On-line courses • Safety committees

16. HAVE EVERY EMPLOYEE ANNUALLY, AND NEW EMPLOYEES UPON HIRE, FILL OUT A POST OFFER OF EMPLOYMENT QUESTIONNAIRE FOR SECOND INJURY FUND QUALIFICATION

17. Prepare for Claims • Written procedure for timely reporting of claims • Training for all staff and supervisors • Transitional Work Program • Coordinate contacts – HR/Payroll & Adjuster

18. Reporting Claims • Timeliness is very important • Study by NCCI and Hartford revealed: • Claims reported two weeks after occurrence had average settlement values 18% higher • Claims reported in third or forth week 30% higher • Claims reported after one month 45% higher • Even claims reported in days 5-7 are noticeably higher than those reported within 72 hours

19. Source: Liberty Mutual Insurance Co.

20. Reporting Claims • Target same day Report of Injury • Signed by employee and employer • Email or Fax to carrier to expedite handling • Failure to file ROI timely subject to penalty • 20% on top of compensation due (AS 23.30.070) • Might be charged back to the insured entity

21. Major Injuries • If employee is hospitalized overnight or dies, contact your carrier immediately and notify AK OSHA within 8 hours • AK OSHA 800-770-4940

22. PROPERLY MANAGE AND CONTROL LOSSES • Ensure that what caused the injury is corrected so other employees will not suffer same type of injury or loss • Study your accident history • Pay attention to “root causes” of accidents • Have a safety committee review all accidents and recommend ways to avoid in the future • Set up Return-to-Work program and get injured workers back to work, even in light duty

23. Transitional Work (AKA Return to Work; Light Duty) • Return to work programs are one of the most effective ways to reduce employer cost

24. If you have transitional work available: • Notify your insurance claims person that work is available • You will be asked to write a letter stating job task, requirements, hourly pay, and date work is available • If the doctor approves and employee refuses, benefits can be controverted.

25. Greatest savings- when employees return to their pre-disability positions with accommodations for their physical limitations Under no circumstances should an employee who is capable of returning to work be allowed to sit at home because the employer "didn't have anything for them to do."

26. Questions