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Workers Compensation Insurance  <<continued from previous page



Some states discontinued their second injury funds following passage of the Americans with Disabilities Act (ADA). Although the ADA requires employers to maintain confidentiality about employees’ disabilities, the confidentiality rule does not apply to communications with state workers compensation authorities or second injury funds.



WHAT CAN I DO TO REDUCE MY WORKERS COMP PREMIUMS?



Manage Your Risks – Most small companies do not believe they can afford to hire a risk manager. Nevertheless, someone in the company should have a continuing responsibility for loss control and the management of workers comp claims. This involves a variety of programs to keep workers safe, the medical management of claims and early return to work for any injured workers.

In some states insurers must provide accident prevention services to employers. Even if not required to do so by law, the majority of workers comp insurers can help you improve safety. In some states, employers are required by law to set up safety committees and other programs to deal with unsafe conditions in the workplace. Even when not required by law, safety committees can be very effective at reducing accidents. For example, after UPS set up worker safety committees at each of its locations to identify the most frequent workplace accidents and took measures to reduce them, injuries that caused workers to take time off from work decreased by 59 percent.

You may also be legally required to have a written injury and illness prevention program. Again, even if not legally required to do so, having and following a written program can help reduce accidents.

Take Advantage of Savings Available in Your State – Several states allow merit rating credits. Smaller businesses that typically pay $5,000 in premiums or less may be entitled to a credit of 5 to 15 percent if they have not had any lost-work-time claims during a designated period. In some states there are premium credits for drug- and alcohol-free workplace programs and safety programs. Some insurers may give you a discount if you hire a professional risk management firm to help you with your safety program.

Be Sure Your Premium Is Figured Correctly – Make sure you have been placed in the right industry category. Check that the insurer’s payroll computation adjusts for overtime pay and allocates the payroll of different employees correctly.

Raise Your Deductibles – A majority of states provide for optional medical deductibles in workers comp insurance policies as a cost saving measure. Deductibles tend to encourage greater safety consciousness on the part of the employer who must pay the deductible amount.

Try to Avoid Assigned Risk – Cutting down on your claims is the best way to stay out of the state’s assigned risk plan, or insurer of last resort, which usually costs more. You may have been put into assigned risk without knowing it. Ask your agent to check on your status.

If you have been put in assigned risk, find out from your state workers comp agency if rates are higher. If they are, make a concerted effort to get other insurance. Just because one agent is unable to find something better for you doesn’t necessarily mean that it doesn’t exist. Talk with other agents, investigate group self insurance programs that may be available in your state and talk with other people in your industry and owners of other businesses of similar size and age and with a similar risk level.

Coordinate Disability Programs – This option isn’t available everywhere, but in some states businesses are trying to bring costs under control through the coordination of workers compensation, health care and disability benefit plans. The integration of workers compensation and other employee benefit programs is a broad concept that ranges from a simple marketing approach that promises savings from using the same insurer for both coverages to programs that offer a managed care approach to the management of all types of disability, regardless of whether they are work-related.

Besides limiting overlapping programs and streamlining administration, proponents say the change to a broad approach addresses the increasing difficulty of distinguishing between work- and nonwork-related injuries and illnesses, such as injuries due to repetitive motion and mental stress claims. It improves productivity, since nonwork-related disabilities are managed with the same focus of getting the employees back to work as work-related cases.


CAN AN EMPLOYEE WHO HAS AN ACCIDENT SUE ME?

Prior to the states’ adoption of the workers compensation system in the first half of the Twentieth Century, injured workers sued their employers after workplace accidents. This was a long, cumbersome and costly process from which the worker might gain nothing if the court failed to find the employer totally responsible for the injury. With so few employers liable for workplace accidents, support for injured workers and the families of deceased workers was a societal problem.

The workers compensation system was adopted to provide injured workers and their dependents timely compensation became regardless of who was at fault for a workplace accident. As part of the compromise that made the employer liable for work-related injury and disease costs regardless of fault, the employee surrendered the right to sue the employer for injuries. For the most part, the system works as intended. Injured workers accept workers comp payments and do not sue. This is why workers comp is referred to as the employee’s “exclusive remedy.”

Nevertheless, there are certainly instances where “exclusive remedy” may not apply and injured workers may sue their employers. Conditions under which such suits are lawful vary among the states. In Florida, for example, injured employees may sue their employers in the following situations:



Source:  Insurance Information Institute www.iii.org