ABCs of Insurance Claims: W is for Workers’ Compensation

Welcome to the ABCs of Insurance Claims. Over the next few months, our Sentinel Risk Performance Group will address an aspect of claims handling for every letter of the alphabet to help provide a better understanding of the claims process.

W is for Workers' Compensation

Workers’ Compensation is a type of ‘no-fault’ insurance the employer provides for the employees. In essence, the employee gives up certain rights to sue their employer in exchange for protection for work-related injuries incurred. In truth, Workers’ Compensation coverage not only protects an injured employee, but it offers certain protections for the employer as well.

For the injured employee, if the claim is deemed compensable, it can provide for lost wages, if they are unable to continue working after the injury, ongoing care costs, and authorized medical treatment expenses. As for the employer, Workers’ Compensation reduces the employer’s liability for work-related injury and illness. Without coverage, employees could sue for a work-related incident or illness to pay for lost wages or medical costs incurred.

Many employers view Workers’ Compensation as just a mandatory line-item expense. However, there are ways you can safeguard your Workers’ Compensation program. It starts with you as the employer – as early as your hiring process. Invest in a good process and learn how to vet your employees. Train yourself to watch their body language as well as listen to what they say or don’t say. As we often say, be careful not to hire your next Workers’ Compensation claim.

Fit For Duty (FFD)

Have you considered Fit for Duty (FFD) testing? Investing in FFD assessments can assure you that a candidate is able to perform the essential job functions both physically and mentally. Each FFD exam is relative to job roles and each workplace environment, targeting different aspects of the role and the employee. FFD assessments can be an important part of the hiring process.

One of the most important investments you can make as an employer is ensuring good communication between upper management and all employees. Setting the tone for the company starts with upper management. If upper management has a strong commitment to a safe working environment, so will your employees. When you invest in your employees, they are proud to work for you and work to protect the company as well.

State Guidelines

As each state has their own Workers’ Compensation guidelines, it is not the employer’s responsibility to interpret the laws or to know them backwards and forwards. It is the employer’s job to perform a thorough investigation once an employee reports a work-related injury. Even if the employee simply says they are having pain….your radar should go up. Don’t skip over it and pass it off as general conversation. Start asking probing questions. This is your opportunity to start gathering important facts. Supervisors are the “First Responders” and should be trained to listen, be insightful, and document everything.

What Do I Do When A Work-Related Incident Occurs?

It is important to understand what to do when an incident occurs:

First, evaluate an employee’s need for medical treatment. 
If they need medical treatment, direct them to an Urgent Care facility (avoid the Hospital and Emergency Rooms unless the injury requires emergency care)
Have the injured worker walk you through the details - show you what happened, and take pictures of the area. The smallest of details can often be the biggest piece of the puzzle. Getting a statement from the employee in their own words and handwriting can be crucial.
The employee’s supervisor should complete a formal incident report and send notice of the incident to your Workers’ Compensation Carrier as soon as possible after the event – which may be minutes after but certainly within 12-24 hours.
Have witnesses write down what they heard and saw. Be sure they provide their contact information in case the carrier needs to be in contact with them for further information.
Share all information with the assigned adjuster so that they have all the facts to make a compensability decision and proceed with the claim accordingly.
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Internal investigations are extremely important. Pay attention to details because the simplest detail can often make a difference. After the claim is reported, your role as the employer is not finished.  Your job is to stay in contact with the injured employee and the adjuster throughout the life of the claim. It is important to check in on your employee and see how they are doing.

Having open communication with the injured worker, especially if they are home recuperating and not at work, will show them you care and that they are not alone. If there are issues or concerns, reach out to the adjuster and your risk advisor for assistance. Many times, the extra step of checking in frequently on the injured worker will help keep your claim out of litigation.  

It is important to note that not everything that happens at work is compensable. That is why a detailed investigation is needed and all facts/rumors/details need to be provided to the adjuster from the start. Your accident investigation process is paramount to the overall workers’ compensation program.

What Types of Claims Are Filed Under Workers’ Compensation?

There are several different types of claims reported under Workers’ Compensation:

Report Only

  • This type of claim is not investigated.
  • Nothing will be paid on the file.
  • It is reported as For Information Only.

Medical Only

  • Incident is not questionable (smashed a finger)

  • Minor medical treatment is required– minimal reserves are placed on the file.

  • The employee did not lose time away from work (per the state guidelines).

  • They are not investigated.

Lost Time/Indemnity

  • The worker is unable to work per the authorized doctor, or the employer cannot accommodate their restrictions for more than 7 calendar days. 

  • The employee incurred medical expenses and lost wages.

  • They are fully investigated.

Questionable/Litigated Claims

  • If there is no recordable injury by accident, or their job is not repetitive in nature to cause or contribute to an occupational disease. 

  • Late reporting by the injured worker.

  • Change in stories.

  • Witnesses do not corroborate the events.

  • Claims with attorney involvement.

  • They are fully investigated. 

Why Is A Return-To-Work Program So Important?

A formal Return-to-Work (RTW) Program allows workers who are unable to perform their regular job duties to work in a limited or light duty capacity temporarily after a work-related injury or illness. Successful RTW programs are proven to help maintain productivity, improve overall employee morale, reduce the total claim expense, and bring quicker resolution to the claim.

Furthermore, it shows the company’s commitment to the employee and allows the employee to stay in the routine of going to work, allowing them to feel productive and maintain their workplace relationships. RTW programs assist in restoring an injured worker to their pre-injury health in as short a time as possible and allows for continued communication with employee. Lastly, RTW programs have been shown to reduce the likelihood of litigation in a claim situation.

Safeguarding Your Success

Workers’ Compensation premiums are determined based on your individual company’s classification of business, payroll expenditures, and prior losses/experience. Your company’s focus on safety culture, Fit For Duty, timely reporting of claims, and Return-to-Work programs will also affect your program pricing.

The goal of your Workers’ Compensation program is to return the injured employee to the status of a productive worker to avoid harming the employer’s business as quickly as possible. Understanding your safety culture, accident investigation and processes will play a key role in building a strong Workers’ Compensation program. To learn more, partner with Sentinel and experience how we are dedicated to Safeguarding Your Success.

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About The Author

With over 20+ years of experience in the Workers’ Compensation arena, Jayme has amassed an impressive array of skills and expertise during her years working directly with carriers and on national accounts.

Jayme brings an elite acumen to the art and science of Workers’ Compensation – an area of specialty that requires a compassionate approach.

She began her career in the health care field, as a therapeutic recreational specialist helping dangerously ill children and stroke victims. She later transitioned to the insurance field, and quickly carved out a niche for herself managing Workers’ Compensation claims and programs.