Reducing Workers’ Compensation Costs

All business owners know that maintaining a business can be costly.  Advertising, inventory, rent, and taxes, just to name a few.  In California, almost all businesses are also required to carry workers’ compensation insurance.  Workers’ compensation insurance can be costly.  All businesses, ranging from large corporations to small businesses, are all trying to reduce costs in order to maximize profitability.  Although California law likely requires you to carry workers’ compensation insurance for your business, there are techniques you can employ to help reduce your workers’ compensation costs.

One way to help you reduce your workers’ compensation insurance costs is to make sure you understand how your workers’ compensation insurance premium is determined.  Workers’ compensation insurance premiums are based on a specific classification system.  The more dangerous the roles of your employees, the higher your workers’ compensation rates will be.  Accordingly, you need to have an open line of communication with your insurance adjuster to ensure that he or she is assigning the correct classification to your workers.

Another way to reduce your workers’ compensation insurance costs is to make sure that your workplace is as safe as possible.  Ensure that you keep your equipment up to date and in good repair.  Creating a safety committee in the workplace can also help, as your employees can take a direct role in keeping your workplace as safe as possible.  As your employees are the ones who directly deal with all workplace conditions, they often have some important suggestions as to how to make your workplace even safer.  The fewer injuries you have in your workplace, the lower your workers’ compensation premiums will be.

Third, you should build a return to work program.  An important rule of thumb to keep in mind is that the longer a workers’ compensation claim remains open, the more expensive the claim will be.  This is because the claim will require that more replacement income benefits must be paid.  Accordingly, if you can build a program that proactively helps workers get back to work, income benefits will not have to be paid for as long a time.  A return to work program often includes allowing an employee to return on a light-duty or even part-time basis.  You will need to coordinate these plans directly with the employee’s health care provider to make sure the work is appropriate for the particular injury.

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

What Is Workers’ Compensation “Leakage?”

Any business owner can tell you that running a business can be a complex proposition.  Trying to make sure your business conforms with all relevant city, state, and federal laws is an essential step before you even get to the practical aspects of your business, such as ordering inventory, advertising, and deciding when to expand.  Workers’ compensation is a very important part of your business, and the law of California provides that you must pay for workers’ compensation insurance unless you qualify under one of the very few limited exceptions.  Being familiar with the insurance system can help make sure you are properly following the rules and regulations surrounding workers’ compensation.  One major issue faced by workers’ compensation insurance carriers is “leakage.”

Leakage in the workers’ compensation context refers to payment errors.  Overpaying claims represents a major problem and challenge for insurance companies.  In general, leakage is divided into two main categories: hard leakage and soft leakage.

Hard leakage refers to erroneous payments made on claims that should not be covered.  If an insurance company pays out on a claim when the insurance policy had actually lapsed, or it turns out the injury was not compensable under the policy, would be two examples of hard leakage. In other words, hard leakage occurs when a payment is made where no types of coverage existed.

Soft leakage, by contrast, refers to when overpayments have been made on claims that are otherwise valid.  Errors in medical payments or even payments made after a claim is denied or disputed are types of soft leakage.

Another type of leakage that does not fall into either of these precise categories is vendor leakage.  Vendor leakage involves payments to outside vendors.  These would be services that are used in the investigation or in handling claims.  Private investigators, private nurse case managers, or independent medical evaluation companies are some of the most common.

Although employers may not think that these types of leakage should concern them, this is not accurate.  The more leakage an insurance company has, the more likely it will  raise rates later to make up for the unnecessary payments.

If you have questions about your business’s rights and responsibilities, call us today. Contact us today for a consultation to talk about your business.

FMLA and Workers’ Compensation

Regardless of the safeguards put in place by the most careful of employers, employees will suffer a work-related injury at some point.  These injuries could be acute, such as a head injury after falling from a ladder, or more slowly developing, such as a repetitive stress injury.  No matter how the injury happens, as long as the employee was acting in the course and scope of employment, the employee can apply for medical benefits and disability payments under the workers’ compensation system.  The employee may be required to take time off from work while recovering from the injury.  In cases where an employee is ill or injured and needs extended time off from work outside of the workers’ compensation context, the employee can seek protection under the Federal Medical Leave Act.  Under the FMLA, eligible employees can take unpaid, job-protected for particular family reasons or medical reasons, such as having a child or a serious health condition that renders the employee unable to perform the essential functions of his or her job.  An employee cannot take unlimited unpaid leave under the FMLA. However,  An employee is limited to twelve work weeks of leave within a twelve-month period, unless the leave is to care for a covered service member with a serious illness or injury if the employee is an immediate family member of the service member.  In those cases, FMLA is limited to twenty-six workweeks of leave in a twelve month period.  As both FMLA and workers’ compensation cases involve an employee taking protected leave to give time to heal from an injury or illness, employers need to understand that the two laws are in place for very different reasons.  An employer cannot force an employee to take FMLA leave if there is a qualifying workers’ compensation claim.  When an injury or illness would qualify the employee for leave, an employee must provide leave to the employee under whichever law provides the employee with the greatest rights and benefits.  Accordingly, as workers’ compensation provides disability payments and medical expenses, an employer cannot force an employee to take time off under the FMLA if the employee also would qualify for time off under workers’ compensation.

We have extensive experience helping business owners understand how the various labor provisions interact.  Contact us today for a consultation.

What Workers’ Compensation Won’t Cover

Workers’ compensation is an essential component of the social welfare system in California.  With workers’ compensation, an employee can receive medical expenses to treat the work-related injury, replacement for lost wages, and permanent benefits if the disability is permanent.  Workers’ compensation benefits can also help to provide training for a new career if the injured employee is permanently disabled and unable to return to work in the capacity he or she previously worked.  There are, however, some things that workers’ compensation will not cover.

One thing that workers’ compensation will not cover is if the employee has an injury that is self-inflicted.  For example, if an employee intentionally slices his arm on a piece of equipment, workers’ compensation would not cover that injury.  Employers should also be cautious of these injuries, as an employee trying to claim workers’ compensation benefits for an injury that was intentionally self-inflicted may also be committing insurance fraud.

Another way that an employee’s injuries may not be covered by workers’ compensation is when the injury was not incurred during the course and scope of the employee’s employment duties.  One of the most common examples of this type of injury is when an employee gets in a car accident during work hours, but he or she is not engaged in work-related activities. For example, if the employee is on a lunch break or running a personal errand, that would not be in the course and scope of employment, and therefore any injury sustained during an accident would not be covered.

Third, some pre-existing injuries will not merit a new workers’ compensation award.  Employers need to keep in mind that if a pre-existing injury is aggravated and worsens as a result of employment, then the employee may be able to recover under workers’ compensation. In other words, whether an employee can recover under workers’ compensation at your business as a result of disability and injury related to a pre-existing injury is a delicate and sometimes complicated inquiry.

Finally, if an employee is injured during an altercation at work that he or she started, then workers’ compensation may not cover those injuries. For example, if your employee assaults a customer, then any injuries sustained in the ensuing fight would not be covered.  However, if the employee is assaulted first by the customer, the injuries may be covered.

If you have questions about whether the circumstances in your case will qualify for workers’ compensation, call us today.  We can help you understand the workers’ compensation system and how your business fits within it.

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.

Workers’ Compensation and Medical Technology

Medical technology, expertise, and understanding have advanced substantially in the past decade.  The advancement of medical science provides potential cures and treatments in all areas of chronic and acute conditions.  When an employee sustains a work-related injury, workers’ compensation provides access to medical care to help address the injury and get the worker back on the job.  Advancements in medical technology can also mean changes in the way workers’ compensation treatment is handled.

One recent advancement in medical technology that can greatly impact workers’ compensation is a blood test that has been recently approved by the Food and Drug Administration.  This blood test can help to diagnose mild brain injuries by detecting particular proteins that are released into the bloodstream after such an injury is sustained.  The test is called the Banyan Brain Trauma Indicator.  The test is reportedly very accurate, with a 97% correlation rate with CT scan results.  However, the test must be done quickly, within 24 hours of the injury.

Another new test is called the Clustered Regularly Interspaced Short Palindromic Repeat, or “CRISPR.”  This genetic test will allow doctors to customize medications based on the individual patient’s genetic code.  Tailoring medication to the individual patient means that the medication can help target the exact work-related injury sustained by the employee, such as regenerating damaged joint tissue.

There are also efforts being made to develop wearable devices to assist with tracking rehabilitation of the employee.  These devices would be worn by an injured employee to make sure he or she is actually doing the physical rehabilitation efforts prescribed by a doctor.  This is important to make sure the employee is making important efforts to heal as quickly as possible and get back to work.  This would also help doctors in making further diagnoses, as the device could track other statistics, such as heart rate and blood pressure.

FaceTime and Skype are also helping with workers’ compensation.  With these technologies, physical therapists can remotely work with their patients.  By eliminating the requirement for an employee to go to an office physically, this could cut down on the amount of time an employee will have to be absent from work.

We have experience assisting our clients to understand their options regarding their employee’s workers’ compensation.  Contact us today for a consultation.

What You Need to Know About AB 1107

California lawmakers work hard to make sure that the state laws are reformed to best protect and serve the residents of California.  The labor code and workers’ compensation are not exceptions to these efforts.  Workers’ compensation is a complicated area of the law and one of the oldest social institutions in California.  This does not mean, however, that these statutes do not need updating and improving.  The California Assembly recently passed A.B. 1107 in an effort to improve the workers’ compensation process.

California Assembly Bill 1107 amends labor code 4610.01.  The purpose of the amendment is to reduce the delays sometimes facing injured employees in receiving medical treatment for their work-related industrial injuries.  The bill as originally filed was partially in reaction to a case called King v. CompPartners Inc.  In that case, an employee was harmed when his medication was withdrawn after a wrongful utilization review.  The injured employee then tried to sue the utilization review provider in civil court, not under workers’ compensation, because of the injuries and the wrongful withdrawal of his medication.  The California Supreme Court held, however, that the injured employee’s exclusive remedies were under workers’ compensation and the employee could not sue the utilization review provider outside of that framework.  The bill was originally filed with the aim of reducing administrative time as well as access to treatment for injured employees by exempting treating physicians from utilization review under specific circumstances.  The bill was later amended to provide that stakeholders may challenge utilization review conclusions.  Critics of the amendment are concerned that the amendment will just result in more litigation and legal gymnastics, which could reduce an injured employee’s access to care.  This is because the injured employee’s treatment will likely be delayed while waiting for the legal dust to settle.  Conversely, proponents of the amendment state that allowing stakeholders to challenge the result of a utilization review provides another much needed layer of oversight.  These advocates of the process point out that having additional oversight can help reduce the incidence of fraud in the workers’ compensation field, which could help save millions of dollars every year for Californians.

We have extensive experience helping business owners understand the changing law and how it impacts their business.  Contact us today for a consultation

Vouchers and Workers’ Compensation

The workers’ compensation system is designed to help provide income replacement for employees who have sustained work-related injuries.  The system also provides reasonable medical expenses related to the treatment of the work related injury, ranging from surgery, prescription medication, or medical equipment.  In some cases, the worker will be able to return to work quickly or may not even miss work at all.  In other cases, the employee may require extended medical care and may not be able to return to work for months, and when he or she does return reasonable accommodations may be necessary for the employee to return to work.  If the worker has been permanently disabled but is able to do some work, another type of benefit he or she can apply for is Supplemental Job Displacement Benefits, which come as a voucher.  The voucher is a non-transferrable voucher that are for injured employees who want to return to school or obtain additional vocational training.  This training or education must be obtained at a state approved or accredited school.

Injured employees wishing to receive these benefits must meet certain conditions to be eligible.  First, the employee must have a permanent partial disability as a result of the work related injury.  The employee also must not have been offered other work by his or her employer.  The voucher is worth up to six thousand dollars to go toward the payment of tuition and retraining to start the employee in a new line of work.  The voucher is meant to cover expenses such as fees, books, cost of occupational licensing or certification fees, up to one thousand dollars for computer equipment, and up to five hundred dollars for miscellaneous expenses such as transportation and uniforms.

If the employee has paid these types of expenses, he can submit itemized receipts showing payment of these eligible costs to the claims administrator.  This must be done before the voucher expires, which is two years after the voucher was issued or five years after the employee sustained a work related injury, whichever comes later.  Alternatively, if you present the voucher to the school or vocational counselor, they may receive payment directly from the claims administrator.  Whether you are being reimbursed or the school is receiving payment directly, payment should be complete within forty-five days of the expenses being properly submitted to the claims administrator.

If you have questions about the voucher system and what that means for your business, call us today.  We can help you understand the workers’ compensation system.

Who Chooses the Doctor?

The workers’ compensation system provides important rights and responsibilities for both employees and employers.  Employees can rest easy knowing that they can receive benefits and medical care costs if they suffer a work-related injury.  Employers can also feel a sense of relief knowing that the workers’ compensation system means that the employee cannot sue for the injury, except in certain limited circumstances.  Despite these reassuring facts, workers’ compensation does require several important procedural steps.  One of the most obvious is that the injured employee will have to get medical attention.  As the medical diagnoses and care are clearly an integral part of the workers’ compensation case, employers may wonder who gets to choose the doctor for the employee?

The medical care provider plays an essential role in the workers’ compensation case.  The doctor will diagnose the condition and determine if the injury was a result of working conditions.  The doctor will also decide how long the employee must stay out of work and what accommodations are necessary when the employee does return to the work force.  The doctor will also decide when the employee’s medical condition has stabilized and whether the employee has any permanent disability.

Before an injury occurs, an employee has the right to “predesignate” his or her personal doctor.  This means that if and when the employee sustains a work related injury, he or she can go directly to that personal, pre-designated physician for treatment.  California labor code 4600 requires employers to give employees the necessary paperwork to predesignate a treating physician.

If an employee has failed to predesignate a health care provider, then he or she will likely not be able to choose the initial physician that he or she sees for treatment of the industrial injury.  Typically the workers’ compensation insurance provider or the employer itself will have a “medical provider network.”  The employee will need to choose a doctor who is included in that network.  There are some important exceptions to this general rule.  First, if the employee needs emergency care, it is not required that he or she use a physician including in the medical provider network.  In addition, if the employer has failed to provide certain required notices or information, the employee may also not be required to use a doctor in the MPN.

We have extensive experience helping our clients understand the workers’ compensation process and how it can impact their business.  Contact us today for a consultation to talk about your business.

When to hire a PI

Employers work hard to make sure that their employees are safe from injury on the job.  Unfortunately, there are times that despite the most careful precautions, an employee sustains a work-related injury and will accordingly submit a claim for workers’ compensation.  The vast majority of employees who submit a claim for workers’ compensation are validly injured and will want to return to work as soon as possible.  Unfortunately, there are a handful of dishonest people who will try to abuse the system.  If you are an employer who suspects your employee is not being totally honest about the work related injury, you may consider hiring a private investigator.

One reason you may want to consider hiring a private investigator is if the medical reports fail to match up with the severity of the injury that the employee is reporting.  This could be both in terms of the acute symptoms as well as how long it is taking the employee to recover.  When an employee commits fraud by exaggerating the severity or duration of his or her injury, it is called “malingering,” and can be a good reason to hire a private investigator.

Another reason could be if the employee’s social media shows him or her engaging in activities that do not seem compatible with the injury.  For example, if the employee states the his or her back pain prevents him or her for standing or sitting for any longer than thirty minutes, but social media indicates the employee spends weekends hiking, hiring a private investigator can help provide more proof of fraud.

Another red flag for fraud that may suggest you want to hire a private investigator is if the employee has filed lots of workers’ compensation cases in the past.  This may indicate that the employee knows how to “work the system” and has made a habit of filing fraudulent claims and malingering.  Hiring a private investigator can help you get details about past claims as well as information about how the employee is spending his or her time away from work.

A private investigator can fill many roles, such as setting up surveillance, collecting information from the internet, and talking to witnesses to the event.  The private investigator can help you uncover fraud and move forward.

We have experience assisting our clients with fraudulent workers’ compensation claims.  Call us today to talk about your business.

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