As business owners you are extremely busy with your day to day activities as you try to run a profitable operation. You have a number of balls in the air including your efforts to provide a safe environment for your staff and customers. One day an employee informs you that they have been injured at work thereby throwing several more balls into your juggling act and, perhaps, a chainsaw just to elevate the degree of difficulty.
What do you do? How do you help your employee get back to their normal job duties? What can you do to ensure their Workers’ Compensation benefits are issued to them timely and properly? How do you keep them from running to an attorney?
This article is designed to answer these questions and more while providing you with simple steps and some helpful hints to help navigate this scenario
Step #1: Have a basic understanding of how Workers Compensation coverage works so that you can be assertive in explaining it to injured employees.
There is a major misconception among small business owners that the availability of Workers’ Compensation benefits should be shrouded in secrecy after an employee has been injured at work. The thought process is that proactively informing your injured employee is tantamount to pushing them towards the Workers’ Compensation system. This can’t be further from the truth.
Think about it…when your employee is injured on the job they are hurt and probably scared. Whether the injury is big or small, chances are they do not know what to expect. They are concerned about their ability to keep their job, their ability to provide for themselves and their family…and frankly, they are concerned about damaging their relationship with you. As their employer, they are looking to you for your guidance. So we suggest that you make understanding Workers’ Compensation benefits a priority, so that you can explain them to the injured employee.
Let me rephrase that last paragraph in a more blunt fashion – if you can’t provide your injured employee with the peace of mind they are seeking, there are countless attorneys that advertise they will… oh…and those attorneys don’t beat around the bush. They’ll come right out and ask “Have you been hurt at work today?” Which leads me to this:
Hard Truth: If your injured employee hires an attorney to help them wade through the Workers’ Compensation waters, you can count on that claim taking longer and settling for more money.
Understanding the core Workers’ Compensation benefits in your state could be all that it takes to ease the mind of your injured worker.
Medical Benefits: Cover the medical expenses to treat the injury. These expenses are paid directly to medical providers by the Workers’ Compensation insurance carrier. There are no out of pocket expenses such as co-payments or deductibles for your employee to worry about.
Indemnity Benefits: Can be classified under two different types: “Lost Time” indemnity pays your injured worker a portion of their Average Weekly Wage (AWW) while they are off work. “Settlement” indemnity is considered the resolution of the claim and, in theory, is payment to your employee for the injured part of their body that presumably will never be back to100%.
TIP: If an employee has payroll deductions such as 401K, health insurance, etc., please note that these deductions are not paid by the insurance carrier while the injured worker is on temporary total disability. Temporary total disability is a non-taxed benefit.
Penalty benefits: Though rare, penalties can be paid in a situation where benefits are not paid to the employee in a timely fashion. This can be the result of a claim that is not reported timely by an employer or if the insurance carrier causes a delay in benefits.
It is important to understand that each state has a different structure as it relates to these benefits.
TIP: Did you know most states have their own Workers’ Compensation website? For example, the Illinois Workers’ Compensation Commission website has an Employee Handbook of which is a cliff note version of the Illinois Workers’ Compensation Act. Let your employees know they can Google their state site for more detailed information. You may also want to take a look at the site to be familiar with your specific state benefits.
Step #2: “Freeze the Facts” by carefully performing your own official investigation of the claim.
It’s called Workers’ Compensation because it is a system designed to benefit the Worker. Unfortunately, it is also a system that can be easily manipulated by the worker. That is why we recommend a multi-point, written accident investigation of any claim scenario in order to “Freeze the Facts”. When your employee comes to you to report a work related injury, have them complete, or complete with them, an accident investigation report (of course, you can have it completed at a later date if emergency treatment is a necessity). It is also a good idea to have this report in other languages to accommodate a diverse workforce. Make sure this report is signed and dated. When they sign and date the report, the facts are frozen. Additionally, have the injured employee’s supervisor complete and sign a “supervisor’s report” so that their understanding of the incident is on record. The same holds true for a “witness report” for any coworkers who witnessed the incident. Freeze those facts!!!
Some claims are difficult and can take years to resolve through litigation. During this time memories can fade and a critical party’s story can change. These forms can provide evidence of what was initially reported or even remind a party what happened at the time. In short, a proper initial investigation will allow the insurance carrier to effectively confirm the compensability of a claim or, on the flipside, to effectively dispute a fraudulent claim.
A nice by-product of having a comprehensive, multi-point accident investigation procedure is that, in addition to, “freezing facts” you are also uncovering good information to help build strategies to prevent similar injuries from happening.
Your insurance broker or carrier should be able to provide you with accident investigation forms.
TIP: Ever have an employee walk in on a Monday morning and tell you they sustained an injury from an accident on Friday but you know very well that your employee is in a weekend softball league or had planned on moving furniture over the weekend? Or have you ever received a claim 2 years after the fact without any documentation it happened? Think about whether a weekly or monthly timesheet signed by your employees to indicate they had a safe work day can be worked into your everyday policies and procedures.
Step #3: Report the claim to your Workers Compensation Carrier
OK, you have already thoroughly investigated the claim and have frozen the facts. Now it is time report the claim. Typically this is done via a toll free number provided by your insurance carrier. Early claims reporting can have a huge impact on the success and cost of a Workers’ Compensation claim. Once you report the claim, the insurance carrier should complete a three point contact which consists of contacting you, the injured employee, and their medical provider within 24-48 hours upon receipt. Reporting the claim early leaves most of the accident information fresh and gives the adjuster greater control over medical treatment. The adjuster will have a better handle on the claim from the beginning.
Fact: Studies show that even reporting claims 8-14 days after the injury has occurred can increase the value of a claim by 4%.
If the injury to your employee necessitates that they need time off from work, it is a good idea to check in with them now and again. Don’t forget to remind them that they are a valuable member of the team and that you look forward to having them back when they are ready. Remember, a good employee will usually only seek attorney representation if they feel that their livelihood is threatened or that their employer is not looking out for their best interest during their claim.
All that said, insurance carriers do not want injured workers making a habit of staying at home watching daytime TV, and neither do you. The cost of ”lost time” benefits that we discussed earlier can be very expensive. This is why your insurance carrier prefers that as an employer you have a light duty program capable of bringing an injured worker back to some variation of work. A physician can release an injured worker back to work with specified restrictions. Whether it is a lifting, ergonomic, or hours worked restriction, try to accommodate them to the best of your ability. Sometimes this is in a role different than the one they left. Perhaps filing or answering phones or some other office work that needs catching up. There have been a few carriers who have even placed light duty work through not-for-profit programs such as the Salvation Army. Remember, the idea of light duty is for it to be temporary, until the injured employee is fully healed.
TIP: You don’t have to be able to accommodate light duty on a full time basis or full wage basis. The difference of the wages would be paid through the claim by the carrier. Check about the Temporary Partial Disability laws with your state. Even a couple hours of work a day can reduce claim costs.
Step #4: Set-up regular claim reviews with your insurance broker and insurance carrier.
We are in the information age and many of us have switched to communicating primarily via voice-mail, e-mail and text messages. However, claims can be long, complicated and ever-changing. That is why we recommend that you set-up claim reviews with your agent and insurance carrier. A claim review brings all parties together to openly discuss the current status and plan of action to resolve a claim. We suggest that these claim reviews be performed in person or on a conference call because it’s a great way to meet your adjuster and develop a relationship with them. Is there attorney involvement? Invite the carrier defense counsel. While everyone is talking to one another, ideas can be formed that might be overlooked in an email.
Hard Truth: Insurance carrier claims adjusters can have hundreds of open claim files in their workflow at any given time. It is only natural that some items may slip through the cracks. You don’t want one of those items to be an open claim reserve that could have been reduced or closed completely. A seasoned Claims Manager at your insurance brokerage can “talk the talk” to get these changes made more effectively.
Hopefully, you can be prepared the next time an employee comes to you with an injury. You can stop them from running to an attorney. You can control the costs. You can weigh in on the outcome. In this litigious society, following these steps will help to keep your injured employees on your side.
Ms. Mooney has been working in the insurance industry for 15 years. The last 12 years has been focused on Workers Compensation with two insurance carriers. Ms. Mooney enjoyed claims administration for a vast account history including construction, healthcare and manufacturing. The claims that come from these clients have been from the smallest laceration to major catastrophic issues.
Ms. Mooney is the Claims Manager with Lamb Little & Company. She uses her claim handling experience to act as an advocate for the clients. She is responsible for monitoring and trouble shooting issues on large, complex claims. She also performs regular claim reviews to make sure that the reserves are appropriate and to ensure that the insurance carrier adjusters are handling the claims properly.
Ms. Mooney lives in the South Suburbs of Chicago with her husband and two sons.
Gary Kalina has been in the insurance industry for over 10 years. As a Commercial Insurance professional, he is charged with providing his clients, and prospective clients, with a full-service solution to risk transfer, risk financing and insurance placements. His philosophy is that a commercial insurance program is not a commodity that can be simplified into solely a “market price”. Instead, his goal is to work with his company partners to affect his customer’s bottom lines. While this includes providing programs that are sensibly priced it also includes implementing safety prevention strategies to mitigate costly claims from occurring; Providing claims management reviews and consulting in order to mediate claims that do happen so they are closed swiftly and accurately; And reviewing client contracts from an insurance angle to inform his clients if they are contractually putting themselves at risk.
Gary is a Vice President at Lamb Little & Co, a full service insurance agency in the Chicago area that has a national reach. Gary is also active in the Claims Advisory Boards of his insurance carrier partners.
He lives in the Chicago area with his wife and two small children.
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