Demystifying Workers’ Compensation November 19, 2014 Presented by: Shari Deutsch, ARM-P Safety & Risk Management Administrator Central Contra Costa Sanitary District
Who Are You? HR Staff? Supervisor or Manager? Regular Employee?
What’s Your Role in WC?
Why Are You Here? I’m just curious I’m new to Workers’ Comp I need a refresher I have specific problems or questions and I’d like some answers Something else?
How Does Your Agency Manage WC? Self-Administered or through a Third Party Administrator (TPA)? Fully insured, self-insured, or blended? Do you have an In-House Workers’ Comp Coordinator?
Things to Consider I can’t give you legal advice, just practical advice. For supervisors and HR folks, who do you work for; the employee or the employer? The rules change often ◦ SB 899 in 2004, SB 863 in 2013 ◦ WCAB and Appellate Court decisions
What We Will Cover A Broad Overview of WC ◦ Benefits ◦ Handling and Settling Claims ◦ Controlling Costs Easy ways to evaluate your WC program Issues and complications for WC program management
WC is the Center of the Universe
What’s Workers’ Comp? • WC was established and is governed by the CA Labor Code - Claims settlement overseen by WCAB (DIR) - Insurance oversight by Dept. of Insurance - We aren’t discussing Federal programs or law • No Fault Standard – Benefits employees - Employees do not need to prove that the employer was negligent. • Exclusive Remedy – Benefits employers - Employees lose the right to sue employer for damages in other venues (civil litigation etc.).
Injuries Three Types of Compensable Injuries: Specific Injury – a single event that results in a physical • or mental condition - Trip/Fall - Car Accident Occupational Disease • - Work-related exposure to asbestos, carcinogens - Result of work environment (i. e. hepatitis) Cumulative Injuries • - Hearing loss over time - Back pain from repetitive bending - Carpal Tunnel, other RSIs
What’s Not Covered Under WC? • Injuries resulting from intoxication; • Intentionally self-inflicted injuries or willful suicide; • Injuries occurring to an initial physical aggressor (person who starts a fight); • Injuries occurring during voluntary recreational activity (what about on- site?);
What’s Not Covered Under WC? • Injuries sustained while committing a felony; • Injuries sustained while commuting (the Going and Coming Rule); • Psychiatric injuries not “substantially” caused by work; • Psychiatric injuries resulting from a good faith personnel action.
Workers’ Comp Benefits • Medical Treatment • Temporary Disability (Total and Partial) • Permanent Disability (Total and Partial) • Supplemental Job Displacement Voucher (after 1/1/04) • Dependent Benefits (death) NOTE: Salary Continuation is not a state-mandated benefit. If offered by the employer, payments are considered income and are TAXABLE.
Benefits: Medical Treatment • Employees are entitle to receive medical treatment reasonably required to cure or relieve the effects of the injury. • “Reasonable” treatment is determined by Utilization Review (SB 899 - 2004). • Treatment includes medical appointments, surgery, follow up care (i. e. physical therapy), prescriptions, medical devices (i. e. knee brace, crutches) etc.
Benefits: Medical Treatment Where does your injured employee go? • On-site Clinic or Health Services • Employer’s Medical Provider Network (MPN) • Employer’s Designated Occupational Clinic • Employee’s Pre-designated Physician • Emergency Room • Other?
Benefits: Medical Treatment If the Employer has an MPN: • Employee has to see a physician within the Network • Employee must seek second AND third opinions from physicians within the Network • After three tries, employee can request an independent medical review
Benefits: Medical Treatment MPNs after SB 863 (1/1/13) Employer’s failure to provide an employee with notice of the MPN or notice of the employee’s right to change doctors does not allow the employee to treat outside of MPN anymore. If employee impermissibly treats outside of MPN, the employer is not liable for treatment provided OR any consequences of that treatment.
Benefits: Medical Treatment If the Employer does NOT have an MPN: • Employer has the right to control medical treatment for the first 30 days if treatment is offered on a timely basis. • If the employer does not offer treatment on a timely basis, employee can seek treatment from provider of their choice and the employer has to pay for it. • Best way to offer timely treatment: designate an occupational clinic to treat all work-related injuries.
Benefits: Medical Treatment Pre-designation of Physician Employee must provide written notice to • Employer before an injury occurs. Doctor must be a someone who has treated the • employee before the injury (i. e. primary doctor). Doctor must have employee’s medical records and • medical history in his/her office. You can still send employee to your clinic first. • NEW: As of 1/1/13, the employee must have • health insurance for non-occupational injuries or illnesses.
Benefits: T emporary Disability • TD is only payable after an employee has been off work beyond the 72 hour waiting period. • TD is available for up to 104 weeks for up to 5 years from the date of injury (DOI). • After 5 years from DOI, no TD is due, no matter how much was used.
Benefits: T emporary Disability • TD is calculated as 2/3 of the injured employee’s average weekly wage up to a maximum of $1,074.64 per week (as of November 2014). • TD is not taxable (but salary continuation benefits ARE). • Two Types: Temporary Total Disability (TTD) and Temporary Partial Disability (TPD)
Benefits: T emporary Disability Employee makes $50 per hour $2,000.00 Average Weekly Wage (AWW) is $50 x 40 hrs. Assume 30% taxes withheld $1,400.00 Take home is $2,000 x .7 Assume TD is payable for 1 week $1,074.64 AWW exceeds Max so Max applies Net effect of being off work for one week: ($325.36) Assuming a 30% tax withholding, the break-even point is: $26.86 after tax hourly rate or $34.93 pre-tax hourly rate $1,074.64/40 or $1,074.64x 1.3/40
Benefits: T emporary Disability Temporary Partial Disability • Employee can do some work while recovering but earns less than before the injury (i.e. works less than full time). • TPD (also called wage loss benefits) pays the difference up to the maximum weekly amount.
Benefits: Permanent Disability Per SB 863 (eff. 1/1/13) Increased the maximum and minimum Weekly Rates. Calculations are based on level of impairment, life expectancy and a host of other considerations The method used to calculate PD changes with every piece of WC reform legislation
Benefits: SJDV after 1/1/13 Supplemental Job Displacement Voucher Worth $6,000 (not tiered by scope of injury) Cannot be settled via Compromise & Release Expires after 2 years after issue or 5 years after DOI Includes $1,000 for computer, $500 for misc. (?) Applies after: ◦ Employee found P&S and ◦ Employee has some level of PD and ◦ Employer does not provide a qualified RTW offer
Benefits: Dependent Benefits Amount determined by date of injury, level of dependency, number of dependents. Death must occur within 240 weeks of the date of injury (roughly 4.6 years).
Handling WC Claims How It Should Work What Goes Wrong Mistakes to Avoid
Handling Claims: How it Should Work Injury occurs ◦ Employee receives medical treatment ◦ Employee receives DWC-1 and NOPE within 24 hours
Handling Claims: How it Should Work Doctor gives/prescribes Rx medications, provides restrictions or takes the Employee off work ◦ If none of these occur, it is a First Aid case, not WC Employee returns claim form (DWC-1) Employer reports the claim to TPA ◦ Submitted via form 5020, Employers’ Report of Occupational Illness or Injury
Handling Claims: How it Should Work Claim is investigated and is either accepted, delayed or denied ◦ Employer (and its agent) has the right to investigate all claims for WC benefits ◦ Most common type of investigation is called AOE/COE ◦ Notice of Delayed Claim must be issued within 14 days of when employer first knew of the injury or the claim is presumed to be accepted ◦ Notice of Denied Claim must be issued within 90 days or the claim is presumed accepted
Handling Claims: How it Should Work Employee receives benefits as appropriate Employee continues treatment until fully recovered or found P&S If Employee fully recovers, the claim closes Otherwise, the claim stays open until it can be closed via Stipulation or C&R
Handling Claims: What Normally Goes Wrong Employee doesn’t report the injury immediately Doctor’s restrictions are vague or indecipherable Employee fails to provide Employer with a work status report after a medical appointment Doctor treatment approvals are delayed when UR requires supplemental information
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