Archives for September 2007

Work Comp Subrogation – Third Concern When Ignored By Adjusting Staff

September 19, 2007 By JL Risk Management Consultants

Work Comp Subrogation Additional Concern

Work Comp subrogation has a kind of quirky standard definition.

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To me, it is the possibility of another party having to share the monetary responsibility of an insured incident or accident.

I give the example in my manual of a company salesperson on sales calls being hit by another car in the back bumper and sustaining Workers Compensation injuries.

The driver of the other car should pay for the damages sustained and reimburse the Workers Comp carrier.

We usually see two errors being made during our file reviews:

We often see the subrogation funds being added back into the file after the file has been closed. However, the amounts reported to NCCI may not change. The funds could greatly affect a company’s Workers Compensation E-Mod.
The Workers Comp adjuster may not have enough time to pursue subrogation or may take a small % of the liability settlement.

Both instances are E-Mod killers. As I pointed out in my manual, there are 13 basic functions of a claims adjuster. This area is one of the lower priority tasks.

In the 1980s, adjusters became much more specialized. I was lucky enough to have experience as an all lines claims adjuster.

Workers’ Comp adjusting evolved to become a very specialized type of adjusting in the 1990s. Each state has its own set of laws and regulations on handling WC claims. Some similarities exist between the states.

Insurance carriers and TPAs rarely have an auto or premises liability adjuster cover workers’ compensation claims. Over time, their employer rarely trained a workers’ comp adjuster in liability adjusting.

The ability was seen as unneeded and a time-waster. Bottom line – workers’ comp adjusters need more training in subrogation liability. Without it, large amounts of money will be left on the table that could be refunded back to an employer’s file and eventually their E-Mod or LDF.

The employer will likely have to monitor the subrogation follow up in most situations. There are many articles on how to track work comp subrogation in this blog.

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Temporary Agencies and Your Workers Compensation

September 18, 2007 By JL Risk Management Consultants

Temporary Agencies vs. Workers Comp

Temporary agencies or temp agencies have long affected the WC rating system.

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Another of the major concerns when I spoke at the NC Mid-State Safety Council quarterly meeting was temporary agencies.

The three main concerns I have with temp agencies are:

In the past temporary agencies would open and close every three years to avoid an experience rating or E-Mod calculation. This harms the way the Workers Comp system is supposed to work. By not having an E-Mod besides 1.0, the temporary agencies that had a horrendous claims history paid no more than the safer ones.
If the temps working for you do not have Workers Comp coverage due to the temp agency lapsing their policy, the TEMP EMPLOYEES WILL BE YOUR RESPONSIBILITY due to the ladder of insurance – see last post.
You may not know the policy/cert has lapsed or had voids in coverage. There is no mechanism to inform you of the lapse.

Employers have unwittingly been on the hook for major claims, as the temps are now covered by their policy. One way to upset an insurance carrier is to have coverage for employees that were not counted in your payroll. Your company may likely face a cancellation in this situation.

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Three Areas of Workers’ Compensation Concern In My Presentation

September 18, 2007 By JL Risk Management Consultants

Workers Comp Concern = Three Areas

I have been out of action for about a week, as this is the end of our tax season. There were three areas that raised the most concern in my presentation at the North Carolina Mid State Safety Council. I will go over each of them over the next few days. Those were:

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Subcontractors
Temporary Agencies
Subrogation

The first area, Subcontractors, has three areas of concern from what I have seen –

The Ladder of Workers Comp Insurance – Workers Compensation courts will move up the ladder of contractors until a company is found to have insurance. If your subcontractor does not have insurance for their employees, you may be stuck for a claim. If your subcontractor subcontracts out their work, if the 2nd level subcontractor and your primary subcontractor does not have insurance coverage, then your company may have to pay benefits to a employee you have never met. This happens more than one might think. Workers Compensation Judges are going to find the responsible party by going up the ladder of insurance until coverage for the injured employee is located.
Certificates of Insurance – A subcontractor may provide you with a Workers Comp Certificate of Insurance. Many companies just take the Certificate of Insurance on its face value. If for some reason the cert is no good, you may be stuck with a claim.
Who is a subcontractor? The IRS has some great rules on who is a subcontractor and who is not. You may want to review them for your Workers Comp subcontractor situation. The link is here This is a good place to start. Each state’s Workers Comp laws has a set of rules for contractors. The IRS website is a good overall guide.

Next time – Temporary Agencies

Workers Compensation Loss Prevention Does Not Stop With Accident

September 10, 2007 By JL Risk Management Consultants

Workers Compensation Loss Prevention Keeps Going After The Accident

Workers Compensation Loss Prevention – where does it end and begin?

As I was reviewing my notes for my presentation tomorrow to the North Carolina Mid State Safety Council quarterly meeting, I noticed one common theme. Loss prevention does not stop when an accident happens. It is instead an ongoing process, especially soon after an incident.

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From my viewpoint, a Loss Prevention/Safety Officer should be heavily involved in the reporting of the injury to the insurance carrier and in the initial physician referral. Safety personnel is often judged by the E-Mod (see previous posts) that are produced each year.

However, the Safety personnel may not have control over where the injured employee is sent for medical treatment. The safety department has to be involved, as the tone is set for the complete claim within the first 48 hours of a Workers’ Comp claim.

I have heard safety personnel say that their job ends once the accident happens. This could not be further from the truth. I have coined the phrase post-accident safety.

Post-accident safety equates to loss control. Once an accident occurs the safety of an employee involves:

Reporting the accident immediately to the insurance carrier or TPA . The carrier or TPA cannot adjust the claim without having the first report of injury (FROI) on file.
Sending the employee to an industrial-mined physician as previously mentioned
Returning the employee to work safety – making sure their job restrictions prescribed by the industrial-minded physician are not violated
Treating the injured employee with respect makes the employee have trust for their boss. Trust is the key to a successful return to work.

I recommend the safety departments become more heavily involved, as you are judged by the E-Mod as a testament to your safety program. Ignoring what happens after an accident/incident can affect your performance greatly.