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Wednesday, March 16, 2011
Workers' Comp Overview (Part 2 of 2)
Posted by mcs on 3/16/2011 2:19:00 PM
This posting continues our discussion on Workers’ Compensation basics in Maine.
What Happens If We Have A Claim?
While we will talk about the WC process here, please be aware that there are OSHA reporting requirements as well, so you will want a process that captures information for both. The requirements are not exactly the same so you may have an OSHA reportable event that is not a WC reportable event and vice-versa; this especially depends on your industry. For example, health care providers have special OSHA needle-stick reporting requirements that won’t come up in a dry-goods warehouse environment. There is much to having a comprehensive safety program, and we can cover that more fully in subsequent postings. Enrolling in Maine’s SHARP program will help keep your premiums low and remove the worry of surprise inspections! More information can be found at http://www.safetyworksmaine.com/safe_workplace/sharp.html.
You will want to select a provider to send injured workers to before a claim arises. If an employee is injured at work, you will first want that employee to seek medical attention and having pre-designated a provider will help control costs as will using the same provider wherever possible. Maine WC law does allow employees to select their own provider after 10 days of treatment with an employer-chosen provider, but starting them on the road to claim management is highly recommended. Most small employers use the provider recommended by their insurance company.
You will generally need to file a first report of injury if the injury requires more than “first aid.” This form must be filed within seven days of the employer’s notice of the first lost day’s work (usually the date of the injury). It is advisable to file if you are in doubt as to whether it is a “fileable event;” having a record of the event will offer some protection later should a claim arise. WC covers medical and lost income, but there are many claims that are medical only and never result in lost work-time compensation. Likely your insurer has provided you with instructions on how to file this via their system so you file only once for both the report and the claim itself. While you may not be filing directly with the Maine Workers’ Compensation Board, here are the forms currently in use so you can have a sense of what is required: http://www.maine.gov/wcb/departments/board.htm.
Remember, if you have employees who work in other states, you will need coverage for them in that state and will need to follow the rules of that state’s WC board. It is also important to mention any telecommuting arrangements.
The claim is really part one. There is a lot more to do if the claim results in lost time. For example, the Family Medical Leave Act requirement will run concurrently with the WC claim so that an employee will need to be educated on the provisions of the FMLA and put on an official FMLA leave. WC cases normally include some return to work on restricted duty, which may or may not need to be accommodated and/or some part-time work. Besides FMLA, the Americans with Disabilities Act must also be considered, especially if the claim will result in any permanent impairment. As mentioned above, depending on the claim, there could be OSHA reporting and of course there will be much to managing the claim itself, including providing a 52 week wage schedule and filling the employee’s role appropriately – ensuring that employee enjoys the job protected status afforded by law while the claim is adjudicated and the leaves run. The injured worker may also qualify for other benefits.
Phew! It can get quite complicated and that level of detail is not appropriate here. As always, I am happy to answer questions and offer resources as you need, so please feel free to direct them to me at email@example.com.
This month's topic is Workers’ Comp (WC) in Maine.
A weighty subject for sure, but here are some basics for starters. We will be expecting some changes over time as the newly appointed Executive Director of the Maine Workers’ Compensation Board, Paul Sighinolfi, settles in. You can learn more about him by visiting www.rudman-winchell.com/attorneys/phsighinolfi.html. As always, you can keep up on new regulatory and legislative actions regarding WC by visiting the Maine State Chamber at www.mainechamber.org.
As we all know, every small business in Maine needs coverage for its employees. The laws are designed to provide money and medical benefits to employees injured as a result of an accident, injury or occupational disease while on the job. It is intended to benefit the employee and employer alike. The employee receives money and medical benefits in exchange for forfeiting the common law right to sue the employer. The employer benefits by receiving immunity from court actions against them by the employee in exchange for accepting liability that is limited and determined. The question of negligence or fault is usually not at issue.
If an employer fails to obtain required coverage and an accident occurs, the injured employee may either file a lawsuit against the employer in civil court or file a claim against the Maine workers’ compensation system. Monetary exposure to a suit in civil court can be extremely significant to the employer. Stop-work orders and fines can be levied in addition to injunction and assessments against the employer. Employers who try and circumvent the law by going "naked" may also expose their personal assets and other business assets as well. It is also important to be sure your independent contractors have coverage or you will be on the hook for them too. Maine does allow sole proprietors and other owners and their family members, as well as officers of charitable and religious organizations, to choose to go without coverage. For the specifics, including the waiver form, please visit http://www.maine.gov/pfr/insurance/consumer/workcomp_opting_out.htm.
Most small employers purchase coverage from insurance companies and may bundle with related insurance for the best deal, but there are provisions for employers demonstrating compliance with relevant safety and lost time injury standards and financial solvency to become self-insured. Even these employers generally indemnify part of this risk in the form of “stop-loss” or “re-insurance.”
How is premium calculated?
Insurance companies generally use three criteria to determine the payment of premiums: ° The payroll; ° The employer classification; and, ° The experience record and number of accidents and severity of injuries included for this employer.
The first element considered is the payroll and these are determined in blocks of $100 of payroll sums. The second consideration is how an employer will be classified into different categories by industry type. Each classification is designated to pay a certain amount of workers’ compensation premiums per $100 block of payroll. Roofers who are at a high exposure to injuries will have a higher experience factor than office personnel who have a low exposure to injuries.
The last consideration is the “experience modification factor” or “mod rate.” This calculation applies to policies with more than $5,000 in premiums. In determining the experience mod, the individual employer is compared with other employers within the classification based upon the frequency of accidents and severity of injuries. The more accidents an employer has had in the past, the higher the modification rating.
This can get quite complicated and since that level of detail is not necessarily needed by all readers, I am happy to answer questions and offer resources so please feel free to direct them to me at firstname.lastname@example.org.
Look for our next posting where we continue the discussion on WC in Maine and focus on the claims process…
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