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Paying Workers Comp Benefits Late – Five Ways It Can Cost You

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Paying Workers Compensation Late – Five Ways It Costs Claims Staff

Paying Workers Comp benefits late can cause a claims adjuster or staff many headaches that quickly can avoid many problems in the future.  Many states have rules on the books that penalize slow payers for benefits that are owed to the injured employee.   Yes, I have missed paying weekly TTD checks in the past and paid them late.  Any adjuster with more than three years of experience has at one time paid a weekly check late.  It happens.

pic of visa card paying workers comp benefits late
Public Use License – Jesipe.cimon

How Paying Workers Comp Benefits Late Ruins A File

  1. Some states heavily penalize settlement check payments on settled files. Even smaller weekly benefits checks can trigger huge fines.   Check out this article where I drove the check to the claimant attorney’s office as it was due that day.   A $12,500 penalty could have been enforced if I mailed it. Why – because it is the date received, not the date mailed that counts in most benefit penalty assessments.  Having to explain why I cost the file $12,500 extra ($15,000 in today’s dollars) was something that I wanted to avoid completely.
  2. File integrity – when the medical providers on a file or the injured worker cannot count on timely payments, their trust diminishes quickly.  One cannot usually regain this trust once a payment runs late.  Check out this WCRI article where injured workers said that trust was the most important component of a Workers Comp file.
  3. Workers Comp commissioners or hearing officers become irritated quickly when the file contains a history of late payments,  or the case is before them because of late payments.   The hearing may not turn out very well.  This goes back to the above #2 that can result in #1 occurring during the hearing.
  4. You lose some or all of your rights to any subrogation funds.  Some states such as PA and HI count the funds paid out on the file – not the amount reserved or expected recovery amounts as the lien on the file.   An example that I read today comes from a Hawaii Supreme Court decision on Workers Compensation liens and subrogation of third parties.  Please note this only applies to Hawaii.   You can find the decision on the Supreme Court’s website here. The part that jumped off the page to me was this passage in the decision:...an employer’s “share” is subtracted from “compensation paid,” and not from “compensation paid” plus “future [WC] benefit payments.” 
  5. Attorney involvement spikes when payments run late.  Paying weekly Workers Comp benefits late or when the injured employee receives a balance billing from a medical provider makes the claim seem out of control.  Claimant attorneys can bring the file back in control quickly.

 

Paying workers comp benefits late has many other disadvantages. Most adjusters could add at least another five to the list.

 

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management 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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