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.

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.

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.

State Compensation Insurance Fund

Under California law, almost all employers are required to maintain workers’ compensation insurance.  This insurance will cover the costs of medical treatment for an employee who sustains injury while working on the job.  California law provides harsh criminal and civil penalties for those employers who fail to abide by this requirement.  In some cases, though, an employer may have difficulty obtaining insurance.  Some companies provide services that are considered “high risk,” and so insurance companies are reluctant to provide insurance to those companies. 

To address this problem, the California State Labor Department created the Workers’ Compensation Joint Underwriting Associations.  The purpose of the WCJUA is to provide a resource for those high risk employers who have a hard time purchasing workers’ compensation insurance.  The primary WCJUA in California is called the State Compensation Insurance Fund (SCIF).  The SCIF may provide workers’ compensation insurance to those businesses that are otherwise unable to obtain coverage on the open market.  SCIF is a non-profit organization and provides the same services as other workers’ compensation insurance providers.  Although the SCIF was established by the California state legislature in 1914, it is not a branch of the California government.  SCIF provides insurance to all types of employers, but is an especially crucial resource for those employers who are unable to purchase insurance elsewhere.  The types of employers who are typically in need of insurance through SCIF are new business owners, business owners with poor premium payment history, or those in a high risk industry.  Typically, in order to be considered hard to place or high risk, an employer must have been rejected by at least three other open-market insurance companies.

There are some drawbacks to the system.  Employers should be aware that even though the state has made it possible for them to buy insurance despite being high risk, the premiums will still be higher than they otherwise would be if they were not engaged in a high risk industry.  The underwriting guidelines for the SCIF are also exceptionally strict and subject to heavier state regulations.  The application is long and meticulous, taking up to a month to obtain an insurance policy.  Finally, out of state work is often excluded from coverage.  If a business has branches in other states, the business may have to purchase insurance in that state as well.  However, on the plus side, the SCIF makes it possible for high risk businesses to comply with the state law requirement to carry workers’ compensation insurance.

Workers’ compensation insurance is a complicated issue and can become further complicated if your business is difficult to place. Call me today at (714) 516-8188 and let me talk with you about your business and workers’ compensation.

Common Reasons Claims Are Denied

The claims process for workers’ compensation can be notoriously complex and difficult to navigate. Each employer should make every available effort to smooth the claims process before it starts by providing adequate training to employees, including managers, and making sure that there are definite procedures in place for the process. Despite best efforts, claims can be denied. Understanding common reasons behind an initial claim denial can assist in smoothing the process.

 

One of the most common reasons for denial of an initial claim is filing a claim after termination .  In California, the statute of limitation on workers’ compensation claim is one year from the date the employee suffered the injury. If the injury was cumulative, meaning it was sustained little by little over time, this could be an exception. If the claim is filed after the statute of limitation has passed, the claim will probably be denied.

 

Another reason could be that the documentation backing the claim is inadequate or inaccurate. An employee needs to provide as much detailed and compelling medical documentation as possible. This includes not only the initial diagnosis, but also how this injury impacts the employee’s ability to work. Just because an employee provides documentation that he or she is injured, even if that injury seems significant, this is not enough. A key component of a workers’ compensation claim is determining an employee’s level of disability. Inadequate documentation supporting a workers’ compensation claim will likely result in the claim being denied.

 

A dispute between the employee and the employer is another common reason for claim denial. An employer may contest a workers’ compensation claim for a number of reasons. For example, an employer may dispute that an injury actually occurred in the scope of employment or that an injury occurred at all. In such a situation, it may be necessary for the employee to gather even additional evidence to resolve the dispute from the employer. Employers should be vigilant for a lack of documentation or other possible signs of fraud, and not be afraid to request additional proof. Workers’ compensation claims may increase an employer’s insurance premiums, so an employer needs to make sure that any potential claims are valid.

 If you have questions about your business and the workers’ compensation claims process, contact me today at (714) 516-8188. The claims process can be complicated, and you need an experienced attorney to walk you through it.

Regional Overview of California Workers’ Compensation Claims

Workers’ compensation is a system designed to make sure that employees who sustain work-related injuries are able to get the treatment they require. When handled properly, it can also help protect employers from liability. Different industries have different rates of workers’ compensation claims, as some types of jobs involve an inherently higher level of danger. Just as the frequency of claims varies from profession to profession, it also may vary by region.

A report released by the California Workers’ Compensation Institute determined that employees in California’s Central Valley have a different claims experience that those workers in other areas. The study determined that the time lag between when the employee notifies the employer of the work-related injury to the notification of the administrator to the initial treatment of the employee are significantly shorter than other regions in the state. The study went on to find that after twenty four months have elapsed after the initial injury, Central Coast claims average more medical visits for the purpose of rehabilitation, evaluation, management, or chiropractic care. The biggest difference, though, was in the surgery rate. Central coast workers’ compensation claims after 11.2 percent more medical payments for surgery than the rest of the state. However, the claims in the Central Coast seem to run significantly faster than in the other regions. The average claim lasts 325 days, which is two and a half months shorter than in other parts of the state. This is consistent with the fact that claims are addressed more quickly in this region over all. In 2015, the Central Coast accounted for 7.7 percent of all work-related injury claims in the state. Over the span of the last eleven years, the Central Coast accounted for an average of 6.7 percent of all workers’ compensation claims.

A large proportion of the claims reviewed in the study were agricultural claims. Almost eighteen percent of the claims involved in the study were agricultural claims. Despite this overall percentage, in the Central Coast, only 2 out of 10 job injury claims were related to agriculture.

 If you have questions about your business, workers’ compensation, and whether your business is taking the proper steps, contact me today at (714) 516-8188. I am highly experienced in guiding my clients through this area of law.

Completed and Accepted Doctrine

The “Completed and Accepted” Doctrine has a long history in the State of California.  Over fifty years ago in Kolburn v. P.J. Walker Co. (2d Dist. 1940) 38 Cal. App. 545, a California appeals court established this doctrine.  This rule states that where an owner accepts the completed work under a contract, the contractor is not thereafter liable to other people who sustain damages arising from allegedly negligent construction.  The reasoning behind this is that once the contractor has finished the work and the owner of the property or item has accepted the work as complete, the chain of negligence is broken.  From there on out, it is up to the owner to maintain the property or work in good working condition and to prevent third parties from being injured.  Essentially, the owner has “accepted” the work as “complete,” and thereafter the burden shifts to the owner.

An illustration of how this doctrine could apply to a workers’ compensation case is provided from a recent unpublished opinion out of Los Angeles.  In that case, the plaintiff worked for Keogh Electric Corporation (“KEC”) on a project to build a distribution panel on top of a concrete pad for Kramar’s.  The panel and pad were installed in August 2012, and the plaintiff texted his boss at KEC that “Kramar is done.”  Kramar paid KEC for the work, and no other person from KEC was ever seen doing additional work on the project.  The plaintiff then accepted a job from Kramar.  In September 2012, the plaintiff tripped and fell into the panel and was injured.  He then sued KEC for negligence.  The plaintiff’s workers’ compensation insurance carried, Insurance Company of the West, intervened.  KEC argued that the plaintiff could not sue, and cited the Completed and Accepted Doctrine.  The appellate court agreed that the work was completed and accepted, and so the plaintiff’s lawsuit as well as that of the workers’ compensation insurance carrier was dismissed.  What this means is that because the work was completed and accepted, the plaintiff could not sue the original contractor for his injuries.  He was required to go through workers’ compensation against his current employer, if possible.  Moreover, the insurance carrier would not be able to recover its expenses paid out under the workers’ compensation claim against the original contractor.

Workers’ compensation can result in an unusual set of facts leading to an unexpected result in terms of who should be held liable for an employee’s work-related injuries.  If you have questions about workers’ compensation and your company’s liability, contact me today at (714) 252-7078 to talk about your business.

Overview of the Workers’ Compensation Process

Law suits can be a long and confusing process. Workers’ compensation law and claims are no exception. The fact that the process does not typically operate like a typical lawsuit makes it even more convoluted and obscure to the typical person off the street. This can really add to the stress and confusion experienced by the people involved in a workers’ compensation suit. A basic understanding of the process can help reduce stress and help you manage the process more efficiently.

The first thing that will happen must be the initial claim. After a worker sustains a work-related injury, he or she will need to make a detailed and accurate account of the related injury. The employer should also take reasonable steps to make sure the report is truthful and complete. This includes determining if there were witnesses to the event. If there were witnesses, the employer should be meticulous about gathering and maintaining written statements, and providing all of this information to the attorney responsible for defending and managing the workers’ compensation claim on the business’s behalf.

After the insurance company receives the statement, an investigator may  be sent out to examine the circumstances of the injury. The investigation will most likely include an on-site survey of the injury site but also an inquiry into the medical records of the injured worker. The investigation will need to look into the extent of the injury and whether it is long term or short term. These issues will obviously have a large impact on the nature, amount, and duration of the benefits awarded to the injured worker.  Following an investigation, there will likely also be an exchange of documents and information that is referred to as “discovery.”  During discovery, both the employer and the employee must exchange certain requested information, including medical records, employer reports, witness lists, and other pertinent material.

After the investigation, if the claim is still disputed, it may go before the Workers’ Compensation Appeals Board. The WCAB will hear the evidence from both sides. The board can then make a decision about whether the injured worker will receive benefits and for how long. If either the employer or the employee disagrees with the results, it is possible to appeal the finding to a higher court.

If your business is facing a workers’ compensation dispute, you need an experienced attorney on your side.  Contact me today at (714) 252-7078 to discuss your business and your case.

Medical Marijuana and Workers’ Compensation

Medical marijuana is becoming more and more common across the United States, and California is no exception. Supporters of medical marijuana proclaim its effectiveness against diseases and chronic pain, and some studies support these claims. Some workers who have sustained work-related injuries are seeking treatment that may include medical marijuana. The use of medical marijuana as a treatment for work-related injuries and whether workers’ compensation covers this type of treatment is not yet resolved. Many states have come to different conclusions, and California does not yet have a definite answer.

 

In Cockrell v. Farmers Insurance, an injured worker had chronic pain from a work-related injury sustained while working at Farmers Insurance. The worker requested that his medical marijuana prescription, which was given to help deal with this pain, be covered by his workers’ compensation benefits. The Workers’ Compensation Appeals Board held that California Health and Safety Code § 11362.7 protected Farmers Insurance from having to cover the medical marijuana. The WCAB based its ruling on the fact that the statute states that a health insurance provider is not liable for reimbursing for medical use of marijuana. However, the case was then sent back to the trial level to determine if a workers’ compensation carrier is a health insurance company, and whether it is accordingly exempt from covering medical marijuana claims.

 

Medical marijuana is further complicated by the fact that marijuana is illegal under federal law, and is classified as a Schedule I drug.  An employer should therefore be cautious when an injured worker returns to work if he or she has a prescription for medical marijuana. It is difficult to determine whether a worker is “impaired” under the use of marijuana. While this could also be said of other pain relievers, such as opioids, because marijuana is illegal under federal law, an employer should be certain to take extra precautions to make sure all workers are safe. Employers should also make sure to review their policies in place to make sure they are current with the latest in state and federal guidelines about the use of medical marijuana in the workplace and whether medical marijuana is covered under workers’ compensation claims.

 

If you have questions about medical marijuana and workers’ compensation, call me today at (714) 516-8188. This is an unresolved area of law and you need an experienced attorney working with you to protect your business.

ACA Repeal and Workers’ Compensation

Today’s shifting political landscape brings many challenges, including planning for the future. The new administration has repeatedly promised to repeal the Affordable Care Act. There are 20,000,000 Americans who currently have insurance purchased through the Affordable Care Act, and a total repeal will undoubtedly have sweeping effects.   These effects would extend to an impact on workers’ compensation.

 

Under the Affordable Care Act, workers’ compensation paid out fewer claims. In 2014, medical costs only rose by 3%, and in 2015, the costs dropped a percent. One reason this probably happened is so many more people had health insurance, due to the Affordable Care Act. As a result, workers’ compensation had to pay out fewer claims. This is because in cases where an uninsured, injured employee had non-injury-related conditions that had to be addressed as part of a treatment plan, workers’ compensation had to pay for the entirety of the treatment plan. However, where the worker had insurance, the worker’s health insurance would take over the portion of the treatment costs attributable to the non-injury related condition. Because so many more people have health insurance due to the ACA mandate, this means that the amount of workers’ compensation claims paid out decreased.

 

The President Elect and other Republicans have frequently promised to do a wholesale repeal of the ACA, which would include the individual mandate. If this happens, there would be definite effects on the workers’ compensation system. Without the individual mandate and the accompanying premium subsidy, many workers may drop their health insurance. This could lead to a higher burden on the workers’ compensation system. Another factor could be that typically people with health insurance are healthier than people without health insurance. This is because those with health insurance are more likely to seek medical care for their conditions or injuries. Without health insurance, it is more likely that an injured worker would have the extra health issues that a treatment plan under a workers’ compensation claim would have to treat. It is not clear exactly how much the ACA has reduced the cost of workers’ compensation claims, but logic dictates that it certainly has been a contributing factor.

 

The future for the ACA and workers’ compensation is unclear. If you have questions about your business’s workers’ compensation liability and future or current legislation, call me today at (714) 516-8188 for an appointment. We can talk about your business and your future.

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