What is the Central Index Bureau and Can It Help My Business?

There are many ways that an employer can properly reduce the cost associated with workers’ compensation, such as properly reporting injuries and the number of employees to the employer’s workers’ compensation insurance company.  Another very important step to reducing costs is taking steps to recognize and curtail workers’ compensation fraud.  The Central Index Bureau is a tool used by workers’ compensation insurance companies to assist in spotting fraudulent workers’ compensation claims.

The Central Index Bureau is a division of the Insurance Services Office, which was formed as an organization for the purposes of advising and rating insurance industries in order to provide statistical services and help combat fraud.  The reports from the Central Index Bureau can also be called “an ISO” or a “claim index.”  The terminology will vary between insurance companies, and almost all insurance companies are members of the ISO Central Index Bureau.  These reports contain a record of every insurance claim filed by any individual, including workers’ compensation claims.  When an employee makes a workers’ compensation claim, a CIB report will be generated by the workers’ compensation insurance company.  This report contains the employee’s name, social security number, aliases, addresses, occupation, and other vital statistical information.  The report will also identify all past claims made by the employee, including the type of injury, the source of the injury (such as automobile accident, medical malpractice, etc.).  The report will also identify the employee’s medical providers for the past injuries and the names of any attorneys who may have represented the employee.

An insurance adjuster can use all of this information to help spot and stop workers’ compensation fraud.  The adjuster will examine this report for repeat injuries.  For example, if the employee has made many workers’ compensation claims, all stating that the employee has a soft-tissue injury, this could be a red flag for fraud, or at the very least indicates a potential pre-existing injury.  The adjuster will also be on the look-out for multiple doctor changes.  Employees who commit workers’ compensation fraud will often switch doctors with a high frequency.  This is so the new doctor will not be familiar with the employee’s history of injuries.

If you have questions about how to best protect your business from fraudulent claims, contact us today at (714) 516-8188.  We will discuss your business and how to stop fraud in the work place.

Technology and Fraud Defense

In recent years, the state of California has devoted a lot of manpower and legislation to combatting workers’ compensation fraud.  This type of fraud costs the tax payers millions of dollars, and it is important to root it out whenever possible.  Employers should also be vigilant in their attempts to recognize, report, and combat fraud.  With the advancement of technology and the pervasive presence of social media in most Americans’ lives, these can be used by employers as an effective tool to help spot and prove workers’ compensation fraud.

Wearable technology has become very popular and many people choose to use these in their personal lives.  Fitbits and other step counters provide the wearers not only with information about steps taken, but some of the more advanced models also provide information about calories burned, heart rate, and sleep patterns.  This information is in turn typically reported and stored in an app on the user’s smart phone.  If an employee is reporting an inability to walk or perform vigorous physical activity, obtaining the history recorded by the employee’s fitness tracker during discovery could be an excellent way to demonstrate that he or she is not actually as injured as he or she claims.

Social media can also provide important insight.  People often tend to “over share” on their profiles, discussing work outs, medical appointments, and vacations.  All of this information can be compiled through discovery and used to show that while an employee may be claiming to be unable to walk comfortably, he or she “checked-in” at a 5K the weekend before.

In addition to worker fraud, provider fraud can also be better detected using technology.  Using data analytics, insurance firms and law enforcement can detect certain red flags such as “cookie cutter” treatments being prescribed for every patient, a high incidence of drug prescriptions, and treatment regimens that are not consistent with the type or severity of a worker’s injury.  A worker may not be aware at all of this sort of fraud, and without using technology to obtain a better overall understanding of a provider’s patterns of treatment, this type of fraud would be much more difficult to detect.

Fraud is a very serious problem in workers’ compensation, and employers should take steps to make sure that fraud is not occurring in their cases.  Call us today at (714) 516-8188 and let us help you make a plan to deal with fraud and talk about how to identify it and defend against it.

What is Temporary Disability?

No employer wants to see his or her employees get injured, and employers take many admirable steps to prevent this from happening.  Unfortunately, work-related injuries will happen despite the best precautions and most careful of training schedules.  In the event that a worker does sustain a work-related injury, the injury will be classified as either permanent or temporary.  The classification of injury will have long-reaching effects for both the employee and the employer.

Temporary disability benefits will be available to an employee who has sustained a work-related injury while he or she is temporarily medically disabled and is prevented from returning to work due to the work-related injury.  These benefits are payable to the employee at the rate of two thirds of the regular wages of the injured employee.  There is a maximum benefit set out by California law.

There are two types of temporary disability benefits available.  One is Temporary Partial Disability (TPD) and the other is Temporary Total Disability (TTD).  TPD benefits are appropriate and available for those workers who have sustained a work-related injury, cannot return to his or her normal employment, but can work in some sort of modified position or capacity.  These benefits are paid at the rate of two thirds of the balance between what a worker normally earns and what he or she is earning in the modified position.  For example, if a worker typically makes $300 per week, but makes only $200 per week in the modified position, the difference between the two is $100.00.  Two thirds of $100 is $66.67.  The injured worker would receive the pay check of $200 per week plus $66.67 in TPD benefits. Note that there is a maximum for benefits set by California law.  If the modified salary is already higher than these maximum amounts, the worker will not be entitled to receive TPD benefits.

TTD benefits will be available to an injured employee where a doctor has determined that the worker is unable to return to any work for at least three days.  The TTD benefits are payable until the worker is able to return to regular work.  The benefits would also end if the employee is able to return to modified work in the event the employer offers such work.  Once the injury becomes “permanent and stationary,” as determined by a doctor, the TTD benefits will end, even if the worker has not returned to work at that time.

Employers should make sure they have a firm understanding of the different types of disability benefits.  Call us today at (714) 516-8188 for an appointment to discuss your business and workers’ compensation benefits.

What is Permanent Disability?

When an employee sustains a work-related injury, he or she may be entitled to receive payment from his or her employer through the workers’ compensation system.  In California, the workers’ compensation system is a no-fault system.  This means that the employee does not have to prove that the injury was the fault of the employer before being entitled to compensation.  The type, amount, and duration of workers’ compensation benefits that an employee may be entitled to is partly governed by whether the injury results in a permanent disability.

A permanent disability is defined as any lasting disability from an employee’s work-related injury or illness that affects the employee’s ability to earn a living.  In the event an employee sustains a permanent disability, he or she will be entitled to permanent disability benefits even if he or she can return to work.  In order to be determined to have a permanent disability, the employee must submit to a medical examination.  The doctor will decide if the employee has a permanent disability.  The doctor will wait until your injury has stabilized and is not likely to worsen or improve before evaluating the permanent disability.  The term for this state is either “permanent and stationary” or “maximal medical improvement.”  Once the employee’s injury reaches this state, the doctor will send a report to the insurance claim administrator reporting whether the employee has a permanent disability, and whether that disability is, in fact, work-related.  The doctor will decide how much of the permanent disability is attributable to the work-related incident, and how much is attributable to any pre-existing conditions.  The doctor will also write a report about the employee’s impairment, which refers to how much the injury actually affects the day-to-day activities of the employee.  The doctor will assign a number to the impairment, which is then plugged into a special calculation in order to calculate the percentage of disability.   Whole Person Impairment generally means how much the impairment will affect the employee’s ability to function in the future.  The employee’s age and occupation will also affect the calculation, as well as diminished future earning capacity, for injuries incurred after January 1, 2013.  The disability will be stated as a percentage, which will determine a specific dollar amount the employee will receive.  After the amount is calculated, an award of benefits will be granted, but must first be approved by a workers’ compensation judge.

Calculating and awarding permanent disability is complicated, and you need an experienced attorney working with your business through this process.  If one of your employees may be permanent disabled as a result of a work-related injury, contact us today at (714) 516-8188 to discuss it.

Reducing Your Business’ Workers’ Compensation Costs and Liability

Every employer should maintain the important goal of reducing work-related injuries to their employees as much as possible.  Not only is this the ethically and morally right step, but it can prove to help an employer with their bottom line.  By taking steps to reduce work-related injury, an employer may be able to reduce the workers’ compensation premiums paid, the risk of serious and willful claims, or the risk of a 132a issue arising.  There are some good steps that any employer can take to reduce his or her business’ workers’ compensation costs and liability for future costs.

First, almost all employers are required to maintain workers’ compensation insurance in the state of California.  There are some exceptions, but by and large, failure to adhere to this requirement can result in hefty penalties, both civil and criminal, for an employer.  Like shopping for health insurance or life insurance, a business owner should get more than one quote for workers’ compensation insurance.  Getting competitive quotes can help to reduce the ultimate cost of insurance premiums.

Second, an employer must pay special attention when submitting insurance information.  This is two-fold.  An employer must first be accurate when submitting information to the insurance company to purchase the policy, as well as keep the information updated.  Moreover, when submitting information about any work-related injury to the insurer, the employer must also be certain to submit accurate and detailed accounting of what happened, together with the necessary paperwork and witness statements.  Although an employer may be initially convinced that not reporting all his or her employees for the premiums or maybe omitting certain details of an injury will help reduce the up-front cost, this is fraud and can ultimately cost the employer much more in penalties.  It   can also end up resulting in no insurance at all to help with the costs.

Third, an employer can implement a good, solid safety program.  Some employers choose to set up safety committees made up of employees, to help create safety policies as well as help implement safety programs.  Rotating the members on the committee as well as making changes to a safety program on a regular basis can help keep the program fresh and keep employees from becoming complacent.

Finally, an employer can create an incentive program to adhere to safety standards.  Financial bonuses, trips, or extra time off for meeting certain safety goals can help create a work-place atmosphere that encourages adhering to safety standards.

If you have questions about how you can reduce your business’ workers’ compensation costs and liabilities, contact me today at (714) 516-8188.  We can discuss your business and what we can do for its financial future.

Defending a Serious and Willful Claim

When an employee sustains a work-related injury, an employer may very well be on the hook for the costs of medical care for the injury through the workers’ compensation system.  The workers’ compensation system is designed as “no fault” system, meaning that in order to receive compensation for the injury, the employee does not have to make any demonstration that the injury was somehow the fault of the employer.  In some limited situations, an employee may make an additional claim under the “Serious and Willful Misconduct” provisions of California Labor Code § 4553.  This code states that if an employer is   found to have caused an employee’s injury through “serious and willful misconduct” they will be ordered to pay an amount that is equal to half the value of all the benefits paid to the employee as a result of the injury.  Clearly, this can amount to a large amount of money.  Moreover, an employer cannot insure against serious and willful claim.  Accordingly, it is important that employers have a firm understanding of how to defend against such a claim.

The most obvious way is to make every effort to make sure that such a claim is never made at all.  An employer can take these steps by being vigilant about the condition of the work place.  Repairs and renovations necessary to keep a worker safe should be promptly made.  Employee complaints about safe working conditions should be reasonably heeded, and an employer should make repairs to working conditions when necessary.

That aside, an employee must prove that an employer failed to act, even though the employer had knowledge that a serious injury would probably result in order to prevail on such a claim.  Therefore, to defend against a “serious and willful” claim, a defense may focus on several areas.  An employee must demonstrate that an employer knew that the danger existed.  A good defense to this will for an employer to be meticulous about documenting each and every report from any employee complaining about a working safety condition.  If no employee every made a complaint about the condition that caused the injury, it could be difficult to prove that an employer knew of the risk.  Another way to defend against such a claim is to document the steps that the employer took in order to improve the risk of injury.  If an employer had taken steps to make sure that no injury would occur, this will provide an excellent defense, as an employee needs to prove a failure to act, not a failure to act appropriately.

Serious and willful claims are serious, and you need an experienced attorney to help you navigate these claims.  We can review your business together to help you with any claim your business is facing.  Contact us today at (714) 516-8188 if you have questions about Serious and Willful Misconduct Defense.

Do I Have Alternatives to Carrying Workers’ Compensation Insurance?

Workers’ Compensation is a vast and often complex system. The goal of the entire set of laws is to protect both the employees and the employer. When an employee sustains a work-related injury, the workers’ compensation system provides a method by which the employee may receive payments for medical treatment and for disability payments and also by which the employer may be insulated from a costly law suit. To make sure the employees receive the compensation that they need following such an injury, California law requires that employers carry workers’ compensation insurance. Some employers find this requirement burdensome, and frequently ask whether there are any alternatives to carrying workers’ compensation insurance. It is first essential to understand that the California requirement to carry insurance is strict, and failure to abide by its provisions can result in both civil and criminal penalties. That being said, there are some limited situations in which an employer may have some alternatives to carrying workers’ compensation insurance.
One alternative to using a traditional insurance company is for an employer to purchase insurance through the State Compensation Fund. This may be an appropriate and essential alternative for those employers engaged in a high-risk business. Such high-risk businesses may be turned away from traditional insurance agencies, or the premiums may simply be too high. For an employer with this problem, seeking options from the State Compensation Fund may be the answer. State Fund is required to offer coverage to any business, although the cost may be higher than an Employer would find with another Insurance Company.
Some employers may also choose the option of being self-insured. To become self-insured, an employer must first apply to the Office of Self-Insurance Plans for approval. The OSIP will evaluate the application and the business for financial strength and stability, the proposed benefit delivery system, and whether the business is suitable to participate in self-insurance. The financial requirements are that there must be $5 million in shareholder equity, an average net profit of $500,000 per year for each of the last five years, and certified, independently audited financial statements must be provided to verify these claims. If the company has affiliates or subsidiaries, each of those must file its own application to become self-insured.
There are some limited circumstances in which an employer may not have to cover certain workers under workers’ compensation insurance at all. These exceptions would apply to independent contractors or certain types of board members in closely held corporations. Before assuming that these exceptions apply to your business, however, you need to consult an attorney.
California requirements to carry workers’ compensation insurance are strict and the penalties are harsh. Before making these decisions for your business, you need to consult an experienced attorney. Contact me today at (714) 516-8188 to more thoroughly review the requirements for your business.

Wrongful Termination Versus “At Will” Employment

No employer enjoys firing an employee.  This is typically made even worse and more complicated if the employee has sustained a work-related injury and has mentioned filing or already has filed a claim for workers’ compensation.  There are special laws and protections in place for employees who have suffered on-the-job injuries.  Conversely, employers are not required to continue to extend employment for an employee who is performing poorly or who is not otherwise fulfilling essential job functions, even if the employee has filed a workers’ compensation claim.  This is where we see a tension between “at will” employment and wrongful termination claims.

In California, most employment is done on an “at will” basis.  This means that an employer may usually fire an employee for almost any reason, unless that reason is deemed part of a protected class, such as race or religion.  There are exceptions to “at will” employment, such as if there are contracts or in some cases if the worker is part of a union.  Ultimately this means that an employer is free to discharge most of its employees at any time for nearly any or even no reason at all.

Labor Code 132a provides an important caveat to “at will” employment.  Under 132a, an employer may not discharge or induce adverse employment action against an employee in retaliation for an employee’s decision to file a workers’ compensation law suit.  This provision is meant to provide essential protection to keep employers from simply firing or punishing any employee who seeks to have his or her medical expenses paid for under the workers’ compensation system.  Note, however, that 132a does not provide an invincible shield for an employee.  An employer is still free to discharge an employee even after the employee has filed a workers’ compensation claim if the reason for the discharge is not in retaliation for the workers’ compensation suit.  As you can see, 132a provides only a very narrow exception to the general “at will” employment rule.  If an employer feels that an employee is not performing well, is not meeting job functions, is no longer a good fit for the office, or basically any other reason not relating to the workers’ compensation claim, the employer is still free to exercise its rights under “at will” employment.

If you own a business, it is crucial to understand the limitations under 132a.  Call me today at (714) 516-8188. We can talk about your business and whether your actions are in compliance with California law.

Car Accidents and Workers’ Compensation

According to the United States Census Bureau, Los Angeles County has the highest percentage of people commuting from out of county in the United States.  In addition, the commute to work for workers in and around Los Angeles County was higher overall than the national average, especially in the category of workers who commute at least an hour.  After workers arrive at work, it is extremely common for the driving to continue.  Workers make deliveries, go to clients’ homes, run courier services, drive trucks, and an enormous variety of other jobs which require vehicular transportation.  With so much driving going on, there are bound to be accidents.  In some cases, a car accident may be covered by workers’ compensation.

 Workers’ compensation provides a means for workers to obtain compensation when they have sustained a work-related injury.  Accordingly, when there is a car accident, the inquiry becomes whether the accident while the employee was engaged in a work-related activity.  Some examples of work-related activities would be driving to make a delivery or driving to a client meeting, running errands on behalf of the business such as picking up office supplies, or going to a service call.  All of these activities are within the scope of the employee’s job.  In other words, an employee is “on the clock” during these times, and going to the destination is necessary to complete their duties.

 What is not generally included are times that an employee is not engaged in work-related activities.  These would include running personal errands, going to lunch, or your commute to or from work.  These are times that you would generally not be getting paid for, and are not in the scope of an employee’s work-related duties. Therefore, if an employee sustains an injury during a car crash at times like those, it is not considered a work-related injury and is not compensable under workers’ compensation.  This is generally what is known as the “going and coming rule.”  In other words, if you are coming to or going from work, that is not generally covered under workers’ compensation.  The “going and coming rule” is not enunciated in the California Labor Code, and instead has been created through a series of cases.  There are many exceptions to the rule, as well, so employers should be cautious as to whether an exception applies.

 If you have questions about car accidents and whether your business is liable under workers’ compensation, contact me today at (714) 516-8188. Let’s talk about your business and its future.

Public Policy Reasons for 132a

The purpose of the workers’ compensation system in California is to make sure that employees receive financial compensation in the event they are injured while working.  The law recognizes that employers need to be taking steps to reduce the risk of injury to their employees, while also recognizing that an injury must be work-related in order for an employer to be responsible for the injuries to the employee.  After an employee is injured, there are additional laws that come into play in addition to the traditional workers’ compensation laws that typically come to mind associated with medical treatment and documentation.  California Labor Code 132(a) is an essential provision that all employers must be aware of and with which they need to ensure compliance.

California Labor Code § 132a provides that an employer may not discriminate or take adverse action against an employee who has filed a workers’ compensation claim.  If an employee suffers discrimination, retaliation, or adverse employment action by virtue of the fact that he or she has filed such a claim, the employer may face severe civil penalties and fines.  It is possible for an employer to discharge an employee even with a workers’ compensation suit filed, but it is essential that employer have reasons to back up a legitimate discharge or negative employment action.

The public policy behind 132a is fairly straightforward.  The law is designed to make sure that employees may exercise their rights under the workers’ compensation system following a work-related injury without fear of retaliation from an employer.  In fact, the law itself contains the statement that “It is the declared policy of this state that there should not be discrimination against workers who are injured in the course and scope of their employment.”  Without the protections provided by 132a, an employer would be free to simply fire any employee who decided to seek compensation for a work-related injury.  With such a strong deterrent, it is likely that few if any workers would actually seek relief under workers’ compensation.  As a result, unscrupulous employers would also have less incentive to ensure work place safety.  Workers’ compensation and 132a help to make sure that workers are safer and the system is not stacked against the employees.

 Labor Code 132a is an essential provision of workers’ compensation and you need to make sure your business is in compliance. I have experience helping clients both prevent 132a claims against their businesses as well as defending such claims.  Contact me today at (714) 516-8188 to talk about your business.

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