Workers Comp Indemnity Costs and Recession

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Recession – WC Indemnity Costs

The California Workers Comp indemnity costs and recession. I was recently reading an article from WCRI concerning an increase in California on indemnity benefits. Their usually very accurate research seemed to equate the rise in indemnity costs to the recession. I think this is a very accurate statement and should not be limited to just CA.

Diagram Of Recession Indemnity Costs with Decrease Arrow
(c) 123rf.com

From my experience, the reasons for longer periods of Temporary Total Disability (TTD) nationwide are:

  • The job may no longer be available due to the recession. The employer may have eliminated the job while the injured employee is on TTD.
  • The employer may not have a modified duty job for a light duty return to work release by the physician. It is very difficult to create modified jobs during a period of layoffs.
  • Employees may be very reluctant to return to work as Workers Comp benefits are viewed as a safety net similar to unemployment benefits
  • The employer may not have communicated their light duty positions to the treating physician – there is no excuse for this to happen with today’s technology. Making a video of a job or modified job to provide to the treating physician is much less tedious than in the past.

    Two Doctor Indemnity Costs Cosults With Patient
    Wikimedia Commons
  • The employer may just not want the employee back due to other personnel issues. I often see the employees that are having HR-type problems be the very ones that are soon to file a claim.
  • The long-term employees may decide to have a condition treated they have worked with over the years. I see this very often in a period of layoffs. One of the main conditions for the delayed treatment is carpal tunnel syndrome even though employers have been able to reduce carpal tunnel by 50%.

This list could have been longer. The indirect cost with indemnity is the increase in medical costs. The longer an employee is out of work, the longer they are required to seek treatment including pharmacy benefits.

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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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