What Am I Obligated to Report to My Insurance Carrier?

Workers’ compensation is an important social program for Californians.  Workers’ compensation allows employees and employers to rest easy knowing that they are both protected in case an employee suffers a work-related injury.  In California, almost all employers, with very few exceptions, are required by law to carry workers’ compensation insurance.  Failure to carry workers’ compensation insurance can result in severe civil and even criminal penalties for an employer who fails to follow the law.  Employers who do properly carry insurance need to understand what must be reported to their insurance carrier to make sure they do not violate their policy.

If you have any questions about what needs to be reported to your insurance company, the first place you should look is your policy documents.  The insurance policy documents will be an essential source of information concerning your responsibilities.  If you fail to adhere to your policy’s requirements, it could result in your insurance carrier refusing to cover an incident.  It could even mean your insurance carrier will decline to continue providing coverage for your business at all.

In addition to those issues that your insurance requires to be reported, there are California laws that will also apply to reporting requirements.  The most important of these is the initial report of the injury or occupational illness.  As an employer, you are required to provide a workers’ compensation claim form within one day after the employee reports a work-related injury or illness.  After the employee returns this form to you, you must provide the claim form along with the report of the injury or illness to your insurance claims administrator within one working day.  In other words, if the employee reports an injury, you are required by law to report this to your insurance.

Another important reporting issue is fraud.  If you have suspicions about fraud in your workers’ compensation case, you need to report this to your insurance carrier.  Workers’ compensation fraud includes not only fraud on the part of the employee, but also the medical providers or even attorneys.  Your insurance carrier will then investigate the fraud concerns.  If there are founded cause for concern, your carrier will report the issue to law enforcement.

We have extensive experience helping our clients understand their responsibilities when it comes to workers’ compensation insurance.  Call us today to talk about your case and your business.

Can I Opt Out of Workers’ Compensation Insurance?

Employers know that they need to take precautions to make sure their business is adequately protected.  Employers need to carry a variety of types of insurance, ranging from fire insurance to insurance on any vehicles.  Workers’ compensation insurance is another important component to protect your business.  Workers’ compensation provides insurance coverage in the event that your employee sustains a work related injury.  Despite its protections, some employers find the cost of workers’ compensation insurance too heavy a price to pay for that protection.  This leads many employers to wonder whether they can opt out of carrying workers’ compensation insurance.

California labor code section 3700 provides that if a business employs one or more employees, that business is required to carry workers’ compensation insurance.  It is important to note that this requirement includes some workers that you would not ordinarily believe would fall under this requirement, such as nannies or handymen.    It also should be noted that due to recent changes in the law, executive officers and directors of corporations must also be included in workers’ compensation coverage unless the corporation is completely owned by the directors and officers.  In that circumstance, they can opt to be excluded from coverage.  Except for those circumstances, all employers are required to carry workers’ compensation insurance and can face hefty penalties for failure to comply.

In some cases, an employer may decide to self-insure.  Self-insurance requires that you receive state approval.  The business must have a net worth of at least five million dollars with a net annual income of at least five hundred thousand dollars.  The employer must also post a security deposit.  Although this generally means that only larger businesses are able to meet the requirements, some small employers in the same homogeneous industry pool their workers’ compensation liabilities.  If the employer is self-insured, workers’ compensation claims may be administered directly by the employer or the employer may contact with a third party administrator to handle the administration of the case.

If you have questions about whether your business is required to carry workers’ compensation insurance, contact us today.  We can talk to you about your rights and responsibilities.

Repetitive Motion Injuries – What Is My Business Liable For?

There are a wide variety of injuries that can occur in a work place.  An employee can fall off scaffolding, get in a car accident while driving to deliver a shipment, or receive an injury from malfunctioning equipment.  Repetitive motion injuries are also a common source of work related injuries.  The most common type of repetitive stress injury is carpal tunnel syndrome.  Carpal tunnel syndrome occurs when the nerves running from the hand to the wrist are compressed through repeated motions, like typing.  There are other types of repetitive stress injuries, which could come from repeated bending or repeated use of one body part, such as repeatedly lifting your arms over your head.  Like other work related injuries, an employer can still be liable for repetitive motion injuries.

If your employee has a repetitive motion injury or shows signs of developing the injury, you need to treat the repetitive stress injury just as you would any other injury.  The employee needs to seek medical attention.  You will need to complete the same paperwork and submit it to your workers’ compensation insurance provider.  The employee will be eligible to receive replacement income, payment of medical expenses, and if necessary, reasonable accommodations when the worker is able to come back to work.

One issue that frequently arises with these types of injuries is that the worker was likely typing a lot or during similar repetitive actions in previous employment.  Employers will often wonder whether they are obligated to cover the repetitive stress injury if the condition started to develop during prior work.  Whether the injury is covered by the workers’ compensation system will be dependent on whether the injury is a pre-existing condition.  For example, if the injury was diagnosed and treated before the worker started with your business, it may very well be excluded from coverage under workers’ compensation.  However, if the pre-existing condition is one that he or she previously received workers’ compensation benefits for and the condition is aggravated by the work with your business, then the employee may very well be eligible for additional workers’ compensation benefits.  The employee will need to get a medical examination to determine whether it is part of a pre-existing condition or a new injury.

We have extensive experience helping our clients understand the workers’ compensation system.  Call us today to talk about what we can do to help you

Origin and Purpose of Workers’ Compensation

The majority of employers take many measures to help make sure their employees are as safe as possible at work.  Employers may decide to provide extra safety training, purchase and install safety technology, or form safety committees, just to name a few examples.  Unfortunately, despite the most diligent efforts, it is likely that at some point, an employee will sustain a work-related injury.  When that happens, the employee may file for workers’ compensation.

The modern workers’ compensation system can trace its origin to the Workers’ Accident Insurance system that was put into place by Otto von Bismark in 1881.  The motivation behind enacting this system was what was referenced as the “unholy trinity” of tort defenses that were available at that time, including contributory negligence, assumption of risk, and the fellow servant rule.  In other words, it was much more difficult for injured employees to be compensated if they were injured on the job.

Different states here in the United States started implementing workers’ compensation systems before the turn of the century, with the first state-wide system being instituted by Maryland in 1902.  Workers’ compensation provided a much needed outlet for injured employees to seek compensation for industrial injuries.  The workers’ compensation system is designed to protect both the employer and the injured employee.  Workers’ compensation in California is a “no fault” system.  This means that the injured employee does not have to prove the injury was a result of negligence or intentional acts on behalf of the employer.  Similarly, the employer is protected from law suits from the employee, with only a few exceptions.

It is no secret that at the turn of the century, industrial working conditions for most Americans were quite dangerous, with few regulations in place to require employers make sure their workers were safe.  Especially in factories or manual labor fields, it was common for employees to sustain truly horrific injuries.  By instituting worker’s compensation, employers were motivated to make sure their businesses were as safe as possible for their employees.  In addition, employers could feel at ease knowing that their employees could not sue for negligence if the employee sustained an injury because the employer overlooked some safety measure.

We have extensive experience helping our clients understand the workers’ compensation system.  Call us today to talk about what we can do to help you.

Handymen, Nannies, Small Businesses, and Workers’ Compensation

Millions of Americans run their own small business.  Whether that business is the primary source of income for the family or just a side job to help provide supplemental income, business owners are all well aware that there are many regulations surrounding formation and running a business.  In addition, many people choose to employ other individuals for help around the house, including nannies and handymen.  Whether you have a small business or you employ others to help you around the house, it is important that you understand your rights and responsibilities regarding workers’ compensation.

California labor code provides that employers are obligated to carry workers’ compensation insurance.  This is true even if the business has only one employee.  This is also true of businesses which are located outside the state of California but still do business in this state.  In other words, if your business is located in Oregon but you sometimes do business in California, you are stills subject to the California requirement that you carry workers’ compensation insurance.  For a sole proprietorship, the law does not usually require workers; compensation if the business has no employees.  The important exception to this is for roofing contractors.  All C-39 roofing contractors in California are required to carry workers’ compensation insurance and file a valid certification with the state.

It is also important to understand your obligation regarding workers’ compensation insurance if you use the services of a nanny or a handyman.  Under California labor code 3352(h), “any person employed by the owner or occupant of a residential dwelling whose duties are incidental to the ownership, maintenance, or use of the dwelling, including the care and supervision of children, or whose duties are personal and not in the course of the trade, business, profession, or occupation of the owner or occupant” is classified as an employee.  This means that you may be required to carry workers’ compensation insurance for your nanny or handyman.  California law goes on to state that if the person has worked less than 52 hours in the 90 days before the injury was sustained or earned less than $100 in wages during that time, the person is not an employee for worker’s compensation purposes.

We have extensive experience helping our clients understand the rights and responsibilities concerning workers’ compensation insurance.  Contact us today to talk about your options.

Corporations and Workers’ Compensation

Small businesses form the backbone of the American economy.  Millions of people very year start their own business.  When forming a business, a founder has a wide variety of choices concerning the type of business organization.  A business can be a sole proprietorship, a limited liability corporation, a limited partnership, or even a hybrid of more than one of these types.  There are benefits and drawbacks to each type of business structure.  If you are thinking of choosing a corporation as the structure for your business, you need to understand how workers’ compensation interacts with the rules for corporation formation.

One thing that business owners in California need to understand is that almost all employers are required to carry workers’ compensation insurance pursuant to California labor code 3700.  Failure to carry the required insurance can result in severe civil and even criminal penalties for the business owners.  Corporations are not exempt from this requirement.  Forming a business as a corporation can provide important shelters from liability as well as tax advantages, but these advantages do not include de facto exclusion from the requirement to carry workers’ compensation insurance.

Moreover, some relatively recent changes to the California labor code provides that executive officers and directors of corporations must be included in the workers’ compensation insurance coverage.  The exception to this is if the corporation is fully owned by the directors and officers.  If that is the case, the directors and officers may elect to be excluded from workers’ compensation coverage and benefits.  For this to apply the person must be a sole shareholder who is an officer or director of a private corporation.  In that case, that person is excluded from the legal definition of “employee.” Any director or officer wishing to opt out will have to fill out specific paperwork to accomplish this.  The document is executed under the penalty of perjury, and states that he or she meets the qualifications under the California labor code for being exempt from the insurance requirements.  For officers or members of the board of directors of a cooperative corporation and for owners of a professional corporation, there are additional waiver requirements that must be met.

.We have extensive experience helping our clients understand their rights and responsibilities with regard to California’s workers’ compensation insurance requirements.  Call us today for a consultation.

When Is Self-Insurance Allowed

Workers’ compensation is an important part of our legal system.  It provides support and financial assistance for injured employees.  It also provides immunity from additional tort law suits to the employer, except in limited circumstances.  California has the largest workers’ compensation system in the United States.  Under California law, employers are required to carry workers’ compensation insurance.  There are severe civil and criminal consequences for employers who fail to fulfill this responsibility.  There are a few narrow exceptions to this rule, including self-insurance.

Self-insurance means that the employer has assumed the financial risk associated with providing workers’ compensation benefits to their employees who sustain work-related injuries.  Workers’ compensation benefits can include not only the cost of medical treatment for the worker, but also other monthly benefits.  Clearly, this can represent a significant financial burden, especially for smaller businesses.

California law provides that there are strict requirements before a business can qualify to self-insure instead of purchasing a workers’ compensation insurance policy.  A business wanting to qualify for self-insurance must apply to the California Office of Self-Insurance Plans.  The business will have to provide particular information and evidence to support the application. First, the business must have been a legally authorized business form for at least three years.  Next, the business will have to provide three years of certified, independently audited financial statements with the application.  The business will also have to demonstrate it has an acceptable credit rating for three years preceding applying for self-insurance. If the company has subsidiaries, each subsidiary must file its own application.  The application may be filed separately or together with the parent company’s application.  If a current existing company that already has been approved for self-insurance creates a new subsidiary or affiliate, a new application can be filed.  If the parent company can demonstrate solvency, the subsidiary is automatically self-insured for 180 days.  The parent company must file an application for a permanent certificate during that time.

Once an employer is approved by the state to be self-insured, the employer is still subject to state audits.  The audits check for the accuracy of claims reserving practices as well as the correctness of the reported workers’ compensation liabilities.

If you have questions about workers’ compensation and your rights and responsibilities as a business owner, contact us today.  We can talk to you about your business and the workers’ compensation process.

Structured Settlements and Workers’ Compensation

The legal system is often thought of by lay people as being complicated, and legal cases may take months or even years to resolve a case.  Unfortunately, workers’ compensation is not always an exception to this, as the nature of the cases often include injuries that take time to heal before it can be determined whether a worker is permanently or temporarily disabled, the type of accommodation the worker requires, or whether the worker can even return to work at all.  Both sides are often looking for ways to shorten the process and come to a settlement.  With a settlement, the parties can avoid the time and expense of a court case that drags out and costs both sides dearly.  One way to complete this in a workers’ compensation case is a structured settlement.

A structured settlement is a settlement agreement wherein the employer or its insurance provider agrees to make a series of periodic payments to the injured worker (or the surviving family) over a period of time.  Some structured settlements provide that each payment amount will be exactly the same, but other settlements can provide additional flexibility.  In some cases, the settlement may provide for a lump sum to be paid up front before the regular payments start.  This lump sum may be to assist with housing, transportation, or medical needs.  In addition, the settlement can take future cost of living expenses increase or inflation rates into account, and provide for future increases at specific times.  It should be noted that a separate account is often set up to handle the injured workers’ future medical expenses, and that the periodic payments are meant to represent the lost wages.

One advantage for the employee in accepting a structured settlement is that the periodic payments are not subject to federal income taxes.  An employer will often benefit from a structured settlement in cases where there has been a catastrophic injury that is likely to result in a finding of permanent partial or total disability, especially where the injury is so severe that the worker is unlikely to be able to return to meaningful employment.

We have extensive experience helping our clients understand what types of settleemnts may be best for their business.  Call us today to talk about what we can do to help you.

Global Assessment of Function Score

The workers’ compensation system is designed to help workers get medical treatment and get back to work as soon as possible after they sustain a work-related injury.  The system also provides protection for employers, as the workers’ compensation system provides that the worker is typically required to seek compensation through this system and cannot sue the employer in civil court.  A worker can seek recovery for a large variety of injuries, including psychiatric injuries.  As with a physical injury, workers who have sustained work-related psychiatric injuries will need to undergo examination by a medical professional.  Part of the examination will result in a Global Assessment Function Score.

A Global Assessment Function (GAF) score must be obtained by any injured worker who is seeking to obtain permanent disability benefits through workers’ compensation.  In the workers’ compensation system, only psychiatrists or psychologists can evaluate an injured worker and make this evaluation.  The GAF score will be based on whether there is a permanent psychiatric disability and the degree or amount of that disability.  The GAF score is a numeric scale used by appropriate mental health practitioners.  The practitioner will provide a subjective rating for the social, occupational, and psychological functioning of the injured worker.  For this rating, the lower the number, the greater the degree of permanent disability.  For example, someone with a GAF score of 1 would be considered not disabled at all, and fully functioning, whereas someone with a score of 1 would be highly impaired.

There are a variety of issues used to evaluate psychiatric functioning.  These include:

–          Participating in activities including keeping a job, completing hygiene related tasks, and socializing with friends;

–          Social effectiveness, including whether the worker can make and keep friendships and other community contacts;

–          Family interactions, such as whether the injured worker neglects family relationships, has issues with domestic violence or frequent arguments;

–          School performance, including grades and truancy; and

–          Performance at work, including whether the worker can interact effectively with clients and coworkers, regularly attend work, and complete appropriate tasks.

The mental health professional will also look at different issues when evaluating symptom severity.  These include anxiety, insomnia, suicidal ideations, or depression, just to name a few.

We have experience assisting our clients understand the role of GAF scores in workers’ compensation cases.  Call us today to talk about your business.

Communications Between an Injured Worker and Their Physician

The confidentiality between a patient and doctor is well established in the United States, and California is no exception.  Confidentiality is strict to make sure that the patients can fully disclose all symptoms and potential sources of illness or injury without fear that embarrassing conditions will be on display for others to read.  Although employees can typically be secure in the knowledge that their medical conditions are private and protected from their employers, this can change in the case of a workers’ compensation case.

During a workers’ compensation case, the injured employee will need to seek medical attention.  Even after urgent conditions have been addressed, the worker may require ongoing treatment or physical therapy.  The worker will definitely need to be evaluated by a physician or medical professional to determine whether he or she is temporarily or permanently disabled, the degree of the disability, and whether he or she requires limitations or work restrictions upon returning to work.  Clearly, these will be medical conditions that are assessed by a medical professional.  Employers and employees alike should have an understanding of what types of communications remain privileged between the injured employee and his or her treating physician.

The Confidentiality of Medical Information Act contains strict rules and prohibitions on when a health care provider can release information.  There are exceptions, however in the workers’ compensation system.  Communications between the patient and the physician concerning the work related injury will be turned into reports that will be submitted by the physician to insurance adjusters, attorneys, and even the employer.  The employer, attorneys, or an insurance adjuster may also request copies of the actual medical records.  When the treating physician has been the worker’s treating physician for other conditions in addition to the work related injury, however, these medical records will contain information that is completely irrelevant to the work related injury.  In that situation, the physician is restricted from releasing more information than is necessary.  In other words, an employer or insurance adjuster is not entitled to receive a complete copy of the employee’s entire medical record.  The physician is required only to release the information relevant to the injury and whether the employee is able to return to work.

We have extensive experience with the workers’ compensation system and all types of associated litigation.  Contact us today for a consultation.

Ratings and Reviews

CBLS