Source: http://cutcompcosts.com/2013/04
Timestamp: 2019-04-22 17:06:21+00:00

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The IRS has initiated an amnesty program for Worker Classifications. This is not the same as Workers Compensation Classification codes. The amnesty program was designed for whether workers are independent contractors or employees. This is a great article on the IRS amnesty program. These types of employees or contractors are also sometimes referred to 1099 employees or subcontractors.
The IRS has never actually been involved in a classification code dispute. The IRS, of course, is more concerned with the unpaid withholding taxes that are filed quarterly on Form 941. Your state taxing authority and the IRS share tax data.
We sometimes receive questions on classification codes as some employers seem to think that if they question their policies then they could be violating some IRS regulation. That is not true.
One of the newest developments is the taxing authorities in each state now share data with the state insurance departments. We have not seen very many cases where a Workers Compensation audit finding having resulted in a tax bill.
This may change in the near future as states such as New Jersey and Connecticut have begun sharing data between all state departments after passing new laws on data sharing. North Carolina has just created the GBICC which is basically a data sharing department.
The Texas and Oklahoma systems get an Opt Out benefit surprise. Oklahoma and Texas will be the two states with opt out provision in their Workers Comp Laws. One of the areas of concern with the upcoming passage of the opt out provisions is that all benefits will be subject to Obamacare in 2014.
Section 2715 of Obamacare is known as the SPD section. All benefits that are provided to employees by their employer must be in the SPD (Summary Plan Description). As Workers Comp in an opt out program is no longer actually a Workers Comp program, the benefits will be a health and disability policy administered by the employer.
One Texas and two Oklahoma insureds are considering the opt out programs once the bill is signed by Oklahoma’s Governor. All three companies did express this concern.
There are other areas of the Health Act that opt outs may be subject to in the future. The companies may want to consider testing the water before “jumping into the river.” In other words, companies in Oklahoma and Texas that decide to use the opt out method may actually be Federalizing their Workers Comp benefits.
The crystal ball on the future of opt outs may still show these types of programs as the future for Workers Compensation. Jumping right in may prove the water to be very cold.
Oklahoma’s new opt out program legislation is working its way through the very long path to becoming law sometime in 2013. The likely passage of the bill has created quite a buzz on the Workers Comp airwaves.
One of the more interesting areas of the new Oklahoma opt out program is that the Workers Comp benefits must be provided under a SPD (Summary Plan Description). The SPD is the description of all benefits provided to each employee such as health benefits.
The SPD’s are usually provided at the start of employment in most cases. As the SPD’s provide information on health benefits and other federally legislated benefits, the Obamacare law may cause more problems and confusion with Workers Comp benefits under the opt out plans.
The Oklahoma Opt Out Bill will likely be signed by the Governor in the coming weeks. The SPD’s contents are often dictated by Federal Laws. One of the Risk Managers for an employer that is heavily pushing for the opt out program had mentioned this point previously.
The Obamacare bill under Section 2715 – specifically address SPD’s calling them summaries. The most important question to ask – If an Oklahoma employer opts out of Workers Comp, then would the benefits then be considered a health and disability policy? The answer is hopefully not, but likely so.
Section 2715 of the bill has been included below.
describes the benefits and coverage under the applicable plan or coverage.
In developing such standards, the Secretary shall consult with the National Association of Insurance Commissioners (referred to in this section as the ‘NAIC’), a working group composed of representatives of health insurance-related consumer advocacy organizations, health insurance issuers, health care professionals, patient advocates including those representing individuals with limited English proficiency, and other qualified individuals.
‘‘(1) APPEARANCE.—The standards shall ensure that the summary of benefits and coverage is presented in a uniform format that does not exceed 4 pages in length and does not include print smaller than 12-point font.
‘‘(2) LANGUAGE.—The standards shall ensure that the summary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the average plan enrollee.
‘‘(I) a contact number for the consumer to call with additional questions and an Internet web address where a copy of the actual individual coverage policy or group certificate of coverage can be reviewed and obtained.
‘‘(c) PERIODIC REVIEW AND UPDATING.—The Secretary shall periodically review and update, as appropriate, the standards developed under this section.
‘‘(C) a policyholder or certificate holder at the time of issuance of the policy or delivery of the certificate.
(3) is deemed to be in compliance with this section if the summary of benefits and coverage described in subsection (a) is provided in paper or electronic form.
Retirement Income Security Act of 1974).
‘‘(4) NOTICE OF MODIFICATIONS.—If a group health plan or health insurance issuer makes any material modification in any of the terms of the plan or coverage involved (as defined for purposes of section 102 of the Employee Retirement Income Security Act of 1974) that is not reflected in the most recently provided summary of benefits and coverage, the plan or issuer shall provide notice of such modification to enrollees not later than 60 days prior to the date on which such modification will become effective.
shall constitute a separate offense for purposes of this subsection.
‘‘(1) IN GENERAL.—The Secretary shall, by regulation, provide for the development of standards for the definitions of terms used in health insurance coverage, including the insurance-related terms described in paragraph (2) and the medical terms described in paragraph (3).
The following Nebraska Supreme Court case could be considered more social legislation such as the infamous Florida decision that can actually wreck a Workers Comp system. For readability, I decided to include all of the decision.
You can also find the case in PDF form here.This will have a ripple effect across many Workers Comp cases in Nebraska. The insurance carriers have likely not reserved for this type of development. The decision will be compacted for readability in the next few days. The main point is that a former employer is responsible for wage benefits even though the employee left his former employee for a higher paying job. Please see the below bolded info.
Filed April 19, 2013. No. S-12-563.
1. Workers’ Compensation. Whether a plaintiff in a Nebraska workers’ compensation case is totally disabled is a question of fact.
2. Workers’ Compensation: Evidence: Appeal and Error. In testing the sufficiency of the evidence to support the findings of fact in a workers’ compensation case, every controverted fact must be resolved in favor of the successful party and the successful party will have the benefit of every inference that is reasonably deducible from the evidence.
3. Workers’ Compensation: Words and Phrases. Temporary disability is the period during which the employee is submitting to treatment, is convalescing, is suffering from the injury, and is unable to work because of the accident.
4. Workers’ Compensation. Total disability exists when an injured employee is unable to earn wages in either the same or a similar kind of work he or she was trained or accustomed to perform or in any other kind of work which a person of the employee’s mentality and attainments could perform.
5. ____. The level of a worker’s disability depends on the extent of diminished employability or impairment of earning capacity, and does not directly correlate to current wages.
6. ____. An employee’s return to work at wages equal to those received before the injury may be considered, but it does not preclude a finding that the employee is either partially or totally disabled.
7. ____. Earning capacity determinations should not be distorted by factors such as business booms, sympathy of a particular employer or friends, temporary good luck, or the superhuman efforts of the claimant to rise above his or her crippling handicaps.
8. ____. If payment of wages upon an employee’s return to work was intended to be in lieu of indemnity benefits for which the employer accepted responsibility, then credit for those wages is allowed.
9. Workers’ Compensation: Rules of Evidence. As a general rule, the Nebraska Workers’ Compensation Court is not bound by the usual common-law or statutory rules of evidence.
10. Workers’ Compensation: Evidence: Due Process: Appeal and Error. Subject to the limits of constitutional due process, the admission of evidence is within the discretion of the Nebraska Workers’ Compensation Court, whose determination in this regard will not be reversed upon appeal absent an abuse of discretion.
Appeal from the Workers’ Compensation Court: Thomas E. Stine, Judge. Affirmed in part, and in part reversed and remanded with directions.
Abigail A. Wenninghoff, of Larson, Kuper & Wenninghoff, P.C., L.L.O., for appellant.
Ryan C. Holsten, of Atwood, Holsten, Brown & Deaver Law Firm, P.C., L.L.O., for appellee.
Heavican, C.J., Wright, Connnnolly, Stephan, McCormack, and Cassel, JJ.
The employer appeals from an award of the Nebraska Workers’ Compensation Court, and the employee cross-appeals. We hold that an employee who leaves a job with an employer responsible for an injury in order to pursue more desirable employment does not waive temporary total disability benefits simply because the employer responsible for the injury would have accommodated light-duty restrictions during postsurgical recovery periods necessitated by the injury.
Pat Zwiener filed a petition against Becton Dickinson-East (Becton) in the compensation court, seeking temporary total disability benefits, compensation for certain unpaid medical bills, mileage expenses, and attorney fees under Neb. Rev. Stat. § 48-125 (Reissue 2010). Zwiener had not yet reached maximum medical improvement and did not seek a permanent impairment rating.
Zwiener suffered a shoulder injury arising out of and in the course of his employment with Becton on August 20, 2009. The injury was originally diagnosed as a strain. Zwiener was treated conservatively with corticosteroid injections, anti-inflammatories, and physical therapy. Zwiener was advised that he could continue working without restrictions.
On March 12, 2010, Zwiener resigned his employment with Becton and began working for Sapp Brothers, Inc., as a driver. The choice of new employment was unrelated to the injury. Zwiener explained that he liked being outdoors and that the pay was better. According to Becton, Zwiener knew surgery for the injury might be a possibility. But Zwiener’s diagnosis and prognosis were, at the time he left Becton, uncertain.
Zwiener’s shoulder injury continued to bother him, and he obtained a second opinion. The injury was eventually determined to consist of a tear to the right rotator cuff and nearby tendons. After further diagnostic tests, surgery was recommended. The recovery period from the surgery would require that Zwiener not use his right arm. Sapp Brothers was unable to accommodate that restriction.
Concerned that he would be without a wage during the recovery period, Zwiener tried to postpone the surgery until August 2010. Despite a medical opinion that waiting a few months would not adversely affect the outcome of the surgery, Becton insisted that Zwiener have the surgery right away if he wanted to ensure it was compensable. The surgery took place on May 10, 2010.
On May 12, 2010, Zwiener was released to work with the restriction of not using his right arm. Because Sapp Brothers could not accommodate this restriction, Zwiener did not work during the period of the restriction. Zwiener was not released to return to work at Sapp Brothers until July 8.
Becton agreed to pay for the surgery and related medical expenses, but it denied payment of any temporary total disability benefits during the recovery period for the surgery. Becton reasoned that if Zwiener had stayed employed there, Becton would have accommodated Zwiener’s recovery restrictions and he would have been able to continue to receive a wage during that period. Becton has an aggressive return-to-work policy designed to put its injured employees back to work rather than have them remain off work collecting workers’ compensation benefits.
Unfortunately, Zwiener’s symptoms were not completely alleviated by the first surgery. Eventually, a second surgery was recommended and scheduled for January 9, 2012. Zwiener testified that Becton had denied compensation for the recommended magnetic resonance imaging to determine whether the first surgery had been successful and whether another surgery was necessary. Zwiener understood that Becton would not approve the second surgery, so he submitted the second surgery for payment through his personal health care insurer instead.
Anticipating Becton’s denial of temporary total disability benefits, on December 22, 2011, Zwiener’s counsel wrote to Becton’s counsel stating that Zwiener would be able to work for Becton, with restrictions, during the recovery period of his surgery. Zwiener’s counsel asked that Becton inform Zwiener whether it would allow this and how to proceed. Becton did not respond. At the workers’ compensation hearing, Becton objected to the letter as hearsay. The objection was overruled.
The second surgery was performed on January 9, 2012. Zwiener’s physician recommended no work until January 30. Zwiener was released to work with restrictions on January 31. But Sapp Brothers was again unable to accommodate the restrictions, which included Zwiener’s not being able to use his right arm.
Zwiener’s counsel again wrote to Becton’s counsel, asking that Becton state whether it would allow Zwiener to work light duty at Becton during the postsurgery recovery period. Becton did not respond. At the hearing, Becton’s hearsay objection to this letter was overruled.
Becton denied temporary total disability benefits for the recovery period of the second surgery. Zwiener was not able to return to work at Sapp Brothers until April 25, 2012.
At the hearing before the compensation court, the parties agreed that Becton had voluntarily paid Zwiener $8,275.37, pursuant to a permanent partial impairment rating after the first surgery. The parties agreed that this amount should be credited against any award and that, accordingly, no waiting-time penalties should be incurred.
The compensation court awarded Zwiener temporary total disability benefits for the periods he was unable to work due to his postsurgery restrictions. The court found no merit to Becton’s position that if an employee is no longer working at Becton and cannot take advantage of Becton’s return-to-work policy, then that employee is not entitled to temporary total disability benefits. The court explained that an employee is not “eternally bound” to remain employed with the employer responsible for the injury in order to receive the workers’ compensation benefits to which the employee is entitled by statute.
The court found that Becton had failed to pay outstanding medical expenses of a community hospital in the amount of $2,173 and of an orthopaedic hospital in the amount of $1,222.18. In addition, Becton was ordered to reimburse Zwiener’s insurer for $5,565.86 in payments it made for medical expenses related to the second surgery. The court determined that Becton owed Zwiener $26.34 in mileage.
The court awarded attorney fees to Zwiener in the amount of $5,155.
This was the total amount of attorney fees Zwiener’s attorney demonstrated were incurred in bringing Zwiener’s workers’ compensation claim against Becton. The court noted that there was no reasonable controversy as to the compensability of the temporary total disability benefits and, also, that certain medical bills and mileage expenses were paid late. The court did not calculate the attorney fee award specifically in relation to the amount of untimely paid medical bills, because it also considered attorney fees due for the denial of temporary total disability benefits.
The court awarded 50 percent waiting-time penalties on all amounts of temporary total disability due and owing. No credit was given for the $8,275.37 Becton already paid. Becton appeals and Zwiener cross-appeals from the award.
Becton assigns that the compensation court erred in (1) finding that Zwiener was entitled to temporary total disability benefits, (2) finding that Zwiener is entitled to waiting-time penalty benefits and for failing to give Becton credit for benefits paid to date, (3) awarding attorney fees of $5,155, and (4) allowing the hearsay evidence contained in the letters written by Zwiener’s attorney, an exhibit pertaining to late medical bills, and the exhibit outlining attorney fees incurred in bringing Zwiener’s claim.
On cross-appeal, Zwiener asserts that the court erred in failing to find that medical bills paid to OrthoWest in the total amount of $9,308 were also untimely paid.
1 Manchester v. Drivers Mgmt., 278 Neb. 776, 775 N.W.2d 179 (2009).
3 Frauendorfer v. Lindsay Mfg. Co., 263 Neb. 237, 639 N.W.2d 125 (2002).
 But, if payment of wages upon a return to work was intended to be in lieu of indemnity benefits for which the employer accepted responsibility, then credit for those wages is allowed.8 Becton did not pay wages to Zwiener during the periods he was convalescing from the two surgeries necessitated by his injury because, had Zwiener not left his employment there, Becton would have paid wages for light-duty work in lieu of temporary total disability benefits. Becton believes an employee waives temporary total disability benefits when the employee moves on from a job that could have accommodated medical restrictions. We disagree.
5 See Heiliger v. Walters & Heiliger Electric, Inc., 236 Neb. 459, 461 N.W.2d 565 (1990).
7 Id. at 471, 461 N.W.2d at 574 (quoting 2 A. Larson, The Law of Workmen’s Compensation § 57.51(a) (1989)).
8 See, Anderson v. Cowger, 158 Neb. 772, 65 N.W.2d 51 (1954); Godsey v. Casey’s General Stores, 15 Neb. App. 854, 738 N.W.2d 863 (2007). See, also, 4 Arthur Larson & Lex K. Larson, Larson’s Workers’ Compensation Law § 82.01 (2011).
9 Guico v. Excel Corp., 260 Neb. 712, 619 N.W.2d 470 (2000).
10 Manchester v. Drivers Mgmt., supra note 1. held that employees who were fired for cause did not forfeit their temporary total disability benefits simply because their employers would have provided light-duty work.
In Guico, the employee lost his light-duty work because he was fired for safety violations associated with the injury. The employee in Manchester similarly was fired and lost her light-duty work because of negligence in the accident leading to her injury. Becton apparently relies on our observation in Guico that some jurisdictions hold that employees lose their temporary disability benefits if their employer provided them with light-duty work and if they were fired and lost that accommodation because of misconduct unrelated to the injury.11 But we did not opine on whether we would adopt such a rule if such facts were presented, and such facts are not presented here.
11 See Guico v. Excel Corp., supra note 9.
12 Id. at 723, 619 N.W.2d at 479 (quoting Aldrich v. ASARCO, Inc., 221 Neb. 126, 375 N.W.2d 150 (1985)).
13 Neb. Rev. Stat. §§ 48-101 to 48-1,117 (Reissue 2010).
14 See, Bacon v. DBI/SALA, 284 Neb. 579, 822 N.W.2d 14 (2012); Visoso v. Cargill Meat Solutions, 18 Neb. App. 202, 778 N.W.2d 504 (2009).
15 See Trosper v. Bag ’N Save, 273 Neb. 855, 734 N.W.2d 704 (2007).
employers responsible for the injury until full recovery, thereby limiting at-will employees’ mobility and freedom to choose other work opportunities. Nothing in the language of the act or public policy supports the waiver rule proposed by Becton.
The compensation court was not clearly wrong in determining that Zwiener had a total loss of earning capacity during the time he was convalescing from the surgeries necessitated by his work-related injury. We affirm the compensation court’s award of temporary total disability benefits in the amount of $11,308.05.
But the court failed to give Becton credit against this award for $8,275.37 already paid to Zwiener. The parties had stipulated this amount should be credited against the award, and they agree on appeal that the compensation court erred in failing to give such credit. The parties agree that because the compensation court failed to give Becton credit for $8,275.37 paid, it erred in awarding waiting-time penalties. Zwiener never sought waiting-time penalties. We reverse with directions for the compensation court to give Becton credit for the $8,275.37 paid and to vacate the waiting-time penalties.
The parties further agree that because of the failure to give Becton credit for the $8,275.37 payment, the compensation court improperly calculated the attorney fee award. At oral argument, Zwiener’s counsel explained that due to the $8,275.37 payment, he had not sought attorney fees as a penalty for Becton’s failure to pay temporary total disability benefits. Zwiener’s counsel conceded at oral argument that the only basis for an attorney fee award here is the late payment of medical bills and that the case must be remanded for a determination as to what portion of the attorney fees is properly attributable to the pursuit of the late medical bills. Because Zwiener has waived any claim to an attorney fee award unrelated to the late medical bills, we reverse, and remand the cause for a redetermination of the attorney fee award based only on the untimely payment of medical bills.
The parties agree that the compensation court should redetermine attorney fees based on the standards set forth in Harmon v. Irby Constr. Co.16 In Harmon, an employer had conceded all points of compensability of the employee’s injury except for a $30 per diem payment that the employee wished to add to his weekly wage calculation. The employee also alleged that the employer had failed to pay one $165 medical bill within 30 days after notice of the obligation for payment. We rejected the employee’s argument concerning the $30 per diem payment, but found the medical bill issue meritorious.
The only dispute between Zwiener and Becton concerning attorney fees is the amount of unpaid medical bills that the court should consider in making its redetermination. Zwiener argues on cross-appeal that the compensation court erred in failing to find an additional $9,308 in late medical bills to Orthowest. Becton did not file a reply brief to Zwiener’s cross-appeal, but apparently believes that the attorney fees should be calculated only on the compensation court’s finding of $1,890.13 in untimely medical bills and expenses.
16 Harmon v. Irby Constr. Co., 258 Neb. 420, 604 N.W.2d 813 (1999).
18 Id. at 430, 604 N.W.2d at 821.
Although Zwiener presented evidence that $9,308 in OrthoWest medical bills were paid 79 days after treatment, the compensation court did not make any finding as to whether the OrthoWest bills were untimely paid after notice, thus falling under the mandatory attorney fee provision found in § 48-125. We direct the court to make such a determination on remand, before recalculating the attorney fee award.
We find no merit to Becton’s remaining assignment of error relating to evidentiary objections. Becton objected to exhibit 1 as hearsay, exhibit 3 on foundation and hearsay, and exhibit 5 on relevance, foundation, and hearsay grounds.
Exhibit 1 was a letter from Zwiener’s attorney stating that Zwiener was willing to work light duty while convalescing. Becton’s objection to that exhibit is moot. The letter is irrelevant to our holding that Zwiener did not waive temporary total disability by leaving his employment with Becton, and it was not the basis for the compensation court’s award of temporary total disability benefits.
Exhibit 3 set forth the fees Zwiener’s attorney incurred in bringing the suit. Becton does not explain how the attorney’s own affidavit as to his fees lacked foundation. And although exhibit 3 may include “all aspects of preparing the case,”19 it is not thereby inadmissible. The compensation court on remand will consider the exhibit in light of Harmon,20 as set forth above.
19 Brief for appellant at 22.
20 Harmon v. Irby Constr. Co., supra note 16.
21 Brief for appellant at 22.
22 See, e.g., State v. Orduna, 250 Neb. 602, 550 N.W.2d 356 (1996).
[9,10] As a general rule, the compensation court is not bound by the usual common-law or statutory rules of evidence.24 Subject to the limits of constitutional due process, the admission of evidence is within the discretion of the compensation court, whose determination in this regard will not be reversed upon appeal absent an abuse of discretion.25 We find no reversible error in the admission of the exhibits complained of by Becton in this appeal.
We affirm the award of temporary total disability benefits. We reverse the failure to credit disability payments made by Becton, the award of waiting-time penalties, and the amount of the attorney fee award. Pursuant to the agreement of the parties, we remand the cause for a redetermination of the attorney fees that should be awarded in connection with untimely paid medical bills only. On remand, we also direct the court to determine whether the OrthoWest bills fall under § 48-125.
Miller-Lerman, J., participating on briefs.
23 See, Werner v. County of Platte, 284 Neb. 899, 824 N.W.2d 38 (2012); State v. McCave, 282 Neb. 500, 805 N.W.2d 290 (2011); Alliance Nat. Bank v. State Surety Co., 223 Neb. 403, 390 N.W.2d 487 (1986).
24 See Tapia-Reyes v. Excel Corp., 281 Neb. 15, 793 N.W.2d 319 (2011).
25 Veatch v. American Tool, 267 Neb. 711, 676 N.W.2d 730 (2004).
Speaker: James Moore, JL Risk Management Consultants, Inc.
The presentation will cover the Six Keys To Workers Compensation Savings. The Six Keys were developed by James J Moore over the last 30 years. The main methods to reducing WC Mods involve a higher level of communication between the employer, claims adjuster, medical treatment personnel, and the employee.
The presentation will last 50 minutes with 10 minutes for questions. James Moore will usually take questions during his presentation. Lunch will be served before the presentation.
If you attend and need a copy of the slides presented, please email [email protected] and ask for the slides.
Fixes for an Extremely High E-Mod are available if a company is patient. I received this question from a blog reader last week. Our E-Mod has been running over 1.4 since our company has been in existence. It is now in excess of 1.7. We are in our state’s assigned risk pool. The rates seem extremely high. What strategies would you suggest to decrease the Mod very quickly?
One of the quickest ways to reduce your E-Mod is by instituting or improving your safety programs. The claim that never happens will always be the best way to lower your E-Mod. With an E-Mod of 1.7, your company likely had repetitive injuries and not just a few high-dollar injuries.
As you are in a NCCI rated state, your company also likely experienced an E-Mod increase due to the E-Mod calculation changes.
Working with your carrier more closely – especially your claims adjuster. The adjuster that sets the reserves usually knows whether your company is using some of the following techniques. This can make a difference in your reserves.
You must have a medical network 24/7/365 available for treatment. Many industrial-minded clinics operate in your area.
You must have – and it looks like your company does not – a return to work program. Assessing your company’s limited duty jobs and having those on file with the aforementioned medical network will reduce your Mod.
The way the employee is treated by your HR staff is important. The injured employee is still your employee. Treating them as such will help in all aspects of the WC claims.
Get a copy of your loss run and analyze it very heavily. The loss runs are basically a map of how your company came to have a higher Mod. Do all of the figures look correct on your loss run?
Online access to loss runs is priceless as you do not have to wait weeks before receiving one which is then dated by the time your receive the paper loss run.
If your company is large enough, a plant nurse is one of the best ways to handle the smaller claims more efficiently and to cut the costs of larger claims. In case of a very serious accident, the plant nurse can be a literal life-saver. Almost all companies that have plant nurses have been very happy with their claims improvement.
Alternative Workers Comp coverage may also be a solution. PEO’s, captives, self-insured groups are all possibilities The one caveat here is choosing the CORRECT alternative for your situation and the right company. Alternative WC coverage can be full of some unscrupulous companies.
This list of quick-fixes is not actually going to be fully seen until three or four years in the future. Workers Comp is a lagging-time system. A bad claims year or a set of great improvements may not show fully in your E-Mod for quite some time. Vigilance is also a key characteristic to companies that improve an extremely high E-Mod.
The North Carolina Industrial Commission has returned to allowing web searches for employers’ Workers Compensation coverage. The website was removed after some very not-so-intelligent legislation that barred anyone from viewing this info.
The ill-timed legislation was enacted following the discovery by a newspaper reporter that 30,000 + companies were operating without Workers Compensation coverage in North Carolina. One has to wonder how many companies are still operating without coverage in North Carolina.
NC’s Governor Pat McCrory decided to create another governmental group – the GBICC – to assure the flow of info between the Industrial Commission, Department of Insurance, NC Rating Bureau, and other departments that are considered critical in the information flow on WC policyholders. Somehow, this all looks to be very complicated compared to other states WC enforcement such as West Virginia.
I actually never understood why the website was taken down. Some of this information could have been shared and still have complied with the privacy laws.
The website seems to be working just fine. The website may be good for verifying coverage for subcontractors if your company wants to check to make sure the certificate of insurance is valid.
Overall, allowing online searches of Workers Comp data will aid in making sure that employers are not operating without coverage. I hope more companies and individuals will use the website.
We paid a very large deposit premium upfront January 2012. We have not heard from the insurance carrier except to renew our current policy for 2013. Should we be expecting a call or letter from our carrier’s premium auditor? Was the deposit premium for 2012 adequate? Should we be doing something on our end?
If your company has paid all premiums requested by your carrier, then you have not really done anything that would violate your 2012 or 2013 policy. April is a little late for a policy that expired in December 2012. Your final policy premium should never be considered as the deposit premium with your new policy.
Most states do have some type of rules on when policies can be audited by the carrier. If you look in your policy, in usually the last few pages, you will find your carrier’s premium audit rules. Most of the time it will have a passage or two on your responsibilities for your final premium audit.
You may want to check your incoming letters. We have seen a very large carrier in the mid-Atlantic states send out a large amount of marketing materials – sometimes two or three times a month. A letter with a follow up letter was sent out by the carrier from the audit department. The client employer actually thought it was marketing material and threw them out each time.
Their first notice was a 10 day notice to cancel their current policy for not abiding by the premium audit rules for the prior policy. With our assistance, the situation was straightened out in the nick of time and coverage cancellation was avoided.
If you feel your company may be owed a refund, then you may want to reach out to the carrier. As post-audit policy refunds are becoming more rare, that is a decision you may want to weigh heavily. All Workers Comp policies require responses, not initial contact.
We are starting to notice a trend between your company’s initial deposit premium and the final premium audit bill. The deposit premium is just that – a deposit to bind coverage. We hear from many company owners and risk managers that what they expected to pay for the year is quite different – causing a budget shortfall.
Congratulations – your company has grown which in turn is going to increase your premium proportionally. When you signed on with a carrier, you may not have expected such growth, which actually increases all variable expenses.
Take the Mod into account – your E-Mod or X-Mod may have been higher than you expected overall. If your company grew, the Mod is not going to decrease substantially.
Along with the previous bullet point, you may have had a bad claims year up to four years ago. This is going to cause your company to pay more than expected if the company grows quickly.
Your business is reclassified – there may have been changes to your business operations. There is a caveat with this one. There are very specific rules on how your business may be reclassified during the policy period.
Your safety program needs improvement. This would be the most popular problem with sharply increasing premiums. NCCI has added in a new penalty of sort if you have repetitive accidents. All the other rating bureaus have a built-in penalty if you have multiple accidents regardless of the size of the claims.
Your company may start operating in multi-state jurisdictions or operate near a navigable waterway. These two situations can cause a large jump in final premium.
“The good quote” by the agent is just a quote – not what you are going to pay after the premium auditor is finished after policy expiry.
Another caveat (I use that word often), is to never start a dispute unless you know the basis for why you are disputing your final bill. Exclaiming that you just feel that your company paid too much often ends up with your company having an even larger premium bill. I have a file on my desk right now that is proof positive of this situation.
The real study results are sometimes hidden or not even included in the article itself.
Workers Compensation statistics can be used to make an invalid point by massaging the data to make sure the data fits the assertion. Overall, misleading statistics are becoming more popular. Writing an article that does not actually agree with the study takes being misleading to a whole new level.
One of the more recent articles that over-embellishes the study results is between cancer and red meat consumption. In fact, there were many articles that left out the fact that there was an association between red meat and early death. An association is not the same as conclusive evidence or a correlation.
This US study looked at associations between high intakes of red meat and risk of mortality, finding a positive association between the two. However, the study was observational, not controlled, and so cannot be used to determine cause and effect.
The Guardian article was actually a correction of an even more boastful but untrue statement. The original stated that an extra serving of red meat raised mortality rate by a fifth without specifying frequency of consumption.
The study should have made a correlation, not an association. Correlations are much more accurate than an association. In other words, there s really no direct correlation between eating red meat and cancer. Most often, a correlation between two variables of more than 80% is seen as being a strong correlation.
The bottom line is there may be a correlation between red meat and stomach cancer, but this study does not address the matter with validity.
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J&L Risk Mgmt Consultants, Inc.
The Expected Losses originate from the first two bullet points. In other words, what claims are expected for the level of payroll of each classification code? The Actual Loss figure is the Total Incurred for a given year.
As the level of payroll increases, the level of Expected Losses will increase overall. Increased losses are more likely with a higher number of employees or work-hours. If the Actual Losses (Claims) do not increase, then the Mod will decrease in most cases.
There is actually a large amount of “number voodoo” required to calculate the Actual and Expected Losses.
The largest bankrupt city in the nation – Stockton, CA is self insured with CorVel as the Third Party Administrator (TPA). Stockton’s Workers Comp program seems to still be a fully funded self insured program.
One of the Five Keys To Saving Workers Comp $$ was being implemented at the time of the bankruptcy filing. Stockton had initiated a medical treatment provider network (MPN) to cut medical treatment costs. The MPN was very likely part of the CorCare network.
Stockton’s Risk Services department requires that all employees initially treat with one of three medical clinics. This is a very conservative cost saving approach to reducing Workers Comp medical costs. The MPN will also enable Stockton and CorVel to better administer their return to work program.
The one area of concern on Stockton’s Workers Comp program is the benefit integration program. Workers Comp is meant to be a standalone program. That is why 2/3 of an injured employee’s wage is paid to them TAX FREE. Basically, the employee is being paid full wages as there is no tax on the Workers Comp benefits.
Stockton is now using the employee’s leave time to integrate with Workers Comp payments to make sure they are being paid FULL SALARY. Actually, Stockton is paying their injured employees that are out of work approximately 125% of their pre-injury wage. This overpayment will remove any of the built-in motivations to return to work.
Workers Comp laws, rules, benefits, etc. were put in place to make the injured employee be as whole as possible while recovering from their injuries. Stockton needs every dime they can find right now as they are out of $$$. The benefit integration program is a mistake that will cancel out any of the savings from the MPN they wisely put in place.

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