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Employers and insurance companies have been using functional capacity evaluations (FCE) for over thirty years. In workers compensation insurance cases, the FCE is used to evaluate an employee's ability to perform activities related to his or her employment.

The FCE process compares the individual's health status, body functions, and structures to the demands of the job and the work environment.

What is the purpose of an FCE in workers’ comp?

An FCE's primary objective in workers’ comp insurance cases is to evaluate objectively an injured employee’s ability to return to work. By identifying functional restrictions and determining the degree of disability, the test is designed to increase the likelihood that an injured worker can safely return to work. The test can also uncover “symptom magnifications,” which, in layman terms, are exaggerated claims of incapacity and pain.

How does the FCE test work?

Experts with a background in industrial rehabilitation and social work administer the physical and cognitive tests. The tests measure the worker’s resilience and endurance. If the employee is unable to perform his pre-injury job, the testers attempt to determine if there are skills that are transferable to another line of work. The results of the testing, used in combination with opinions and other findings, are used to decide if the employee can return to work.

The FCE provides objective information in the following areas:

• When to allow the employee to return to work
• If the employee can return to the same job
• The employee’s functional abilities on the job
• The employee’s functional abilities away from work
• A disability evaluation
• A rehabilitation plan
• The need for other medical treatments

There are two types of FCE

The Job Specific FCE evaluates an injured worker’s ability to work in a particular job. The test can be performed at a clinic or on the actual job site. The therapist will determine if the worker can safely perform the tasks of the job he held before the injury or if modifications of the required work will be needed.

The General Purpose FCE is used if the employee no longer has a job to which he can return or if the job functions have not been determined. The results of this test will be used to find out the worker’s ability to work at specific jobs that may become available in the future.

When should you use an FCE?

It probably goes without saying that you won’t need to use a functional capacity evaluation in every one of your workers’ comp cases. But the tests should be utilized in any case in which the injured worker’s functional ability is at issue. You would certainly consider using the evaluations when the employee claims not to be able to return to work because of restrictions, education, or non-transferable skills. If the worker is requesting retraining benefits or looking for permanent total disability, an FCE would be warranted.

Choose the right time to seek an FCE

If your employee is currently at a point in the healing process where additional medical care will be needed, the FCE will not help the defense of the workers comp insurance claim. But if you suspect that your employee is malingering, the tests may help to detect the symptom magnification mentioned above. The report from the tests could lead to a quick settlement or bring about an advantageous result in litigation.

Finding the right evaluator

Choosing an expert comes down to looking at a few vital factors:

• Professional reputation
• Education and background
• Ability to write a plausible FCE report
• Capability to provide trustworthy testimony

To learn more about workers compensation insurance, contact American Insuring Group online, or call us at (800) 947-1270 or (610) 775-3848. We're independent agents who with access to many competing providers.

We'll match up your needs with the companies who can provide reliable workers compensation insurance at a competitive price. Call or click today to get started!

Maybe you’re like many employers who believe that workers’ compensation insurance is just one of those unavoidable costs of doing business and an expense over which you have little control. Good news: controlling your workers comp costs isn’t as difficult as you might think!

The following six steps could help you reduce your workers comp insurance costs by 20% to 50%, depending on how many of them you have already initiated. 

#1. Build your workers compensation program on a solid foundation

You cannot get your program underway unless everyone in your company is on board. Everyone on the management team must be committed to understanding their specific roles and the responsibilities of everyone throughout the company. This commitment from your key employees includes a thorough knowledge of how the workers’ comp system works; an understanding of experience modification rates, the formulas that produce them, and proper classification of employees is a good place to start.

#2. Pay attention to your hiring process

Competent employees tend to be safety conscious workers who are less likely to incur workers comp claims. Make sure your system for hiring brings the best into your company:

• Good interview techniques and thorough background checks will help you identify potential problems.
• Carefully review the applicant’s resume, paying attention to gaps in employment history. Ask the applicant to explain these gaps. Probe for information about the applicant’s attendance record during previous jobs.
• Conduct a complete background check after you have obtained written consent from the applicant.

#3. Make workplace safety a top priority

Safety needs to command equal status with production and quality. Train new employees to perform their jobs safely. Wellness initiatives, which reportedly return three to four dollars for each dollar invested, must be included here. Safety and wellness programs are critical in preventing claims from ever happening. Continually remind your employees to practice safety by posting reminders in common areas and holding meetings to discuss any issues affecting your staff.

#4. Set up a post-injury system

Studies of temporary and permanent disability claims reveal that timely medical treatment reduces expenses. Require employees to report all injuries, no matter how minor they may seem, and then ensure that injured employees receive prompt medical attention. Make sure that your company’s communications systems and post-injury response systems are in place and that you have an effective return-to-work program and policy that monitors your injured employees’ recovery and helps them get back on the job as quickly as possible. These are the core components of your workers’ compensation management program.

#5. Manage workers’ comp insurance claims efficiently

This might begin with using surveillance to prevent workers’ comp fraud. You’ll need to decide whether to request an independent medical examination (IME) and when to use various vendors. Planning for settlements and Medicare set-asides are important aspects of managing your claims. Your claims adjuster, armed with detailed account handling instructions, is also vital in managing claims efficiently.

#6. Control medical costs

Medical and pharmacy costs are rising at an unprecedented pace. Managing these expenses will take a substantial bite out of your workers’ comp bill. Building relationships with a medical provider, using a medical advisor, and utilizing a nurse case manager to monitor complex cases are all steps to be considered here. Also, be aware of the dangers to your injured employees from prescription drug overdose, which has become the biggest killer in the country.

No one benefits when employees get hurt on the job. With focus and effort, you can make workplace injuries less frequent, less severe, and less costly.

Reduce the Cost of Workers Comp Insurance: Get Help From American Insuring Group! 

Contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848 for help in lowering the cost of workers compensation insurance for your business. 

Employers have been using cameras and video surveillance in the workplace for many years. In fact, in a 2005 survey, over half of the responding companies indicated they used video surveillance to counteract theft, violence, or sabotage. 16% of those respondents used surveillance to monitor their workers’ performance.

Still others were monitoring their employees to help prevent workers’ compensation fraud—something that could pay dividends for their companies in terms of payouts and workers compensation insurance rates.

Staging a workers comp injury caught on video

A California workers’ comp insurer had three cases in 18 months where workers’ comp fraud was proven because of videos that showed the workers staging their injuries. The videos—two from restaurant kitchens and the other in a warehouse--show the workers rearranging furniture and objects, kicking the objects, then screaming out in pain. They were subsequently taken away in an ambulance.

The videos were proof that the injuries were faked, and after an investigation, criminal complaints were filed and convictions resulted in a matter of months. There was no impact on the company’s experience rating, or a corresponding premium increase, because the cases were handled quickly, and fraud was easily proved. 

Caution: Employers must respect the laws on workplace privacy

If employers want to use video cameras to monitor employees, they must have a legitimate business reason to do so. State privacy laws will usually determine the extent at which video monitoring is considered legitimate and lawful. Yet, cameras that also record sound may be in conflict with federal wiretapping laws, with or without an otherwise legitimate reason. Most laws that limit surveillance in the workplace pertain to those areas in which there is a reasonable expectation of privacy—restrooms and break rooms, for instance. Some states also prohibit the use of two-way mirrors in restrooms, locker rooms, and similar locations.

Once a company has ascertained a legitimate need to use video monitoring, employees must be notified of the cameras, and filming must be confined to public areas. Under these conditions, the surveillance is likely to be upheld by the court. But since filming can involve privacy rights, it is critical that employers not cross the line.

Certain employee activities remain private

Other activities may also be off-limits for employer surveillance. The National Labor Relations Act (NLRB) prohibits employers from using video cameras to monitor employees' union activities, including union meetings and conversations involving union matters. Employers are required to bargain with union employees before using video surveillance in the workplace. Also, video surveillance may not be used in a manner that is meant to intimidate current or prospective union members.

Some employees have challenged employer surveillance of their activities while on leave for a medical condition or workers' compensation injury. The courts sided with the employer and denied the challenges in cases that involved clear employee abuse of leave laws. (One employee took FMLA leave to vacation in Las Vegas, while another was caught on camera working out at a gym after claiming he was too injured to work). Aside from these flagrant examples, courts would likely rule differently if an employer's surveillance drifted into private activities and effectively deterred employees with a legitimate need from exercising their legal rights.

Workplace video surveillance guidelines

Employers use video cameras to monitor employees for a host of reasons, all of which could save their businesses money. But it is important to do it lawfully. Here are some general guidelines:

• Make sure you have a legitimate reason to use surveillance
• Do so only in public areas
• Inform your employees that you have cameras in the workplace
• Do not record their conversations
• Refrain from taping union activity

Consider speaking with a labor lawyer in your area if you have additional questions or concerns. To find out more about your state's workplace privacy laws, contact your state labor department.

Lower Your Workers Compensation Insurance Costs

For more information about workers compensation insurance, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848.

Our independent insurance agents will help you find the best policy to meet your needs, and do it at the right price. As an independent agency, we're free to shop among many competing insurance carriers, and to provide you with the best deal on quality workers comp insurance.

Call or click today to get started!

Every day, thirty men and women across the United States are severely injured in work-related accidents. That amounts to over ten thousand workers each year who are hurt so critically that the consequences to themselves and their families are sometimes permanent. Clearly, many U.S. worksites have been hazardous to workers. Reducing workplace hazards is good for employees and a smart way to reduce workers compensation insurance claims and costs.

Until last year, the Occupational Safety and Health Administration (OSHA) was not receiving timely information about where and how most of those injuries were happening. Then, on Jan. 1, 2015, a requirement took effect that compelled employers to report to OSHA, within 24 hours, any severe work-related injury, such as amputation, in-patient hospitalization, or loss of eye.

The new requirement should enable the agency to target their compliance assistance and enforcement efforts to the areas where workers are at greatest risk. It should also help to engage more high-hazard employers in identifying and eliminating serious risks.

Some interesting findings from the requirement

After one year of the reporting program, employers had notified OSHA of 10,388 incidents involving severe work-related injuries, inclding 7,636 hospitalizations and 2,644 amputations

Not surprisingly, nearly one-half of the hospitalizations and about two-thirds of the amputations occurred in companies from the manufacturing and construction sectors.

The industry groups with the most severe-injury reports were:

1. Building exterior contractors (391)
2. Building equipment contractors (343)
3. Support activities for mining such as drilling oil and gas wells (323)
4. Non-residential building construction (271)

According to an OSHA report on the findings, most of the hazards that led to these severe injuries are well-understood and easily prevented. And they also account for a majority of work-related fatal injuries. In most cases, employers can stop these injuries and deaths with some clear-cut and cost-effective changes, including providing fall protection equipment, installing guarding over dangerous machinery, and clearly marking pathways.

Failure to report a workers comp insurance claim can be expensive

After one year of the requirement, OSHA concludes that, based on injury claim numbers for workers’ compensation, there has been some serious underreporting of severe injuries—possibly as much as 50%. To discourage this, OSHA has said that it is more likely to cite businesses for non-reporting, and it is raising the penalty for not reporting a severe injury from $1,000 to as high as $7,000. While these penalties pertain to many small and mid-sized companies that may not even be aware of the new reporting requirements, the penalty can be even more costly if OSHA discovers that an employer intentionally and willfully chose not to make a timely report. 

A safe working environment is smart for business

A better way to avoid severe injury reporting is to avoid the injury. A safe workplace should be every company’s goal. Without it, businesses faces higher workers’ compensation insurance costs, loss of employees from potentially severe accidents, and an increase in liability exposure. A safe working environment, on the other hand, saves money by reducing workers’ compensation insurance claims, and it gives OSHA fewer reasons to launch an on-site inspection of a facility—a potential money saver in itself.

Contact Us for Help in Reducing Workers Comp Insurance Costs

If you want to discuss how your business can maintain a safe worksite or if you would like to lower your workers compensation insurance premiums, contact American Insuring Group online or call us at (800) 947-1270 or (610) 775-3848. 

Opioid use and misuse by workers has become a major concern for employers and their workers’ compensation managers.

An increasing number of injured workers are being prescribed these powerful and addictive drugs to alleviate pain, but frequently the opioid use results in extended disability and additional medical issues for claimants. The overuse of these prescription painkillers is burdening the workers’ compensation system by increasing the cost of each insurance claim. 

These startling workers compensation insurance statistics attest to this:

• Average cost of a claim without opioids: $13,000
• Average cost of a claim with a short-acting opioid, such as Percocet: $39,000 (I.e., triple)
• Average cost of a claim with long-acting narcotic, like OxyContin: $117,000 (I.e., 10x)

Adding to the costs, workers’ compensation insurers are now being compelled to pay for prescriptions of buprenorphine and naltrexone, two drugs that are used to wean workers off these addictive opioids.

Opiod Abuse: A Growing Problem

State governments, insurers, and an assortment of workers’ comp stakeholders have been obliged to contend with the issue of opioid usage by injured workers in varying degrees through myriad methods. But pinning down the problem has proved to be as difficult as correcting the problem of opioid abuse itself.

Utilization of statewide databases that track opioid prescriptions, finding and punishing overprescribing doctors, and stricter controls in management provider networks are some of the solutions states have adopted - or are considering - to tackle this complex problem.

And, as opioid abuse continues to grow, it’s gotten the attention of the Centers for Disease Control and Prevention. 

“It’s a big problem, and it’s a growing problem,” said Dr. Leonard J. Paulozzi, a medical epidemiologist with CDC’s National Center for Injury Prevention & Control, which has been studying the impact of opioid overdoses, and the problem of overuse. Paulozzi views the drug problem as being potentially more prevalent among the injured worker population.

“There’s an awful lot of back injuries in the workers’ comp population and subsequent surgery related to back problems, and back pain is one of the most common indications now of use of opioids in the United States,” he said. “And it’s being used frequently for back pain and it’s being used long-term for back pain.” 

Education and communication are essential

Workers’ compensation managers are fighting a prescription drug epidemic, and the stakes are high. Failure to wage an effective battle can lead to unfortunate consequences:

• Increased costs from protracted disability, medical care, and treatment
• Increased case valuation and settlement costs, which deplete financial reserves
• Increased possibility of deaths and drug overdoses

In order for claims managers to be effective in controlling costs that result in higher workers compensation insurance premiums, they may need to seek outside help. Many are now forming partnerships with various Pharmacy Benefits Management companies that have specific expertise in effecting change. Communication is the first step:

• Educate the injured workers directly about the importance of safe treatment
• Communicate with physicians, explaining all concerns regarding opioid-based prescription drugs
• Post bulletins warning of the dangers of prescription painkillers

Good communication yields encouraging results

Results from companies that have used this system of communication have been encouraging. One pharmaceutical company saw a reduction of almost 11% in opioid usage among their workers’ compensation clients. In addition, the percentage of injured workers using long-term opioids decreased by 2.6% during the same period.

The effort makes financial sense

All studies and efforts to curb opioid usage should have a positive effect on the all-important bottom line, since the medical portion of a workers’ comp claim may be open for several years and could be open for the lifetime of the injured worker. The claims management teams need to be proactive and willing to cooperate and collaborate with the pharmacy industry in educating everyone on this crucial issue.

Contact Us for Help in Getting the Right Workers Comp Insurance 

To learn more about workers compensation insurance, and to get the right insurance at very competitive prices, contact us online or call us at (800) 947-1270 or (610) 775-3848. 

A recent study on distracted driving from in-car data collection and analysis showed that drivers spend more than half their time focused on things other than driving.

There are a variety of activities that count as distractions, and it’s estimated that these distractions contribute to more than 5,000 traffic fatalities each year. 

Here are some of the most common driving distractions, any of which can result in higher workers compensation insurance rates if they occur while on the job:

• Talking on a cell phone
• Texting
• Eating and drinking
• Attending to child passengers
• Grooming
• Reading, including maps
• Using a navigation system
• Watching a video
• Adjusting a radio, CD, MP3 or temperature controls

Your Business and Your Workers Comp Insurance Rates

When your workers are behind the wheel on your company’s behalf, their safety is your business. And since texting takes your drivers’ attention away from the road for almost five seconds (the equivalent of driving the length of a football field at 55 mph blindfolded), it is important that you prohibit them from texting in your commercial vehicles.

“It is well recognized that texting while driving dramatically increases the risk of a motor vehicle injury or fatality.” Explains David Michaels, Assistant Secretary at Occupational Safety and Health Administration (OSHA). “We are asking employers to send a clear message to workers and supervisors that your company neither requires nor condones texting while driving.”

Your Legal Responsibility to Safeguard Drivers at Work

As a business owner or manager, your legal responsibility under OSHA is to safeguard drivers at work. And it makes no difference whether they drive full-time or only occasionally to carry out their work, or whether they drive a company vehicle or their own. When OSHA receives a plausible complaint that an employer requires texting while driving or organizes work so that texting is a necessity, they will investigate and issue citations and penalties where necessary.

Your cooperation can minimize the danger to your business

Building a workplace culture of safety requires clear, explicit policies and sound practices. OSHA, which enforces worker safety laws, has joined with the Transportation Department, other agencies, key associations and organizations to enlist the help and cooperation of businesses of all sizes in a nationwide outreach, education, and enforcement effort to stop the dangerous practice of texting while driving.

Here are a few of the recommendations for employers to follow:

• Prohibit texting while driving. OSHA encourages employers to declare their vehicles “text-free zones.” Also, emphasize that commitment to their workers, customers, and communities.
• Establish work procedures and rules that do not make it necessary for workers to text while driving in order to carry out their duties.
• Set up clear procedures, times, and places for drivers’ safe use of texting and other technologies for communicating with managers, customers, and others.
• Incorporate safe communications practices into worker orientation and training.
• Eliminate financial and other incentive systems that encourage workers to text while driving.

Millions of Americans drive on the job every day, and this deadly behavior, texting while driving, has put them at risk. And that risk continues to grow as texting becomes more widespread. OSHA believes that by improving our understanding of how mental and physical distractions impair your company drivers and by educating them about avoiding distractions, we can eliminate these needless deaths and make our businesses safer while lowering commercial vehicle insurance and workers compensation insurance costs.

For more information about safe driving, commercial vehicle insurance, and workers comp insurance, contact us online or call (800) 947-1270 or (610) 775-3848.

Problems can occur when workers covered by Medicare Advantage Plans sustain workers compensation injuries and use the plan to pay for medical care.    

Congress created the original Medicare program (Parts A and B) in 1965. It was designed to offer older and disabled Americans access to affordable health insurance. With the Balanced Budget Act of 1997, Medicare Part C was born with the intention of giving beneficiaries a choice: opt for original Medicare or choose the newly created Part C plans, better known as Medicare Advantage Plans (MAP).

These plans, with coverage provided by private insurers, cover all Medicare services and offer additional benefits such as prescription coverage, dental, and vision. However, problems can occur when workers covered by these plans sustain workers’ compensation injuries and use the plan to pay for medical care.    

Medicare and Workers' Compensation Insurance

If a worker is receiving Medicare benefits and is hurt on the job, workers’ compensation insurance (WC) is the primary payer. An insurer or workers’ compensation plan cannot, by contract or otherwise, supersede federal law--for instance by alleging its coverage is supplemental to Medicare.

WC is always the primary payer for Medicare beneficiaries’ work-related illnesses or injuries, and Medicare beneficiaries are required to apply for all applicable WC benefits. If a Medicare beneficiary has WC coverage, providers, physicians, and other suppliers must bill WC first.

In situations in which Medicare has paid for WC-claim-related care before the beneficiary has obtained a settlement, judgment, award, or other payment, those Medicare payments are referred to as “conditional payments.” They are considered conditional payments because Medicare pays under the condition that it is reimbursed when the beneficiary gets a WC settlement, judgment, award, or other payment.

Do Medicare Advantage Plans have the same right of recovery as original Medicare?

This an evolving issue in the courts, and it continues to be discussed and debated. Courts have ruled both ways on this issue. Here are some examples:

• In a Third U.S. Circuit Court of Appeals case in 2013, Humana Insurance Company, a MAP, demanded reimbursement from GlaxoSmithKline for payments Humana had made. The Court held that Medicare Secondary Payer regulations “unambiguously provide[s] Humana with a private cause of action.” Consequently, Humana’s payments were subject to reimbursement.
  
  
• The U.S. Supreme Court subsequently denied Glaxo’s petition for review, supporting the argument that MAP’s have the same right of recovery as does traditional Medicare—at least in the Third Circuit Court jurisdiction, which is New Jersey, Delaware, Pennsylvania, and the U.S. Virgin Islands.
  
  
• Later in 2013, a Ninth U.S. Circuit Court of Appeals case ruled the other way. Here, the Ninth Circuit Court of Appeals held that a Medicare Part C Plan--PacifiCare of Arizona--did not have the right, under federal law, to pursue a reimbursement claim.
  
  
• In a recent case in Florida, Humana Insurance Company sued Western Heritage for recovery of double damages. Humana argued that as a MAP they have the same right of recovery as does traditional Medicare, including recovery of double damages. The District Court ruled in Humana’s favor.

Recent rulings have created some uncertainty for employers

There is still uncertainty among insurers and employers when settling cases with Medicare beneficiaries who have ever received benefits from a MAP. Claim management departments need to consider the recovery rights of MAP’s when settling claims. The logical starting point would involve confirming the type of Medicare coverage at issue. Determine if the claimant is a beneficiary under traditional Medicare or under a MA plan.

We Can Help

For help meeting your compliance obligations, or to obtain quality worker's comp insurance at the right price, call us at (800) 947-1270 or (610) 775-3848 or contact us onlilne.

Hearing loss may be a compensable work injury leading to increased workers compensation insurance costs. Taking steps to reduce the risk of hearing loss is easier than you might think.

Loud noises in the workplace can damage your employees’ hearing. It’s estimated that 22 million workers are exposed to potentially hazardous noise levels at work. The National Institute for Occupational Safety and Health (NIOSH) recommends that workers should not be exposed to noise at a level that amounts to more than 85 decibels for 8 hours. In an effort to create a safer workplace by reducing noise levels, NIOSH suggests an approach that implements controls based on a hierarchy of effectiveness.

Control Workers Comp Premiums by Adopting the Hierarchy of Hazard Controls

Occupational health and safety professionals apply the following actions, listed from most effective to least effective, to reduce or remove a noise hazard:

1. Elimination: Physically remove the hazard
2. Substitution: Replace the hazard
3. Engineering Controls: Isolate workers from the hazard
4. Administrative Controls: Change the way employees work
5. Personal Protective Equipment: Protect workers with special clothing and equipment

Low-Noise Tools

Purchasing low-noise tools and machinery, reducing vibration where possible, providing barriers to isolate workers or loud equipment, and maintaining machinery with proper lubrication are effective methods for reducing noise in the workplace.

In addition, the Occupational Safety and Health Administration (OSHA) requires employers in general industry to maintain a hearing conservation program whenever noise exposure meets or exceeds the eight hour time-weighted average of 85 decibels. Baseline and annual audiograms, employee training, and hearing protection must all be included in the program.

But even with controls and programs in place to eliminate or reduce noise hazard on the job, some employees will experience work-related hearing loss resulting in a compensable work injury resulting in a workers compensation insurance claim.

Hearing loss may be a compensable work injury

The Workers’ Compensation Act provides for benefits for loss of hearing related to exposure to noise while at work, and it’s estimated that $242 million is spent annually on workers’ compensation for hearing loss disabilities.

While most states recognize hearing loss as compensable, the specifics of the law may vary (for instance, in some states the employee must have hearing loss of at least ten percent in both ears in order to be entitled to benefits). The employee must be evaluated by a physician who specializes in hearing problems to determine the percentage of hearing loss, and the worker must show that there was exposure to hazardous noise in the workplace.

The difficulty for any workers’ compensation adjuster will be determining what portion of hearing loss is work-related and what part of the loss is age-related or is due to non-work related activities (shooting a gun for sport or using a chainsaw on weekends). Another issue that the adjuster may face is finding a previous audiogram from which to compare the present test to get a true measure of hearing loss.

Protect your business against hearing loss claims

There are steps that employers can take to eliminate or reduce the size of a hearing loss workers comp claim, and in the process lower your long-term workers compensation insurance costs:

• New employees who will be exposed to excessive noise should have an audiogram completed as part their hiring requirements. This will provide the baseline for any future hearing loss claim.
• Do a risk assessment by having the decibel level of your plant checked. Any noise level above 85 decibels can then be addressed.
• If a worker is constantly exposed to tools and machinery that reach more than 85 decibels, an audiogram should be completed annually.
• The mandatory use of hearing protection (earplugs or earmuffs) should apply to all employees who work in areas of excessive noise.
• All employees should be provided with safety materials that address the importance of hearing protection at work and in non-work related activities that create high noise levels.

Occupational hearing loss is one of the most common work-related illnesses. Safeguard your workers and minimize the costs to your business by effecting and maintaining these essential controls and programs.

Workers Comp Questions? Contact Us!

To learn more about Workers Compensation Insurance, contact us online or call (800) 947-1270 or (610) 775-3848.

Employees who are injured on the job may be entitled to compensation for medical care and wage replacement through their employer’s Workers Compensation insurance. The insurance provides medical care, lost wages, and any rehabilitation needed to return to work. Sometimes an employee is permanently and totally disabled or disabled to the point that the employee cannot return to meaningful employment. These cases are usually complex and can be difficult to settle. If a lump-sum cash settlement does not resolve a case, a structured settlement may offer a solution.

What is a Workers Compensation Structured Settlement?

A structured settlement is a financial or insurance arrangement whereby a claimant agrees to resolve a personal injury claim by receiving periodic payments on an agreed schedule rather than as a lump sum. Structured settlements are often used to resolve workers’ compensation insurance cases in which the negotiations between the plaintiff’s attorney and the insurance company have reached an impasse. The responsibility of future payments to the plaintiff falls on an independent third party—usually a life insurance company from which an annuity has been purchased by the workers’ compensation insurer.

Congress has encouraged the use of these settlements through the federal tax code since 1983. Internal Revenue Code section 104 specifies the amount of each payment, and the earnings on payments are excluded from the settlement recipient’s income.

Not all payout schedules from a structured settlement are alike. There are three main forms of periodic payments from a structured settlement:

• Deferred Lump-sum Payments: Payments are structured under a schedule of pre-determined dates. These payments are usually larger than regular periodic payments.
• Flexible Settlement Plan: Payments in this plan consider the needs of the injured worker—important future events at different stages of life—while maintaining control of the costs for the employer and insurer.
• Period Certain Annuity: The injured employee gets a larger settlement by agreeing to shorten the time period that the annuity will pay.

An initial lump-sum payment can be included in the settlement to cover such items as housing and transportation, and the settlement can also be structured to increase periodic payments at fixed dates in the future to account for inflation.

Advantages of Structured Workers Comp Insurance Settlements

Structured settlements are helpful for the injured worker in compensation cases. They can be set up to provide tax-free money for long-term and immediate needs, while eliminating the worry of managing a large amount of money. In most cases, a structured settlement will provide more money over the long term than the employee would realize from a cash settlement. The plan can be structured around age and life expectancy, thereby providing funds for maintaining medical treatment, future surgeries, and replacement of durable medical equipment.

The closure of the claim, expedited through a structured settlement, is a major benefit to the employer. It also avoids the uncertainty of litigation and all of the expenses that go with it. In the case of a disability that lasts a lifetime, all of the mortality and investment risk is transferred to the third-party insurer.

Insurers benefit because they free up money that would have been used for a lump-sum settlement and can now concentrate on other cases.

The employee’s lawyer has a satisfied client for whom he has provided financial stability.

A word of caution

A structured workers comp settlement is a flexible tool for resolving troublesome claims. Keep in mind, however, that each state has different laws with regard to settling workers’ compensation claims. Be sure to partner with a professional who can confirm the laws of your state.

Learn More About Workers Compensation Insurance

For more information and advice on workers compensation insurance, contact us online or give us a call at (800) 947-1270 or (610) 775-3848.

Avoidinging Workers Compensation Insurance Claims via Risk Awareness

For construction workers and others whose jobs require them to be outside, winter means a few months of extreme cold and challenging days, during which they will be susceptible to cold-related injuries.

In addition to injuries resulting from slips and falls as temperatures dip below freezing, there is also the risk of cold stress. Cold Stress is the result of skin temperature being lowered, ultimately resulting in a reduced core body temperature.

The human body’s natural reaction when exposed to cold environments is to maintain its core temperature. To do so, blood shifts away from less critical body parts--hands, feet, arms, legs and skin--to concentrate in the vital chest and abdomen areas. As a result of the blood shift, the body parts containing less blood face an increased risk of cold-related injuries. Under severe conditions, tissue damage and death may occur.

Cold stress and the risk of cold-related injury can be reduced by increasing management and worker awareness of the hazards. In order to ensure a safe working environment, mitigate risk and prevent workers' compensation insurance claims, it is important to understand the elements of cold stress. 

Types of cold stress facts you need to know

• Hypothermia involves a severe loss of body heat, resulting in shivering, confusion, and loss of motor skills to an extent where workers cannot replenish their warmth.
  
  
• Frostbite is the freezing of an area of the body, typically the nose, ears, cheeks, fingers or toes. Severe cases of frostbite may lead to amputation. Symptoms include numbness, hard skin, tingling or blisters.
  
  
• Trench foot occurs when a worker's feet remain damp for a prolonged period of time. Although not directly tied to extreme cold (wet feet can contribute to the condition in warmer temperatures), it is a threat in winter with symptoms of red skin, numbness swelling, or bleeding.

Workers can help prevent cold stress

Workers will be able to monitor their own health and identify problems with colleagues if they understand the symptoms of cold stress. Following some simple guidelines will also help them to prevent cold stress injuries:

• Dress in several loose-fitting layers and don’t forget boots, gloves, and a warm cap
• Have at least one layer of waterproof clothing to protect at least some of their other clothing from getting wet
• Take breaks to get warm. If possible, go indoors for a few minutes or at least get out of the elements
• Stay hydrated. This is every bit as important in winter as it is in hot weather
• Keep spare clothing nearby in case the clothing they’re wearing gets wet

What can employers do about cold stress?

A cooperative approach with employees is important. A cold stress prevention program, outlining steps to limit cold stress and reduce risk of injuries and illnesses, is a good start.

Another step you can take is a review of your scheduling. If at all possible, plan outdoor work, equipment repairs and other tasks when the weather is more favorable. While it is not always possible to prevent workers from operating outside at all times, especially in the construction industry with its deadline pressures, you can limit the length they have to spend in the coldest temperatures. 

Next, you must train your team. Review the symptoms of cold stress in a group meeting. Emphasize the safety measures that workers must take, and discuss the best emergency response methods and who to notify should an employee begin to show signs of cold stress.

Finally, you need to provide resources for your workers. These can include insulated clothing, a heated shelter, warm beverages or educational materials. Above all else, call attention to cold-weather safety this winter. These measures will help to keep your workers on the job and your workers compensation insurance costs low.

Control Your Workers Compensation Insurance Cost

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