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Arizona Workers Compensation At A Glance

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(1)

Arizona Workers’ Compensation

At A Glance

(2)

Worker’s Compensation

Premium Rankings

(3)

Arizona’s Ranking

$1.77 $1.49 $1.73 $1.71 $1.61 $1.00 $1.20 $1.40 $1.60 $1.80 $2.00 $2.20 $2.40 $2.60 $2.80 $3.00 $3.20 2000 2004 2006 2010 2012 Ra ng e of P rem iu m R at

es 2012 Ranking: 36 (15th lowest in country)

Premium Rate Index per $100 of Payroll: $1.61

Percent of National Median ($1.88): 86%

Source: Oregon Workers’ Compensation Premium Rate Ranking Summary Reports, Oregon Department of Consumer & Business

(4)

Workers’ Compensation

Rates

(5)

-4.3 0.6 2.4 4.5 8.4 -3.1 4.5 4.1 7.9 -4.2 -2.8 5.2 4 -6 -4 -2 0 2 4 6 8 10 2002 2003 2004 2005 2006 2006 2007 Jan 2008 2008 Oct 2010 2011 2012 2013

(6)

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463.2 541.9 571.5 672.9 724.1 820.6 946.9 1059.3 1015.5 864.4 773 806 924 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Taxable Premium

In Millions

(8)

2012

Taxable Premium Allocation by Payer

In Millions

All Insurance Carriers $647.6 Self-Insured $276.4

(9)

(10)

184,600 155,687 136,985 120,535 97,415 94,772 96,003 99,497 24,615 27,865 26,847 23,561 22,772 22,469 23,613 1994 2000 2007 2008 2009 2010 2011 2012 All Self-Insured

(11)

660 991 1173 912 739 944 879

Arizona Colorado Nevada New

Mexico Utah Regional CW

Claim Frequency of Lost Time

Claims Per 100,000 Workers

(12)

(13)

523.8 416.2 362.3 404.2 431.7 467.2 481.4 524.6 558.7 562.6 519.4 544.7 568.2 558.7 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Total Direct Losses

(14)

1999 to 2011

Allocation of Losses by Payer

In Millions

296.2 187.8 168.9 146.3 136.0 135.2 126.6 129.7 137.4 165.5 161.9 187.6 212.2 61.2 70.3 77.2 75.3 84.6 100 111.6 100 105.5 111.3 105.9 114 137 166.4 158.1 116.1 182.6 211.1 232 243.2 294.9 315.7 285.7 251.6 243 219 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

(15)

2012

Loss Allocation by Payer

In Millions

All Insurance Carriers: $432.5 (77%) Self-Insured: $126.2 (23%)

(16)

$416.2 $362.3 $404.2 $431.7 $467.2 $481.4 $524.6 $558.7 $562.6 $519.4 $544.7 $568.2 $558.7 155.7 147.3 137.8 128.8 136.1 138.7 142.4 134 121 97.4 94.8 96 99.5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Losses in Millions Frequency in Thousands

(17)

24.8 18.7 19.9 18.7 2002 2003 2004 2005 2006 2007 2008 2009 2010 In T ho us an ds $

AZ Average Indemnity Cost Per Case

Adjusted to Current Wage Level

Actual

(18)

Comparison to CW Average Indemnity

Cost Per Case

Actual 20.7 18.7 20.5 22.3 2007 2008 2009 2010 2011 In T ho us an ds $ Arizona CW

(19)

40,879 46,911 42,100 32,779 42,483 42,100 2002 2003 2004 2005 2006 2007 2008 2009 2010 In T ho us an ds $

Average Medical Cost Per Case

Adjusted to Current Wage Level

Actual

(20)

Comparison to CW Average

Medical Cost Per Case

Actual 39.1 42.1 24 28 2007 2008 2009 2010 2011 In T ho us an ds $ Arizona CW

(21)

Distribution of Benefit Costs

Carrier Claims

Ten Years Ago

50% 50% Medical Indemnity Today 71% 29% Medical Indemnity

(22)

Distribution of Benefit Costs

Self-Insured Claims

Ten Years Ago

72% 28% Medical Indemnity Today 76% 24% Medical Indemnity

(23)

(24)

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Calendar

Year Admin Fund Rate Admin Fund Revenue in Millions % Change from Prior Year 2012 3.0% $27.7 +14.7% 2011 3.0% $24.2 +18% 2010 2.65% $20.5 -21.% 2009 3.0% $26 -14.8% 2008 3.0% $30.5 -4.1%

(26)

Special Fund Revenue

Calendar

Year Special Fund Rate Fund Revenue Total Special in Millions % Change from Prior Year 2012 2.5% $23.1 +14.9% 2011 2.5% $20.1 +4.1% 2010 2.5% $19.3 +48.5% 2009 1.5% $13 -14.5% 2008 1.5% $15.2 -42.6%

(27)

Actuarial deficit estimated as of 6-30-12: $46.9 million

Special Fund

Actuarial Picture

(28)

Calendar Admin SF General SF Insolvents SF Apportionment Total

1985 3% 1.5% 0 0 4.5% 1986 3% 1.5% 0 0 4.5% 1987 3% 1.5% 0 0 4.5% 1988 3% 1.5% 0 0 4.5% 1989 3.% 1.25% 0 0 4.25% 1990 3% 1% 0 0 4.% 1991 3% 1% 0 0 4.% 1992 3% .75% 0 0 3.75% 1993 3% 0 0 0 3.% 1994 1.25% 0 0 0 1.25% 1995 1.45% 0 0 0 1.45% 1996 1.25% 0 0 0 1.25% 1997 2.15% 0 0 0 2.15% 1998 3% 0 0 0 3.% 1999 3% 0 0 0 3.% 2000 3% 0 0 0 3.% 2001 3% 0 0 0 3.% 2002 2.75% 0 0 0 2.75% 2003 3% 0 0 0 3% 2004 3% 1.5% 0 0 4.5% 2005 3% 1.5% .5% .5% 5.5% 2006 3% 1.5% .5% .5% 5.5% 2007 3% 1.5% .5% .5% 5.5% 2008 3% 1.5% 0 0 4.5% 2009 3% 1.5% 0 0 4.5% 2010 2.65% 1.5% .5% .5% 5.15% 2011 3% 1.5% .5% .5% 5.5% 2012 3% 1.5% .5% .5% 5.5% 2013 2.75% 1.25% .5% .5% 5%

Tax/Assessment History

(29)

SB 1310

(30)

1. The Commission shall publish a report showing the amount of cash and assets held by the Special Fund that are

attributable or allocated to the payment of claims of insolvent insurers as of June 30, 2013.

2. The report shall include all insurance carriers that have had claims assigned to the Special Fund.

(31)

3. The report shall be accompanied by an actuarial opinion confirming the adequacy of the reserves reported and shall also include an opinion from an independent CPA that the methodology used fairly presents the attributable cash and assets.

4. The amount of attributed cash and assets shall include the total amount of monies that are held by the Special Fund from any assessments, recoveries, and released deposits.

(32)

5. The Commission must publish the report by the last Commission meeting in 2013.

(33)

SB 1148

Workers’ Compensation

Reciprocity

(34)

The “old” A.R.S. § 23-904 is repealed and replaced with a “new” A.R.S. § 23-904.

Subsection (A) is the same as it was and preserves the entitlement to AZ benefits for the worker who is hired or regularly employed in AZ but injured in another state

Everything else is new effective September 13, 2013!

A.R.S. § 23-904. Effect of injury without

the state; right to compensation of

(35)

Insurance coverage from State A follows ER’s workers performing temporary work in State B. Benefits are provided as if the worker were injured in State A.

(36)

A state will honor the extraterritorial

provisions of another state as long as the other

state honors its extraterritorial provisions.

(37)

What Claims are Subject to Reciprocity?

Any claim made after September 13, 2013,

regardless of the date of injury.

Any claim that has not been accepted as

compensable or adjudicated as compensable as

of September 13, 2013.

(38)

If Reciprocity Criteria Apply, Then:

An employer and worker from another

reciprocity state are exempt from the Arizona

Workers’ Compensation Act while the worker is

temporarily in Arizona doing work for the

employer.

An Arizona employer and worker are exempt

from the application of the workers' compensation

insurance laws of another reciprocity state while

the Arizona worker is temporarily working in the

other state doing work for the employer.

(39)

An Arizona worker who is injured in another

reciprocity state while temporarily working in

that state is entitled to receive Arizona benefits as

their exclusive remedy.

A worker from another reciprocity state who is

injured while temporarily working in Arizona

may not file a claim in Arizona. Their exclusive

remedy is under the WC laws of the other

reciprocity state.

(40)

• An employer is exempt from requirement to obtain

WC insurance in reciprocity state where worker is temporarily working because employers’ insurance policy in “home” state covers out-of-state

temporary employment (extraterritorial coverage).

(41)

• Employer has WC coverage in home state that covers a worker's

temporary employment while in Arizona (e.g. policy with extraterritorial coverage)

• Employer’s home state recognizes extraterritorial provisions of

Arizona and exempts employers and workers from application of the home state’s workers’ compensation laws.

• The workers’ compensation benefits of the home state are the

exclusive remedy against the employer for injuries sustained by a worker who is injured while temporarily working in Arizona

• Employee has worked less than 90 continuous days in Arizona

during the 365 days immediately before the date of injury

(42)

Talk to your Legal Counsel!!

(43)

• If the Claims Division receives a claim for a worker

injured while temporarily in this state, and no Arizona coverage is found, the Special Fund No Insurance Section will be notified.

• If it appears extraterritorial reciprocity coverage

exists, the Special Fund will deny the claim and check box 11 with this explanation.

• The injured worker can then file in his/her state of

usual employment or can protest the denial.

(44)

Evidence Based Medical

Treatment Guidelines

(45)

Legislation

A.R.S. § 23-1062.03, requires the Industrial Commission of Arizona to develop and implement a process for the use of evidence-based treatment guidelines, where appropriate, to treat injured workers no later than December 31, 2014.

(46)

Advisory Committee Established to

Represent Stakeholders

• Dir. Laura McGrory, Chair

• Donald Dearth, D.C.

• Marjorie Eskay-Auerbach,

M.D., J.D.

• Dennis Kurth, Attorney

• Chris Labban, D.O.

• Bill Lewis, M.D

• Todd Lundmark, Attorney

• Melinda Poppe, ICA Staff

• Sydney Standifird, State of

Arizona Risk Management

• Patricia Treharne, M.D.

• Cathy Vines, SCF Arizona

• Steve Weiss, Attorney

• Joe Tracey, York Risk

(47)

Recommendations for the Development and

Implementation of Treatment Guidelines

Advisory Committee has agreed to the following:

• It is appropriate to use treatment guidelines in the

management of chronic pain.

• Existing guidelines will be considered for adoption

(as opposed to drafting Arizona specific guidelines).

• A multidisciplinary panel of respected specialists

will be established to evaluate case scenarios under the following guidelines: ACOEM, Colorado State, ODG, and Washington State.

(48)

2014 Statutory

Maximum AMW

Beginning

January 1, 2014,

for injuries that

occur during calendar year 2014, the maximum

(49)

Change of Physician Requests

Under A.R.S. § 23-1062.02

Off-Label prescription of controlled substances; Prescription of schedule II controlled substances;

(50)

Change of Physician Requests Under

A.R.S. § 23-1062.02

• An employer, carrier, or the Commission may request

a change of physicians if the treating physician does not comply with the provisions of the statute

• File Request to Change Physician with the Claims

Division specifically stating that it is made pursuant to A.R.S. § 23-1062.02(C)(2)

• The Claims Division will refer the request to the

Administrative Law Judge Division for investigation and resolution. If necessary, the matter will be set for hearing on an expedited basis

(51)

Deductible Policies

Is it time to level the “paying” field?

(52)

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