What’s on the horizon in 2015 for Ohio’s workers’ compensation system?

As 2014 comes to a close, we look ahead to the continued changes to be made in the Ohio workers’ compensation system that will bring a few benefits to the employers in the state.

“In 2015, the Ohio Bureau of Workers’ Compensation (BWC) expects to implement several new initiatives that include other states’ coverage, ICD-10 diagnosis codes and a prospective billing system for the collection of workers’ compensation premium versus the current in arrears payment,” says Randy Jones, senior vice president of Ohio TPA operations at CompManagement, Inc.

Smart Business spoke with Jones about why the BWC is planning these changes in 2015 and the advantages that each initiative will bring to employers.

Why is other states’ coverage a problem?

Other states’ refusal to recognize Ohio’s coverage of Ohio employees working temporarily in other states has resulted in fines and ‘stop work’ orders, and has also forced employers to acquire the other state’s policy and pay additional premiums. A solution was implemented in 2008 to segregate out-of-state payroll and have an employer purchase private insurance in the marketplace. This solution has become too expensive and is also not available for certain industries. It has also inflated the employer’s experience modifier — a factor used to calculate premium — because claims continue to be reported to Ohio.

What is the BWC doing to help employers with other states’ coverage?

Through House Bill 493, BWC has been granted the authority to offer limited other states’ coverage. It permits the BWC to enter into a fronting arrangement with an insurer of other states via a request for proposal (RFP) that would provide coverage for employer-requested jurisdictions. Ohio employers would then be able to show proof of coverage, eliminate contingent reciprocity provisions, eliminate the requirement to segregate payroll and be given one combined premium for coverage both in-state and out-of-state. The BWC is expected to issue the RFP by Jan. 1, 2015, and select a provider before the proposed implementation date of July 1, 2015.

Why is the BWC implementing ICD-10 diagnosis codes?

Due to the Health Insurance Portability and Accountability Act (HIPAA), covered entities must convert from the current ICD-9 diagnosis system to ICD-10 in 2015. Although the BWC is exempt from HIPAA, there were still several reasons to implement that included the fact that ICD-9 would not be maintained; medical providers in Ohio would need to treat BWC differently when processing workers’ compensation bills; new diseases would not be listed; ICD-10 is more specific and has approximately 68,000 codes versus the 13,000 under ICD-9; and the impact on Medicare reporting as well as benchmarking for national comparisons. Given these reasons, the BWC is currently modifying its system infrastructure to have the ability to receive both ICD-9 and ICD-10 codes by the deadline date of Oct. 1, 2015.

When it comes to prospective billing, how will employers be able to learn more about it and the changes that are being made to the system?

By now, employers should have received communication from the BWC or their third-party administrator on the key changes for implementation that include earlier enrollment deadlines for premium discount programs, transition credits to be offered, new payment schedules and the implementation of a true-up process. The BWC has plans to continue its communication effort via direct mail; its external website, www.ohiobwc.com; presentations to employer groups; articles in Payroll News; a seminar series to be conducted in the spring of 2015; webinars; social media; newspapers; and sessions to be held at the 2015 Ohio Safety Congress & Expo at the Columbus Convention Center March 31 to April 2.

Employers should have discussions with their third-party administrator and complete a feasibility study to know all of their options for 2015 before automatically re-enrolling in the same premium discount program. Other programs may offer better savings for this next policy year.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

Prospective billing implementation impacts key dates for Ohio employers

The Ohio Bureau of Workers’ Compensation (BWC) currently collects premium after extending coverage to an employer — i.e. in arrears or retrospective billing. By transitioning to a prospective billing system, the BWC will align with a standard industry practice enabling it to collect premiums before extending coverage. This change will have an impact on many of the key dates for Ohio employers that have been the same for a number of years.

Smart Business spoke with Lisa O’Brien, director of rates and underwriting services at CompManagement, Inc., about upcoming changes that could impact an employer’s coverage status or alternative rating program eligibility, costing them potential savings.

Who will be impacted by the changes?

Prospective billing becomes effective July 1, 2015, for private employers, so they will see changes first. Public employers will not switch to this new billing practice until the Jan. 1, 2016, policy year.

What is the timeline for private employers?

These are the enrollment deadlines for Alternative Rating Programs in the 2015 policy year:

  • Nov. 24, 2014 — Group Rating.
  • Jan. 30, 2015 — Group Retro, One Claim, Individual Retro and Deductible.
  • May 29, 2015 — Destination Excellence.

What are the private employer payroll and premium reporting deadlines?

Payroll and premium reporting during calendar year 2015 are as follows:

  • March 2, 2015 — Payroll due for July 1, 2014, to Dec. 31, 2014.
  • May 1, 2015 — Policy year 2015 estimated premium notice will be mailed by BWC.
  • June 1, 2015 — Policy year 2015 premium invoice will be mailed by BWC for first prospective installment. BWC will pay as part of transition credit.
  • July 1, 2015 — Payroll reports will be mailed by BWC for Jan 1, 2015, to June 30, 2015.
  • Aug. 1, 2015 — Policy year 2015 premium invoice will be mailed by BWC for second prospective installment.
  • Aug. 31, 2015 — Payroll report due for Jan. 1, 2015, to June 30, 2015. No payment will be due for this payroll report as BWC will pay with transition credit. Second prospective installment is due for 2015 policy year. Bi-monthly installment payments will continue through April 2016.

What is the timeline for public employers?

Enrollment deadlines for the Alternative Rating Programs for the 2016 policy year are:

  • May 29, 2015 — Group Rating.
  • July 31, 2015 — Group Retro, One Claim, Individual Retro and Deductible.
  • Nov. 30, 2015 — Destination Excellence.

What are the public employer payroll and premium reporting deadlines?

Payroll and premium reporting during calendar year 2016 are as follows:

  • March 31, 2016 — Policy year 2015 payroll report and policy year 2016 premium invoice will be mailed by BWC.
  • May 15, 2016 — Policy year 2015 payroll report and 2016 premium invoices are due. Both will be discounted by 50 percent as part of the transition credit by BWC.
  • Sept. 1, 2016 — Balance of policy year 2015 and 2016 premium are due. They will be discounted by 50 percent as part of the transition credit by BWC.
  • Nov. 1, 2016 — Policy year 2017 estimated premium notice will be mailed.
  • Dec. 1, 2016 — Policy year 2017 premium invoice will be mailed.
  • Dec. 31, 2016 — Policy year 2017 first prospective installment is due. Employers may opt to defer payment until April 30, 2017.

With the change to how premium is billed, will an organization be able to make installment payments?

In the first prospective year, BWC will invoice and require private employers to follow a bi-monthly payment schedule.
Public employers will be invoiced monthly starting with the 2017 rating year. In subsequent years, employers will have other installment options that include: monthly, bi-monthly, quarterly, bi-annually or annually.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

Changes to premium discount programs mean earlier deadlines

As the Ohio Bureau of Workers’ Compensation (BWC) begins its transition to a prospective billing system, it has announced the first changes to be made in order to implement this new system, which involves the enrollment deadlines for premium discount programs.

“In order to implement prospective billing, BWC has created earlier deadlines to sign up for incentive/discount programs,” says John Logue, vice president at CompManagement, Inc. “Employers will have to make their selections sooner than normal as the transition becomes effective July 1, 2015, for private employers and Jan. 1, 2016, for public employers.”

Smart Business spoke with Logue to determine when employers need to be prepared to act this year and next so that they do not miss the opportunity to reduce their annual workers’ compensation premium.

When do private employers need to act for their upcoming policy year?  

Private employer deadlines for the 2015 policy year, which is the first year impacted by prospective billing, have been moved up about three months in advance of normal:

  • The group rating deadline has been changed to Monday, Nov. 24, 2014. It was previously the last business day of February.
  • The group retrospective rating/other alternative rating program deadlines are Friday, Jan. 30, 2015. They had previously been the last business day of April.
  • Destination excellence program deadlines are Friday, May 29, 2015. These have moved from the last business day of April.

Are there other deadline changes outside of the premium discount programs for private employers this year?

Settlement applications (C240 forms) for private employers are due Tuesday, July 15, 2014, for any settlements that are to be applied to the 2015 experience. Previously, this deadline was Oct. 15.

What changes occur this year for public employers?

Enrollment deadlines for public employers do not change for the Jan. 1, 2015, policy year. Employers should enroll by the following deadlines this year:

  • Group rating: Friday, Aug. 29, 2014.
  • Group retrospective rating/other alternative rating programs: Friday, Oct. 31, 2014.
  • Destination excellence programs: Friday, Oct. 31, 2014.

What changes should public employers be aware of for the 2016 policy year?

Public employer deadlines for the 2016 policy year, which is the first policy year impacted by prospective billing for this employer population, are as follows:

  • The group rating deadline will be Friday, May 29, 2015, moved up from the last business day of August.
  • Group retrospective rating/other alternative rating programs will be Friday, July 31, 2015. Previously, the deadlines were the last business day of October.
  • Destination excellence program deadlines are Monday, Nov. 30, 2015, moved from the last business day of October.
  • Settlement applications (C240) are due Monday, Feb. 16, 2015, for settlements to be applied to the 2016 experience. This was previously May 15.

With the implementation of prospective billing and change to enrollment deadlines, will employers end up having two payments at once?

To eliminate having to pay two semi-annual premium payments during the transition, one-time premium credits will be given by BWC to help offset the transition to prospective billing from the current ‘in arrears’ reporting. Private employers will receive a full credit to their final in arrears premium payment due in August 2015, which is payroll between Jan. 1, 2015, and June 30, 2015, and a two-month or 1/6 credit for the first prospective payment for payroll between July 1, 2015, and June 30, 2016. Public employers will receive a 50 percent credit on their May 2016 premium payment, based on 2015 payroll, and a 50 percent credit on their first prospective payment, based on 2016 payroll.

Insights Workers’ Compensation is brought to you by CompManagement Inc.

How Ohio safety council program participation can lead to savings

The Ohio safety council rebate program created by the Ohio Bureau of Workers’ Compensation (BWC) rewards employers for their active participation in a local safety council. It also provides an additional performance bonus rebate for reducing the frequency or severity of workers’ compensation claims.

“With the number of safety councils available across the state with a focus on a variety of industries, employers are able to not only receive information on new safety techniques, products and services to assist their businesses, but also reduce their premium for simply attending these helpful meetings throughout the year,” says Russ Hocutt, vice president at CompManagement, Inc.

Smart Business spoke with Hocutt about how this rebate program works.

How much of a rebate can be earned?

Currently the incentive program enables employers to receive a rebate of 2 percent of their annual workers’ compensation premium through program participation and an additional 2 percent performance bonus based on the reduction of the frequency or severity of claims.

How can a local safety council be found?

BWC’s Division of Safety & Hygiene sponsors more than 80 safety councils across the state, organized through chambers of commerce, trade and manufacturing associations, American Red Cross chapters or other local, safety-minded organizations. A list is available at www.ohiobwc.com.

What are the requirements for the participation rebate portion?

An employer must enroll in a local safety council by July 31. Once enrolled, an employer must attend 10 meetings or events between July 1 and June 30. Two of the 10 meetings may be external educational options such as BWC Safety & Hygiene training courses or industry-specific training. The chief executive officer must attend at least one safety council-sponsored function or meeting. Semiannual reports must be submitted for the calendar year to document attendance. The documentation must be an official certificate of attendance or transcript. Only employers that meet the participation eligibility requirements will be eligible for an additional 2 percent performance bonus.

How is the performance bonus calculated?

Employers that reduce their frequency or severity of claims by 10 percent or more compared to the previous year’s frequency or severity, or employers that maintain both frequency and severity at zero, will receive an additional 2 percent refund of their annual premium, assuming the participation portion of the safety council program is met.

BWC calculates frequency by multiplying the total number of claims reported in the measurement year by 1 million and dividing by the employer’s total reported payroll for that year. Severity is determined by multiplying the total number of days absent during the measurement year by 1 million and then dividing by the employer’s total reported payroll for that year. The measurement period for private employers is claims and payroll reported between July 1 and June 30 compared to the previous year. For public employers, the measurement period is between Jan. 1 and Dec. 31.

What impact would the program have on a midsize company’s premium?

Assuming the participation requirements are met and the employer was able to reduce the frequency or severity of claims as indicated above, a midsize service company could expect the following in annual premium savings, assuming the employer is participating in no other alternative rating programs:

  • Payroll — $3,990,000.
  • Individual discount — 16 percent.
  • Individual premium — $14,683.
  • 2 percent safety council participation rebate —  $200*.
  • 2 percent safety council performance rebate — $200*.

*Based on pure premium which does not include assessments for DWRF and administrative costs for operation of BWC/IC

Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with the safety council program such as Destination Excellence, Drug Free safety Program, Group Rating (performance bonus only), Group Retrospective Rating (participation bonus only), Large/Small Deductible, Individual Retrospective Rating, or One Claim Program. Always have your third-party administrator conduct a feasibility study to evaluate the best savings options available for your organization.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

How to use deductibles to lower workers’ compensation premiums

Mark MaGinn, Vice President, CompManagement, Inc.

Mark MaGinn, Vice President, CompManagement, Inc.

The Deductible Program was implemented in 2009 by the Ohio Bureau of Workers’ Compensation (BWC) as another alternative for employers to control their costs while promoting workplace safety. Over the past few years, the program has been enhanced to include a small and large deductible program so that employers of different sizes, hazard groups and risk tolerance levels have options that best fit their organization.

“The Deductible Program can be financially beneficial for those employers that have a focus on their safety efforts and are able to keep their claim costs low,” says Mark MaGinn, vice president at CompManagement, Inc. “An employer should consider having a feasibility study performed by their third-party administrator prior to participating in order to analyze the deductible levels available and ensure it is the best program for their organization.”

Smart Business spoke with MaGinn about how this alternative rating program works.

How does the Deductible Program work? 

Similar to other insurance deductible plans, an employer agrees to pay the portion of a workers’ compensation claim that falls below their selected deductible level in exchange for an upfront premium discount. Claims costs are paid in full by the BWC, then the employer reimburses the BWC for the claim costs up to the selected deductible level. The employer will receive monthly invoices from the BWC until the selected deductible level is reached. All deductible bills must be paid within 28 days of the invoice date.

What deductible amounts are available to choose from?

Deductible levels range from $500 to $200,000. The small deductible program includes levels of $500, $1,000, $2,500, $5,000 and $10,000. The large deductible program includes levels of $25,000, $50,000, $100,000 and $200,000. There is no deductible level available between $10,000 and $25,000. An employer is limited to 25 percent of its annual premium if the deductible selected is less than $10,000, and 40 percent of annual premium if the deductible is $25,000 or more.

How does an employer join the Deductible Program?

An employer must complete a BWC Application for Deductible Program (U-148) to enroll in the Deductible Program, and meet eligibility requirements. The enrollment deadline for private, state-funded employers is the last business day in April for coverage beginning July 1, and for public employers it is the last business day of October for coverage beginning Jan. 1. Changes to the deductible level or withdrawal from the program are not allowed until the next policy year.

Is there any method to cap the annual out of pocket?

Employers selecting a deductible level of $25,000 or more have the option to request an annual aggregate stop-loss limit of three times the deductible, allowing them to cap the potential annual out-of-pocket expense that may arise from participating in the program.

How is the Deductible Program savings projection calculated?

Based on the deductible level chosen and the employer’s hazard group, which is based on the employer’s manual classifications and risk level, the BWC will establish the savings percent. This discount can range anywhere from 1.4 to 26 percent for small deductible options and is applied to the employer’s standard premium.

An example for a midsize service company selecting a $5,000 deductible within the small deductible program:

• Payroll — $5,000,000.

• Individual premium — $460,000.

• Deductible discount savings — $32,000.

• Premium with discount — $428,000.

• Plus estimated deductible billing — $10,000.

• Net premium — $438,000.

• Net savings — $22,000.

In addition to this savings, deductible payments under the small deductible program will not be charged to the claim, therefore possibly reducing future rate calculations. λ

Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with either the small or large deductible program, such as the Go Green or Safety Council discounts.

Mark MaGinn is vice president at CompManagement, Inc. Reach him at (800) 825-6755, ext. 65868 or [email protected]

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

 

How to use deductibles to lower workers’ compensation premiums

Mark MaGinn, Vice President, CompManagement, Inc.

Mark MaGinn, Vice President, CompManagement, Inc.

The Deductible Program was implemented in 2009 by the Ohio Bureau of Workers’ Compensation (BWC) as another alternative for employers to control their costs while promoting workplace safety. Over the past few years, the program has been enhanced to include a small and large deductible program so that employers of different sizes, hazard groups and risk tolerance levels have options that best fit their organization.

“The Deductible Program can be financially beneficial for those employers that have a focus on their safety efforts and are able to keep their claim costs low,” says Mark MaGinn, vice president at CompManagement, Inc. “An employer should consider having a feasibility study performed by their third-party administrator prior to participating in order to analyze the deductible levels available and ensure it is the best program for their organization.”

Smart Business spoke with MaGinn about how this alternative rating program works.

How does the Deductible Program work? 

Similar to other insurance deductible plans, an employer agrees to pay the portion of a workers’ compensation claim that falls below their selected deductible level in exchange for an upfront premium discount. Claims costs are paid in full by the BWC, then the employer reimburses the BWC for the claim costs up to the selected deductible level. The employer will receive monthly invoices from the BWC until the selected deductible level is reached. All deductible bills must be paid within 28 days of the invoice date.

What deductible amounts are available to choose from?

Deductible levels range from $500 to $200,000. The small deductible program includes levels of $500, $1,000, $2,500, $5,000 and $10,000. The large deductible program includes levels of $25,000, $50,000, $100,000 and $200,000. There is no deductible level available between $10,000 and $25,000. An employer is limited to 25 percent of its annual premium if the deductible selected is less than $10,000, and 40 percent of annual premium if the deductible is $25,000 or more.

How does an employer join the Deductible Program?

An employer must complete a BWC Application for Deductible Program (U-148) to enroll in the Deductible Program, and meet eligibility requirements. The enrollment deadline for private, state-funded employers is the last business day in April for coverage beginning July 1, and for public employers it is the last business day of October for coverage beginning Jan. 1. Changes to the deductible level or withdrawal from the program are not allowed until the next policy year.

Is there any method to cap the annual out of pocket?

Employers selecting a deductible level of $25,000 or more have the option to request an annual aggregate stop-loss limit of three times the deductible, allowing them to cap the potential annual out-of-pocket expense that may arise from participating in the program.

How is the Deductible Program savings projection calculated?

Based on the deductible level chosen and the employer’s hazard group, which is based on the employer’s manual classifications and risk level, the BWC will establish the savings percent. This discount can range anywhere from 1.4 to 26 percent for small deductible options and is applied to the employer’s standard premium.

An example for a mid-sized service company selecting a $5,000 deductible within the small deductible program:

• Payroll — $5,000,000.

• Individual premium — $460,000.

• Deductible discount savings — $32,000.

• Premium with discount — $428,000.

• Plus estimated deductible billing — $10,000.

• Net premium — $438,000.

• Net savings — $22,000.

In addition to this savings, deductible payments under the small deductible program will not be charged to the claim, therefore possibly reducing future rate calculations.

Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with either the small or large deductible program, such as the Go Green or Safety Council discounts.

Mark MaGinn is vice president at CompManagement, Inc. Reach him at (800) 825-6755, ext. 65868 or [email protected]

Save the date: Deductible Program enrollment for private employers ends April 30 for the 2013 policy year.

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

 

 

Why Group Retrospective Rating may be a solution for your organization

Heather Vogus, vice president, Comp Management, Inc.

Over the past few years, many employers in Ohio have been looking at the Group Retrospective Program implemented in 2009 by the Ohio Bureau of Workers’ Compensation (BWC) as another option to garner savings when it comes to their workers’ compensation premium. Enrollment numbers have doubled each year, especially with employers that are of medium size and debit-rated by the BWC.

“If you are an employer in Ohio who has some claims in your experience — as accidents will happen — but also has a solid safety program in place, Group Retrospective Rating may be an option. Organizations that do not qualify for a Group Rating program or are seeing little savings from this program should consider Group Retrospective Rating as an alternative,” says Heather Vogus, vice president at CompManagement, Inc.

Group Retrospective Rating enrollment for private employers ends April 30 for the 2013 policy year.

Smart Business spoke with Vogus about the program and why it has the attention of businesses across Ohio.

What is Group Retrospective Rating? 

Group Retrospective Rating is a performance-based incentive program designed to recover a portion of premiums for employers that reduce injury rates and lower associated claims costs. It is similar in concept to Group Rating, as companies are grouped together to be rated as if the group was one big company. However, with this program, companies continue to pay their own individual premium but have the opportunity to receive retrospective premium adjustments, such as refunds or assessments, at the end of each of the three evaluation periods performed by the BWC.

How are groups evaluated by the BWC?

Three evaluations are performed by the BWC at 12, 24 and 36 months after the end of the policy year. At the end of each period, the BWC looks at the expected losses of the group and compares those to the actual losses to calculate the group’s Retrospective Premium. If the premium calculated is less than the group’s total Standard Premium, the participants receive a refund for that period. However, if the premium is greater, an assessment will be levied by the BWC, but each group limits the maximum assessment by selecting a premium cap that can be factored into your budget so that your organization is prepared. Before entering a program, be sure to have a feasibility study created to ensure this program fits the risk tolerance of your organization and has the ability to garner appropriate savings.

Why should my organization participate?

If your organization is committed to improving workplace safety and accident prevention, as well as taking action to reduce the frequency and severity of accidents involving your employees, this program has the ability to attain premium savings to boost your bottom line. The BWC has just released statistics showing that the 2009 private employer Group Retrospective Rating program has refunded a grand total of $12.4 million to date, for an average of $33,940 per employer.

How is the Group Retrospective savings projection calculated?

First, the overall group premium is calculated. As an example, suppose the Standard Premium for the group is $4 million and the Minimum Premium, assuming 25 percent, is $1 million. Add Developed Losses, which is incurred losses multiplied by the BWC developmental factor of  $1.4 million, and that equals the Retrospective Premium — the minimum premium plus developed losses — to give you $2.4 million.

The Group Retrospective Refund, which is the Standard Premium minus Retrospective Premium, is  $1.6 million, and the Estimated Refund Percentage is 40 percent.

Using the estimated refund percentage of 40 percent from the group example above, a mid-sized service company, assuming a payroll of $1 million, may expect:

• Individual Premiums of $62,500

• Group Retrospective Rating Premiums of $37,500

• Group Retrospective Rating Savings of  $25,000.

Savings reflected above do not include the additional savings that can be realized by also participating in programs compatible with Group Retrospective Rating such as Destination Excellence Go Green and Safety Council (participation rebate).

Heather Vogus is vice president at CompManagement, Inc. Reach her at (800) 825-6755, ext. 65440 or [email protected]

Insights Workers’ Compensation is brought to you by CompManagement, Inc.


 

How to reduce annual workers’ compensation premium through limiting claim costs

Nick Principe, vice president of claims, CompManagement, Inc.

The Ohio Bureau of Workers’ Compensation calculates an employer’s annual premium based on three factors: the employer’s industry, claim costs and payroll. In order to begin to control claim costs, organizations at a minimum should have written work rules that are enforced uniformly and consistently, implement best practices for injury reporting, and have written guidelines and procedures for supervisors to follow for proper injury investigation.

“One of the most important phases in the life of a claim starts at the very beginning, when the claim is first acknowledged,” says Nick Principe, vice president of claims at CompManagement, Inc. “Every organization should have policies in place for reporting injuries, investigating and documenting accidents, offering transitional duty and having ongoing communication with injured workers.”

Smart Business spoke with Principe about what all employers should be doing when a claim occurs in their workplace.

How do I know the difference between an injury and an incident?

An injury, or claim, is when an employee seeks outside treatment instead of onsite first aid, an accident report is completed and submitted to a supervisor instead of filing an incident report, and a supervisor investigates the ‘accident’ instead of a supervisor investigating the ‘incident’ or ‘near miss.’

What is key information to communicate to an employee prior to any injuries occurring?

Make sure all employees understand the reporting protocol, such as the time frame for reporting, who should complete an accident report and to whom it should be submitted, and whether failure to comply with the company policy could result in disciplinary action.

Failure to properly report injuries also results in loss of calendar and disability days and does not allow the employer to address workplace hazards that may exist.

How do I know if a claim is compensable in Ohio?

Ohio has a ‘no-fault’ workers’ compensation system, which means injuries are compensable regardless of negligence by any party. The only exceptions to this are when an injury results from drugs and/or alcohol; a self-inflicted injury, or an injury resulting in or arising from ‘horseplay.’ With a substantial aggravation or worsening of symptoms, a pre-existing condition can be considered compensable.

Should I always certify a claim?

Claim documentation should be reviewed to determine if, as the employer, you are in agreement with the injury description and each condition listed, and then the claim may be certified. The claim should be continually monitored to ensure that only appropriate medical benefits and compensation are being paid. A valid reason for not certifying a claim is always needed. Rejecting a valid claim only delays recovery time and may increase your workers’ compensation costs. If you believe the claim is invalid, information must be gathered to support rejection of the claim.

What are some key points an employer should look for when a new claim is filed to help with the certification decision?

• Injury reporting: Watch for lapses between the date of injury and the first notice to the employer. This could indicate that the injury occurred outside of the workplace.

• Timing of the injury: Watch for injuries reported prior to holidays or before/after the weekend. Some may view an injury as an opportunity to extend a holiday, weekend or take a vacation.

• Witness statements: Watch for injuries that have no witnesses or that contain conflicting statements. This can lead to credibility issues and opportunities to reject the merits of the incident.

• Accident descriptions are subjective or vague: Watch for accident descriptions that do not paint a clear picture of what happened. You should be able to visualize the accident and draw conclusions from the description. Be on the lookout for changes to statements or inconsistencies in recollection of the accident/injury.

• Work performance: Watch for injuries following disciplinary actions. These types of injuries are often retaliatory in nature and either lack the objective evidence to support them or can be viewed as self-inflicted.

• Multiple claims: Watch for injuries to similar body parts or claims filed around the same time of the year, for example, a reinjury to the same body part or a link to outside activities such as hunting season, sports or hobbies.

How can I prevent significant ongoing costs in a claim if one does occur?

One cost containment strategy that may be utilized is developing a transitional work program. Transitional work is a cost-containment strategy for workers’ compensation that helps injured workers return to productivity in the workplace by providing modified job duties that accommodate their medical restrictions due to work-related injuries. The idea is to return an injured employee to gainful employment activities as soon as possible to avoid the so-called ‘disability trap.’ With transitional work, the injured worker receives a full paycheck with the ultimate goal of returning to his/her original job. The advantages to implementing a transitional work program include a reduction in costs associated with long-term claims, improved productivity, lower injury downtime, improved employee recovery time, increase in employee morale and a protection of your work force investment, as the loss of experienced employees will result in additional training costs associated with hiring new employees.

NICK PRINCIPE is the vice president of claims for CompManagement, Inc. Reach him at (800) 825-6755, ext. 65819, or [email protected]

Insights Workers’ Compensation is brought to you by CompManagement, Inc.

How wellness programs can impact workers’ compensation costs and how new grants can help

Randy Jones, Senior Vice President, TPA Operations, CompManagement, Inc.

Employers today are experiencing escalating health care costs associated with the significant increase in health risk factors, such as obesity, chronic disease and an aging work force. The impact these conditions and others have on workers’ compensation costs is generally left out of the equation. Studies have shown that workplace wellness programs have the ability to generate a significant reduction in return-to-work days, frequency and severity of claims, as well as presenteeism or absenteeism and the cost of health care benefits. Depending on accepted metrics, the return on investment (ROI) for employers can reach $6.50 for each dollar of investment.

“Implementing workplace wellness programs not only can improve the health and well-being of Ohio’s employees, but also impacts one of the largest operational expenses for an employer, workers’ compensation premium. With grant monies now available from the Ohio Bureau of Workers’ Compensation (BWC), even small employers have the ability to access resources that usually only the larger employer can afford,” says Randy Jones, senior vice president, TPA Operations for CompManagement, Inc. Smart Business spoke with Jones about the monies that are now available for your business in Ohio.

Why did the BWC start this grant initiative?

To meet the challenges of obesity, rising incidence of chronic diseases, and the aging work force, BWC recently established a Workplace Wellness grant. The objectives are to limit and control the escalating cost of workers’ compensation claims through addressing these health risk factors as well as to reduce health care costs for employers and improve the health of Ohio’s work force.

In 2010, 25 to 29 percent of Ohio’s adult population was considered obese (body mass index equal to or greater than 30) and the largest percent of our work force was between the ages of 45 to 54. Research has shown these challenges contribute to increased incidence and cost of workplace accidents and illnesses.

Who is eligible to receive a grant?

All employers (public and private) participating in the state-funded workers’ compensation program are eligible for the grant. Self-insured employers are not eligible. The employer may not currently have a wellness program in place, which consists of a tool that measures health risk factors plus programs that are designed to address those factors. If an employer does not have a tool or a program or lacks both, they will qualify for grant funding. If however, the employer uses a tool and designs programs based on the results from the tool, the employer will not qualify at this time. As an example, if an employer currently offers a Health Risk Assessment (HRA) but does not create any programs from the results of the HRAs, the employer would be eligible for a grant.

How much money is available under the Workplace Wellness grant initiative?

BWC has allocated $4 million for the Workplace Wellness grants over a four-year period. Grants are available to employers up to $15,000 over four years, which will allow for up to 50 employee participants per employer and $300 per participating employee. The amount per employee is graduated each year as BWC takes employee participation into consideration when awarding and renewing the grant. These funds are intended to supplement the cost of a wellness program, not fully fund it.

How does the application work?

Applications are received and reviewed by BWC on a first come, first served basis. The application form is available on their website at www.ohiobwc.com/employer/programs/safety/WellnessGrants.asp. The major components of the application include a profile of your organization, an estimated budget for the workplace wellness plan, selection of a workplace wellness vendor, and a timeline for implementation of your program. A safety management self-assessment is also required.

What are the requirements for participation?

An employer must contract with a third party vendor that provides wellness program services in order to participate and submit an application to BWC. In addition, the employer must complete an online safety self-assessment, submit baseline data such as HRAs, biometrics, and a program plan within three months of receiving the grant funding, provide receipt documents, and submit an annual case study that explains what has been accomplished in creating and implementing a program as well as a plan for the upcoming year. Data elements pertaining to health risk factors such as cholesterol, blood pressure, etc. must also be reported annually in an aggregate format for all participating employees.

Why should my organization apply for this grant and implement a wellness program?

While workplace wellness programs help to reduce health risks, improve quality of life, and enhance personal effectiveness for your employees, studies show these programs also help to reduce workers’ compensation and disability costs for an employer by an average of 30 percent. This initiative is best suited for employers with measurable claims experience, a strong interest and desire to implement workplace safety and wellness programs, and a willingness to participate for four years.

How can my Third Party Administrator for workers’ compensation help with the process?

TPAs that provide safety services to their clients are well-suited to assist with this implementation. They will be able to develop occupational risk assessment tools as well as analyze data of health risk factors that contribute to the length and severity of incurred workers’ compensation claims. By linking safety and occupational health programs such as wellness together, an employer should see an overall reduction of workers’ compensation costs with enhanced employee morale and improved productivity.

Randy Jones is the senior vice president of TPA Operations for CompManagement, Inc. Reach him at (800) 825-6755, ext 2466 or [email protected]

How employers can focus on successful back-to-work initiatives

Quinn Guist, President, CompManagement Health Systems

Returning injured workers to their jobs has been a high priority for Managed Care Organizations (MCOs) and the Ohio Bureau of Workers’ Compensation (BWC) since the inception of the Health Partnership Program; however, we can always improve. MCOs, BWC, employers and providers must work collaboratively to advance return-to-work efforts.

Regardless of the greatest intentions and efforts of MCOs, Third Party Administrators (TPAs) and BWC, employers of all sizes and industries should have at least one thing in common — workers’ compensation must be a priority. This may not be a part of your business that welcomes you warmly when you come into the office each morning, but it is one that requires time and attention to keep from growing into an uncontrollable burden.

One approach to handling workers’ compensation is simply to entrust your claims to vendors and allow them to manage on your behalf. MCOs, TPAs, BWC and workers’ compensation attorneys can all help administer this critical segment of your business. But most would agree a more effective approach is for employers to prepare themselves well and become proactive partners in managing workplace injuries. Here are some fundamental key principles employers can utilize to gain significant return for their effort.

Establish Basic Employee Guidelines

A policy for workers’ compensation injury management does not have to be all-encompassing from the start, but begin by addressing basic expectations for employee behavior. Why does this impact workers’ compensation? Two reasons:

Basic guidelines establish a foundation for evaluating and managing employees from the beginning. Challenging employees sometimes create challenging claims.

More importantly, guidelines allow you to specify employee behavior that facilitates transparency and communication throughout the life of a workers’ compensation claim. For example, you should require that injuries and incidents be reported to a supervisor within a specified time (e.g., before the end of the shift, 24 hours, etc.). You can also require employees to return medical documentation regarding their treatment and recovery to you directly (HIPAA laws do not apply to workers’ compensation claims).

Transitional Work

Known by many names — modified duty, light duty, work accommodations — transitional work simply means bringing an employee back to work and adjusting their job requirements while they recover from injury. A multitude of studies show an injured employee will recover more quickly while in their working environment. Transitional work may not be possible in every situation, however, the more creativity used in identifying productive work for an injured employee, the better your chances are of avoiding one of the most costly elements of workers’ compensation claims — lost workdays.

A key point: your employee’s physician decides when they may return to work. Early return-to-work amounts to a reconciliation between the physician’s determination of the employee’s physical capacity and your flexibility to accommodate the employee’s limitations while they recover. Depend heavily on your MCO to assist in informing the physician of modified work options available for the injured employee. It is important for the doctor to understand the actual nature of work you have and that performing those tasks will not put your employee at risk of re-injury.

 

Injury Reporting Protocols

Establishing a consistent procedure for documenting work-related injuries and initiating the claim-filing process is important in a successful return-to-work program. Timing is critical, as early intervention in a claim from you and your expert resources (MCO, TPA, BWC) helps bring clarity to the claim process. Having the opportunity to discuss return-to-work options with your employee and their treating physician in the early days and hours after an injury helps all parties approach the claim proactively with the goal of early return-to-work.

Many employers maintain a readily available supply of injury reporting forms, contact information and a list of simple instructions. Make sure management and supervisors are familiar with these forms and are prepared to assist injured workers in completing the information and obtaining medical treatment if necessary. The injury-reporting process is an opportunity to build employee trust and confidence by demonstrating a well thought-out game plan for injury management.

Relationships with Local Medical Providers

Remember, the physician has final say regarding return-to-work timing for an injured employee, and your MCO serves all parties by ensuring the physician is as informed as possible when making decisions about your employees’ return-to-work status. Take notice of the medical treatment options available in your area and ask your MCO for recommendations and advice. Build relationships with key physicians. Invite them to tour your facility so they can personally see the types of job duties your employees perform. Their understanding of your business contributes to their decision-making process regarding return-to-work.

Consider other medical services you may need as an organization (pre-employment physicals, drug testing, etc.) and position your organization as a wise consumer. Ohio employers cannot require employees to seek treatment with a specified physician, but you can certainly recommend excellent options and establish relationships with service providers to foster communication and trust.

 

Culture of Health with Your Employees

It only makes sense that a healthier work force tends to have fewer injuries or, once injured, employees who return to work more quickly. BWC will soon introduce a workplace wellness grant program; take advantage of this to create your own healthier work force and positively impact your workers’ compensation experience.

Putting all the pieces together in your workers’ compensation puzzle will optimize a safe and efficient return-to-work program that ultimately benefits all parties.

Quinn Guist is the President of CompManagement Health Systems. He has been in the workers’ compensation industry for more than 23 years, including 15 years focused on managed care. He can be reached at (614)760-2416 or [email protected]