Workers comp premiums will increase if Congress fails to renew TRIA in 2015

If the federal terrorism reinsurance backstop program isn't reauthorized during the first quarter of 2015, employers renewing their workers compensation coverage could be forced to the residual markets and face significant premium increases.

Established by the Terrorism Risk Insurance Act in 2002 following the Sept. 11, 2001, U.S. terrorist attacks, the program expired Dec. 31 due to objections in the Senate, surprising and dismaying insurers and buyers.

While many industry experts expect TRIA will be reauthorized by the new Congress that convenes Jan. 6, workers comp insurers and reinsurers are keeping quiet as they evaluate what risks they would underwrite without the backstop safety net, experts said.

“The market is still operating under the presumption that TRIA is going to be reauthorized in January,” said Robert Hartwig, president of the New York-based Insurance Information Institute. “If we get to the middle of February and there's still no reauthorization, that becomes a game changer.”

Though uncommon, some insurers are including language in workers comp policies that would allow them to rescind coverage for companies that have large concentrations of workers in “high-risk, Tier 1 cities” such as New York and San Francisco if TRIA isn't extended, Mr. Hartwig said.

Workers comp pricing also will spike in such areas, but “it will be muted initially,” he said.

It seems insurers are prepared to honor workers comp policies with effective dates through March, said Tim DeSett, executive vice president of risk practices at Lockton Cos. L.L.C. in Kansas City, Missouri.

Some insurers “have their own filed endorsements, which they used to say, "This is how much premium we are charging for terrorism risk,' “ said Pam Ferrandino, executive vice president and casualty practice leader at Willis North America Inc. in New York.

Such endorsements allow insurers to adjust their pricing down the road, she said.

Since terrorism coverage can't be excluded from workers comp policies in any state, insurers will look to limit any potential losses, sources said.

“I've heard from some carriers that they're trying ... to issue a nonrenewal notice for the entire account only so they can carve out the states where they have concentration,” Ms. Ferrandino said. In other words, they'd cancel a company's nationwide account and “issue a renewal term on an all-other-states basis.”

If TRIA hasn't been reauthorized by February, sources said some employers could have trouble renewing or purchasing traditional workers comp coverage and be forced into residual markets, known as the insurers of last resort.

The cost of residual market coverage could be “considerably higher,” according to a 2014 Rand Corp. report, which said 32 states and the District of Columbia have assigned risk pools, and 14 states direct all residual market business to competitive state funds.

While the Rand report said a nationwide estimate of residual market costs was not available, it did note that the Illinois Workers' Compensation Commission advised employers that premiums are 45% more in the residual market than the traditional market.

In addition, state workers comp funds could see their market share increase “significantly” as employers are denied coverage in the standard market, said Bruce Wood, Washington-based vice president and associate general counsel at the American Insurance Association.

“So if companies are forced into higher markets or residual markets, then laying off people becomes an option they would have to face,” said Carolyn Snow, Louisville, Kentucky-based director of risk management at Humana Inc.

TRIA's expiration didn't affect workers comp rates for Kelly Services Inc., which renewed its workers comp coverage with Ace Ltd. effective Jan. 1, said Gary Pearce, vice president of risk management group at the Troy, Michigan-based temporary staffing firm.

Mr. Pearce said Kelly Services is a more desirable risk since workers aren't concentrated in one high-risk area, but also said the company would be hit if TRIA is not reauthorized.

“Our employees are the first ones to be laid off,” Mr. Pearce said. “So to the extent that there's a deficient insurance backstop, that could hurt employment.”

Insurers also could be adversely affected, Mr. Wood said.

Workers comp insurers that leave the voluntary market to avoid terrorism losses still could be assigned to cover such risks in the residual markets for various states, he said.

“In that sense, there is nowhere to run and nowhere to hide,” Mr. Wood said.

Self-insured employers have unique concerns, since excess workers comp insurers can exclude terrorism risks from their policies, except in New York and Florida, Ms. Ferrandino said.

“To the extent that TRIA expiration reduces insurers' willingness to provide these alternatives to traditional (workers comp) coverage, self-insurance may become more difficult,” according to the Rand report.

Ms. Snow said Humana, which funds its comp coverage through its captive insurer, had not yet heard from its excess insurers following TRIA's expiration.

“The markets have just been really quiet,” Ms. Snow said. “I suspect it's because they expect action in the first quarter, but it's kind of been surprising how quiet (insurers and reinsurers) have been. ... Everything at this point is speculation.”

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Contact the Law Office of O'Toole & Sbarbaro, P.C. today if you have a workers' compensation or a Social Security disability case.

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Phone: 303-595-4777

We are located in the Denver Metro area.

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Any content of this blog is intended for informational purposes only.It is not intended to solicit business, provide legal advice from The Law Office of O'Toole & Sbarbaro, P.C. and does not serve as a medium for an attorney-client relationship. Therefore, The Law Office of O'Toole & Sbarbaro, P.C. is not responsible for the information on this blog which may not apply to every reader. Always seek professional counsel if you have any legal matters. Contents within the blog of The Law Office of O'Toole & Sbarbaro, P.C., logos and other related media are protected by the copyright laws of the United States and other jurisdictions.

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Fitness-For-Duty Exams in Workers' Compensation

By John H. Geaney 07/12/2013 14:19:00

The words “fitness for duty” do not appear in the New Jersey Workers’ Compensation Act, but the issue is of paramount importance to employers and employees in many workers’ compensation cases.  In New Jersey the need for a fitness exam is often compelling because medical and temporary disability benefits end at maximal medical improvement often without any comment from the treating physician about whether the employee can return to work.  When workers’ compensation benefits end, the focus often turns next to whether the employee can return to work and perform the essential job functions.  This is not for the Judge of Compensation to decide in New Jersey.

When can an employer require a fitness-for-duty examination in a workers’ compensation setting?

Practitioners must differentiate between employees who are out of work and employees who are working.  When an employee seeks to return to work following a workers’ compensation absence and there are restrictions imposed by the treating doctor, a fitness-for-duty exam is appropriate.  In fact, New Jersey physicians often seek guidance from FCEs, functional capacity examinations.  In contrast, when an employee with a workers’ compensation claim is working, an employer cannot request a fitness exam absent a business reason. A medical evaluation of an employee can be required by an employer under the Americans with Disabilities Act and under state disability law. The ADA standard is “job related and consistent with business necessity.” 42 U.S.C. 12112(d)(4).  In other words, the employer must have a legitimate reason to require an existing employee who is working to attend a fitness exam.  Examples might be if the employee is expressing difficulty or pain on the job, is limping while working, or is asking for accommodations.

It is important to appreciate differences between the New Jersey Workers’ Compensation Act and laws in other states.  Many states have a requirement for vocational rehabilitation.  New Jersey does not.  Awards for partial permanent disability in New Jersey are not generally dependent on how long an employee has been out of work but on the level of functional loss in the injured body member.  New Jersey compensation law does not provide job protection, except against retaliation for filing a workers’ compensation claim.  Temporary disability benefits and medical benefits end at maximal medical improvement in New Jersey.  Whether the employee returns to work may not matter all that much as far as the outcome of a workers’ compensation claim but it matters to the employee and employer for obvious reasons.

Workers’ compensation cases suddenly merge into labor law at the return to work stage.  It is outside the power of a Judge of Compensation to order an employer to return an employee to work.  However, employees have rights under the Americans with Disabilities Act, the Family and Medical Leave Act, and the New Jersey Law Against Discrimination that impact on return-to-work status.  Many workers’ compensation claimants are covered under the ADA and NJLAD but these laws do not automatically mean the employee must be reinstated.  An employee with a disability must be able to perform the essential functions of the job with or without reasonable accommodation.

How then do employers decide whether an employee who has been out of work with a serious injury is fit for duty?

Medical and legal guidance is crucial.  From a medical vantage point, employers can reach out to treating doctors, occupational physicians or physiatrists for advice on fitness for duty.  As mentioned above, FCEs are a wonderful tool that provide objective and scientific information about ability to perform essential functions. For this reason, treating doctors routinely ask for FCEs before giving opinions on restrictions and ability to perform job duties. From a legal standpoint, it is important to consider the application of disability and leave laws that may apply.

            Here are some common traps that employers fall into in fitness assessments:

            * The Ambivalent Treating Doctor Syndrome

 Quite often the treating doctor imposes serious job restrictions that carry on for many months.  There may be severe restrictions against lifting, bending, reaching and performing other physical functions. Light duty may be offered. After maximal medical improvement is reached and compensation benefits end, the employee will often contact the employer to return to work. When the employer expresses concerns about the medical restrictions, a short note may suddenly appear from the treating doctorremoving all restrictions.  This stunning turn of events leaves employers shaking their heads.

            * The “Wing It” Return-To-Work Note

 New Jersey is blessed with highly skilled surgeons in the workers’ compensation arena.  However, surgeons are not always the best choice when it comes to deciding whether the employee can do a particularly difficult job.  A good fitness-for-duty examination requires time, information and medical expertise.  The job description must be read and considered, and the physician must speak with the employee about job duties.  In addition, FCEs should be analyzed to see that the testing reflects the actual job duties to be performed. Cryptic medical notes following a serious surgery stating, “Bill may return to work full duty” without analysis or any indication that job description has been analyzed are more often than not “wing-it” notes.  There are risks to the employee who is returned to a job that he or she cannot safely perform, and a well-intentioned “wing-it” note can do more harm than good.

            * Reflexively Turning to Treating Doctors

When it comes to assessing fitness for duty, the best choice is generally an occupational physician or physiatrist who specializes in this area of medicine and has an understanding of reasonable accommodation requirements. These experts often have training in biomechanics and are willing to expend the time it takes to fully appreciate the job duties and consider possible accommodations. There is simply no substitute for thorough analysis. The idea that fitness assessment is as simple as scribbling on a note pad could not be further from the truth.  Yet all practitioners continue to see treating doctors hurriedly write “full duty” without any analysis at all of the job requirements or previous restrictions.

            * Asking the Comp Adjuster Whether the Employer Must Reinstate

 This is also a very common mistake that employers make in New Jersey.  The reason this happens is that many employers erroneously think that return-to-work issues are decided in comp court.  Almost every adjuster has been asked more than once for advice from an employer on whether the employer can terminate or must reinstate.  This is a complex medical/legal inquiry with significant labor law implications that should be put to house counsel or outside counsel for guidance.

Developing a return-to-work team is the best solution. There is an important role on this team for counsel, HR managers, claims professionals, supervisors, nurse case managers, and medical experts.  It is a fact of life that many employees post-injury cannot return to their former job while many others can and should be reinstated.  The process is complex but can be handled effectively with a consistent and comprehensive approach.

Original Article Here

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Calif. Workers'-Comp Fraudster Goes From Crutches To High Heels in Same Day

Video of Modupe Martin ditching crutches to meet a man for a park tryst helped convict her, DA said.
01/10/2013

US News
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Contact the Law Office of O'Toole & Sbarbaro, P.C. today if you have a workers' compensation or a Social Security disability case.

Law Office of O'Toole & Sbarbaro, P.C. 

Phone: 303-595-4777

We are located in the Denver Metro area.

226 West 12th Avenue Denver, Colorado 80204

Disclaimer 

Any content of this blog is intended for informational purposes only.It is not intended to solicit business, provide legal advice from The Law Office of O'Toole & Sbarbaro, P.C. and does not serve as a medium for an attorney-client relationship. Therefore, The Law Office of O'Toole & Sbarbaro, P.C. is not responsible for the information on this blog which may not apply to every reader. Always seek professional counsel if you have any legal matters. Contents within the blog of The Law Office of O'Toole & Sbarbaro, P.C., logos and other related media are protected by the copyright laws of the United States and other jurisdictions.

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What is the purpose of a waiting period in Workers' Compensation?

Waiting periods are a very common feature in US workers’ compensation systems but are relatively rare in the Canadian context and absent from Australian systems.   A waiting period in workers’ compensation is a form of worker deductible.  Most commonly, waiting periods start on the first day for which wages are lost and last anywhere from one day to one week with three and seven day waiting periods being very common.

Many systems allow for medical-only claims during the waiting period and most have no prohibition against the employer paying some benefits during this time.  In fact, collective agreements may contain provisions that require wage continuation during a workers’ compensation waiting period.  In such cases, there is no administrative or indemnity saving by introducing a waiting period.  All that changes is the pocket from which the benefit is paid.

Most systems with a waiting period have a retroactive point.  If the worker is off work beyond this point (ranging from one to four weeks but most commonly two weeks), the waiting period is waived and the worker receives wage-loss indemnity payments for the waiting period as part of the workers’ compensation claim.  Eliminating a waiting period impacts only the cases with durations less than the waiting period.

When workers’ compensation systems started, the waiting period was seen as a way to constrain insurance costs.  As may be deduced from the structure of the waiting-period deductible and the retroactive provision, the waiting period is targeted at less severe (in terms of duration) claims. Let me be clear, waiting periods limit cost to the insurer (and, through insurance rate-setting and experience-rating provisions, to the employer).  The human and financial cost of the injury for the waiting period is borne by the worker and his family unless this burden is offset by collective agreement provisions or employer practice of wage continuation (or access to sick leave or other paid leave provisions) provided by the employer. 

When workers’ compensation got started in BC in 1917, the waiting period was three days.   In 1972, the waiting period was eliminated.   This was part of a trend in Canada, however, there has been a recent trend to consider and implement waiting periods.  Prince Edward Island and Nova Scotia each have a “2/5^ths” of a week waiting period [which works well for 4 day weeks and other non-five days a week schedules] and New Brunswick has a 3 day waiting period. 

From a pure insurance point of view, the best injury claim is the one never filed.  Introducing waiting periods conceptually reduce administrative costs [assuming healthcare costs are paid by someone else] and indemnity costs but they may well discourage many claims of longer duration from ever being filed.  If sick leave or other leave provisions are in place, a worker may well elect to forgo a possible workers’ compensation claim with all the burden of filing and often with an implied or perceived onus of proving work-relatedness in favour of a simple sick leave application within the firm.  Firms may well tacitly approve this practice as it may (or may be perceived to) positively impact workers’ compensation premium rates through experience rating. 

For workplaces with no alternatives, a waiting period externalizes a cost of production [work-related injuries and illnesses] to workers.  If this forces the worker or a family to access other aspects of the social safety net [social welfare services] or community food banks, then the mere existence of a waiting period externalized costs beyond the workplace.  Put another way, those externalized costs amount to a subsidy (paid by workers’ families, taxpayers or the community) to businesses where injuries occur. 

Yes, the firm will have to hire a replacement worker for a few days or bear the costs of lost productivity, but that is the case regardless of the legislative existence of a waiting period. Contrast a firm in a jurisdiction with a waiting period to one where work-related claims are payable from the day following the day of injury and the collective value of waiting periods is obvious. 

Some may argue that the financial subsidy or externalization of costs at the aggregate level is not large.  If this is the case, then reverse is also true: the cost of eliminating waiting periods where they exist will not be large either. If, however, the value of a waiting period is argued to be significant, then its cost or subsidy value should be part of the policy discussion. 

Every jurisdiction has to make its own decision regarding waiting periods in workers’ compensation.  That’s a matter for legislators and their electorates.  There may be good and valid reasons for waiting periods that outweigh the costs or justify the subsidy in a particular jurisdiction.  I am not saying the public policy choice to have or introduce a waiting period is always a bad one.  I am suggesting that the policy debate include a full discussion of the externalized costs and subsidy values involved.

Original Source

Contact the Law Office of O'Toole & Sbarbaro, P.C. today if you have a workers' compensation or a Social Security disability case.

Law Office of O'Toole & Sbarbaro, P.C. 

Phone: 303-595-4777

We are located in the Denver Metro area.

226 West 12th Avenue Denver, Colorado 80204

Disclaimer 

Any content of this blog is intended for informational purposes only.It is not intended to solicit business, provide legal advice from The Law Office of O'Toole & Sbarbaro, P.C. and does not serve as a medium for an attorney-client relationship. Therefore, The Law Office of O'Toole & Sbarbaro, P.C. is not responsible for the information on this blog which may not apply to every reader. Always seek professional counsel if you have any legal matters. Contents within the blog of The Law Office of O'Toole & Sbarbaro, P.C., logos and other related media are protected by the copyright laws of the United States and other jurisdictions.

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How High Will Your Work Comp Premiums Go? - Law Office of O'Toole & Sbarbaro, P.C. Worker's Comp Blog

By ReduceYourWorkersComp 06/19/2013 09:30:00

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Employers in 2013 are finding it difficult to renew their existing workers’
compensation policy or to obtain coverage from a new workers’
compensation insurer.  For many employers, 5% to 10% price increases
in 2012 are being followed by another 5% to 10% price increase in 2013.
Workers’ compensation insurance has become the most difficult insurance
line for many risk managers to obtain. Work comp also has become the
highest cost component of many employers’ insurance programs.

The Work Comp Insurance Market is “Hardening”

If you ask insurance brokers what is causing the price increases in
workers’ compensation or the difficulty in finding work comp coverage,
you will often get the reply that the market is “hardening.”  A “hard”
insurance market is a period of time where insurance brokers have to
work extra hard to find any coverage or affordable coverage for their
clients.  This “hardening” of the insurance market is being caused by
several factors, including:

• Stringent capital requirements are dampening insurers’ risk appetite
• A low interest rate environment has lowered the income insurance companies
  get from their investments
• Insurers have been incurring underwriting losses – paying out more on
  claims and related cost then they are taking in, in premiums
• The component costs of workers’ compensations, both indemnity (wages)
  and medical have been steadily increasing, especially the cost of medical
  care, which continues to accelerate as a percentage of the overall cost
  of workers’ compensation

The response of the insurance companies to the above factors is to
become more selective on whom they will insure.  If insurers are willing
to provide workers’ compensation insurance, they do not want to incur
an underwriting loss to do so; hence the insurers raise their premiums
to a level where they anticipate they can make an acceptable level of profit.

Employers Need to Take Action to Control Their Premiums

Employers do not have to sit idly by while their workers’ compensation
insurance premiums continue to go higher and higher.  There are
several steps employers can take to put the brakes on the unrelenting
upward spiral of work comp costs. 
This includes:

• Analyzing the risk financing strategy
  • Self insurance
  • High deductible program
  • Full coverage through a work comp insurer
    • Multi-year program
    • Negotiated fixed future price increases
• Evaluating and reevaluating the risk management strategy
• Improving the safety program
  • Analyzing and updating the safety program
    • Identifying the drivers of frequent accidents
    • Identifying the types of accidents that have
      high severity
    • Increasing enforcement of established safety
      procedures
    • Training of employees, supervisors and managers
      on how to be safe
    • Creating a culture of safety
    • Auditing safety compliance
• Screening new hires to eliminate job candidates prone to injury
• Claims management practices
  • Immediate reporting of accidents
  • Required or recommended medical providers
  • Frequent follow up with the injured employee by both
    the adjuster and the employer
  • Transitional duty programs
  • Medical management

Employers who take the above actions make themselves more
attractive to workers’ compensation insurers.  These steps reduce
the likelihood of accidents and the resulting workers’ compensation claims.
The workers’ compensation market will remain “hard” for employers
who make limited efforts to control the cost of their workers’
compensation claims.  The cost of workers’ compensation premiums
will not go up near as high for the employers who proactively manage
their workers’ compensation program.

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk
Solutions, Inc. is an expert in employer communication systems and
part of the Amaxx team helping companies reduce their workers
compensation costs by 20% to 50%. He is a writer, speaker, and
website publisher.  www.reduceyourworkerscomp.com.  Contact:mstack@reduceyourworkerscomp.com.

©2013 Amaxx Risk Solutions, Inc. All rights reserved under
International Copyright Law.

The post How High Will Your Work Comp Premiums Go?
appeared first on Reduce Your Workers Compensation
Insurance Coverage Costs with Timely Information for Employers
| Work Comp Roundup.

Source: http://www.workerscompensation.com

Contact the Law Office of O'Toole & Sbarbaro, P.C. today if you have a workers' compensation or a Social Security disability case.

Law Office of O'Toole & Sbarbaro, P.C. 

Phone: 303-595-4777

We are located in the Denver Metro area.

226 West 12th Avenue Denver, Colorado 80204

Disclaimer 

Any content of this blog is intended for informational purposes only.It is not intended to solicit business, provide legal advice from The Law Office of O'Toole & Sbarbaro, P.C. and does not serve as a medium for an attorney-client relationship. Therefore, The Law Office of O'Toole & Sbarbaro, P.C. is not responsible for the information on this blog which may not apply to every reader. Always seek professional counsel if you have any legal matters. Contents within the blog of The Law Office of O'Toole & Sbarbaro, P.C., logos and other related media are protected by the copyright laws of the United States and other jurisdictions.

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