WORKERS’ COMPENSATION WHY PROACTIVE EFFORTS MATTER December 10, 2019 Abby Johnson Alanna Soukkala Claims Manager Safety Consultant 763-746-8279 218-623-5878 Abby.Johnson@MarshMMA.com Alanna.Soukkala@MarshMMA.com
AGENDA • WC Terminology • Time of Loss – Claim Reporting • Post-Loss • Return-to-Work • Cost of Risk 1 MARSH & McLENNAN AGENCY LLC December 13, 2019
WORKERS’ COMPENSATION TERMINOLOGY MARSH & McLENNAN AGENCY LLC
WORKERS’ COMPENSATION • Exclusive Remedy • Injury or Illness • Arising Out of/Course and Scope • Coming and Going Rule • Proximate Cause • Employee Hired “As Is” • “Caused, Aggravated or Accelerated” 3 MARSH & McLENNAN AGENCY LLC December 13, 2019
WAITING PERIOD Waiting Period For Wage Benefits – Begins Day Of Injury – State Specific Waiting Period – Retroactive Period 4 MARSH & McLENNAN AGENCY LLC December 13, 2019
STATUTORY BENEFITS • Medical Only (M.O.) • Indemnity Claims (Lost Time) – Temporary Total Disability (TTD) – Temporary Partial Disability (TPD) – Permanent Partial Disability (PPD) • Maximum Medical Improvement (MMI) • Independent Medical Exam (IME) 5 MARSH & McLENNAN AGENCY LLC December 13, 2019
INJURY KIT • First Report Of Injury Form • Claim Coordinator Contact Information • Employee Information Sheet – State Specific • Accident Investigation Form • Workability • Witness Statement Forms • Carrier Contact Information 6 MARSH & McLENNAN AGENCY LLC December 13, 2019
INJURY KIT • Medical Facility Contact Information • Job Descriptions – Regular – Stay-At-Work • Transitional Duty Commitment Statement 7 MARSH & McLENNAN AGENCY LLC December 13, 2019
TIME OF LOSS MARSH & McLENNAN AGENCY LLC
TIMELY REPORTING • 24 Hours • First Report Of Injury (FROI) • Injury Worsens Without Treatment • Attorney Involvement • Fraud Potential • Increased Indemnity • Undirected Medical Care • Less Cooperative • Memories Fade • Employer Statement 9 MARSH & McLENNAN AGENCY LLC December 13, 2019
Common Questions – What constitutes notice? – What date should be used for date of injury? – Duty to inquire? – What if the accident is not our fault? 10 MARSH & McLENNAN AGENCY LLC December 13, 2019
TIMELY REPORTING • Study By The Hartford – Claim Costs Increased: - 18% When Reported After 1 Week - 29% When Reported After 2 Weeks - 31% When Reported After 3 Weeks - 45% When Reported After 4 Weeks Claim Costs On Back Injuries Increased 40% When Reported After 1 Week 11 MARSH & McLENNAN AGENCY LLC December 13, 2019
TIMELY REPORTING 47% 50% 45% 34% 40% 29% 35% 30% 22% 25% 20% 15% 10% 5% 0% 0-10 Days 11-20 Days 21-30 Days 31+ Days LITIGATION INVOLVEMENT 12 MARSH & McLENNAN AGENCY LLC December 13, 2019
POST LOSS MARSH & McLENNAN AGENCY LLC
FRAUD PREVENTION : POST-INJURY COMMUNICATION • Employee - Listen - Find Common Ground - Be Available - Show Compassion - Transitional Duty Accommodations MARSH & McLENNAN AGENCY LLC 14
External Communication • Provider – Transitional Duty Accommodations – Appointment Schedule – Work Status • Adjuster – Compensability – Work Status • Agent – Issues MARSH & McLENNAN AGENCY LLC
RETURN-TO-WORK MARSH & McLENNAN AGENCY LLC
RETURN-TO-WORK • Transitional Duty – Reduces Cost, Direct And Indirect - Indemnity Costs Decrease - Medical Costs Decrease – Speeds Healing – Reduces Litigation Risk – Improves Employee Morale – Promotes Good Relationships And Trust 17 MARSH & McLENNAN AGENCY LLC December 13, 2019
STAY-AT-WORK • 80% of employees off more than 6 weeks will need assistance returning into the workforce • 50% of employees off more than 6 months will never return to work • 80% of employees off more than 12 months will never return to work * According to the National Institute of Disability Management and Research 1995 report 18 MARSH & McLENNAN AGENCY LLC December 13, 2019
RETURN-TO-WORK Transitional Duty Must Be Meaningful But Does Not Need To Be: • Related To Regular Job • Fun • In The Assigned Location • Regular Shift MARSH & McLENNAN AGENCY LLC 19
RETURN-TO-WORK Stay-At-Work Job Offer • Should Be In Writing • Within Physical Restrictions • At Or Near Pre-Injury Wage • Employee Obligated To Respond Within “Reasonable” Time • Unreasonable Refusal = Forfeiture Of TTD Benefits MARSH & McLENNAN AGENCY LLC 20
RETURN-TO-WORK Financial Impact: Employee On Restrictions Average Weekly Wage (AWW) = $600/wk • With Job Offer Indemnity $0 Medical $10,000 70% Exp Mod Reduction • Without Job Offer TTD $400/wk Medical $10,000 TPD working 20 hours/week - $200 MARSH & McLENNAN AGENCY LLC 21
COST OF RISK MARSH & McLENNAN AGENCY LLC
Your Risk • Auto • House • Medical • Dental • Hobbies • Others? Insurance Coverage? What happens when you make too many insurance claims? MARSH & McLENNAN AGENCY LLC
Company Risk • Business Operation • Business Auto • Building • Medical • Dental • Workers’ Compensation • Others? **Let’s Focus on Work Comp Risk Costs** MARSH & McLENNAN AGENCY LLC
Premium Calculations – Fixed Costs • Base Rate - Rate/hundred of payroll (ex: $1.95 per $100 of payroll) • Exposure - Hundreds of dollars of payroll MARSH & McLENNAN AGENCY LLC
Premium Calculations – Controllable Costs • Experience Rating (W.C. Modifier) – Based on your experience compared to the industry average – Average mod is 1.0 – Uses oldest 3 of the last 4 years • Medical Only claims are reduced 70% • Greater weight placed on frequency than severity MARSH & McLENNAN AGENCY LLC
Effect Of Experience Actual Better Worse Premium $500,000 $500,000 $500,000 Mod Factor 1.0 0.85 2.00 Modified Premium $500,000 $425,000 $1,000,000 Savings / Cost (from 1.0) ($0.00) $75,000 ($500,000) MARSH & McLENNAN AGENCY LLC
Hidden Cost of Loss 28 MARSH & McLENNAN AGENCY LLC
Hidden Costs • The National Safety Council estimates that for Cost every $1 of Direct Accident Accident Cost Multiplier Costs there are an $0 - $2,999 4.5 additional $1.10- $4.50 of Indirect Costs. $3,000 - $4,999 1.6 • Other studies indicate the $5,000 - $9,999 1.2 hidden costs can be up to 10 times the direct cost. > $10,000 1.1 MARSH & McLENNAN AGENCY LLC
Hidden Costs • • Hiring/training Time lost from work replacement workers by injured worker • • Deductible amounts Lost time by fellow employees • Loss of morale • Lost time by • Legal issues supervision • First aid costs • Damage to tools • Reduced output of and equipment replacement workers • Spoiled work • Overtime • Failure to Fill Orders • Loss of efficiency MARSH & McLENNAN AGENCY LLC
How Can We MAKE A DIFFERENCE MARSH & McLENNAN AGENCY LLC
What Can You Do TODAY? • You Have Limited Time – Focus where you will get your biggest return. - What do I do every day that is the most hazardous? - How can it be made safer? – Focus on the Main Injury Trends MARSH & McLENNAN AGENCY LLC
What Can You Do TODAY? • Communicate – Report Unsafe Conditions or Hazards – Share a Safety Message – Discuss Ideas for Improvement • Participate – Actively Attend Training – Actively Remove Hazards – Prioritize the Safe Way First – Lead by Example – Follow Procedures – Manage Housekeeping MARSH & McLENNAN AGENCY LLC
What Can You Do TODAY? • Build & Foster A Positive Safety Culture – Participation – Priority – Management Support – Always Strive for Improvement – Watch Out for Others - Actively Care MARSH & McLENNAN AGENCY LLC
Legal/regional regulatory statement to be added here if required.
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