Setting up the Claim
A.)When you are presented with a Claim from one of your employees, you are obligated immediately to complete the Employer’s section of your Insurance Company’s Claim Form and provide the employee with a copy of that individuals claim form for their completion and direct return to the Insurance Company.
B.)Secondly, you need to document your appropriate file indicating the date that you notified the Insurance Carrier of the claim and the date that you provided the claim form to your employee. If for some reason you are not able to give the employee a direct notice because of that individual’s non-availability, you must then immediately mail it to the employee’s last known address or if you have received previous permission to communicate with the employee via fax or email , (“on the subject of Worker’s Compensation and/or employee benefits”). Please note that if you have not prior received in writing, written permission to communicate with the employee via fax or email, your sending this document does not constitute acceptance and could cause you a problem when the claim is processed by your Insurance Company.
A.)Now it is your job to have a discussion with the Insurance Claims Adjuster. You will have previously received an acknowledgement from the Insurance Company when you sent the claim to them. It is important that you provide written documentation in addition to what you provided in the Employer’s first notice that may give the Insurance Company a better insight to the validity and severity of the claim. All too often the employer does not properly provide input to the Insurance Company so that they can fairly discern if there is a
potential fraud or that information that will mitigate the Insurance Company’s obligation to pay or to be able to look toward other parties for subrogation purposes.
B.)It is very important that if there is a third party that has contributed towards this employee injury, that the Insurance Company also have notice of this and then they will have an ability to attempt to recover monies paid out on this claim and for a potential revision in your experience modification over time.
C.)While you may consider it to be an extra labor that you had not contemplated, your reasonable interaction with the Claims Adjuster is important when you have subsequent information and not just a wild thought that the Insurance Company is paying too much on this claim. Remember that the laws in various States are tilted in favor of the employee and most times there is nothing you can do to mitigate the amounts of monies that are being paid or awarded to that injured individual. You do not have the right to control the claim nor do you have any rights as to any decision making other than reasonable input that must be substantive in nature to aid in the Insurance Carrier’s decision making.
D.)While it is true that you may have the feeling that the Insurance Company paid too much for a claim… Yes, this cost is going to be passed onto you in the future years with an increase in your experience modification and your ability to renew with an Insurance Carrier because of this and other losses. Simply put, this is the cost of doing business and is out of your control and yelling, screaming or being emotionally disturbed is a very inefficient process and really gains no weight to the final outcome. You have no rights to control the claim. The terms of your policy are very specific on this matter.
E.)At the very beginning of a claim, the Insurance Company will set up a “reserve” which is a wild guesstimate cost of defense and indemnity to that Insurance Company. As the claim matures, the reserves are reviewed by the Claims Adjuster and/or their superiors and can be adjusted upwards or downwards. The only period of time that you need to have concern and to give any input that you think is pertinent is approximately 30 days before that Insurance Carrier has to report your loss statistics to the Worker’s Compensation Bureau that controls your experience modification for the States in which you have employees. At that juncture your Insurance Broker generally will participate with you in a conference call or aid you in a discussion regarding potential close-out of the claim or a downward valuation of the outstanding reserve. Most times these conversations are not effective do to the fact that the Insurance Carrier has analytical statistics to evaluate the claim that is outside the normal individuals realm of projecting. We are now in a new environment of insurance evaluation and underwriting. The algorithmic mathematical formulas used in the industry now become the predictor of losses of your industry, your business and the environment from which you are working. Additionally if the claim is litigated, those analytical statistics are also available to the Insurance Carrier as to geographical debits or credits, the cost of the claim and other inputs are primarily calculated through a software program. These claims are long, laborious and take time to settle out and this is the reason why many States have several adjustment look-back periods on a claim that even though the policy charged with a claim is no longer in force. Such a process can help lower your worker’s compensation experience modification on a retroactive basis.
To summarize, if you smell what appears to be a fraudulent claim or know that the claimant is claiming a particular disability but is reasonably functioning with the disability during their work with you or through another employer or personally engaging in activities off of the Company time clock that would surprise you, these are the items you need to immediately bring to the attention of the Insurance Adjuster. It is my suggestion that you have a direct interaction with the adjuster and not through a third party as the items do not get well translated and are less effective when you do not directly input this data to the Insurance Company.
That is the way we do it at Bone Robertson & McBride Inc.
Good health to you.
Don Bone, President (800) 510-1095 – For Questions