Insurance Policy = Contract Between Your Company and Carrier

June 14, 2017 By JL Risk Management Consultants

Read Your Insurance Policy On Receipt To Save Headaches

Your insurance policy equals a contract between you/your company and your insurance carrier. This applies to Workers Comp policies even though they are usually more state-regulated than liability policies.

Three questions asked over the last two weeks that applied to an insurance policy made me decide to step outside of Workers Comp a little.

Using a highlighter, whether electronic or the one in your desk drawer, go over any policy line by line, word by word. I did this with an auto policy last weekend. Watching grass grow seemed more exciting. However, I did find a mistake in one of the policies, so I felt vindicated in reviewing the policy.

picture barn raising insurance policy rural

Wikimedia Commons – Ron Shawley

Our Workers Comp consultant interns initial training requires the college student to read all of our policies along with the various endorsements. Yes, I do not read the one for the businesses, the interns read them over. They learn bucket-loads of knowledge. Many compile a list of questions to ask me. So, if our interns can read them, someone can read them in your offices or at home for personal policies.

For instance, the Proof of Loss policy requirements generate so many misunderstandings

Magnifying Glass Insurance Policy With Proof Foot Print

StockUnlimited

. Yes, a claim must be filed immediately. However, almost all carriers in all states require a Proof of Loss in 60 days. FEMA provides a great explanation for Proof of Loss here. A summary is:

A Proof of Loss is a policyholder’s statement of the amount of money being requested, signed to and sworn to by the policyholder with documentation to support the amount requested. It is important to understand the Proof of Loss is not the claim.

On a side note, I decided to become FEMA flood certified this year to handle FEMA NFIP claims.

Your Workers Comp insurance policy requires no Proof of Loss. However, you should read the policy front to back or as recommended in this blog back to front. The Declarations Page counts as a few pages. The Dec Pages do not count as the whole policy. Also, read the Endorsements on your Work Comp insurance policy as you receive them throughout the policy year.

Always call or email (my recommendation) with questions on your insurance policy.

©J&L Risk Management Inc Copyright Notice

California WCIRB First Aid Claim Requirements – Good and Bad

May 4, 2017 By JL Risk Management Consultants

California WCIRB Issues Mandate on Filing First Aid Claims

The California WCIRB is the workers compensation insurance rating bureau for specifically the Golden State. The WCIRB produces notices of rule changes that will affect California employers.

British Red Cross First Aid kit California WCIRB green bag

Wikimedia Commons – Owain Davies

One that I wanted to call attention to (even though it was published in November 2016) concerns the handling of First Aid and Small Medical Only claims. I have written many articles on WCIRB’s conferences, webinars, rulings, etc. over the last fifteen years. As with most rating bureaus, California WCIRB has provided me with great assistance and almost always a very positive attitude. See my conclusions on the new rule at the bottom of this article.

Reporting of Small Medical Only or First Aid Claims – California WCIRB

Bulletin 216-25

The Insurance Commissioner recently approved amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan—1995 (USRP) effective January 1, 2017, to clarify the reporting requirements for small medical only or “first aid” claims. The Insurance Commissioner’s Decision (CDI File No. REG-2016-00018), dated October 14, 2016, approved amendments that specifically reference first aid as defined in California Labor Code Section 5401(a), to clarify that insurers must report the cost of all claims for which any medical care is provided and medical costs are incurred, including those involving first aid treatment, even if the insurer did not make the payment.

Man Injured California WCIRB With First Aid Briefcase

StockUnlimited

These changes can be found at Section II, Definitions, Rule 24, Medical Only or Medical Claims Only, and Section V, Loss Information, Subsection A, General Loss Reporting Instructions, Rule 1, Reporting Losses, of the USRP and are provided below for your reference. As indicated in the Insurance Commissioner’s Decision, the reporting of first aid claims has been an enduring concern. It has been the long-standing position of the CDI and the WCIRB, as communicated in several prior WCIRB Bulletins, that insurers are required to report the medical costs incurred on first aid claims, even if paid by the employer, as any other medical loss.

By explicitly citing first aid in the definition of medical claims and the reporting of losses, the amendments clarify the intent of the regulations and what has been communicated in prior WCIRB Bulletins.

There are no special or unique coding requirements related to the reporting of claims meeting the Labor Code Section 5401(a) definition of first aid. The reporting requirements in Part 4 of the USRP applicable to the reporting of medical costs incurred on any other medical only claim also apply to the medical costs incurred on claims meeting the first aid definition.

Part 4, Unit Statistical Report Filing Requirements, Section II, Definitions: 24.

Woman On Desk California WCIRB With Papers And Computer On Desk

StockUnlimited

Medical Only or Medical Claims Only A claim or injury for which no indemnity is incurred, but for which medical treatment costs are incurred is a “medical only” claim or injury, regardless of whether the cost of medical treatment, including first aid, is paid by an employer or insurer, or regardless of whether a Workers’ Compensation Claim Form (DWC 1) is filed.

“Medical Only” claims or injuries include but are not limited to all compensable injuries in which the disability does not extend beyond the waiting period specified in the workers’ compensation laws of California, or injuries for which immediate medical treatment has been provided prior to a determination of compensability pursuant to Labor Code Section 5402(c).

Part 4, Unit Statistical Report Filing Requirements, Section V, Loss Information, Subsection A, General Loss Reporting Instructions

1. Reporting Losses Any and all claims, including those involving first aid as defined in California Labor Code Section 5401(a), in which Indemnity Losses or Medical Losses are incurred or Allocated Loss Adjustment Expenses are paid must be reported individually. All loss amounts are on a direct basis (excluding reinsurance assumed and adjustment for reinsurance ceded) and must be reported on a gross basis prior to the application of any deductibles.

Good

Hand Showing California WCIRB Solution Icon

StockUnlimited

Requiring employers to report all claims no matter the seriousness results in two great developments:

Twilight Zone phone calls from medical providers wanting medical authorization
Claims festering (c) avoidance – some of the worst claims start as ignored minor claims
The WCIRB also included small medical only claims in the rule which should always be reported

Bad

The other side of the coin indicates that for a reported First Aid claim

Almost all carriers assign $500 to $1,000 to any first report of injury received – possibly skewing an Experience Modification Factor for a claim or group of claims that never really existed
The paperwork involves a large increase in recordkeeping – more regulations?

Solution

The rule stands. Report all your claims. The California WCIRB enforces the legislated rules. They do not create the rules. Do not try to work around the rule.
Contact your agent/carrier when your renewal date approaches to see if they have a Reportable Only category. Most do, make sure you get out the most important tool for policy renewals – the proverbial highlighter – and see how your carrier charges and reports Reportable Only claims.

Yes, I do realize the Rating Bureaus supply credits for reporting Medical Only claims.

Best Workers Comp Policy and Audit Review Tool

June 25, 2015 By JL Risk Management Consultants

Best Workers Comp Policy And Audit Tool Inexpensive

One of the best Workers Comp policy and audit review tools is not some type of overly expensive software or app. The use of a highlighter and a print out of your complete Workers Comp policy will work wonders for examining your current Workers policy and subsequent premium audit.

Picture Of Hand Giving Policies Files Best Workers Comp Policy On Other Hand

If the access to your policy is online, then you can use the highlight button on your PDF or Word file.

I always recommend reading the whole policy as you will be surprised what is in there. Making the effort to examine your policy is a great way to begin cutting your Workers Comp costs.

You can always just review the Dec Page (Declarations Page). However, the Dec Page may only cover approximately 20% of your policy at the most.

When reviewing your policy, highlight anything you do not understand or any confusing clauses. These will need to be covered with your agent or consultant BEFORE you sign off on the policy or agree to finalize any premium audit results. This is no way means there may be something wrong with your policy or audit.

However, if you are going to sign off what you will have to live with for the next year, it may be in your best interest to bring up questions and concerns as soon as possible. Waiting until after the policy audit results are mailed to your company is not necessarily too late. The longer you wait, the more difficult it becomes to review any questions that you may have had in the past.

Picture Of Hand Gesture Best Workers Comp Policy With Audit Concept

StockUnlimited

When our clients contact us about performing a review of their premium audits, we often hear that there were questions when the policy was quoted or issued. Your agent should be and usually will be happy to answer any of your questions. That is part of his/her/their services to earn their commissions they charge for quoting and binding your policy.

The longer an employer waits to question anything on a policy oar premium audit, the more leverage is lost if there is a dispute. If you are reading this and have questions or either your WC policies or premium audits, there are tens if not hundreds of answers in this blog.

The bottom line is the best the best workers comp policy and audit and review tool is the attention that you or your staff is giving to your insurance program by just paying attention to what is occurring in your policies and audits.

If you still have questions, feel free to drop us a note on our contact page or at [email protected]