4/11/2012

Why Keep Workers in the Dark About Comp Claims Management?

Why are employees kept in the dark about workers’ compensation? Is this merely an oversight, or could it be intentional?

By Sam Friedman

Wherever I’ve worked, my first day was usually spent in an orientation that devoted a good deal of time briefing me about my employee benefits program, including health insurance, the dental plan, sick leave, vacation policy, and the like.

Funny, but I don’t recall ever being told that I would be covered for any job-related ailments or injuries through workers’ compensation, even though the coverage is mandatory in most states. I definitely don’t remember being informed about what to do if I were to be injured at work.

How do I report a comp claim? Who must I tell? What forms do I fill out? Can I use my own doctor, or must I go to one suggested by my employer or their comp insurer? Must I cover a deductible or co-payments out of my own pocket?

What if I can’t work due to a job-related health problem? Do I still get paid and, if so, how much and for how long? Who coordinates my treatment and rehabilitation? What if I cannot physically handle my former job, either temporarily or long-term? Is there still a place for me at my company when I’m ready to go back to work in some capacity?

These are just some of the questions that might arise if an employee suffers a work-related injury, yet such information is not usually brought to the attention of people when they start a job. Perhaps workers’ comp is covered in the employee manual (if a company has one), but really, how many read such a document cover to cover? I doubt most seek out information about work-related injuries before they are actually hurt on the job.

Why are employees kept in the dark about workers’ compensation? Is this merely an oversight, or could it be intentional? I suppose some employers (and insurers) may be concerned that if people are told they can get medical care without deductibles or co-payments if their health problem is work-related, more might be tempted to file a comp claim for personal health issues unrelated to their jobs.

The old chestnut I hear at workers’ comp meetings is about the proverbial guy who hurts his back playing basketball in the driveway, then looks to avoid out-of-pocket medical expenses by saying his injury took place lifting a box on the loading dock (particularly if the employer doesn’t offer health insurance).

However, I would argue that the potential benefits of proactively informing people about their workers’ comp benefits would far outweigh the potential drawbacks.

In my former job, I ran an award program recognizing organizations with excellent workers’ comp risk management approaches, and most of them not only kept their employees in the loop, they made them active participants in the loss control and claims management process. Such efforts run the gamut from convening safety councils among the rank and file to report and rectify potential safety hazards, to CEOs visiting injured workers in the hospital to show the company’s concern and make sure they are getting the proper care.

There are plenty of opportunities to make employees more aware of and get them involved in the workers’ comp claims management process. You can start by making comp a standard point of discussion in new-employee orientations, in both verbal and written communications.

These suggestions don’t apply only to those doing physical labor on loading docks, assembly lines, and construction sites. A workers’ comp claim can just as easily arise in the context of service companies, with so many people glued to computer screens and keyboards and toting around heavy backpacks or suitcases filled with laptops and other mobile tech devices. In any case, all such exposures can be mitigated through workplace training and education.

In addition, it might be useful for employers to nominate a workplace injury “ombudsman” who can help injured workers navigate their way through the comp system and avoid the friction and other costs associated with using lawyers to litigate for benefits.

Indeed, running a more transparent shop in terms of workers’ comp claims management could go a long way towards reducing exposure to litigation in general and bad faith claims in particular.

If an employer and/or insurer are worried about encouraging fraud, they should just be frank with employees about how workers’ comp claims are subject to independent investigation, with the penalty for false filings at a minimum being the risk of losing their job and perhaps even being arrested and prosecuted.

So, what should employers and their insurers do? Establishing safety councils is a time-honored way to help employers get intelligence from the front lines about the hazards workers face on the job and how to rectify those risks, thereby heading off potential claims. But in these days of social media, employers and their insurers have an even greater opportunity to solicit comments and concerns from employees across the organization less formally over an internal Web-based site.

The employer or their insurer could also develop a smartphone application outlining what to do when someone is hurt on the job, as well as offer the ability to report an incident on the spot in real time or point out a potential workplace hazard from the actual scene. Such reports could include pictures or video taken with and uploaded from the smartphone to document a claim or spotlight a safety issue.

Employers and insurers could also more effectively manage claims by showing the workers’ comp system in action, highlighting the successful treatment and return to work of a particular employee (with their permission, of course) in a Web video or e-newsletter.

To combat fraud—this time by providers rather than claimants—employers and insurers might also consider issuing an explanation of benefits to injured workers, just as health insurers do. This way, the employee can serve as a backstop to make sure their medical care providers actually are delivering the services for which they are charging their comp insurers—claims costs that ultimately get passed along to their employer in the form of higher premiums or hits to their self-insured retention.

In short, instead of perpetuating ignorance about the workers’ comp claims management process—whether in fear of seeing a spike in fraudulent claims or simply failing to consider the importance and potential benefits of full disclosure—employers and their insurers would be wise to follow the example of their more proactive and inclusive colleagues. 

The reality is that workers’ comp insurance, injury case management, and return-to-work programs are all employee benefits just as important as any other insurance coverage or perk that people typically receive from their organizations—and for those who are hurt at work, they are even more important.

So why not make employees a partner and active participant in the workers’ comp process? The payoff will come in better claims management that prevents incidents from happening in the first place and gets those who are unfortunately injured on the job back to work more quickly and more efficiently, to everyone’s benefit.


Sam Friedman is insurance leader with Deloitte Research, part of Deloitte Services LP in the U.S. He has been a fellow with CLM since 2011 and can be reached at samfriedman@deloitte.com.

 

Learn More at WCEC

Interested in learning more about workers’ comp? Friedman will be moderating a panel entitled “Start Spreading the News: How to Recruit Workers for the Comp Cost Control Crusade!” in Orlando, Fla., on Aug. 21, 2012, during the Florida Workers’ Compensation Institute’s National Workers’ Compensation Educational Conference.



Sam Friedman is insurance research leader with Deloitte’s Center for Financial Services in New York. He has been a Fellow with CLM since 2011, and can be reached at samfriedman@deloitte.com.

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