WORKERS COMPENSATION WHY PROACTIVE EFFORTS MATTER December 10, 2019 - - PowerPoint PPT Presentation

WORKERS’ COMPENSATION

WHY PROACTIVE EFFORTS MATTER

December 10, 2019

Abby Johnson Claims Manager 763-746-8279 Abby.Johnson@MarshMMA.com Alanna Soukkala Safety Consultant 218-623-5878 Alanna.Soukkala@MarshMMA.com

MARSH & McLENNAN AGENCY LLC

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December 13, 2019

AGENDA

• WC Terminology
• Time of Loss

– Claim Reporting

• Post-Loss
• Return-to-Work
• Cost of Risk

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WORKERS’ COMPENSATION TERMINOLOGY

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WORKERS’ COMPENSATION

• Exclusive Remedy
• Injury or Illness
• Arising Out of/Course and Scope
• Coming and Going Rule
• Proximate Cause
• Employee Hired “As Is”
• “Caused, Aggravated or Accelerated”

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WAITING PERIOD

Waiting Period For Wage Benefits – Begins Day Of Injury – State Specific Waiting Period – Retroactive Period

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December 13, 2019

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STATUTORY BENEFITS

• Medical Only (M.O.)
• Indemnity Claims (Lost Time)

– Temporary Total Disability (TTD) – Temporary Partial Disability (TPD) – Permanent Partial Disability (PPD)

• Maximum Medical Improvement (MMI)
• Independent Medical Exam (IME)

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INJURY KIT

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• First Report Of Injury Form
• Claim Coordinator Contact Information
• Employee Information Sheet – State Specific
• Accident Investigation Form
• Workability
• Witness Statement Forms
• Carrier Contact Information

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INJURY KIT

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December 13, 2019

• Medical Facility Contact Information
• Job Descriptions

– Regular – Stay-At-Work

• Transitional Duty Commitment Statement

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TIME OF LOSS

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TIMELY REPORTING

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• 24 Hours
• First Report Of Injury (FROI)
• Injury Worsens Without

Treatment

• Attorney Involvement
• Fraud Potential
• Increased Indemnity
• Undirected Medical Care
• Less Cooperative
• Memories Fade
• Employer Statement

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Common Questions

– What constitutes notice? – What date should be used for date of injury? – Duty to inquire? – What if the accident is not our fault?

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December 13, 2019

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TIMELY REPORTING

• Study By The Hartford

– Claim Costs Increased:

• 18% When Reported After 1 Week
• 29% When Reported After 2 Weeks
• 31% When Reported After 3 Weeks
• 45% When Reported After 4 Weeks

Claim Costs On Back Injuries Increased 40% When Reported After 1 Week

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TIMELY REPORTING

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22% 29% 34% 47% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0-10 Days 11-20 Days 21-30 Days 31+ Days

LITIGATION INVOLVEMENT

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POST LOSS

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FRAUD PREVENTION : POST-INJURY

• Employee
• Listen
• Find Common Ground
• Be Available
• Show Compassion
• Transitional Duty

Accommodations

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COMMUNICATION

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External Communication

• Provider

– Transitional Duty Accommodations – Appointment Schedule – Work Status

• Adjuster

– Compensability – Work Status

• Agent

– Issues

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RETURN-TO-WORK

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RETURN-TO-WORK

• Transitional Duty

– Reduces Cost, Direct And Indirect

• Indemnity Costs Decrease
• Medical Costs Decrease

– Speeds Healing – Reduces Litigation Risk – Improves Employee Morale – Promotes Good Relationships And Trust

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STAY-AT-WORK

• 80% of employees off more than 6 weeks will need assistance

returning into the workforce

• 50% of employees off more than 6 months will never return to

work

• 80% of employees off more than 12 months will never return to

work

*According to the National Institute of Disability Management and Research 1995 report

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December 13, 2019

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RETURN-TO-WORK

Transitional Duty Must Be Meaningful But Does Not Need To Be:

• Related To Regular Job
• Fun
• In The Assigned Location
• Regular Shift

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RETURN-TO-WORK

Stay-At-Work Job Offer

• Should Be In Writing
• Within Physical Restrictions
• At Or Near Pre-Injury Wage
• Employee Obligated To Respond Within

“Reasonable” Time

• Unreasonable Refusal = Forfeiture Of TTD Benefits

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RETURN-TO-WORK

Financial Impact: Employee On Restrictions Average Weekly Wage (AWW) = $600/wk

• With Job Offer Indemnity $0

Medical $10,000 70% Exp Mod Reduction

• Without Job Offer

TTD $400/wk Medical $10,000 TPD working 20 hours/week - $200

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COST OF RISK

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Your Risk

• Auto
• House
• Medical
• Dental
• Hobbies
• Others?

Insurance Coverage? What happens when you make too many insurance claims?

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Company Risk

• Business Operation
• Business Auto
• Building
• Medical
• Dental
• Workers’ Compensation
• Others?

**Let’s Focus on Work Comp Risk Costs**

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Premium Calculations – Fixed Costs

• Base Rate
• Rate/hundred of payroll (ex: $1.95 per $100 of

payroll)

• Exposure
• Hundreds of dollars of payroll

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Premium Calculations – Controllable Costs

• Experience Rating (W.C. Modifier)

– Based on your experience compared to the industry average – Average mod is 1.0 – Uses oldest 3 of the last 4 years

• Medical Only claims are reduced 70%
• Greater weight placed on frequency than severity

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Effect Of Experience

Actual Better Worse

Premium $500,000 $500,000 $500,000 Mod Factor 1.0 0.85 2.00 Modified Premium $500,000 $425,000 $1,000,000 Savings / Cost (from 1.0) ($0.00) $75,000 ($500,000)

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Hidden Cost of Loss

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Hidden Costs

• The National Safety

Council estimates that for every $1 of Direct Accident Costs there are an additional $1.10- $4.50 of Indirect Costs.

• Other studies indicate the

hidden costs can be up to 10 times the direct cost.

Accident Cost Cost Multiplier $0 - $2,999 4.5 $3,000 - $4,999 1.6 $5,000 - $9,999 1.2 > $10,000 1.1

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Hidden Costs

• Time lost from work

by injured worker

• Lost time by fellow

employees

• Lost time by

supervision

• Damage to tools

and equipment

• Spoiled work
• Failure to Fill Orders
• Loss of efficiency
• Hiring/training

replacement workers

• Deductible amounts
• Loss of morale
• Legal issues
• First aid costs
• Reduced output of

replacement workers

• Overtime

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MAKE A DIFFERENCE

How Can We

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What Can You Do TODAY?

• You Have Limited Time

– Focus where you will get your biggest return.

• What do I do every day that is the most hazardous?
• How can it be made safer?

– Focus on the Main Injury Trends

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What Can You Do TODAY?

• Communicate

– Report Unsafe Conditions or Hazards – Share a Safety Message – Discuss Ideas for Improvement

• Participate

– Actively Attend Training – Actively Remove Hazards – Prioritize the Safe Way First – Lead by Example – Follow Procedures – Manage Housekeeping

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What Can You Do TODAY?

• Build & Foster A Positive Safety Culture

– Participation – Priority – Management Support – Always Strive for Improvement – Watch Out for Others

• Actively Care

Legal/regional regulatory statement to be added here if required.