Workers Compensation

1. Workers' Compensation Richard A. Posthuma, JD, Ph.D., SPHR, GPHR

2. Learning Objectives Overview: Know the legal requirements. Understand the methods to meet requirements. Know what benefits workers receive. Understand what drives employer costs. There will be two main parts to this presentation. The first part will provide an overview of workers� compensation. There will be two main parts to this presentation. The first part will provide an overview of workers� compensation.

3. Learning Objectives Risk Management: Understand methods for WC risk management: Risk avoidance. Risk financing. Loss prevention. Loss reduction. Learn effective ways to implement each method. The second part will explore a risk management approach to workers� compensation.The second part will explore a risk management approach to workers� compensation.

4. Workers� Compensation Overview State laws. Texas exception (employers can opt out). Federal government employees and those in maritime industries have different laws (e.g., Longshore and Harbor Workers� Compensation and Jones Acts). Workers� compensation is a benefit that is required by state law for almost all private and public sector (i.e., local government) employers. Texas doesn�t require workers� compensation coverage, but most employers have it; those employers who choose not to have it can be sued for work-related injuries. Federal government employees and those involved in maritime work are covered by federal laws. Each state has somewhat different laws. Workers� compensation is a benefit that is required by state law for almost all private and public sector (i.e., local government) employers. Texas doesn�t require workers� compensation coverage, but most employers have it; those employers who choose not to have it can be sued for work-related injuries. Federal government employees and those involved in maritime work are covered by federal laws. Each state has somewhat different laws.

5. Workers' Compensation Overview Options to provide coverage (state laws differ): Commercial insurance. State funded. Risk pools. Self-insurance (for larger employers). All states permit employers to purchase workers� compensation insurance to meet their WC obligation. Sometimes private insurance companies are reluctant to sell workers� compensation insurance because of fluctuations in the insurance markets. Some employers who operate in high-risk industries or who have a history of expensive claims may not be able to purchase workers� compensation coverage. Those employers have the option of getting coverage either from a state-funded workers� compensation program or from a pool of insurers who share the risks of coverage (risk pools). State-funded and assigned risk pool coverage is often more expensive. In some states, groups of employers can form a risk pool or a mutual insurance company that they essentially own and operate. This is often a less expensive option. Large employers can self-insure, meaning they obtain permission to assume the risk of WC claims and pay the claims themselves or through a third-party claims administrator (TPA).All states permit employers to purchase workers� compensation insurance to meet their WC obligation. Sometimes private insurance companies are reluctant to sell workers� compensation insurance because of fluctuations in the insurance markets. Some employers who operate in high-risk industries or who have a history of expensive claims may not be able to purchase workers� compensation coverage. Those employers have the option of getting coverage either from a state-funded workers� compensation program or from a pool of insurers who share the risks of coverage (risk pools). State-funded and assigned risk pool coverage is often more expensive. In some states, groups of employers can form a risk pool or a mutual insurance company that they essentially own and operate. This is often a less expensive option. Large employers can self-insure, meaning they obtain permission to assume the risk of WC claims and pay the claims themselves or through a third-party claims administrator (TPA).

6. Workers� Compensation Overview Small employers usually buy workers' compensation insurance. Large employers may self-fund and/or self-administer. The employee gets the same benefits; the difference is in the administration and cost. Because of the uncertainty of the number and size of claims, small employers are usually better off buying workers� compensation insurance. They may also get some safety advice from their insurer. Larger employers can spread the risk and uncertainty of the frequency and severity of claims over a larger pool of employees. For that reason, they can achieve relatively stable workers� compensation costs without shifting the risk to an insurance company that charges more than the actual costs of paying claims. Self-insurance typically requires permission from a state agency that will make sure the employer is financially able to pay the claims that could occur. Self-insuring employers may have in-house employees who pay the claims directly, or they may contract with another company (third-party administrators or TPAs) to pay the claims on their behalf. TPAs are organizations that have experience and expertise (e.g., computer software payment systems) handling claims for many different employers and are familiar with the applicable state regulations. Regardless of who pays, the employee is entitled to receive the same WC benefits.Because of the uncertainty of the number and size of claims, small employers are usually better off buying workers� compensation insurance. They may also get some safety advice from their insurer. Larger employers can spread the risk and uncertainty of the frequency and severity of claims over a larger pool of employees. For that reason, they can achieve relatively stable workers� compensation costs without shifting the risk to an insurance company that charges more than the actual costs of paying claims. Self-insurance typically requires permission from a state agency that will make sure the employer is financially able to pay the claims that could occur. Self-insuring employers may have in-house employees who pay the claims directly, or they may contract with another company (third-party administrators or TPAs) to pay the claims on their behalf. TPAs are organizations that have experience and expertise (e.g., computer software payment systems) handling claims for many different employers and are familiar with the applicable state regulations. Regardless of who pays, the employee is entitled to receive the same WC benefits.

7. For workers who suffer injury or illness, the injury or illness must be work-related �in and out of the course of employment,� regardless of whose fault it was. This means the employee cannot sue his or her employer for pain and suffering for work-related injuries and illnesses. Usually, the employee�s exclusive remedy against the employer is wage-loss benefits and necessary medical or rehabilitation treatment. Employees are legally entitled to receive WC benefits if they have an injury or illness that arises out of the course of their employment. Once you punch in, you are at work and covered. Typically, the costs of being injured while driving to and from a fixed work location are not covered under WC. If an injury happens at work, the employee is entitled to WC benefits even if the injury was his or her own fault (unless they intentionally self-inflicted an injury). For example, lifting a box resulting in a back injury is eligible under workers� compensation; getting a skin rash from an allergic reaction to cleaning solvents at work is eligible under workers� compensation. Employees are legally entitled to receive WC benefits if they have an injury or illness that arises out of the course of their employment. Once you punch in, you are at work and covered. Typically, the costs of being injured while driving to and from a fixed work location are not covered under WC. If an injury happens at work, the employee is entitled to WC benefits even if the injury was his or her own fault (unless they intentionally self-inflicted an injury). For example, lifting a box resulting in a back injury is eligible under workers� compensation; getting a skin rash from an allergic reaction to cleaning solvents at work is eligible under workers� compensation.

8. Wage loss: A percentage of the wages that the employee lost for time out of work. States have formulas that calculate wage-loss benefits based on recent average earnings. Example: Last 13 weeks of actual earnings (including overtime) multiplied by 70 percent, up to a specified maximum. In many states, the wage-loss benefit depends on the type of disability: Permanent total disability (can never do any job). Permanent partial disability (can never do some jobs). Temporary total disability (for now, can�t do any jobs). Temporary partial disability (for now, can�t do some jobs). If the employee misses work because of the injury or illness, they will receive a large percentage of their lost wages paid by WC. Each state has different payment schedules. If the employee misses work because of the injury or illness, they will receive a large percentage of their lost wages paid by WC. Each state has different payment schedules.

9. Benefits include all reasonably necessary medical treatment. Employers can challenge the �reasonableness� of treatment. Employers can challenge medical bills for errors or charges in excess of state guidelines. Rehabilitation (therapy, education). Death benefits for survivors. Employees are also entitled to the full cost of all reasonably necessary medical treatment with no deductibles or co-pays. For this reason, if there is a question about whether something is work-related, employees often prefer it to be work-related because they get full medical coverage, unlike the coverage that they might be entitled to under a typical health insurance plan. Rehabilitation benefits can include physical or occupational therapy to enable the worker to recover some of his or her lost work capacity. Death benefits (like life insurance) are provided for the survivors of an employee who was killed at work. Employees are also entitled to the full cost of all reasonably necessary medical treatment with no deductibles or co-pays. For this reason, if there is a question about whether something is work-related, employees often prefer it to be work-related because they get full medical coverage, unlike the coverage that they might be entitled to under a typical health insurance plan. Rehabilitation benefits can include physical or occupational therapy to enable the worker to recover some of his or her lost work capacity. Death benefits (like life insurance) are provided for the survivors of an employee who was killed at work.

10. Employer pays entire cost. Factors affecting employer costs: Risk-based ratings: Percentage of payroll by job classification. Experience rating: Based on prior claim experience. Other adjustments: Volume discounts. WC insurance is paid for by the employer only; there is no payroll tax like Social Security or unemployment insurance paid by either the employer or the employee. The cost of WC insurance typically begins with an examination of the employer�s projected payroll for different pay classifications. There is usually a set cost per $100 of wages. The cost is higher for jobs where it is more likely that there will be WC claims. The next slide shows an example of this calculation. Also, an employer�s actual WC cost can go up or down depending on the number of WC claims that are paid to their workers. Thus, employers have a big incentive to avoid work-related injuries and illnesses. Depending on the state, there are other possible adjustments that can be made to the cost of WC insurance. This could include volume discounts for larger employers.WC insurance is paid for by the employer only; there is no payroll tax like Social Security or unemployment insurance paid by either the employer or the employee. The cost of WC insurance typically begins with an examination of the employer�s projected payroll for different pay classifications. There is usually a set cost per $100 of wages. The cost is higher for jobs where it is more likely that there will be WC claims. The next slide shows an example of this calculation. Also, an employer�s actual WC cost can go up or down depending on the number of WC claims that are paid to their workers. Thus, employers have a big incentive to avoid work-related injuries and illnesses. Depending on the state, there are other possible adjustments that can be made to the cost of WC insurance. This could include volume discounts for larger employers.

11. Example of Payroll-Based Calculation of WC Premium This table is a simplified example of the calculation of a projected basic WC insurance premium. This employer has 4,700 employees in several different job classifications. The WC rate for each classification is different. You can see that the rate for office employees (including clerical employees and managers) is very low. The cost for warehouse workers and truck drivers is much higher because experience has shown that employees in these jobs are more likely to be injured and file WC claims. The basic rate is calculated by multiplying the rate per $100 of payroll times the actual payroll for each job class. Then the total premium is the result of the premiums for all different job classifications. For this employer, the total premium would be approximately $3.8 million. This premium can be adjusted upward or downward based on other factors, such as the history of claims and volume discounts.This table is a simplified example of the calculation of a projected basic WC insurance premium. This employer has 4,700 employees in several different job classifications. The WC rate for each classification is different. You can see that the rate for office employees (including clerical employees and managers) is very low. The cost for warehouse workers and truck drivers is much higher because experience has shown that employees in these jobs are more likely to be injured and file WC claims. The basic rate is calculated by multiplying the rate per $100 of payroll times the actual payroll for each job class. Then the total premium is the result of the premiums for all different job classifications. For this employer, the total premium would be approximately $3.8 million. This premium can be adjusted upward or downward based on other factors, such as the history of claims and volume discounts.

12. Workers' Compensation and Risk Management

13. Risk Management Approach Risk avoidance: Don�t do operations that require employees. Risk financing: How to pay for it. Loss prevention: Reduce the possibility of worker injuries. Loss reduction: Reduce the cost of injuries. It is often helpful for employers to recognize that they have several options to manage their WC obligations. These options can be categorized as: Risk avoidance: Employers find a way to avoid the risk of WC claims. Risk financing: Employers effectively manage the financial aspects of the WC obligation. Loss prevention: Employers reduce the likelihood of work-related accidents and injuries, and thereby reduce the frequency of WC claims. Loss reduction: Employers actively manage the losses that do occur to reduce costs. It is often helpful for employers to recognize that they have several options to manage their WC obligations. These options can be categorized as: Risk avoidance: Employers find a way to avoid the risk of WC claims. Risk financing: Employers effectively manage the financial aspects of the WC obligation. Loss prevention: Employers reduce the likelihood of work-related accidents and injuries, and thereby reduce the frequency of WC claims. Loss reduction: Employers actively manage the losses that do occur to reduce costs.

14. Risk Avoidance Don�t engage in operations that require employees. This may be difficult depending on corporate strategy. Outsource functions that require employees in higher-risk occupations. Make sure that the contractor assumes the risk of injuries. Use contracted labor to shift the risk to another employer. For example, a temporary help agency. By avoiding operations that require workers in higher-risk job classifications, the risk of WC losses is avoided. For example, Nike makes all of its shoes outside the U.S. using contractors. In some cases, employers could replace employees with machines. However, it may be less costly to do the work in-house, especially if an employer has a good loss prevention program. Employers could contract out those functions (e.g., delivery truck driving) that have greater risk. However, when contracting out, it is important to establish a clear understanding of who the actual employer is and who is responsible for paying any WC claims that may arise. By avoiding operations that require workers in higher-risk job classifications, the risk of WC losses is avoided. For example, Nike makes all of its shoes outside the U.S. using contractors. In some cases, employers could replace employees with machines. However, it may be less costly to do the work in-house, especially if an employer has a good loss prevention program. Employers could contract out those functions (e.g., delivery truck driving) that have greater risk. However, when contracting out, it is important to establish a clear understanding of who the actual employer is and who is responsible for paying any WC claims that may arise.

15. Risk Financing The cost of WC obligations is effectively managed. Competitive bids for WC coverage. Alternative financing arrangements for WC premiums. For example, retrospective rating plans that reduce premiums when there are fewer or smaller claims. Consideration of cost-effectiveness of alternatives. Insurance, risk pool, self-insurance. Effectively managing the financial aspects of WC obligations can reduce overall costs. Although WC insurance companies are regulated by state law, they often have some discretion in the amount they will charge. Thus, from time to time it may be a good idea to get competitive bids from different carriers to ensure that the most cost-effective coverage is purchased. In this process, the relative costs and benefits of both claims handling and safety consulting services that the insurance company might provide should be evaluated. Insurance companies often offer employers the opportunity to share some of the uncertainty of the amount of WC claims through a variety of funding arrangements, such as retrospective rating plans. This may be desirable for employers who wish to implement effective loss prevention and loss reduction programs. The costs and benefits of different funding arrangements (insurance, pools, self-insurance) should also be considered. Effectively managing the financial aspects of WC obligations can reduce overall costs. Although WC insurance companies are regulated by state law, they often have some discretion in the amount they will charge. Thus, from time to time it may be a good idea to get competitive bids from different carriers to ensure that the most cost-effective coverage is purchased. In this process, the relative costs and benefits of both claims handling and safety consulting services that the insurance company might provide should be evaluated. Insurance companies often offer employers the opportunity to share some of the uncertainty of the amount of WC claims through a variety of funding arrangements, such as retrospective rating plans. This may be desirable for employers who wish to implement effective loss prevention and loss reduction programs. The costs and benefits of different funding arrangements (insurance, pools, self-insurance) should also be considered.

16. Loss Prevention Identify the most likely causes of injuries. Implement cost-effective safety measures to reduce the likelihood of these injuries. Don�t discriminate or retaliate against employees who file WC claims (in hiring, promotion, job assignments, pay, etc). The goal of loss prevention is to identify the losses that are most likely to occur and to implement cost-effective ways to prevent them from occurring. Another important loss-prevention technique is to avoid discrimination or retaliation against employees who file workers' compensation claims. Employers should not refuse to hire someone because he or she has filed a claim in the past. They should not demote or fire current employees who file claims. Nevertheless, at some point, if a worker exhausts all of his or her available leave and is no longer able to work, the employer may legally terminate his or her employment so long as they do not violate any other law or regulation. The goal of loss prevention is to identify the losses that are most likely to occur and to implement cost-effective ways to prevent them from occurring. Another important loss-prevention technique is to avoid discrimination or retaliation against employees who file workers' compensation claims. Employers should not refuse to hire someone because he or she has filed a claim in the past. They should not demote or fire current employees who file claims. Nevertheless, at some point, if a worker exhausts all of his or her available leave and is no longer able to work, the employer may legally terminate his or her employment so long as they do not violate any other law or regulation.

17. Loss Prevention Frequent sources of injuries: Repetitive motion. Bending and lifting. Falls. Pinch-points. Vehicles. The types of injuries that are more likely to occur depend on the nature of the work that the employees perform. However, in the area of WC, certain types of injuries seem to be more notorious and more difficult to prove or disprove, such as soft tissue (e.g., muscle pain) injuries. For example, repetitive motion injuries occur when workers perform the same task over and over again, such as keyboarding or operating a machine that requires them to do the same motion repeatedly. This has often resulted in carpal tunnel injuries to the wrist. Sometimes employees are injured when they bend over to lift something and hurt their spine or some other part of their body. Often employees incur serious injuries as a result of falling off something or falling down stairs. Machines or equipment in the workplace could grab and/or pinch a part of an employee�s body (fingers, skin, hair). And when employees operate vehicles in the course of their duties (e.g., delivery truck drivers), any injuries resulting from a motor vehicle accident will be WC.The types of injuries that are more likely to occur depend on the nature of the work that the employees perform. However, in the area of WC, certain types of injuries seem to be more notorious and more difficult to prove or disprove, such as soft tissue (e.g., muscle pain) injuries. For example, repetitive motion injuries occur when workers perform the same task over and over again, such as keyboarding or operating a machine that requires them to do the same motion repeatedly. This has often resulted in carpal tunnel injuries to the wrist. Sometimes employees are injured when they bend over to lift something and hurt their spine or some other part of their body. Often employees incur serious injuries as a result of falling off something or falling down stairs. Machines or equipment in the workplace could grab and/or pinch a part of an employee�s body (fingers, skin, hair). And when employees operate vehicles in the course of their duties (e.g., delivery truck drivers), any injuries resulting from a motor vehicle accident will be WC.

18. Loss Prevention Sources of illness (more rare): Environmental exposure. Psychological trauma. Ordinary diseases of life (e.g., influenza, measles): Generally not covered by WC. Although typically less frequent and less costly, WC claims sometimes arise from something that is characterized as an illness rather than an injury. For example, maintenance workers could be exposed to poison ivy when they are required to remove foliage. Workers could have allergic reactions to substances they come into contact with on the job. Medical staff or others might be eligible for WC if they contract a disease from a bloodborne pathogen such as Hepatitis or AIDS if it can be proven that they contracted the disease during their job duties. In some cases and in some states, employees might be eligible to receive WC for psychological conditions that are sustained at work. For example, post-traumatic stress disorder could result from witnessing someone killed in the office. However, as a general rule, ordinary diseases of life (such as a cold or the flu, hypertension, etc.) are typically not eligible for WC benefits. Although typically less frequent and less costly, WC claims sometimes arise from something that is characterized as an illness rather than an injury. For example, maintenance workers could be exposed to poison ivy when they are required to remove foliage. Workers could have allergic reactions to substances they come into contact with on the job. Medical staff or others might be eligible for WC if they contract a disease from a bloodborne pathogen such as Hepatitis or AIDS if it can be proven that they contracted the disease during their job duties. In some cases and in some states, employees might be eligible to receive WC for psychological conditions that are sustained at work. For example, post-traumatic stress disorder could result from witnessing someone killed in the office. However, as a general rule, ordinary diseases of life (such as a cold or the flu, hypertension, etc.) are typically not eligible for WC benefits.

19. Telecommuting: Employees who work out of their homes could be eligible for WC benefits if their injury occurs as part of their employment. The risk of injury may be low if the work involves office-type computer work. Nevertheless, employers might reduce the risk of false claims by requiring that work be done only in designated spaces and times.

20. Assume that workers do get hurt; you can reduce the cost of their injuries. The goal is to manage claims to reduce overall costs.

21. Types of Claims: Medical only: No time lost from work. Wage loss: Employee misses some time from work. Some companies supplement wage-loss benefits. There are several different types of WC claims that can be categorized according to the benefits employees are entitled to receive. First, medical-only claims occur when there is a work-related injury or illness, but the worker does not lose any wages. For these claims, however, the employee is entitled to receive all reasonably necessary medical treatment. This is paid without deductibles or co-pays by the employee. Many states have specific fee schedules that either serve as a guideline or regulate the types of treatment and the amounts that can be charged for specific types of treatment. Wage loss claims occur when a worker misses work because of a work-related injury. Workers may not be entitled to wage-loss benefits for a few days after the injury. This is intended to prevent workers from filing fraudulent claims. However, when they do become eligible for wage-loss benefits, they receive only a percentage of the wages they would have earned. Each state has a different schedule of wage-loss benefits including percentages and maximums. Sometimes employers will make up some or all of the difference between the statutory mandated WC wage-loss benefits and the wages the worker would have earned. This may be required under a collective bargaining agreement for unionized workers.There are several different types of WC claims that can be categorized according to the benefits employees are entitled to receive. First, medical-only claims occur when there is a work-related injury or illness, but the worker does not lose any wages. For these claims, however, the employee is entitled to receive all reasonably necessary medical treatment. This is paid without deductibles or co-pays by the employee. Many states have specific fee schedules that either serve as a guideline or regulate the types of treatment and the amounts that can be charged for specific types of treatment. Wage loss claims occur when a worker misses work because of a work-related injury. Workers may not be entitled to wage-loss benefits for a few days after the injury. This is intended to prevent workers from filing fraudulent claims. However, when they do become eligible for wage-loss benefits, they receive only a percentage of the wages they would have earned. Each state has a different schedule of wage-loss benefits including percentages and maximums. Sometimes employers will make up some or all of the difference between the statutory mandated WC wage-loss benefits and the wages the worker would have earned. This may be required under a collective bargaining agreement for unionized workers.

22. Types of Claims: Rehabilitation: To help workers recover their capacity to work. Death: From job-related causes. Specific loss: Eye, finger, leg, etc. WC laws often require that injured employees receive some form of rehabilitation, such as physical or occupational therapy. This benefit is designed to help employees perform some work, even though they remain partially limited in their physical abilities. This can be very expensive, and employers often resist paying for this if it appears to be unnecessary or ineffective. When a worker is killed on the job, their family is entitled to receive a cash amount, such as life insurance, that is specified by state law. Also, when workers lose, or lose the use of, some part of their body (e.g., an eye, a finger), they are entitled to a specified benefit in addition to any necessary medical treatment. WC laws often require that injured employees receive some form of rehabilitation, such as physical or occupational therapy. This benefit is designed to help employees perform some work, even though they remain partially limited in their physical abilities. This can be very expensive, and employers often resist paying for this if it appears to be unnecessary or ineffective. When a worker is killed on the job, their family is entitled to receive a cash amount, such as life insurance, that is specified by state law. Also, when workers lose, or lose the use of, some part of their body (e.g., an eye, a finger), they are entitled to a specified benefit in addition to any necessary medical treatment.

23. Claims can vary in cost; depends on the amount of payments for: Medical expenses. All reasonably necessary medical expenses must be paid for. However, there are ways to reduce these costs. Wage loss. Get the employee back to work sooner. The cost of WC claims can often be reduced through effective claims management. Worker rights to their legally entitled benefits should not be infringed; however, the cost of the claim should not be unnecessarily high.The cost of WC claims can often be reduced through effective claims management. Worker rights to their legally entitled benefits should not be infringed; however, the cost of the claim should not be unnecessarily high.

24. Company doctor. Independent medical exams. Issues: For some types of injuries/illnesses (such as back pain, headaches, soft tissue), it�s more difficult to prove or disprove disability or work relatedness. The key questions: Is the worker unable to work? Is the injury or illness work-related? Is expensive medical treatment necessary? Sometimes medical opinions will differ. Some doctors may think that a worker is disabled and should be off work; other doctors may disagree. Some doctors may think that the injury or illness is work-related and other doctors may disagree. Some doctors may think that a particularly expensive course of medical treatment is necessary, whereas other doctors may disagree. Therefore, employers, insurers and TPAs should be aware of their options in seeking medical opinions from different doctors. They should not try to prevent employees from receiving the treatment they deserve; however, some doctors have techniques that are used to evaluate the veracity of a disability or whether it is work-related. Employers rely on the opinions of doctors to help prevent the payment of unnecessarily expensive or fraudulent claims.Sometimes medical opinions will differ. Some doctors may think that a worker is disabled and should be off work; other doctors may disagree. Some doctors may think that the injury or illness is work-related and other doctors may disagree. Some doctors may think that a particularly expensive course of medical treatment is necessary, whereas other doctors may disagree. Therefore, employers, insurers and TPAs should be aware of their options in seeking medical opinions from different doctors. They should not try to prevent employees from receiving the treatment they deserve; however, some doctors have techniques that are used to evaluate the veracity of a disability or whether it is work-related. Employers rely on the opinions of doctors to help prevent the payment of unnecessarily expensive or fraudulent claims.

25. Develop rapport with doctors: Requires honest concern for employee welfare. Provide a detailed job description to the doctor: Paper (physical requirements: weight, motion, frequency). Video. On-site visits. Employers are entitled to receive medical records related to WC claims, but they should be kept confidential. Focus on rehabilitation. The results of medical exams can be more useful when the employer has spent some effort communicating and/or developing a relationship with a doctor. The goal here is to provide the doctor with all the necessary information to make an informed decision; but it also gives the doctor a sufficient level of confidence that the employer is not trying to unfairly deny benefits to a worker. Communications with a doctor should make it clear that the goal is to rehabilitate the worker to the extent possible, not to retaliate against them for filing a claim.The results of medical exams can be more useful when the employer has spent some effort communicating and/or developing a relationship with a doctor. The goal here is to provide the doctor with all the necessary information to make an informed decision; but it also gives the doctor a sufficient level of confidence that the employer is not trying to unfairly deny benefits to a worker. Communications with a doctor should make it clear that the goal is to rehabilitate the worker to the extent possible, not to retaliate against them for filing a claim.

26. Light duty, favored, supervised or transitional work: Avoid secondary gain. Secondary gain is the extent to which having an injury serves some additional purpose (e.g., staying away from work). Rehabilitate worker. Diary files. Good to be consistent with work-related and non-work-related assignments (i.e., don�t make work-related more onerous). Do not retaliate! One effective method to reduce the cost of some WC claims is to assist the employee in returning to work as soon as possible to facilitate their recovery. Shorter time off work means less wage-loss benefits paid. When the doctor says that a worker can go back to work, even with some restrictions on duties (e.g., no lifting over 30 pounds, no repetitive bending), it is advantageous to both the employer and the employee to return them to work. The risks of re-injury should be avoided by ensuring that the employee does not do more than he or she are able to safely do. However, by returning to work, he or she will get back in a routine of working, feel better about themselves and often recover faster. Sometimes it is said that workers who don�t come to work gain from the pleasure of not working. This secondary gain may be a barrier to effective rehabilitation. A diary can help the employer keep track of future dates when the employee is expected to return to work. If on that date the worker doesn�t come back, the employer can proactively seek them out to determine their status. If an employee refuses to return to work when they are able to do so, the employer might be legally entitled to terminate their employment under advice of their legal counsel. However, employers should be careful not to use this as a tool to retaliate against workers for filing WC claims. One effective method to reduce the cost of some WC claims is to assist the employee in returning to work as soon as possible to facilitate their recovery. Shorter time off work means less wage-loss benefits paid. When the doctor says that a worker can go back to work, even with some restrictions on duties (e.g., no lifting over 30 pounds, no repetitive bending), it is advantageous to both the employer and the employee to return them to work. The risks of re-injury should be avoided by ensuring that the employee does not do more than he or she are able to safely do. However, by returning to work, he or she will get back in a routine of working, feel better about themselves and often recover faster. Sometimes it is said that workers who don�t come to work gain from the pleasure of not working. This secondary gain may be a barrier to effective rehabilitation. A diary can help the employer keep track of future dates when the employee is expected to return to work. If on that date the worker doesn�t come back, the employer can proactively seek them out to determine their status. If an employee refuses to return to work when they are able to do so, the employer might be legally entitled to terminate their employment under advice of their legal counsel. However, employers should be careful not to use this as a tool to retaliate against workers for filing WC claims.

27. Challenge the claim: Activity evidence: What activities was the employee involved in away from work? Private detectives: Hired to gather evidence refuting the claim of a disability. Employers may also be able to challenge the validity of questionable claims if they can accumulate sufficient evidence to show that the worker was either not injured at work or is not disabled. Sometimes activity evidence can prove that the worker is not disabled. For example, a supervisor might see Joe bowling on Saturday when Joe was supposed to be off work because of his bad back. It may be appropriate, depending on state laws, to hire a private investigator to document (e.g., video recording) the behaviors of the employee to prove that the employee�s claim of pain from a work-related injury is not real. However, employers should use this technique only in unusual situations where it is highly likely that the employee is faking and only under the guidance of their legal counsel.Employers may also be able to challenge the validity of questionable claims if they can accumulate sufficient evidence to show that the worker was either not injured at work or is not disabled. Sometimes activity evidence can prove that the worker is not disabled. For example, a supervisor might see Joe bowling on Saturday when Joe was supposed to be off work because of his bad back. It may be appropriate, depending on state laws, to hire a private investigator to document (e.g., video recording) the behaviors of the employee to prove that the employee�s claim of pain from a work-related injury is not real. However, employers should use this technique only in unusual situations where it is highly likely that the employee is faking and only under the guidance of their legal counsel.

28. Coordinate benefits: Investigate who else could be paying: An automobile insurance policy from another driver? The product liability insurance policy of the manufacturer of the defective product that injured the worker? Second injury funds: Some states have funds that will reimburse employers who have hired an employee who was injured at a previous employer�s workplace. In some situations, there is the possibility that some other employer or organization should be responsible for paying at least part of the expenses of a WC claim. When this occurs, the payment of benefits should be coordinated among multiple parties. A few states still have laws designed to help injured workers to get hired by others. These laws proportion the cost of second or repeat injuries between the first employer where the employee was first injured and the second employer where the employee was subsequently injured. When this occurs, employers should check to make sure that they, their TPA or their insurance company is seeking reimbursement from the previous employer. In other situations, a worker may be injured at work due to the fault of another party. Although their exclusive remedy against their employer is WC benefits, they might be able to sue the other party (e.g., the manufacturer of negligently designed or manufactured equipment that caused the injury). When this occurs, the employer may be able to recover some of their loss from that third party as well. Employers should proactively seek opportunities to coordinate benefits and reduce their claim costs.In some situations, there is the possibility that some other employer or organization should be responsible for paying at least part of the expenses of a WC claim. When this occurs, the payment of benefits should be coordinated among multiple parties. A few states still have laws designed to help injured workers to get hired by others. These laws proportion the cost of second or repeat injuries between the first employer where the employee was first injured and the second employer where the employee was subsequently injured. When this occurs, employers should check to make sure that they, their TPA or their insurance company is seeking reimbursement from the previous employer. In other situations, a worker may be injured at work due to the fault of another party. Although their exclusive remedy against their employer is WC benefits, they might be able to sue the other party (e.g., the manufacturer of negligently designed or manufactured equipment that caused the injury). When this occurs, the employer may be able to recover some of their loss from that third party as well. Employers should proactively seek opportunities to coordinate benefits and reduce their claim costs.

29. Offsets from unemployment insurance. Question: Could there be an overlap between workers' compensation and unemployment insurance? Answer: Usually not. To get WC benefits, you have to be unable to work. To get UI benefits, you have to be available for work. Usually, both of these can�t happen at the same time. A few states might permit employees to receive WC partial disability wage-loss benefits and UI benefits at the same time. Most states provide offsets or prohibitions so that employees cannot get both WC and UI benefits at the same time. To get WC benefits, you have to be unable to work; to get UI benefits, you have to be available for work. Usually, both of these can�t happen at the same time. However, a few states recognize that since some employees are partially available to work (i.e., for some jobs), they might be eligible for UI benefits.A few states might permit employees to receive WC partial disability wage-loss benefits and UI benefits at the same time. Most states provide offsets or prohibitions so that employees cannot get both WC and UI benefits at the same time. To get WC benefits, you have to be unable to work; to get UI benefits, you have to be available for work. Usually, both of these can�t happen at the same time. However, a few states recognize that since some employees are partially available to work (i.e., for some jobs), they might be eligible for UI benefits.

30. Propose lump-sum settlements. Requires legal oversight. May terminate benefits. Employers should get: A resignation. Waiver of any and all other claims. Sometimes the employer believes that the employee should return to work and has sufficient medical documentation to back up their assertion. In a situation such as this, employers may choose to send a certified letter to the employee requiring that they return to work at a specified time and place to do the work they have been assigned. If the employee refuses or simply fails to show up, then the employer may have the legal right to treat this employee just like any other employee who doesn�t show up for work. This requires a consistently enforced company policy. Often, employers have policies that state that if an employee doesn�t come to work for three consecutive days without a legitimate excuse, they will be assumed to have resigned their employment. The employer may send them a letter confirming the employee�s abandonment of their employment. This may serve as a catalyst to the worker to seek representation by a WC attorney or file some type of claim with a state agency. A dispute that might arise over such a claim can often result in a settlement in which the employee receives some cash amount and signs an agreement that their employment is terminated and that they have no legal right to file any other claims against the employer. Sometimes the employer believes that the employee should return to work and has sufficient medical documentation to back up their assertion. In a situation such as this, employers may choose to send a certified letter to the employee requiring that they return to work at a specified time and place to do the work they have been assigned. If the employee refuses or simply fails to show up, then the employer may have the legal right to treat this employee just like any other employee who doesn�t show up for work. This requires a consistently enforced company policy. Often, employers have policies that state that if an employee doesn�t come to work for three consecutive days without a legitimate excuse, they will be assumed to have resigned their employment. The employer may send them a letter confirming the employee�s abandonment of their employment. This may serve as a catalyst to the worker to seek representation by a WC attorney or file some type of claim with a state agency. A dispute that might arise over such a claim can often result in a settlement in which the employee receives some cash amount and signs an agreement that their employment is terminated and that they have no legal right to file any other claims against the employer.

31. Family and Medical Leave Act: Gives qualified workers the right to time off from work without losing their jobs for serious medical conditions. Applies even for work-related injuries. Up to 12 weeks. Some employers require employees to use up their entitlement to FMLA leave. After 12 weeks is up, if there is no reasonable accommodation, the worker may be terminated. Check with your own legal counsel. When handling workers' compensation claims, sometimes the provisions of other statutes set limits on what employers can do. For example, the Family and Medical Leave Act requires that employers permit employees to take up to 12 weeks of unpaid leave for a serious medical condition. To be qualified for this benefit, the employee will have had to work for the employer for a specified amount of time, and the employer must have a specified number of employees. On completion of their FMLA leave, the employee is entitled to be returned to their regular job. Some employers have required employees who are off work due to a work-related disability to use their FMLA leave. In this way, after they are off work for 12 weeks, the employer is no longer required to keep their job open for them. If at the end of that time, the employee is not able to perform the essential functions of the job or there is no reasonable accommodation that the employer can provide for them, then the employer might be legally entitled to terminate their employment. Of course, employers should rely on their own legal counsel whenever they take such serious steps as firing someone. The FMLA requirements are specific about the time off that must be provided. By contrast, the Americans with Disabilities Act, the next statute that we will discuss, is more vague in that it requires a �reasonable accommodation.� When handling workers' compensation claims, sometimes the provisions of other statutes set limits on what employers can do. For example, the Family and Medical Leave Act requires that employers permit employees to take up to 12 weeks of unpaid leave for a serious medical condition. To be qualified for this benefit, the employee will have had to work for the employer for a specified amount of time, and the employer must have a specified number of employees. On completion of their FMLA leave, the employee is entitled to be returned to their regular job. Some employers have required employees who are off work due to a work-related disability to use their FMLA leave. In this way, after they are off work for 12 weeks, the employer is no longer required to keep their job open for them. If at the end of that time, the employee is not able to perform the essential functions of the job or there is no reasonable accommodation that the employer can provide for them, then the employer might be legally entitled to terminate their employment. Of course, employers should rely on their own legal counsel whenever they take such serious steps as firing someone. The FMLA requirements are specific about the time off that must be provided. By contrast, the Americans with Disabilities Act, the next statute that we will discuss, is more vague in that it requires a �reasonable accommodation.�

32. Americans with Disabilities Act: Requires a reasonable accommodation for disabilities (even if work-related). The accommodation must be provided if the: Disability is a major life function (e.g., seeing, walking, hearing); and Accommodation is reasonable (i.e., not an undue hardship on the employer) Not too expensive but larger employers need to spend more Employee would otherwise be able to perform the essential functions of their job; and Accommodation will not cause undue risk of harm to the employee or others. The Americans with Disabilities Act may also come into play in situations regarding work-related injuries. This statute requires employers provide a reasonable accommodation to employees who are disabled from either a physical or mental impairment. However, for employees to be eligible for this accommodation, the disability must be a substantial limitation of a major life activity (e.g., the employee can�t sit, stand, lift, reach). The employee must be able to perform the essential functions of the job. The accommodation must be reasonable. The reasonableness depends on the size of the employer; larger employers are expected to be able to spend more. Also, there should be no unreasonable risk of harm to the employee or to others from the accommodation. Thus, under some circumstances, employers may have a legal obligation to provide a limited accommodation to employees with work-related injuries.The Americans with Disabilities Act may also come into play in situations regarding work-related injuries. This statute requires employers provide a reasonable accommodation to employees who are disabled from either a physical or mental impairment. However, for employees to be eligible for this accommodation, the disability must be a substantial limitation of a major life activity (e.g., the employee can�t sit, stand, lift, reach). The employee must be able to perform the essential functions of the job. The accommodation must be reasonable. The reasonableness depends on the size of the employer; larger employers are expected to be able to spend more. Also, there should be no unreasonable risk of harm to the employee or to others from the accommodation. Thus, under some circumstances, employers may have a legal obligation to provide a limited accommodation to employees with work-related injuries.

33. Workers' compensation is legally required. The costs are variable and can be reduced. Employees should be treated with respect and dignity, and without retaliation.