Accidents do happen anytime and anywhere. Whether it be in the safe confines of our home, on the road, a hospital, or even in the workplace. It’s like seeing the popular adage Murphy’s Law come to life, “if anything will go wrong, it will.”
If that will be the case, how can a business owner prepare for this eventuality and protect both his employees and his business itself? There are many types of insurance policies that can address these needs but the simplest is the Workers’ Compensation Insurance program. What is it all about?
Workers’ compensation is a state-based insurance system. This program aims to give employees who could not go back to their original job due to a work-related accident or an occupational disease.
This is administered by the U.S. Department of Labor, through the different Office of Workers Compensation Programs (OWCP). Each state may have its policies and procedures in administering this program. However, if anything, the main objective remains — to provide the affected employee with wage replacement benefits, medical treatment, and vocational rehabilitation.
On the other hand, this program also protects the employer from future litigation and medical expenses as well. Premiums are paid for by the employers and are given to employees as part of their benefits.
What is Covered under the Workers’ Compensation Program?
Under the Workers’ Compensation program, as long as the employee is doing his job, his injuries are covered. This is regardless of whether he is offsite or onsite. An example is a mechanic who suffered a burn while doing an “on-call” or off-site job is considered as covered under this program.
This program also includes injuries sustained through workplace violence, terrorist attacks, and natural disasters. Aside from this, occupational diseases developed overtime from his employment, like carpal tunnel or any subsequent effects from toxic chemical exposure are also included.
Excluded in this provision are the following scenarios:
- Stress or emotional injuries without physical workplace trauma
- Self-inflicted injuries
- Injuries incurred from fighting with another employee or horseplay
- Any injuries sustained while traveling to or from work
- Injuries incurred while under the influence of an illegal substance while violating company policies or committing a crime
A business owner’s consideration is protecting both his employees and the business. To do this, he should make sure of the following:
- The company can cover his business with a workers’ compensation policy.
- All employees are made aware of their rights and responsibilities
- Information about workers’ compensation has been disseminated through posters in strategic locations around the workplace
Having established all these premises, both the business owner and his employees should know what to do to help them navigate through the program.
A 5-Step Guide to Workers’ Compensation Claim Process
Documentation is always a necessity in filing any claim. With an emergency on hand, however, panic may overrule common sense and this important step may altogether be forgotten. Both the employer and the worker should follow this requirement on time, otherwise, the claim may fail approval. The worst thing that can happen is the employer getting sued for the worker’s missed benefits. To protect both, below is a guide to consider.
Step 1: Report the injury.
Ironic it may be, but this benefit is only applicable if there is an involved incident or accident at work. This is the reason why both parties need to be vigilant in ensuring that it should not be abused and misused.
What an injured employee should do once an incident occurs at work is to immediately go to a healthcare professional for assessment and treatment. Insurers often have a network of healthcare providers for their clients to receive their benefits. Business owners should be vigilant in keeping a record of this and provide a copy of this to their employees.
For immediate diagnosis and treatment in emergencies, companions of the injured employee should just take him to the nearest emergency room instead of looking for the accredited healthcare provider. Some states allow treatment with the patient’s choice of a healthcare provider, while others are strict with just using the services from the insurer’s network.
The rule of thumb is to report the incident immediately to their employer or HR in-charge to facilitate documentation.
Step 2: File the Incident Report.
In emergency situations, top of mind should be the injured person’s welfare first and foremost. Then documentation for filing the claim should start already. The injured employee’s supervisor or manager gathers all these documents and submits them to their employer or Human Resources within the prescribed period. This includes:
Company details: business name, account number, location, and policy number
Employee details: full name, date of birth, address, phone number, Social Security number, age, gender, beneficiary, etc.
4W1H of the incident:
- (When) date and time the incident occurred,
- (What) type of injury suffered, exact body part injured
- (How) situation
- (Why) official diagnosis and medical report (preferably an accredited physician or medical practitioner)
- (Who) witness and victim’s report.
It is also better if there is another supporting proof or evidence like pictures of the incident.
As a best practice, companies would do well with some ready form or checklist which supervisors or managers can use when filing these reports. If physically possible, the employee should also sign this report before submission.
Step 3: Filing of the Official Insurance Claim
Once the written reports and supporting documents are gathered, the company’s HR Department files an official claim on behalf of the injured employee. It will be passed to the claims administrator and the corresponding Workers’ Compensation Agency Office (WCAO) of the state for processing the claim.
The timeframe to file the report differs per state. The norm is usually one and three years from the date of injury or death. An example of this is the state of Colorado. Written reports must be submitted within four days after the incident or lose one-day compensation for each day of delay. Earlier the report is filed, the better. Below is a chart to help employers check the deadlines of filing the workers’ compensation claim per state.
States Deadlines in Filing Workers’ Compensation Claims
Submitting a Written Report to the Employer (or Human Resources)*
Prescribed deadlines start from the date of the accident or injury. Failure to file the report could result in the denial of workers’ compensation claims. It is possible that some states already made amendments with the list, particularly on report submission extension. It was consolidated in January 2018.
Filing a Workers’ Compensation Claim with the Insurer**
The Workers’ Compensation program “no-fault clause” means the injured employee may file a claim regardless of who is at fault. However, depending on the state administering it, two statutes of limitations is used to validate the claim:
(1) according to the timeline of the injury or illness incurred, and
(2) based on the last date on which the employee received compensation or benefits from a previous injury.
The above list refers to the standard statutes of limitations based on the date of the injury or illness. There are some states which provide longer “discovery” periods for occupational illnesses than others. Employees who are no longer connected with the company at the time of the “discovery”, may use this as an appeal.
Step 4: Conducting an Investigation.
HR investigation and compensation investigation are not in the same league. Human Resources should make sure the efficient processing of claims to prevent any possible lawsuits against the business. However, filing the claim happens only upon the submission of the written incident report to the Human Resource. Only then can the latter submit it to the claim administrator for processing.
The Human Resource handles the Interviewing of key witnesses to the incident. This is within the Family and Medical Leave Act (FMLA) and the Americans with Disabilities Act (ADA) regulations. The insurer and the state workers’ compensation claims board on the other hand handles the compensation investigation.
Unfortunately, it may seem, however, but some people would do claimant fraud schemes to get free money and vacation time. Some of these bogus claims include:
- A fake injury
- An exaggerated injury
- Misrepresented injury or an injury incurred outside work
- Using an old injury that did not quite heal
These are other red flags to watch out for:
- There are no witnesses.
- Refusal to receive treatment or employee providing a conflicting diagnosis.
- Delay in reporting the incident with no valid explanation.
- Inconsistency or suspicious report.
- History in making workers’ compensation claims.
- History in changing jobs or medical providers within a limited period.
- Timeliness of the incident before or after a weekend, strike, or holiday.
- Timeliness of the incident before termination or expiring contract.
- Evidence the employee is moonlighting for a second job at the time of the incident.
- The activity done at the time of the incident is almost impossible with their injury (i.e.driving a delivery van with a fractured knee)
- The “injured employee” could not be reached or located.
- Employing the services of a lawyer upon getting “injured” and/or is pushing for a speedy settlement.
Another red flag is when the employee malingers or delays his return to work because of an apparent “not yet fully healed” condition. Only to be found out later on that he is just stalling so he could do other work while continuously receiving his workers’ compensation
Even with these red flags, employees can not be directly accused of fraud until a thorough investigation is made.
To ensure the veracity of the claim, the Human Resources or employer may use the following points as a guide in the investigation:
- Getting the details from the employee himself.
The employee may be asked in detail to describe the accident. The HR as the investigator may also use specific questions to help the employee provide you with details that you could almost visualize the incident.
- Describing the location
Ask the employee about the location and condition of the area. Ask whether the floor is wet or if the carpet is not properly plastered on the floor, or there are visible wires or clutters that could cause potential injuries, etc. Getting a clear picture of the location could help identify factors that led to the injury.
- Ask for witnesses at the time of the accident
It is ill-fated to be in an accident, most especially if there is no one to assist the injured man. This could spell a life and death situation at worst. Aside from providing immediate assistance to the injured person, a witness can also provide important information about the incident that could help validate the injured employee’s narrative.
- Adherence to company protocols
There are big reasons why protocols are being implemented across the company. One of these is to prevent accidents and errors from happening. It normally involves using the right tools and equipment and following certain procedures. Injuries may happen if such are ignored and the erring employees should understand that it is already within their responsibility.
- Job description
It is equally important that the employee is acting based on their job description. It must be established that the injury happened while the employee is performing his task within his job description. Otherwise, the claim may get quite complicated once it is found that the injury is incurred while doing a job outside their official duties.
- Nature and Scope of the Injury
This information may be sourced from the medical provider who attended to the employee. Most states have accredited healthcare providers, while some states allow the use of private physicians. Both may provide diagnosis, prognosis, treatment plans, and work restrictions to support the investigation. It can be used as a cross-reference and should match with the employee and witness accounts.
- Job matching
The investigation is not necessarily meant to discredit the injured employee and prevent him from making a claim. It is a check and balance. This is also used as a mechanism to improve procedures at work.
The Human Resources and the employee’s immediate superior use the treatment plans and work restrictions suggested by the employee’s medical provider to modify his task and help him return to work. (i.e. a receptionist who was injured in a wet floor may be relieved of her front desk duties while she is still in a cast, and given back-office tasks in the meantime)
- Prior workers’ compensation claim
Depending on the job description of the injured employee, some may be more hazardous than others. However, it can get quite worrisome if the employee involved has a history of several workers’ compensation claims on his record, has taken it to court, and failed. Numerous failed attempts is a tell-tale sign of trying to fraud the system.
- The end in mind
These expectations should be the focus of the investigation: (1) confirm the authenticity of the claim to compensate the person injured; and (2) identify immediately to longer-term solutions that could prevent similar incidents from repeating. Thereby providing a better and safer workplace.
Step 5: Tracking the Employee’s Progress
The ultimate goal of the rehabilitation and medication is to prepare the injured employee to get back into shape and be reintegrated to work again. The Human Resource maintains contact with the employee and plans with him a return to work program, if applicable. This could be in the form of continuous rehabilitation and retraining in case of job displacement.
If the employee can still go back to work, the doctor-directed medical restrictions must be taken into consideration. He may be given back his old function if he is physically and mentally equipped already to do it.
Otherwise, the employee should be informed about the restrictions suggested by his doctor, as well as the light and modified work that will be offered to him so he could return to work again. It should be communicated clearly with him so the employer can also get his commitment to returning to the workforce.
This works both ways. It is good for the employee’s self-esteem to be back to work even in a limited capacity. For the employer, it can help reduce overhead costs from hiring temporary employees, paying overtime, and even workers’ compensation rates.
How can a business benefit from Workers’ Compensation insurance? It can benefit through its 2-part program. The first part is for the employees’ benefits and the second part is for the employee and business protection. The first part has five basic benefits:
- Medical care benefits which are aimed to help employees recover from work-related injury or illness.
- Temporary disability benefits which compensate lost wages for employees who are temporarily impaired and are unable to work during recovery
- Permanent disability benefits are compensation for employees who are permanently impaired or incapacitated to earn a living due to their sustained injuries
- Supplemental or job displacement benefits (SJDB) is a non-transferable voucher for educational retraining or skill enhancement that is given to the injured employee in case he does not recover completely and could not return to work for his employer anymore.
- Death benefits are compensation given to the employee’s dependents like the spouse, children, or immediate relative in case of death from work-related injury or illness.
Given the fourth and fifth benefits, it is evident that not everyone will be able to recover and return to work, whether in full or partial capacity. What is important is the employer can show his employees that he cares enough about their welfare by giving them this benefit. It is also true that the claim may still be denied or accepted depending on the merit of the case, but regardless of the outcome, getting it for the business is already a step ahead.
The second part of this program serves as a protection for the business and the owner. Without this coverage, an injured employee may sue his employer in court. In cases like this, some states may opt to use their special funds to compensate these injured employees and reimburse it from their employers. These employers could face further criminal charges and pay steeper penalties from their non-compliance of state laws.
As if in irony, this may be more than what they should have spent, if they prioritized getting the coverage first. As they say, “prevention is better than cure.” For more information, check our resources for details.
Contact us and we’ll make help you with more information or the best insurance coverage for you.