Workers
Workers
’
’
Compensation 101
Compensation 101
Terminology, Concepts and
Terminology, Concepts and
Principles
Principles
Melissa LeRoy Melissa LeRoy VP Sales VP SalesSpecialty Risk Services Specialty Risk Services
Definition
Definition
Workers
Workers
’
’
Compensation
Compensation
•
• StateState--mandated, employermandated, employer--provided provided coverage in all 50 states. Most are
coverage in all 50 states. Most are
compulsory compliance.
compulsory compliance.
•
• Covers employeeCovers employee’’s economic losses s economic losses due to work related injury or disease
due to work related injury or disease
•
• Provides employer with liability Provides employer with liability
protection from being sued for work
protection from being sued for work- -related conditions
Terminology
Terminology
Exclusive Remedy
Exclusive Remedy
•
• Employer gives benefits in return Employer gives benefits in return for protection from being sued by
for protection from being sued by
the employee
the employee
•
• Similar to a noSimilar to a no--fault approach to fault approach to workplace injuries and accidents
workplace injuries and accidents
•
• Does not apply if employer is Does not apply if employer is
fraudulent, negligent, assaults the
fraudulent, negligent, assaults the
employee, or is not acting as an
employee, or is not acting as an
employer
Terminology
Terminology
Compensability
Compensability -- Determining if benefits are owed Determining if benefits are owed
based on state statutes, case law and facts of the
based on state statutes, case law and facts of the
case
case
•
• Course and ScopeCourse and Scope
•
• HorseplayHorseplay •
• Personal errandPersonal errand •
• DeviationDeviation •
• Traveling employeesTraveling employees
•
• Arising out of the EmploymentArising out of the Employment
•
• Accident and defined occurrenceAccident and defined occurrence •
• Idiopathic injuriesIdiopathic injuries •
Terminology
Terminology
Compensability
Compensability
•
• Occupational Disease Occupational Disease
•
• Illness due to prolonged exposure to Illness due to prolonged exposure to chemicals or other environmental factors
chemicals or other environmental factors
•
• Cumulative TraumaCumulative Trauma
•
• No clear or defined accidental occurrenceNo clear or defined accidental occurrence •
• Gradual onset of symptomsGradual onset of symptoms •
• Injury sustained over time due to repetitive Injury sustained over time due to repetitive activity such as pushing and pulling, lifting
activity such as pushing and pulling, lifting
or bending
or bending
•
• Pervasive in many industries from Pervasive in many industries from manufacturing to office environments
Terminology
Terminology
Statute of Limitations
Statute of Limitations
•
• Legally specified timeframe during which Legally specified timeframe during which an action must be taken to be subject to
an action must be taken to be subject to
regulatory requirements
regulatory requirements
•
• Notify the employerNotify the employer
•
• Seek medical careSeek medical care
•
• Submit a claim Submit a claim
•
Terminology
Terminology
•
• Apportionment and Second Injury FundsApportionment and Second Injury Funds
•
• Allows the employer to take credit or Allows the employer to take credit or
seek reimbursement of claim costs
seek reimbursement of claim costs
where the employee had prior injury or
where the employee had prior injury or
disability.
disability.
•
• PrePre--existing injury or condition impairs existing injury or condition impairs
recovery
recovery
•
• Must be documented through medical Must be documented through medical
records and in some cases recorded at
records and in some cases recorded at
the time of hire
Terminology
Terminology
•
• SubrogationSubrogation
•
• A third party may be deemed responsible A third party may be deemed responsible
for the accident or injury
for the accident or injury
•
• Auto accidentsAuto accidents •
• Slips and falls on property maintained Slips and falls on property maintained by others
by others
•
• Assault by coAssault by co--workers or othersworkers or others •
• Injury due to defective machinery or Injury due to defective machinery or equipment
equipment
•
• WC payor may pursue reimbursement of WC payor may pursue reimbursement of
some or all costs related to that claim
Who is covered?
Who is covered?
All All ““employeesemployees”” or or ““contractorscontractors””
–
– Receiving pay for servicesReceiving pay for services –
– Where employment is expressed Where employment is expressed (orally or written) or implied
(orally or written) or implied
(by actions)
(by actions)
–
– Where contractors activities, Where contractors activities, methods and equipment are
methods and equipment are
controlled by employer
controlled by employer
What is Covered?
What is Covered?
Bodily injury, disease, or death
Bodily injury, disease, or death
manifesting itself from covered
manifesting itself from covered
“
“onon--thethe--jobjob”” occurrences occurrences
Bodily injury may be construed to
Bodily injury may be construed to
include stress or psychiatric conditions
include stress or psychiatric conditions
in some states
WC Benefit Types
WC Benefit Types
Temporary Disability (TD) Temporary Disability (TD) • • Total (TTD)Total (TTD) • • Partial (TPD)Partial (TPD) •• Wage calculations based on average Wage calculations based on average
earnings
earnings
•
• State defined minimum and maximumState defined minimum and maximum
•
• Total typically paid at 66 2/3%Total typically paid at 66 2/3%
•
• Partial paid at loss of earningsPartial paid at loss of earnings
•
WC Benefit Types
WC Benefit Types
Permanent Disability Permanent Disability • • Total (PTD)Total (PTD) •• Lifetime benefitsLifetime benefits
•
• May offset with Social Security or other disability benefitsMay offset with Social Security or other disability benefits
•
• Partial (PPD)Partial (PPD)
•
• ScheduledScheduled
•
• Amputation, loss of limbAmputation, loss of limb
•
• Percentage of ImpairmentPercentage of Impairment
•
• Doctor’Doctor’s ratingss ratings
•
• DeathDeath
•
• BurialBurial
•
What is Covered?
What is Covered?
•
•
Medical
Medical
•
• Directed Care and Choice of PhysicianDirected Care and Choice of Physician
•
• Medical Fee SchedulesMedical Fee Schedules
•
• Utilization and PreUtilization and Pre--Certification rulesCertification rules
•
What is Covered?
What is Covered?
•
•
Vocational Rehabilitation
Vocational Rehabilitation
•
• May be state funded or employer May be state funded or employer
funded
funded
•
• Generally specifies how long or Generally specifies how long or
to what dollar amount will be
to what dollar amount will be
paid
How claims are resolved
How claims are resolved
Each State has rules related to when an
Each State has rules related to when an
employee is considered stable, cured
employee is considered stable, cured
or at Maximum Medical Improvement
or at Maximum Medical Improvement •
• Some states allow for full and final Some states allow for full and final settlements
settlements
•
• Some states require Some states require ““lifetime medicallifetime medical”” •
• Employee may be permitted to reEmployee may be permitted to re--open a open a claim if they aggravate the injury or
claim if they aggravate the injury or
experience a worsening of their condition
