© reed business information, a division of reed elsevier inc. workers’ compensation– supervisor...

© Reed Business Information, a division of Reed Elsevier Inc.

Workers’ Compensation– Supervisor Briefing


Question

Are psychiatric illnesses or conditions and aggravations of pre-existing conditions at or due to work compensable?


Answer

Potentially, depending on state law.


Objectives of This Briefing

This Supervisor Briefing examines the law and best practices regarding injuries suffered in the workplace, illnesses that may result form working and the (primarily) state-specific worker’s compensation programs that provide wage replacement and medical benefits to injured or ill employees.


Objectives of This Briefing (con’t.)

Supervisors are the first line of defense when it comes to receiving and reporting claims up the chain of command.



That means they may have to:• Create accident reports, • Collect data and information, • Comply with reporting requirements

both inside and outside of the organization; and

• Proactively strive to prevent safety incidents.



This Supervisor Briefing covers the following topics:1.Workers’ Compensation Programs2.Accident Prevention and Response3.Employers Covered by Workers’ Compensation



4. Employees Covered by Workers’ Compensation5. Compensable Injuries and Illnesses6. Wage Replacement and Medical Benefits7. Workers’ Compensation Claims Process


Workers’ Compensation Programs

Workers’ compensation is an insurance program that requires employers to compensate employees, either directly or through an insurance carrier, for work-related injuries or illnesses.


Workers’ Compensation Programs (con’t.)

Workers’ compensation is primarily run by states and is considered a “no-fault” system, meaning that an employer is required to provide compensation or insurance regardless of “fault” when it comes to injuries or illnesses.



Workers’ compensation benefits typically include wage replacement benefits, medical treatment and vocational rehabilitation to certain employees or their dependents, but only if the employee qualifies for benefits under either a federal or state insurance program.



Federal workers’ compensation programs include:• Federal Employees’ Compensation Act (FECA):

Provides coverage to civilian employees of the federal government or federal agencies in the form of medical benefits, wage continuation, disability compensation, vocational rehabilitation and death benefits. This statute covers primarily postal workers, employed both inside and outside the US.



•Longshore and Harbor Workers’ Compensation Act (LHWCA): Provides coverage to employees of companies that employ full-time or part-time employees for

maritime work or in a maritime occupation on US navigable waters or in “adjoining waterfront areas” like bays, rivers and lakes. It requires an employer to fashion “suitable alternative employment” to covered employees who are injured on the job.



• Merchant Marine Act of 1920 a/k/a the “Jones Act”: Provides coverage to deck hands, engineers, mates and basically all persons involved in the maritime “offshore” industry. This coverage requires employers to compensate, treat and repatriate injured workers, but is one of the few programs which uses a fault-based system to calculate awards to an injured seaman.



• Black Lung Benefits Act (BLBA): Provides wage replacement and medical benefits coverage to coal miners who are totally disabled from “pneumoconiosis” (black lung disease) arising from employment in or around coal mines in the US. Also provides coverage to survivors of miners who died from black lung disease.



•Energy Employees Occupational Illness Compensation Program (EEOICP): Provides lump sum payments and medical benefits to some employees

of the Department of Energy who work with nuclear weapons development

and who experience illnesses or disease related to exposure to radioactive or toxic substances in the workplace.



•Federal Employers Liability Act (FELA): Provides coverage to railroad workers who are injured on the job, but only

if the worker can prove that his or her employer was at least “partly at

fault” in causing the injury or injuries in question.



For individuals who are not covered by these federal programs or statutes, their only other option is to look to state-specific regulations to determine if they are covered by workers’ compensation regulations and if so, whether they are eligible for benefits.



Each state has its own regulatory scheme which determines whether:• A particular employer is required to

furnish workers’ compensation insurance;

• A particular type of individual associated with that employer is covered by the insurance;



• The injury or illness in question is “compensable;”

• What wage replacement and medical benefits an injured or ill individual is eligible for; and

• The process by which claims are filed, examined, argued, appealed and resolved.


Accident Prevention and Response

• Considering that workers’ compensation is a primarily state-driven program, any requirements for employers pertaining to accident prevention would also derive from state law.

• Common accident prevention protocols include surveys, recommendations, training programs, consultations, and analyses of accidents, industrial hygiene and industrial health services.


Accident Prevention and Response (con’t.)

Some states may require these types of protocols in order to qualify for workers’ compensation insurance, while others may simply make these protocols “recommended” for employers to minimize their exposure to workers’ compensation claims and ultimately, benefits.



•Generally speaking, an employer should strive toward accident prevention, despite the fact that workers’ compensation is a no- fault system.

•The fewer claims made against employers for benefits, the less risky the employer

will be in terms of its insurability, and thus, the cheaper the employer’s workers’ compensation insurance premium may be.



•This is where supervisors can play a crucial role for their organizations.

•Regular safety inspections, compliance with OSHA regulations and proactive safety training can substantially

reduce the number of claims an employer may face, which certainly will reduce its workers compensation footprint.



Supervisors may be asked to:• create safety training curricula for

employees; • to hold regular worksite safety meetings;

and • to collect signatures and

acknowledgments from employees who have completed courses or who have attended safety meetings.



• These records are crucial for the organization both in preventing incidents, but also in responding to those incidents and defending the rights of the organization.

• Most organizations have their own internal reporting regulations which supervisors and managers must comply with initially.



Thereafter, responsibilities may include:• Required reports to state workers’

compensation agencies;• Required reports to the state

departments of labor; and/or• Stringent reporting requirements from an

employer’s insurance provider.



•Reports to government agencies must typically be completed using

particular forms or requiring particular types of supporting documentation like medical reports and photographs.

•Failure to abide by state-specific regulations may expose an employer to

fines and penalties.



In addition to timely reporting of accidents or illnesses to insurance carriers, supervisors may also be responsible for timely reporting of incidents to HR and to facilitate exchange of paperwork with employees.



For example, a supervisor may be asked to: • Generate and file accident reports

internally;• Communicate with employees regarding

their medical condition following the incident(s); and

• Ensure employees remain informed of their rights and responsibilities in the workers’ compensation program.


Employers Covered by Workers’ Compensation

•In addition to the employers of individuals covered under the federal workers’ compensation programs, most businesses will also be covered by workers’ compensation requirements at the state level.

•Some state-specific regulations may be quite broad or quite narrow

depending on the state in question.


Employers Covered by Workers’ Compensation (con’t.)

Examples:In Colorado, any employer with “one or more full-time or part-time employees” must have workers’ compensation insurance coverage. In Texas, no employers are required to carry workers’ compensation insurance coverage, but instead, they may elect to do so.



In states where an employer is covered under the workers’ compensation program, it may have the option to purchase workers’ compensation insurance from a licensed provider or to “self-insure” against workers’ compensation liabilities.



• To obtain self-insurance, the organization may be required to disclose financial information to the state regulatory agency that administers workers’ compensation.

• The state will then determine whether the employer is financially viable enough to cover workers’ compensation liabilities.


Employees Covered by Workers’ Compensation

• Only certain individuals will be covered by workers’ compensation, depending on their relationship to the organization and the manner in which they were injured or contracted an illness.

• The scope of coverage is generally quite broad, as the state workers’ compensation program will cover most employees.


Employees Covered by Workers’ Compensation (con’t.)

• Generally, independent contractors are not covered by state-specific workers’ compensation schemes.

• Most states will use a multi-faceted test to determine whether an individual qualifies as an independent contractor.



The test typically involves questions of who:• Controls the work the individual

does, • Has the power to hire or fire him or

her; and • Reviews the quality of the

individual’s work.



Every state, including Washington, D.C., provides a form of anti-retaliation protection to employees who:•Experience a workers’ compensation-eligible injury or illness;

•File a claim for wage replacement and/or medical benefits; or

•Participate in the workers’ compensation process by giving information to

investigators.



•In most cases, the state-specific workers’ compensation scheme has

anti-retaliation and anti-interference language built into it.

•In other cases, the state labels retaliation in this context as a violation of public policy.


Compensable Injuries and Illnesses

•Whether a particular injury or illness is “compensable” or covered under workers’ compensation insurance is

primarily determined by state regulations.

•Typically, states require that in order for injuries or illnesses to be

compensable, the injured or ill individual must have been engaged in work during the time the injury or illness occurred or began.


Compensable Injuries and Illnesses (con’t.)

•Many states include “scope of the employment” language in such regulations, specifying which activities are considered part of work and which activities are outside the scope of traditional employment.

•There are, of course, exceptions to the rules that cover particular injuries or illnesses.



Example:If the individuals were engaged in “horseplay” or were intoxicated at the time of the incident(s), they may not be covered by workers’ compensation insurance despite the injury or illness being otherwise compensable.



Some states carve out specific times of the day (lunch breaks) or activities (commuting) that are not within the scope of employment for the purposes of workers’ compensation.



• The types of injuries or illnesses might also impact whether the individual is eligible for compensation.

• Example: Traumatic injuries are almost always covered, but “continuing” injuries or injuries that result from repetitive stress or degenerative conditions over time are more difficult to prove and ultimately, compensate.



•Some states cover “psychiatric” illnesses like post-traumatic stress disorder or depression, but only if they are

directly attributable to a work-related incident or injury.

•Others cover aggravation of preexisting injuries, but typically only to the

extent that the aggravation itself undermines the employee’s work, as opposed to the liability associated with the original injury.


Wage Replacement and Medical Benefits

•Depending on eligibility and coverage, and whether a particular injury or

illness is considered “compensable,” an individual may be eligible for wage

replacement and/or medical benefits to address the condition.

•Payments and reimbursements are controlled by state-specific regulations.


Wage Replacement and Medical Benefits (con’t.)

•Depending on eligibility and coverage, and whether a particular injury or

illness is considered “compensable,” an individual may be eligible for wage

replacement and/or medical benefits to address the condition.

•Payments and reimbursements are controlled by state-specific regulations.



Wage replacement benefits are typically disbursed based on:•The severity of an injury or illness; •How long the injury or illness is expected

to limit the individual; •Whether the individual will have a lingering

disability after he or she is able to return to work; and

•whether the individual has died and left behind eligible beneficiaries.



Common designations for replacement wages are as follows:• “Temporary” benefits – Designed to

expire upon the resolution of an injury or illness;

• “Permanent” benefits – Designed to compensation individuals for injuries or illnesses which are not expected to resolve;



• “Partial” benefits – Intended to replace only a portion of an individual’s wages if he or she is able to return to work in a limited capacity; and

• “Total” benefits – designed to compensate individuals who are not able to return to work at all.



Depending on the designation, a combination thereof and, of course, the state where the claim is filed, individuals may be eligible for a wide range of wage replacement payments.



Medical benefits typically include: • Reimbursement for covered

treatment with approved medical providers;

•Coverage of some or all prescription or medical device costs;

•Vocational rehabilitation; and•Return-to-work programs.



In some states, individuals who require medical treatment must submit to an examination by an employer’s pre-approved physician in order to be eligible for reimbursement.



In other states, individuals must choose from a pool of an employer’s pre-approved medical providers, and in some states, exceptions exist which allow individuals to select their own preferred medical providers.



Other states, like California, utilize an “Independent Medical Review” process to resolve disputes between medical providers that have not reached the same conclusion regarding the severity of an injury or illness, together with the individual’s prognosis and schedule for returning to work.


Workers’ Compensation Claims Process

Given that workers’ compensation is a state-driven regulatory system, all states in the US, including Washington, D.C., will have some regulatory body or agency that manages its workers’ compensation program.


Workers’ Compensation Claims Process (con’t.)

That agency will set the rules for various administrative functions, including:•Filing claims for benefits;•Responding to claims from an employer’s perspective;


Workers’ Compensation Claims Process (con’t.)

•Specifying the defenses an employer might use to argue against the validity of a claim;

•Appealing decisions made by the regulatory agency or court; and

•Issuing rulings on workers’ compensation claims.


Test YourselfQuestion 1

Workers’ compensation is administered by:a. States only, with no involvement at

the federal level. b. States primarily, with some specific

programs at the federal level depending on industry.

c. The federal government primarily, with some states administering their own claims.


Test YourselfQuestion 1: Answer

Workers’ compensation is administered by:a. States only, with no involvement at

the federal level. b. States primarily, with some specific

programs at the federal level depending on industry.

c. The federal government primarily, with some states administering their own claims.


Test YourselfQuestion 1: Rationale

b. Workers’ compensation is primarily administered by state-specific agencies, regulatory bodies and dedicated court systems. There are some specific programs at the federal level that cover certain occupations or industries, but for the most part, workers’ compensation is administered at the state level.


Test YourselfQuestion 2

An employer’s best bet to reduce its workers’ compensation exposure is to:

a. Take steps to prevent accidents in the workplace.

b. Establish a protocol to respond to accidents in a timely and effective manner.

c. Comply with its insurance provider’s deadlines regarding accident notification and investigative results.

d. All of the above.


Test YourselfQuestion 2: Answer

An employer’s best bet to reduce its workers’ compensation exposure is to:

a. Take steps to prevent accidents in the workplace.

b. Establish a protocol to respond to accidents in a timely and effective manner.

c. Comply with its insurance provider’s deadlines regarding accident notification and investigative results.

d. All of the above.


Test YourselfQuestion 2: Rationale

d. In order to reduce its workers’ compensation exposure, an employer should devote time and attention to accident prevention, given that it will result in fewer claims filed. An employer can also reduce exposure by responding to claims in a timely and effective manner and abiding by the deadlines set by its insurance company regarding accident notification and investigation response.

© reed business information, a division of reed elsevier inc. workers’ compensation– supervisor...

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