Workers Comp and Expansion Into Other States 10 Things to Remember

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Workers Comp and Expansion Into Other States

The 10 things to remember in Workers Comp and Expansion into other states.

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After talking with a few premium auditors, adjusters, and from conversations with employers and our employer-clients, we have found a trend that needs to be pointed out to avoid a disaster. We have also recently been contacted by more than one employer that received an unexpected hefty premium audit bill to cover employees in a more expensive state.

Even though the economy is ailing, some companies are expanding into to other states to obtain business. There are a few considerations on Workers Comp when expanding into other states:

  1. You do not have automatic coverage for a binding period such as an auto policy. The first day that an employee works in another state than is on your policy could lead to a denial if you do not have coverage in that state.
  2. Even though your company may have coverage in certain states, an employee may file a claim in a totally different state than expected. We have seen this happen often with trucking companies.
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    It is critical that you alert your agent immediately (in writing) and inform the premium auditor during your yearly audit that you have employees that operate in other states than what is on your current Workers Comp policy. This will avoid a denial of coverage by your carrier.

  4. We do see All Other States coverage on some policies. They are becoming rarer over time.
  5. You could actually be owed a premium refund or credit if the state you are expanding into has lower rates with your current carrier.
  6. Your Workers Comp situation can become very messy if your current carrier does not write coverage in the expansion state.
  7. The situation can be even messier if you are expanding into a monopolistic state such as OH. Those employees have to be covered by a policy provided by the state and not your insurance carrier.
  8. Employers are being forced to pay some claims out-of-pocket. If that happens, you lose the right to fee schedule the medical bills and other rights. Your company may end up paying the full bill that is charged by each medical provider.
  9. Your company could be heavily fined for not covering your employees in a certain state.
  10. The bottom line is that you do not want the Workers Comp adjuster to be the one to inform you that your employee is not covered in a state.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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