Profit Report 2304
HOW TO MANAGE
AN INDUSTRIAL INSURANCE CLAIM
prepared by: Independent Business Association
Following is information you can use to reduce the cost of an
industrial insurance claim and thus reduce your future state industrial
insurance costs. Understand that as an
employer you will pay for one or more industrial insurance claim over 3 years
by paying higher state industrial insurance premiums. The higher the cost of the claim, the higher the future premiums
will be.
The KEY to reducing your cost is to begin immediately after the injury
to reduce those costs by effectively managing the claim. This IBA Profit Report
will review the following:
1. Investigate each accident immediately
2. Pay the injured workers wages if appropriate
3. Contact the injured worker as soon as possible and assure him/her of your desire to them him/her back to work as soon as possible
4. Contact the injured workers doctor and advise him/her of your desire to get the injured worker back to work as soon as possible
5. Create a light duty position for the injured worker that meets his/her abilities as soon as possible
6. Complete the employers portion of the claim form
7. Contact the Department’s claims manager and advise him/her of your desire to get the injured worker back to work as soon as possible
8. Appeal claim decisions you disagree with within the 60-day appeal period.
DISCLAIMER: The following information summary management assistance information and is not legal advice. You are advised to consult with a qualified attorney regarding any legal matters related to this issue.
1. Investigate EVERY worker accident or illness claim immediately. Ask other workers what they saw and what happened. If it is equipment related, analyze the equipment, see if it failed in some way. Was the worker using the required safety equipment? Was the worker following operational requirements? Was some other worker at fault? Was some other person or some other company responsible in part for what happened (car ran a red light and collided with your worker's vehicle)?
YOU need this information WRITTEN DOWN for three reasons. First, if some other person (outside your company) or some other company was partially responsible for the accident or exposure, they may be liable for part of the cost of the claim--it could reduce your costs. Second, if the worker claims an injury or exposure but there is proof that the alleged injury or exposure did not happen (i.e. other workers testify that the worker wasn't in the area at the time of the alleged claim, or the injured worker told another worker the injury happened during non-work hours when the injured worker was doing some non-work activities), you may have a case to appeal the validity of the claim. Third, if the injury or exposure did occur, by doing an accident investigation, you can discover changes you need to make in work practice, etc., to avoid another claim like this in the future.
2. Immediately after the worker in injured, you must decide whether you will continue paying his/her wages or salary while the worker is off work. Many small employers are not aware that they can save a great deal of money in future state industrial insurance premiums if they continue to pay the wages of an injured worker who will be out of work for a short period of time, rather than have the worker collect "time-loss" benefits from the state's industrial insurance fund. In fact, employers can reduce their state industrial insurance premiums by up to 40% simply by having no claims where "time-loss" benefits are paid out.
WHAT AN EMPLOYER MUST DO TO USE THIS PROGRAM
The employer must pay the worker's full wages as if he/she worked a normal workweek while the worker is off work due to a workplace injury or illness. No reduced wages and no gap in paying wages like for sick leave or vacation. NOTE: there is a 3 day waiting period for "time-loss" benefits and benefits are not paid unless the worker is off work for 14 consecutive days. If the worker is likely to return to work without taking more than 14 days off (14 days total - even if the worker returns to work for a few days and finds he/she cannot continue to work and takes more days off), you do not have to pay their wages to reap this savings. But, if the worker is off more than 14 days total, you must pay from day 1 as if the worker was not away from work in order to reap these savings.
HOW MUCH SHOULD AN EMPLOYER PAY?
The real challenge for employers is to determine when it is advisable to pay an injured workers wages rather than have them collect "time-loss" benefits. This depends on what industry you are in, how many employees you have and obviously, how long the worker is expected to be unable to work. There is no scientific formula. However, here is IBA's suggestion to help you make a determination of how much in wages you might want to pay an injured worker.
A. Take how much you paid for state industrial insurance premiums in the last quarter and multiply that by 3.
B. Now take how much you paid for state industrial insurance premiums in the last quarter and multiply that by 5.
C. The results of 1 and 2 is the likely range of how much it is likely to cost you over the next 3 years if you do not pay the worker's wages while he/she cannot work due to the injury and the worker collects "time-loss" benefits from the state's industrial insurance program. This is assuming your employment levels remain the same over the next 3 years and there are no other changes to your firm's experience modification factor due to past state workplace injury or illness claims.
D. Now compare the amounts determined by 1 and 2 and compare that to what you are likely to pay the injured worker before he/she can return to work.
E. Finally, consider the number of injuries and illnesses your firm has had on average over the past 3 to 5 years where workers have been off work due to the injury or illness. If there have been none or very few, you can afford to pay this injured worker more in wages than if the number of injuries per year are higher.
Example:
Here is an example of a fictious business that has an "experience modification factor" for its industrial insurance premiums of 1.0. Using this formula above we find:
Last quarter's state industrial insurance premium was $900
$900x 3 = $2700 (from step 1 above)
$900 x 5 = $4500 (from step 2 above)
Thus it is likely to cost this firm between $2700 and $4500 over the next 3-years if the firm does not pay the wages of the worker while he/she cannot work.
If it is likely that it will cost this firm $1,000 - $2,000 to continue this worker on wages before he/she can return to work, AND the firm has had NO other workers off work for the past 3 years due to a workplace injury or illness, it is probably a good decision to pay the worker's wages instead of having him/her collect "time-loss" benefits from the Department of Labor and Industries. If it will cost much more than $2,000, it probably is not a good idea to pay this worker's wages while he/she is off work, especially if this firm has had other workers off work due to workplace injuries or illnesses in the past 3 years.
SOME FINAL THOUGHTS
3. If the injured worker is off work, when he/she is well enough to talk with you, contact the injured worker and do the following:
· Tell him/her you will do all you can to help them get back to work
· You will be working with the injured worker and his/her doctor to find suitable light duty work so the worker can return to work as soon as possible.
· If you are paying the injured workers wages, tell him/her because this will mean they can pay their bills. A big concern of injured workers.
· Ask if there is anything you can do to help with their return to work and try and accommodate their request.
4. Contact the injured worker’s doctor and advise the doctor that you want to help the worker to return to work as soon as possible and you will do everything you can to find light duty work for the worker. Ask the doctor to advise you on what types of limitations the worker will have so you can design a light duty job for the injured worker. Some physicians are more helpful than others in providing you this information. If you are having problems with the doctor, try and get the injured worker on the phone with you and the doctor to get this information, or get a signed statement from the injured worker asking the doctor to discuss return-to-work options with you.
5. Now create a light duty return to work job for the worker. Some employers have had injured workers help with filing, doing inventory, etc. The worker may not be able to work all day, but a few hours a day to start is just fine. The key here is that the sooner you can get an injured worker back to work, the faster the worker heals and can get back to their old job. This is one of the most effective ways to reduce the cost of an industrial insurance claim.
6. Be sure to complete the employer's portion of the accident report. Whenever a worker claims an industrial injury or illness, they complete a WA Industrial Insurance program Accident Report. A copy of that report is sent to you for you to complete and return to the Department. Keep a copy for yourself. This is your first opportunity to start building your case if the worker has filed a false claim. Use the information you gained from your accident investigation to complete this form and return it promptly. Be sure to note on the claim form that you will be offering light duty work to help the worker return to work as early as possible.
7. If the worker has been off for more than a week and it looks like he/she will be off a while longer, contact the claims manager and advise him/her of your plan to provide light duty work to get the injured worker back to work as soon as possible. Ask the claims manager for help in making this happen. Most will help. If you are having problems with a claims manager, ask to talk with his/her supervisor.
8. A week or so after the injury, you will receive by mail from the Department a Notice of Decision indicating whether they will approve or disapprove the worker's claim for benefits. This is just one of many Notice of Decisions you will receive for a worker's claim. Each is very important to you.
Each time you receive a Notice of Decision, you have 60 days to appeal that decision. AFTER 60 days, you lose all of your rights on the issues included in that Notice of Decision.
YOU can appeal an industrial insurance claim to the Board of Industrial Insurance Appeals. An appeal to the Board of Industrial Insurance Appeals must be filed within 60 days of receiving the Notice of Decision letter, which is the subject of your appeal. IBA strongly urges you to consult with an attorney experienced in industrial insurance appeals to the Board of Industrial Insurance prior to filing your Notice of Appeal to ensure that it includes all requirements and effectively states the basis of your appeal. Your appeal must be in writing and specifically include a statement like:
"I am formally appealing the Department's decision on whatever the issue of the decision in the Notice of Decision is, issued on date of decision on the notice of decision letter for claims number here."
You may want to include in your letter your reasons for protesting the Department's decision but it is not required. Consulting with an attorney on the contents of this letter is strongly advised. Send your notice of appeal letter to the Board of Industrial Insurance Appeal at the following address:
Board of Industrial Insurance Appeals
PO Box 42401
2430 Chandler Court SW
Olympia, WA 98504-2401
IBA strongly recommends you send your letter with return receipt requested to
show proof when it was delivered to protect your appeal rights.
The Board of Industrial Insurance Appeals is very much like a court of law. In fact, if you appeal the decision of the Board of Industrial Insurance to the Superior Court, the appeal before the Superior Court is limited to a review of the record developed by the Board of Industrial Insurance Appeals--no new evidence or testimony is allowed. Thus, IBA strongly recommends you consult with an attorney who has extensive experience in dealing with the Board of Industrial Insurance Appeals if you want to maximize your chances of a successful appeal.
Your actual appeal is heard by an administrative law judge who serves as the judge in your appeal. The matter is done very much like a court proceeding without a jury. Rules of evidence are followed. After the hearing with the ALJ, the ALJ issues his/her proposed decision. You have 20 days after the ALJ issues his/her Proposed Decision and Order to petition to the full 3-member Board for a review. This process requires substantial additional detail that can be obtained from the Board of Industrial Insurance Appeals by calling 1-800-442-0447
Ultimately, the Board will issue its final Decision and Order. If you disagree with it, you can appeal that decision to the Superior Court within 30 days of the Board issuing its final order. Again, this is a complex process and you will need an attorney to file your apple to the Superior Court. If you do not know of an attorney with experience in Industrial Insurance appeals, IBA can provide you with names of attorneys we know have extensive experience with this area of law.
One more item. If you appeal a decision of the Department to the Board of Industrial Insurance Appeals, the Department may “reassume” the decision in order to reconsider it. This is usually a good thing so do not be surprised. When the Department “reassumes” a decision, it often means the Department will reverse its decision instead of having to argue the decision before the Board of Industrial Insurance Appeals. However, the Department may confirm its decision after they “reassume” a decision you have appealed in which case the appeal continues moving forward.