Workers’ Compensation Insurance Under a Collective Bargaining Agreement

1. Workers’ Compensation Insurance Under a Collective Bargaining Agreement DWC Educational Conference Los Angeles – Feb 24, 2005 Oakland – March 1, 2005 (An Alternative Workers’ Compensation Insurance System)

2. California Labor Code Section 3201.5 of the Labor Code became law in 1994. Section 3201.7 was added in 2004. The sections are customarily referred toasalternative dispute resolution (ADR) or construction carve-out programs.

3. The law allows Contractors to enter into an agreement with a bona fide organized labor collective bargaining unions in order to provide a system for the delivery of workers’ compensation benefits to employees of union employers. This agreed upon system is separate and distinctive from traditional system, in that the workers’ compensation court is only available as an appellate vehicle and is not a trial component.

4. The law has six basic requirements • An alternative dispute resolution system consisting of ombudsman, mediation and arbitration • An agreed upon list of exclusive providers of medical service • An agreed upon list of qualified medical evaluators • Joint labor management safety committees • A light duty, modified job return-to-work program • An agreed upon list of providers of vocational rehabilitation services

5. Union Agreements for Workers’ Compensation Insurance Collectively Bargained Workers’ Compensation Programs are also known as ADR “Carve-Out” Programs Insurance provided by commercial insurance companies to union employers who, as part of their collectively bargained agreement with the union, have elected to create their own alternative dispute resolution process designed to eliminate cost drivers associated with the adversarial and litigious statutory system. Self-insured union employers may also participate.

6. Union Agreements for Workers’ Compensation Insurance Goals and Objectives of a Collectively Bargained Workers’ Compensation Insurance Program • Improve benefit delivery • Promote labor-management cooperation • Reduce Workers’ Compensation claim costs • Reduce employers’ costs • Promote safety • Create more jobs for union members

7. Components of a Collectively Bargained Workers’ Compensation Insurance Program • ADR agreement, Ombudsperson, Mediation, and Arbitration • Agreed list of exclusive medical providers • Joint labor/management oversight committee • Commitment to workplace safety • Early return to work program • Agreed list of vocational rehabilitation providers

8. Alternative to Statutory Workers’ Compensation

9. Workers’ CompensationClaims Process – Alternative Dispute Resolution

10. Benefits of a Collectively Bargained Workers’ Compensation Insurance Program • Reduced litigation • Reduce loss costs • Shorter claim cycle times • Faster return to work • Better medical care

11. Alternative Workers’ Compensation Source: California Workers’ Compensation Institute (March, 2003)

12. Alternative Workers’ Compensation Source: PointSure Insurance Services/2003

13. Alternative Workers’ Compensation Source: PointSure Insurance Services/2003

14. Alternative Workers’ Compensation Source: PointSure Insurance Services/2003

15. Alternative Workers’ Compensation Source: PointSure Insurance Services/2003