Understanding the coverage process in Ohio

It’s the law in Ohio for all state-funded employers with one or more employees to have workers’ compensation coverage.

“Typically employers apply for coverage because they’re a new business or because of an acquisition, merger, or purchase or sale of an existing business,” says Scott Westerman, rate specialist at CompManagement.

Smart Business spoke with Westerman about who needs coverage and how to apply.

Who actually needs workers’ compensation coverage?

All employees of a business operating in Ohio must be covered by workers’ compensation insurance, which for state-funded employers is provided exclusively by the Ohio Bureau of Workers’ Compensation (BWC). This includes corporate officers who are considered to be employees and therefore must be covered if actively working for the corporation.

Coverage for the owners of sole proprietorships, partnerships, and LLCs acting as sole proprietorships or partnerships is not required, although such owners may elect to cover themselves if they wish. The same is true for ordained ministers of religious organizations, family farm corporate officers and individuals who are acting as corporations with no other employees. Regardless of the coverage status of such owners, all regular employees must still be covered.

Are volunteers covered under workers’ compensation?

That depends. Volunteers for private companies are not covered by BWC. Emergency volunteers of public entities, such as volunteer firemen and auxiliary police, are required to be covered. Public entities may also elect to cover nonemergency volunteers by passing a resolution stating this intent and filing form U-69 Contract for Coverage of State Agency of Political Subdivision with BWC.

How do you apply for coverage with BWC?

A private company must file form U-3 Application for Ohio Workers’ Compensation Coverage, along with payment of $120 for the minimum annual premium. Coverage goes into effect the day of receipt by BWC, but it will probably take three to four weeks for BWC to issue the permanent policy number. A new public entity just needs to provide BWC with a copy of its charter or other founding documents and BWC will issue a policy.

How does an acquisition affect coverage?

If you buy another company, either outright or as an asset purchase, you will inherit the BWC claims and payroll history of that company. This essentially means that you are inheriting the rates, good or bad, of that company. If you buy only a part of another business, then you will inherit the claims and payroll history associated with the division or operation that you buy. For this reason, it is in your best interest to review the company’s BWC history as part of your due diligence. You may do so by filing form AC-4 Request for Business Transfer Information with BWC.

Is a new policy number always necessary when buying another company?

If the new owners do not have active coverage with BWC, they should file form U-3 to apply for a new policy. The only exceptions are when there is a sale within the immediate family or when there is a stock sale with no change in name or Federal Employer Identification Number (EIN). In these cases, the new owners may inherit the existing BWC policy of the former owner if they wish to do so.

Whatever the case, form U-118 Notification of Business Acquisition/Merger or Purchase/Sale must be filed with BWC. This form may be completed by the buyer, the seller or both. BWC will then combine the previous owner’s policy into the new owners’ policy, if applicable, and the new owners will inherit all outstanding liabilities associated with the predecessor policy.

What should be done if there is a restructure, but no change in ownership?

If you are just restructuring to a new legal entity, but there is no or very minimal change in the actual ownership of the company, then form U-117 Notification of Policy Update should be completed. BWC will update your existing policy with the new name, EIN or other information as necessary.

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Why having the right classifications is so critical

As businesses in Ohio set up shop or expand their operations, two critical items related to their workers’ compensation coverage involve their manual classification, which is based on their business operations and their reportable payroll. If this information is incorrect, not only is an employer paying incorrectly, but it could cause other employers across the state to pay incorrectly as well.

Smart Business spoke with Jarred Post, rate representative at CompManagement, about how manual classifications are assigned in Ohio and what an employer should be reporting regarding its payroll.

What are manual classifications and how are they assigned?

Ohio Bureau of Workers’ Compensation (BWC) assigns manual classification codes established by the National Council on Compensation Insurance (NCCI) based on the description of operations provided on an employer’s initial coverage application.

Manual classifications codes are divided into two types — basic and standard exception. Basic classifications describe a company’s general business operations. With over 500 basic classification codes, many companies may, however, find that they are so specialized in their operations that there is not a specific code for them. In these cases, BWC will assign the basic classification code most analogous to their operations.

There are five standard exceptions that apply to employees common to many businesses whose job duties are not described by a basic classification, such as clerical office employees. To qualify, employees generally cannot have any other duties within the company outside the scope of the standard exception.

Why is the correct manual classification so important?

Workers’ compensation premiums are based on these classifications. Every year, each classification is assigned a base, or starting premium rate that BWC calculates based on statewide claims costs and payroll for employers reporting under that code. If you are not reporting payroll and claims correctly, not only are you paying incorrect premiums, but you are also potentially causing other employers statewide to pay incorrectly. This can also result in an inaccurate calculation of your experience modification rate (EMR). Your EMR is the percentage above or below the base rate at which an employer will pay premium. Reporting payroll using the wrong classification can, in some cases, result in over-inflated workers’ compensation premium.

What is considered reportable payroll?

BWC reportable wages typically consist of gross wages — including overtime and bonuses — less employee contributions to health insurance, flexible spending accounts and dependent care savings accounts. The basic rule of thumb is that if something is not reportable to the IRS, then it is not reportable to BWC.

Are there any caps or limits regarding payroll reporting?

There are minimum and maximum payroll reporting limits for active executive officers of a corporation, owners of sole proprietorships, partners in a partnership, and individuals incorporated as a corporation with no employees. There is also a maximum weekly reporting cap for employees in the construction industry, which is the same as the weekly maximum for the people previously listed. However, there are no minimum or maximum reporting limits for regular, non-construction employees.  For the current rate year of July 1, 2016 to June 30, 2017, the payroll reporting minimum is $443 and the maximum is $1,328.

What if incorrect payroll is reported? 

If incorrect payroll has been reported, an employer can file an amended payroll report with revised payroll amounts. However, this could trigger an audit by the BWC. Usually an amended report that would result in a refund of over $5,000 in premium will be referred for audit. During an audit, BWC compares internal payroll records and reports to other agencies — IRS, Ohio Department of Job and Family Services — to validate information reported. They can audit up to two years, but usually audit only one.

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New option now available for employers operating in other states

The Ohio Bureau of Workers’ Compensation (BWC) is now authorized to offer workers’ compensation coverage in other states to eligible Ohio businesses. This new coverage gives companies a simple solution to protect their employees without having to manage multiple workers’ compensation policies in varying states with different laws.

“Up until now, the BWC provided coverage for Ohio employees working temporarily outside of the state, but many states did not honor that coverage,” says Kelly Lowry, client services manager at CompManagement. “This option allows employers to buy coverage for their exposure through the BWC and its partner versus separate coverage state by state.”

Smart Business spoke with Lowry about this new program and how it works for businesses with exposure outside of Ohio.

Why was Other States Coverage developed?

Historically, for employers that temporarily send employees outside of Ohio to work, there has been a risk that their coverage through the BWC was not sufficient as the BWC could not respond to a claim that was filed in another jurisdiction. In 2014, the Ohio General Assembly passed legislation granting the BWC the authority to contract with an insurer licensed in other states to provide coverage to eligible employers for out-of-state exposure. The policy is designed to prevent workers’ compensation gaps and protect employers from penalties and stop-work orders in other states.

What is the risk of not having coverage?

Each time an employee leaves Ohio, even for a short period, there is a risk that a work-related injury could occur and the injured employee could file a claim in a jurisdiction other than Ohio. The BWC does not and cannot respond to a claim filed in another jurisdiction. Therefore, that other state could find the employer to be uninsured and subject them to fines and/or other penalties, including the actual cost of the claim.

How is the BWC offering coverage?

The BWC is working with United States Insurance Services (USIS) and Zurich Insurance to offer optional coverage to employers that may face exposure while temporarily working outside of Ohio. It is not the intent of Ohio’s extraterritorial coverage to cover employees who regularly perform work outside of Ohio. A solution is available in all U.S. states except those that do not permit private workers’ compensation insurance.

How does the application process work?

Ohio employers apply directly to the BWC using the ACORD 130 application. Employers may seek assistance from their insurance agent who should be familiar with this form or contact the BWC’s Other States Coverage Unit directly. The BWC will determine eligibility and the premium cost for this coverage. The BWC will review the employer’s experience modifier, loss history, safety record and other pertinent information and then work with USIS and Zurich to secure a quote. If coverage is secured, the BWC will issue a policy via Zurich to cover out-of-state exposures. Zurich will handle all claims filed outside of Ohio under this program.

When should coverage be considered?

Employers should consider Other States Coverage when an employee is hired to do work in other states, when an Ohio-based employee is working in another jurisdiction for an extended period and when an employee is working in another state where the law requires specific coverage for temporary exposures.

Who is eligible?

An employer must have the majority of its business in Ohio, which equates to two-thirds of its total payroll for all related business operations in order to be considered for coverage. In addition, the employer must have active coverage with the BWC, have no lapses in coverage in the past 12 months at the time of application and have no past due balances. Self-insuring employers, temporary employment agencies, staffing entities and professional employer organizations are not eligible for coverage. Employers with operations that include certain high-risk manual classifications are also not eligible, which include but are not limited to aircraft exposures, grain mills and high-risk manufacturing.

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Monetizing managed care in Ohio workers’ compensation

Ohio employers will soon have the opportunity to select a managed care organization (MCO) for the medical management of workers’ compensation claims. Open Enrollment will be held this month, and there will be an abundance of material published that attempts to compare MCOs in terms of effectiveness and service. Ultimately, employers must select an MCO based on what is most important to them. Service is an obvious factor, but the financial impact of the MCO should drive the decision.

Smart Business spoke with Quinn Guist, president of CompManagement Health Systems, to learn more about factors to consider when choosing an MCO.

What might employers miss when choosing an MCO?

It can be difficult to assess medical management and MCOs in terms of financial impact. When we think about money in Ohio workers’ compensation, we typically think of discount and rebate programs, administered by third-party administrators, that provide financial relief. We may also think of fighting a questionable claim to prevent unnecessary costs and preserve lower premium rates. These factors have clear implications for an employer’s premium, but the MCO’s function in managing the medical aspect of a claim cannot be overlooked.

What could be driving up costs that may go unrecognized?

Qualifying for a premium discount or rebate depends on claim costs relative to an employer’s size. Claim costs are mainly driven by lost workdays. The MCO’s primary focus is to facilitate a prompt, safe return to work, limiting lost workdays and helping injured employees recover and get back to work. Of course, injuries can be severe at times and may result in substantial time off work. Lost-time incurred on the claim drastically accelerates costs, and directly impacts the employer’s premium rates and options for discounts or rebates.

It is in cases like these where the MCO’s role is crucial to the financial future of the employer. Consistently engaging the injured employee and physicians to keep them focused on the return-to-work goal is critical. Every claim is different and there is no magical formula that guarantees painless results, but an employer should feel informed and confident that their injured employees are receiving appropriate medical treatment to help them recover and return to work.

What are the signs of a high-performing MCO?

One sign that an MCO is performing at a high level is in its response to treatment requests. Most treatment requests are appropriate for the injury and approved by the MCO. Occasionally, a treatment request will seek to treat issues unrelated to the claim and may be denied. But even with appropriate medical treatment requests, there are often opportunities to coordinate with the treating provider to encourage more beneficial treatment and/or shorter durations to keep the recovery process moving as quickly as possible. This requires a thoughtful MCO that is closely scrutinizing every opportunity to shorten periods of disability and minimize the burden of the claim on both the employer and the injured employee.

Most employers are aware of the value of offering modified duty to encourage an early return to work. MCOs can play a key role in matching a physician’s assessment of their patient’s physical ability with the employer’s flexibility to accommodate work restrictions. Throughout this process, there are therapy and rehabilitation resources available to help employers and employees continue to close the gap on working full duty, and the MCO is the access point for these services.

Another sign of a high-performing MCO is in their review of drugs prescribed in claims. While the Ohio Bureau of Workers’ Compensation utilizes a pharmacy benefits manager to oversee the prescription medications in workers’ compensation claims, it now allows MCOs to refer cases to be reviewed for excessive or inappropriate medications. It is well-known that the costs of prescription medications can be exorbitant, but it is not uncommon for an individual to be unable to work solely because of the side effects of prescribed medication.

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What an employer should expect from their third party administrator

Companies rely on third party administrators (TPAs) to be their experts, analyzing and quickly grasping the implication of new workers’ compensation rules, regulations and programs.

“Your third party administrator should be viewed as part of your team, which comes with the same expectations for performance, quality and results that exist for any of your direct reports,” says Scott Weisend, client services representative at CompManagement. “Use appropriate due diligence when making your selection, comparing not only price, but reputation, history, types of services and their results.”

Smart Business spoke with Weisend about what to expect from your TPA and what to consider when making a selection.

What type of TPA should an employer partner with?

First and foremost, ensure that the TPA is full service. There are a fair number of organizations that refer to themselves as full service that are not. A true full-service firm provides claims management, cost containment solutions, administration of alternative rating/premium discount programs, safety consulting services, rating and actuarial services as well as hearing representation for the employer before the Ohio Industrial Commission and Bureau of Workers’ Compensation. None of these services should be outsourced to another organization.

What is the reputation of the TPA and how can it be validated?

You can learn a lot about a TPA from the references that they provide, but there are other ways to learn about their services. Ask for information on their results such as settlements obtained, handicap reimbursements awarded, refunds generated from group performance, etc. Also, speak to their business partners. In particular in Ohio, many TPAs work with trade associations, chambers of commerce and other entities that could provide a tremendous amount of feedback about their products and services. Your peers in the industry could also be a valuable resource. Ask which TPA their organization has selected and the reasons for their choice.

Should a TPA need to have industry-specific experience?

Yes. Every employer should be represented by an organization that understands its business and the risks that the company faces each day. If you are a public employer, you should consider a TPA with experience working with municipalities, school districts, counties, etc. Likewise on the private side, if you are in the construction industry, it’s fair to ask a TPA what kind of experience it has in your field. It is also fair to inquire into its results. It’s also important to make sure that the individuals you are working with daily are knowledgeable and have the experience, training and expertise to assist you.

What type of training and educational opportunities might a TPA offer?

A full-service organization should offer training opportunities in the area of workers’ compensation and safety. Look for topics related to the management of claims, return-to-work strategies, premium rate calculation and programs impacting premium, safety best practices and current trends, as well as legislative and industry issues so that you and your team are kept abreast of all matters impacting workers’ compensation today. Ideally, training should also be offered via different media, and cover multiple positions such as employee level, supervisor and management training.

Should a TPA have the personnel to offer consultative support?

If your company is like many today, the person in charge of workers’ compensation most likely wears many other hats. It’s not realistic to be an expert in all matters concerning workers’ compensation if this is the case. This is where a full-service TPA can assist your business and bring an overall peace of mind that they are always a step ahead on making the right decision for both your injured workers as well as your company’s bottom line. Consultative support should come from all levels of the TPA: claims, hearing representation, rates, program participation and safety, and be consistent and thorough.

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This voluntary program helps injured employees get back to work safely

The goal of the Ohio Bureau of Workers’ Compensation (BWC) Vocational Rehabilitation (Voc Rehab) program is to prevent a lengthy disability for an injured worker with a lost-time claim.

“Voc Rehab is an essential element of the benefits provided to employees under the workers’ compensation program,” says Bruce Preston, client services manager at CompManagement and current Rehabilitation Chair of the BWC’s annual Ohio Safety Congress. “It can help employers maintain control over claims and direct employees to great occupational health care.”

Smart Business spoke with Preston about both the benefits and the costs involved in developing a Voc Rehab plan.

What is Voc Rehab?

Voc Rehab is an option when other return-to-work efforts are exhausted or when a worker’s injuries are so severe it prevents a return to their original position. It involves a qualified rehabilitation professional who meets personally with the injured worker to develop a specific plan to accomplish their work-related goal, such as a return to their same or different job with the same employer, or a return to the same or different job with a different employer.

How are the costs covered?

The costs associated with Voc Rehab, including lost-time compensation, are covered by the BWC surplus fund and are not charged to the employer’s policy/experience for rate-making purposes. Limited Voc Rehab services are available for medical-only claims, but those costs are charged to the employer’s premium experience.

What are the benefits of Voc Rehab?

Programs like Voc Rehab can help keep employers involved in the injured worker’s medical condition and treatment plan. It also allows an employer to retain experienced workers, thereby eliminating the time and costs associated with hiring/training new employees. Employers can also help maintain workforce morale and confidence in their plan to help them deal with the injury and preserve their job. Voc Rehab benefits for an injured worker include a quicker recovery, a smoother transition back to regular duty, keeps job skills current and reduces problems related to inactivity.

Who is responsible for determining the feasibility of a plan?

While any party to a claim can make a referral for Voc Rehab, an employer’s managed care organization is responsible for determining program feasibility, which includes reviewing any medical, psychological or other barriers to an injured worker’s ability to fully participate in the return to work focused rehab plan. The BWC is responsible for determining program eligibility.

What’s often included in a Voc Rehab plan?

The main services included in a Voc Rehab plan include:

  • Employer incentive contract — compensates for lost productivity for workers who return to work before they are capable of performing regular job duties up to 50 percent of their salary for 13 weeks.
  • Gradual return to work — allows injured workers to return to work on a graduated basis building up from four hours a day to full-time status. BWC pays injured workers for lost wages due to hours not worked up to 13 weeks.
  • Job modifications — can be made by removing or altering any physical barriers that prevent injured workers from performing essential job functions.
  • Tools and equipment — may also be provided under the plan to allow the injured worker to return to work.
  • On-the-job training — allows an injured worker to obtain or upgrade vocational skills through actual work experience. The employer is reimbursed for the trainer’s time up to a set amount.
  • Work trial — permits an injured worker to attempt a return to work in their original job or a new job for a period of one month allowing an employer to test, evaluate and observe the worker at the actual job prior to hiring.
  • Job seeking/skills training — assists an injured employee who is not able to return to his or her original employer.

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How to benefit from an Ohio program designed to employ the handicapped

The handicap reimbursement program designed by the Ohio Bureau of Workers’ Compensation (BWC) is an important means for employers to reduce their overall experience costs and resulting premium rates.

“The program was designed to encourage employers to hire individuals with pre-existing conditions,” says Teri Hinckley, handicap reimbursement specialist at CompManagement. “It allows employers to request a percentage reduction in cost of the claim charged to their experience if the claimant has a pre-existing condition that caused the injury, contributed to increased costs or delayed recovery.”

Smart Business spoke with Hinckley about the handicap reimbursement program in Ohio as well as the impact that an employer may see from filing a request.

What is a handicap reimbursement?

The Ohio Revised Code 4123.343 explains that the handicap reimbursement program was designed to encourage employers to hire and retain handicapped employees. An employer then may be eligible to have a percentage of the costs associated with a workers’ compensation claim charged to, or refunded from, the statutory surplus fund.

When is a claim eligible for a handicap reimbursement?

In order for a claim to be eligible for handicap reimbursement, the claimant must have received temporary total compensation, permanent total compensation, a scheduled loss award, death benefits or have been paid salary continuation. The claimant must also have one of the conditions that qualify for reimbursement, a list of which is available on the BWC’s website. All requests for handicap reimbursement are reviewed and determined by the BWC’s Legal Operations Department.

What impact may a handicap reimbursement have on a company’s premium rate?

The handicap percentage that is awarded by the BWC is applied to medical costs, reserves and any reducible compensation — temporary total compensation, permanent total compensation, a scheduled loss award or death benefits — charged to the claim. Those reduced costs are then used in the experience calculation for the employer and the employer’s rates are reduced accordingly.

When a handicap is awarded, it is applied to all years that the claim impacts the employer’s premium rates. Based on our experience with employers, that can result in premium refunds for previous years as well as rate reductions for current and future years. The percentage, however, is not directly applied to the employer’s bottom line premium — a 10 percent handicap does not equate to a 10 percent premium reduction.

When is the best time to file for a handicap reimbursement?

We have found through working with employers that there are several factors that can determine the optimal time to file an application for a handicap reimbursement. In order to obtain the greatest percentage relief, employers have generally found it is best to wait until the claim has been sufficiently developed. This may entail waiting until the claim is nearly out of the employer’s experience. If a handicap application is filed too soon in the life of the claim, the percentage awarded can be lower because it may be difficult to show delayed recovery if the claimant has not recovered yet. In addition, there may be additional conditions allowed later in the claim that could result in a higher percentage.

Employers, however, also like to weigh the alternative rating program eligibility impact and premium savings when determining the best time to file. For example, if obtaining a handicap will help keep an employer eligible for a group rating program, it may be better to file for the application earlier in the claim as the group savings may offset any potential for a higher handicap percentage. In addition, for employers that participate in a group retrospective rating program, filing earlier may result in increased retrospective refunds.

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How to determine when a settlement makes sense

Settlement is an important claims management tool that is allowed by the Ohio Bureau of Workers’ Compensation (BWC) .

“Employers find a settlement to be advantageous as it removes existing reserves or prevents future costs,” says Jill Havens, settlement coordinator at CompManagement. “There is, however, a deadline each year established by the BWC for filing settlements for the policy year. For private employers it is July 15 and for public employers it is Feb. 15.”

Smart Business spoke with Havens about the settlement process and when to initialize a settlement with an injured worker.

What is a settlement?

The BWC defines a settlement as when the parties to a claim agree to a sum of money to forever resolve all past, present or future claim issues or liabilities. There are two types of settlements: partial and full. A partial settlement is defined as the settling of only certain conditions, compensation and/or benefits. A partial settlement keeps a reserve open on a claim, which is used by the BWC as an estimated value to determine future premium for the employer. A full settlement means settling all allowed conditions, compensation and benefits which ends the reserve. Only the injured worker/injured worker representative, employer/employer representative or the BWC can file for a settlement.

When does a settlement make sense?

Based on our long history of working with employers to help settle their claims, they have found that better settlements tend to occur during the following circumstances:

  • An injured worker is no longer employed with the company.
  • An injured worker is no longer receiving medical treatment or lost time compensation.
  • A large reserve is being assessed for future medical and/or indemnity.
  • Wage loss is being paid or has been requested.
  • A permanent partial application has been filed, but not yet awarded or paid.
  • A permanent total disability application has been filed.
  • Additional conditions have been requested on the claim.
  • A rehabilitation plan has been completed.

What claims may not be beneficial to review for settlement?

We have found that in working with employers, their encounters have shown that it may not be beneficial to settle a claim during the following circumstances:

  • An injured worker is still receiving ongoing temporary total compensation, extensive medical treatment or is pending surgery.
  • The claim has reached maximum value based on compensation, medical and the BWC program.
  • The claim has no reserve or no current activity.
  • The claim is no longer impacting the employer as it is out of the experience period.

How is a settlement approved?

The BWC will review the settlement application for the claim to understand the potential benefits, determine if the claim is ready for settlement and identify a value for settlement. If all parties and the BWC sign the settlement agreement, an approval letter is sent to all parties to the claim as well as the Industrial Commission of Ohio. All parties have 30 days to withdraw their approval of the settlement, otherwise the settlement will be paid to the injured worker or their representative. Once a claim is settled, it cannot be reopened, nor can any medical or indemnity be paid against the claim.

Does a settlement impact a premium discount program?

Yes, a settlement may have an impact on premium discount programs and should always be reviewed prior to initializing an application. Settling a claim can help reduce costs to potentially keep an employer eligible for a program and reduce future liabilities that are charged directly to the employer.

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Tools that benefit employers and injured employees

The goal for every employer should be to return their injured employees back to work in a safe, timely and healthy manner. To assist employers with this goal and keep claim costs at a minimum some consider two beneficial strategies: transitional duty and salary continuation.

“From the injured employee’s perspective the programs offer a smoother transition back to regular duty, allows them to stay current on job skills, and maintains work relationships and financial stability,” says Todd Keserich, assistant vice president of client services at CompManagement.

“For employers, the programs help to reduce costs, keep productivity in the workplace and reinforce their commitment to the welfare of their employees.”

Smart Business spoke with Keserich to learn more about these programs.

What are the benefits of transitional duty?

Transitional duty is a method of returning an injured worker to modified duties or tasks that fit within the restrictions of the injury but are different than the job performed at the time of the injury. The program offers an alternative to downtime and allows for the retention of an experienced employee while facilitating a safe return to full and normal duties.

How are job modifications determined?

Determining job modifications needs to be a collaborative effort between the employer, injured employee, physician of record, managed care organization and rehabilitation professional.

As modifications are being developed, keep in mind the injured employee’s limitations, restrictions, functional capacity and physical capabilities. The costs of job modifications for lost-time claims may be charged to the Ohio Bureau of Workers’ Compensation (BWC) surplus fund under rehabilitation costs.

What makes transitional duty successful?

Although a formal documented program is not required by the BWC, it is highly recommended to utilize job analyses.

All normal work rules should be followed and, prior to implementation, any job restrictions should be obtained from the physician of record. An added benefit would be to have the physician of record actually approve the specific duties the injured employee will be doing while in the program.

A transitional duty offer should always be presented to the injured employee in writing and include a start date and time, expected duties, hours and rate of pay. A signature of acceptance or refusal should also be obtained from the injured employee.

Paying the injured employee his full salary despite actual hours worked or duties performed while on transitional duty may prevent eligibility for wage loss compensation, thus keeping claim costs low. In addition, the BWC offers a transitional duty 3-to-1 matching grant program to help employers implement a program as well as a 10 percent bonus if the program is successfully utilized.

How is salary continuation beneficial?
Salary continuation is defined as the continuation of wages in lieu of temporary total compensation payments by the BWC to the injured employee.

Salary continuation can be beneficial for both the injured employee and the employer. The injured employee receives full wages instead of the reduced rate of pay under temporary total in addition to avoiding any potential delays in compensation.

The employer, on the other hand, is able to avoid the compensation from contributing to the claim costs.

How is salary continuation monitored?

Employers should stay connected and monitor claims involving salary continuation by setting clear expectations that the injured employee will be compliant with treatment and provide status updates.

Employers should request medical records regularly to help determine if they are able to accommodate restrictions for a return to work through modified tasks within their original job or another restricted-duty job at the company with the ultimate goal of a full duty release.

If there is no progression of the restrictions or release to restricted or full duty from the physician of record in sight, an employer should consider establishing an end date to the payment of salary continuation.

Always consult with a third party administrator to find the right time to do so and provide notification to the injured employee in writing. ●

Insights Workers’ Compensation is brought to you by CompManagement

Important steps to take when investigating a claim

There are several claims management strategies to use when assessing a new claim that occurs in the workplace.

“It is important for employers to have a well-defined internal program in place so that you are prepared to deal with any injuries or incidents that may occur in your workplace,” says Debbie Smith, claims team lead at CompManagement. “The two most important are related to the investigation of a claim and the corresponding documentation. If a claim becomes contested, the steps an employer takes in the very beginning and the attention given to the details may assist them in defending against the claim if warranted.”

Smart Business spoke with Smith about what to look for, red flag indicators and recommended strategies for documenting a workers’ compensation incident.

What are the key factors in an investigation?

Take the time to review the circumstances surrounding the claim. Look at where the incident occurred and take steps to prevent another injury. Take pictures or review security tapes. Ask co-workers what they saw or know about the incident and about the injured worker, such as hobbies and outside activities. Conduct the investigation as soon as possible after an injury occurs so the details are fresh in everyone’s minds.

What are some red flag indicators?

Although the vast majority of claims filed are compensable claims, there are still some red flags that employers should be on the lookout for in order to prevent fraudulent claims from hitting their experience. Some important red flags include:

  • Lapse in injury reporting. A gap between the date of injury and the first notice to the employer could indicate that the injury occurred outside the workplace.
  • Timing of the injury. Was the injury reported prior to a holiday or before/after a weekend?
  • No witnesses. Lack of witnesses or accounts of the incident containing conflicting statements can lead to credibility issues.
  • Vague accident descriptions. Watch for those that do not paint a clear picture of what happened.
  • Work performance. Did the injury follow a disciplinary action? If so, the injury may be retaliatory in nature and lack objective evidence.

What questions should be asked?

Through the course of any investigation, there are five questions that should be asked that include:

  • What was the employee doing just before the injury occurred?
  • What happened?
  • What object or substance directly harmed the employee?
  • Were unsafe acts involved?
  • Were there unsafe conditions involved?

Why is documentation so important?

Any workplace incident should be documented whether or not it results in an injury or illness. The information will help clarify medical conditions related to the claim and can help an employer identify the need for training, additional safety equipment or procedural improvements. Make sure all reports are completed, such as an incident report, supervisor’s report, witness statements and Bureau of Workers’ Compensation paperwork. If a claim is contested, this information will be important to have available to defend against the claim.

What should be documented?

When developing your internal program, keep the following five items in mind:

  • Use the appropriate forms. Supervisors and any witnesses should document the incident, multiple witnesses should submit separate written accounts of the incident.
  • Make it mandatory. Communicate expectations with employees, managers and supervisors for documenting and reporting injuries.
  • Be thorough. The details of an injury are key factors in determining medical conditions that should or should not be included in a workers’ compensation claim.
  • Timing is important. The earlier the incident is reported and documented, the more valuable and accurate the information is from the involved parties.
  • Train your supervisors. All supervisors should understand that documentation should be timely and thorough.


Insights Workers’ Compensation is brought to you by CompManagement