Self-Insured Workers Compensation Program. Copyright 2010 Raytheon Company. All rights reserved. Page 1

Self-Insured Workers’ Compensation Program Frank Ruel

Agenda

g



Raytheon Company Overview



Integrated Disability Program



Workers’ Compensation Program



Self Administration Benefits



Return to Work

WHO WE ARE

 A technology and innovation leader specializing in defense, homeland

security and other government markets throughout the worldy g g

 2009 net sales: $25 billion  75,000 employees worldwide

 Headquarters: Waltham, Massachusetts

OUR VISION

To be the most admired defense and aerospace systems supplier through world-class people and technology

Raytheon Business Headquarters Raytheon Business Headquarters Raytheon Business Headquarters Raytheon Business Headquarters

Integrated Defense Systems Tewksbury, MA Global Headquarters Waltham, MA Technical Services Reston VA Network Centric Systems

Space and Airborne Systems El Segundo, CA BD and Raytheon International Operations Rosslyn, VA Reston ,VA Intelligence and Systems McKinney, TX Missile Systems Tucson, AZ Intelligence and Information Systems Garland, TX

Organization Chart

g

VP -- Corp ServicesCorp Services VP VP -- Benefits, Comp, Benefits, Comp, PD, GHR

PD, GHR

Risk Management

Risk Management EHSEHS Integrated Disability Integrated Disability Programs

Integrated Disability Program at Raytheon

g

y

g

y



Workers’ Compensation

• Self Insured and self administered in MA and RI • Self-Insured and self-administered in MA and RI

• Claims administered by Liberty Mutual nationwide (except MA/RI) as well as for U.S. employees working overseas



Short/Long-Term Disability

• Self-Insured throughout the U.S. for STD and LTD

• Employees can purchase optional coverage for higher benefit p y p p g g rates and long-term disability

• Claims are handled by MetLife.



Unemployment Compensation (Claims)



Unemployment Compensation (Claims)

Raytheon Disability Program Absence Management Goals

y

y

g

g



Return to work initiatives

• Early and medically safeEarly and medically safe • Whether Occ. or Non-Occ. • Plan RTW- Lead discussions



Corp resource to consult and train re:

Absence Management / productivity

• HR, management, and front-line leaders , g , • Safety and medical staff



Develop innovative RTW programs



Engage medical community and

Raytheon Physicians

Raytheon Workers’ Compensation Program (MA & RI)

y

p

g

(

)



Self-Insured

• Raytheon funded for workers’ compensation coveragey p g

• Excess coverage through Liberty Mutual over retention level



Self-Administered

• “In-house” Claims processing – investigationIn house Claims processing investigation, forms, claims decisions

• Bill Payment

• Utilization Review (UR)Utilization Review (UR) • Loss Prevention

• Litigation Management – Outside Counsel



Other Resources



Other Resources

• On-site Clinics staffed with nurses and M.D.’s • Medical Consultants

Vocational Rehabilitation Specialists • Vocational Rehabilitation Specialists

Advantages vs. Disadvantages of Self-Administration

g

g

Pros



Integration with the Business

• Access to Raytheon facilities

Cons



Bonding requirements

• Access to Raytheon facilities and Supervisors (in-person) • Working relationships with

management & safety



Personnel issues



Overhead costs

• Head count • Employer databases



Claim Analyst handles

Conciliations

Head count • IT costs

• Office Space



Manage medical-only claims



Integration of RMIS, Risktrac,

MetLife Database, Medgate



Relationships with Doctors



TPA comparison

Raytheon Workers’ Compensation Program History

y

p

g

y



Self-Insured as of 1/1/1992



Self-Administered as of 1993

Se

d

s e ed as o

993



Currently cover about 15,000 employees (MA & RI)

•

Union workforce ~ 2,300

•

Early 1990’s Union workforce ~10,000



Decreased claim volume due to:

•

Reduction of touch-labor

Reduction of touch labor

workforce in MA

•

Proactive EHS initiatives

WC

f

Paid Lost Work Days – Insured vs. Self Insured

y

Average Lost Time Claim Cost – Insured vs. Self Insured

g

$35 000 00

$31,287.29

$25 000 00

$30,000.00

$35,000.00

$18,459.03

$15,000.00

$20,000.00

$25,000.00

$5,000.00

$10,000.00

$15,000.00

$0.00

$ ,

3 YR AVG $ LT Claims

Average Expense Cost – Insured vs. Self Insured

g

p

$800 00

$781.69

$600 00

$700.00

$800.00

$400.00

$500.00

$600.00

$205.14

$200.00

$300.00

$205.14

$0.00

$100.00

3 YR AVG $ Expense

3

G $

pe se

Jurisdictional Difficulties



No control of medical

(choice of physician)



Legal issues

(choice of physician)



High SAWW, high

compensation rates

• Fee incentive for employee attorneys to file

• RTW can be lengthy legal process



MA Fee schedule

-negotiated medical rates



Fairly liberal ALJ’s

process



No cap on TTD



Specific benefits

a y be a

J s



Difficult to get relief from

SIF

• Whole body disfigurement • Very subjective system

Coordination of Benefits



Share data with Raytheon's Health Insurance

C

i

(

lf f

d d)

Carriers (self-funded)



Coordination of benefits with MetLife for

STD/LTD

STD/LTD



Integrated Health Management (Mission:Health)

Sh

WC d t

ith

l

t f

t

t



Share WC data with unemployment for contract

Getting Absent Employees Back to Work

g

p y



Temporary Job Accommodations

p

y

• Seek detailed restrictions

• Job rotation or alternative assignments • Assistive devices and work station

• Assistive devices and work station modifications



Raytheon Works with MD’s

Employee Physician

• RTW promptly in a medically appropriate and safe manner

• Physician tours of our facilities _Raytheon • Pre arranged fee arrangements for top

notch Dr’s who get it.

The Employer Statement of Job Demands

p y



Outlines the physical

requirements of the job



Completed by the

employee’s supervisor



Describes potential

accommodations



It is NOT a job description



Can be forwarded to treating

physicians

The Lost Time Intervention Team (LTIT)

(

)



Medical (RN/MD), HR, Voc

The worksite Return to Work Planning Forum

Medical (RN/MD), HR, Voc

Rehab Experts and Claims



Reduced Hours and other

accommodations are often

used to ease return

used to ease return



Clear communications to the

absent employee is an

Conclusions



Better service



Lower claims cost (especially

(

p

y

expense)



Better RTW outcomes through

i t

ti

ith th b

i

integration with the business

and personal relationships



Innovative forum to develop

p

and create tools for RTW