Overview of Workers’ Compensation Coverage

Overview of Workers’ Compensation Coverage Presented by: Cheryl Wimberly and Rozell Anderson, Jr.

Common Law Liability • Common Law • Before Workers’ Compensation Laws, the common law dictated when an employer was liable for injuries. • Tort • Social wrong committed against another party.

Four elements of every tort • A social duty owed to another person; • A breach of that duty; • Damage or injuries; and • A reasonably close casual relationship between the breach of duty and the damage or injuries.

Recovery from an employer • Until workers’ compensation laws, an injured employee would pursue recovery from the employer thru the courts.

Unfair system

Common Law DefensesAvailable to Employer • Successful employment of these defenses could reduce or bar injured employee’s recovery: • Contributory Negligence – employee’s own carelessness caused all/part of the injury • Assumption of Risk – employee aware of dangers of the job and accepted it in exchange for wages • Negligence of Fellow Employee – employee’s injuries caused by co-worker’s actions who was not under employer direct control

Texas Workers’ Compensation Act • Modified the Common Law system • VOLUNTARY in Texas – Employer can elect to go “bare” – referred to as a “non-subscriber”. • If Employer elects Workers’ Compensation coverage: • Employee surrenders rights to sue employer for benefits • Employee receives lower, fixed benefits (no large jury verdicts against the Employer) • Workers’ Compensation benefits– sole remedy • Benefits are paid without regard to fault (if claim is covered)

The Workers’ Compensation Statute and Governing Bodies • The Texas Workers' Compensation Act of 1989 is the current law that governs all aspects of workers' compensation in the state of Texas. • The Texas Workers' Compensation Commission (TWCC) WAS the state agency that administered all aspects of the workers compensation statute. • During last year's Texas Legislative Session, House Bill 7 was signed by Governor Perry • Effective September 1, 2005, HB7 abolished The Texas Workers' Compensation Commission.

The Workers’ Compensation Statute and Governing Bodies-con’t • The TWCC became the Division of Workers' Compensation (DWC) under the control of the Texas Department of Insurance • Mike Geeslin was appointed Commission of Insurance in 2005 • An Office of Injured Employee Counsel was created to assist and advocate for injured workers. • Governor Perry appointed Normal Darwin as the Public Counsel to head the Office of Injured Employee Counsel.

House Bill 7-Health Care Networks • HB 7 allows insurance carriers to create or contract with health care networks • The goal of health care networks is to provide injured workers with timely access to quality health care • Doctors who are network members will be versed in principles of occupational medicine and return to work guidelines • Employers who carry workers compensation insurance will choose whether their company participates in the network health care option • Injured Employees of employers who participate in the network health care option will select their treating doctor from the network’s provider list

Compensable Injury • An insurance carrier is liable for compensation for an employee’s injury without regard to fault or negligence if: • At the time of injury, the employee is subject to this subtitle; and • The injury arises out of and in the course and scope of employment.

A carrier is not liable if the injury: • Occurred while the employee was in a state of intoxication; • Was caused by the employee’s willful attempt to injure himself or another person; • Arose out of an act of a third person intended to injure the employee for personal reasons; • Arose out of voluntary participation in an off-duty recreational, social or athletic activity that did not constitute part of the employee’s work duties; or • Arose out of an act of God. • If the injury was a result of the employee’s horseplay.

Medical Benefits • An employee with a compensable injury is entitled to all health care reasonably required. The employee is specifically entitled to healthcare that: • Cures or relieves the effects naturally resulting from the compensable injury; • Promotes recovery; or • Enhances the ability of the employee to return to or retain employment.

Medical Benefits • Payable from the date of the compensable injury. • Except in an emergency, all health care must be approved or recommended by the employee’s treating doctor. • An insurance carrier’s liability for medical benefits may not be limited or terminated by agreement or settlement.

Choice of Doctor • The first doctor who provides health care to an injured employee shall be known as the injured employee's initial choice of treating doctor.

Choice of Doctor • The following do not constitute an initial choice of treating doctor: • a doctor salaried by the employer; • a doctor recommended by the carrier or employer, unless the injured employee continues, without good cause as determined by the commission, to receive treatment from the doctor for a period of more than 60 days; or • any doctor providing emergency care unless the injured employee receives treatment from the doctor for other than follow-up care related to the emergency treatment.

Pre-Authorization • DWC Rule 134.600 specifies a list of medical services that require pre-authorization by the insurance carrier. • If these services are not pre-authorized, the carrier will not be liable for the services. • Exceptions are made only in case of documented emergencies. • Pre-Auth rules will be impacted by House Bill 7, but the new rules have not been adopted at this time.

Income Benefits • TIBs-Temporary Income Benefits • IIBs-Impairment Income Benefits • SIBs-Supplemental Income Benefits • LIBs-Lifetime Income Benefits • DIBs-Death Benefits

Temporary Income Benefits (TIBs) • Paid during a period of temporary disability to help make up for lost wages. • While disability exists, these benefits will be paid weekly until the earlier of: • the date when the employee returns to work full duty or • reaches Maximum Medical Improvement (MMI); or • 104 weeks after income benefits begin to accrue. Benefits may be extended temporarily if an injured employee requires spinal surgery during the last 12 weeks of the 104-week period.

Impairment Income Benefits (IIBs) • Paid after the employee reaches Maximum Medical Improvement (MMI) to help compensate the employee for the permanent physical harm resulting from the injury. • The employee does not have to be losing wages to receive IIBs, but must have a permanent impairment certified by a doctor.

Supplemental Income Benefits (SIBs) • Paid during a period of long-term wage loss after Impairment Income Benefits have been paid in full. • Benefits can be paid up to 401 weeks after the date of injury. • Must meet certain eligibility requirements.

Supplemental Income Benefits (SIBs) • To be eligible for SIBs, an employee must: • have a 15% or greater impairment; • not have opted for lump-sum payment of IIBs; • be earning less than 80% of the pre-injury average weekly wage due to the impairment from the injury; and • be looking for work in accordance with his/her ability to work.

Lifetime Income Benefits (LIBs) • Paid for the lifetime of the injured employee, but only for certain severe injuries.

Death Benefits (DIBs) • Paid to eligible beneficiaries or financially dependent family members of a fatally injured employee.

Death Benefits (DIBs) • Beneficiaries are divided into several groups. • Spouse, including common law • Children of deceased employee • Certain other family members if; • they were financially dependent on the deceased employee at the time of death; and • there are no eligible children, grandchildren, or spouse.

Benefits Disputes Overview Benefit Review Conference (BRC) Contested Case Hearing (CCH) OR Binding Arbitration Appeals Panel (AP) Judicial Review

Benefit Review Conference (BRC) • The first step in the TDI/DWC administrative dispute resolution process. • Designed to bring about agreement on disputed issues. • Mediation Oriented-designed to bring about resolution on disputed issues. • Informal, compared to other TDI/DWC dispute proceedings.

Benefit Contested Case Hearing (BCCH) • Second step in the TDI/DWC administrative dispute resolution process. • The only formal hearing administered by TDI/DWC for benefits issues. • Disputed issues must be discussed in a BRC before a CCH can be held on those issues. • The exceptions to this is a dispute of attorney fees.

Appeals Panel (AP) • Serves to review the decisions of CCH officers for propriety and compliance with the law. TDI/DWC in-house panel who review the decisions of BCCH Officers for propriety and compliance with the law. • They function like an appellate court reviewing the decisions of lower courts.

Judicial Review • The judicial review provisions in the Act and TDI/DWC Rules permit disputes to be tried in court only after unsuccessful adjudication in the DWC administrative dispute resolution system.

Arbitration • Used in many types of proceedings in addition to Workers’ Compensation disputes, can bring about quick settlement of issues through informal discussion and, if necessary, binding orders. • Not often used in Workers’ Compensation disputes because they are binding orders – no avenue to dispute decision.

Workers’ Compensation Forms • Employers have the duty or the option to file a number of forms in the process of reporting and administering workers’ compensation claims. • Forms can be downloaded for free from the TDI web site: http://www.tdi.state.tx.us/wc

Employer’s First Report of InjuryDWC 1 • Employers have the option of providing this notice to the insurance carrier by telephone, computer, fax, or mail. • Employer must provide a written copy of the injury report to the employee, along with a copy of the employee’s rights and responsibilities under Texas law. • TDI/DWC does not want a copy of the report from the employer.

Supplemental Report of InjuryDWC 6 • Used to report changes in work status after an on-the-job injury has occurred. • Completion of the wage information is vital to accurate payment of income benefits. • Late or incomplete filings of this form may result in underpayments or unrecoverable overpayments. • The form is sent to the insurance carrier and the employee.

Supplemental Report of InjuryDWC 6 • Covers four specific situations and has different deadlines for each situation. • Employee returns to work after an injury (must be filed no later than 3 days after return to work). • Employee suffers additional days off work after returning to work (must be filed no later than 3 days after lost time resumes). • Employee’s post-injury earnings change while on light duty (must be filed no later than10 days after the end of each pay period where earnings change). • Employee resigns or is terminated prior to reaching Maximum Medical Improvement (must be filed no later than 10 days after the employee resigns or is terminated).

Employer’s Wage StatementDWC 3 • Form for reporting an injured workers’ pre-injury wages. • The employer must file this form with the insurance carrier within 30 days after the 8th day of an employee’s lost time.

Employer’s Report for Reimbursement of Voluntary PaymentDWC 2 • On occasion, employers pay for medical treatment of injured workers or provide post-injury income payments. • Employers may be entitled to reimbursement from the insurance carrier for these voluntary payments by promptly notifying the insurance company of these voluntary payments.

Employer’s Contest of CompensabilityDWC 4 • If an insurance carrier accepts liability for a claim that the employer believes should be denied, the employer may file a dispute with the TDI/DWC. • In addition to filing the DWC 4, the employer can request a Benefit Review Conference to pursue his contest of compensability.

Work Status ReportDWC 73 • Completed by any doctor who has examined the injured worker. • Intended to provide a detailed work status report to the employer and insurance carrier. • The form must be given to the injured worker upon the first medical visit, and thereafter whenever the employee’s work status or work restrictions change. • The insurance carrier and employer will receive a copy by fax from the doctor within two business days after the medical visit.

Contractor/Subcontractor Forms • DWC 81-Agreement Between General Contractor and Subcontractor To Provide Workers’ Compensation Insurance • DWC 82-Agreement Between Motor Carrier and Owner Operator • DWC 83-Agreement for Certain Building and Construction Workers • DWC 84-Exception to Agreement for Certain Building and Construction Workers • DWC 85-Agreement Between General Contractor and Subcontractor to Establish Independent Relationship

DWC Record Check Forms • Two forms are available to identify workers with records of prior workers’ compensation claims: • DWC-155, Request For Record Check • DWC-156, Prospective Employment Authorization and Certification

Injured Workers’ Rights • An injured worker may have the right to receive benefits. • An injured worker may receive benefits regardless of who caused or helped cause the injury. An injured worker may not receive benefits if: • the injury occurred while the worker was intoxicated • the worker injured himself or herself intentionally or while unlawfully attempting to injure someone else • the worker was injured by another person for personal reasons • the worker was injured while voluntarily participating in an off-work activity • the worker was injured by an act of God or • The injury occurred during horseplay.

Injured Workers’ Rights – con’t • An injured worker has the right to receive the medical care that is reasonable and necessary to treat a work-related injury or illness without any specific time limit. • An injured worker has the right to the initial choice of doctor. • An injured worker may not change doctors except with the approval of the Division of Workers’ Compensation. An injured worker does not need to get approval to go to a different doctor: • for emergency treatment • if the worker or the doctor moves or • if the doctor is unable to continue treating the worker. • An injured worker has the right to hire an attorney to help the worker get benefits or to help resolve disputes.

Injured Workers’ Rights – con’t • An injured worker has the right to receive assistance from appropriate, qualified Division staff and, in the event of a dispute resolution proceeding, from a Division ombudsman free of charge. • An injured worker has the right to confidentiality.

Overview of Workers’ Compensation Coverage